##### 









UNITED STATES SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549





Form 10-K


|  |  |                                                                                         
|- |  | ----------------------------------------------------------------------------------------
|þ |  | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934
| 
|  |  | For the fiscal year ended December 31, 2004                                             

Commission File Number: 001-31593





Apollo Gold Corporation


(Exact name of registrant as specified in its charter)


|                                                                   |  |                                         
|------------------------------------------------------------------ |  | ----------------------------------------
|Yukon Territory                                                    |  | Not Applicable                          
|(State or other jurisdiction of
    incorporation or organization) |  | (I.R.S. Employer
    Identification No.)

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


þ o


o


þ o






DOCUMENTS INCORPORATED BY REFERENCE












---



##### 



REPORTING CURRENCY, FINANCIAL AND OTHER INFORMATION










NON-GAAP FINANCIAL MEASURES






STATEMENTS REGARDING FORWARD-LOOKING INFORMATION






| |   |                                                                       
| | - | ----------------------------------------------------------------------
| |  | the establishment and estimates of mineral reserves and
    resources;
|
| |  | production;                                                           
|
| |  | production commencement dates;                                        
|
| |  | production costs;                                                     
|
| |  | cash operating costs;                                                 
|
| |  | total cash costs;                                                     
|
| |  | grade;                                                                
|
| |  | processing capacity;                                                  
|
| |  | potential mine life;                                                  
|
| |  | feasibility studies;                                                  

2



---



##### 





| |   |                                                             
| | - | ------------------------------------------------------------
| |  | development costs;                                          
|
| |  | expenditures;                                               
|
| |  | exploration;                                                
|
| |  | permits;                                                    
|
| |  | expansion plans;                                            
|
| |  | closure costs;                                              
|
| |  | development drilling and its potential results;             
|
| |  | surveys of claims;                                          
|
| |  | recovery rates;                                             
|
| |  | geological prospects;                                       
|
| |  | impact of governmental laws;                                
|
| |  | nonpayment of dividends and use of earnings from operations;
|
| |  | delivery of metals;                                         
|
| |  | cash flows;                                                 
|
| |  | future financing;                                           
|
| |  | our ability to fund our capital requirements;               
|
| |  | factors impacting our results of operations; and            
|
| |  | the impact of adoption of new accounting standards.         





| |   |                                                                                              
| | - | ---------------------------------------------------------------------------------------------
| |  | unexpected changes in business and economic conditions;                                      
|
| |  | significant increases or decreases in gold prices;                                           
|
| |  | changes in interest and currency exchange rates;                                             
|
| |  | timing and amount of production;                                                             
|
| |  | unanticipated grade changes;                                                                 
|
| |  | unanticipated recovery or production problems;                                               
|
| |  | changes in mining and milling costs;                                                         
|
| |  | pit slides at our mining properties;                                                         
|
| |  | metallurgy, processing, access, availability of materials,
    equipment, supplies and water;
|
| |  | determination of reserves;                                                                   
|
| |  | changes in project parameters;                                                               
|
| |  | costs and timing of development of new reserves;                                             
|
| |  | results of current and future exploration activities;                                        
|
| |  | results of pending and future feasibility studies;                                           

3



---



##### 





| |   |                                                                                                
| | - | -----------------------------------------------------------------------------------------------
| |  | joint venture relationships;                                                                   
|
| |  | political or economic instability, either globally or in the
    countries in which we operate;
|
| |  | local and community impacts and issues;                                                        
|
| |  | timing of receipt of government approvals;                                                     
|
| |  | accidents and labor disputes;                                                                  
|
| |  | environmental costs and risks;                                                                 
|
| |  | competitive factors, including competition for property
    acquisitions;                      
|
| |  | availability of external financing at reasonable rates or at
    all; and                      
|
| |  | the factors discussed in this Annual Report on Form 10-K
    under the heading Risk Factors. 



4



---



##### 



GLOSSARY OF TERMS




|                              |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|----------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Reserve                       |  | The term reserve refers to that part of a mineral
    deposit which could be economically and legally extracted or
    produced at the time of the reserve determination. Reserves must
    be supported by a feasibility study done to bankable standards
    that demonstrates the economic extraction. (Bankable
    standards implies that the confidence attached to the
    costs and achievements developed in the study is sufficient for
    the project to be eligible for external debt financing.) A
    reserve includes adjustments to the in-situ tonnes and grade to
    include diluting materials and allowances for losses that might
    occur when the material is mined.
|                             
|Proven Reserve                |  | The term proven reserve refers to reserves for which
    (a) quantity is computed from dimensions revealed in
    outcrops, trenches, workings or drill holes; grade and/or
    quality are computed from the results of detailed sampling and
    (b) the sites for inspection, sampling and measurement are
    spaced so closely and the geologic character is so well defined
    that size, shape depth and mineral content of reserves are
    well-established.                                                                                                                                                                                                                          
|                             
|Probable Reserve              |  | The term probable reserve refers to reserves for
    which quantity and grade and/or quality are computed from
    information similar to that used for proven
    (measured) reserves, but the sites for inspection,
    sampling, and measurement are farther apart or are otherwise
    less adequately spaced. The degree of assurance, although lower
    than that for proven reserves, is high enough to assume
    continuity between points of observation.                                                                                                                                                                                                                            
|                             
|Mineralized Material          |  | The term mineralized material refers to material
    that is not included in the reserve as it does not meet all of
    the criteria for adequate demonstration for economic or legal
    extraction.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                             
|Exploration Stage             |  | An exploration stage prospect is one which is not in
    either the development or production stage.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                             
|Development Stage             |  | A development stage project is one which is
    undergoing preparation of an established commercially mineable
    deposit for its extraction but which is not yet in production.
    This stage occurs after completion of a feasibility study.                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                             
|Production Stage              |  | A production stage project is actively engaged in
    the process of extraction and beneficiation of mineral reserves
    to produce a marketable metal or mineral product.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                             
|Mining                        |  | Mining is the process of extraction and beneficiation of mineral
    reserves to produce a marketable metal or mineral product.
    Exploration continues during the mining process and, in many
    cases, mineral reserves are expanded during the life of the mine
    operations as the exploration potential of the deposit is
    realized.                                                                                                                                                                                                                                                                                                                                                 
|                             
|Cash Operating Cost per Ounce |  | is equivalent to direct operating cost expense for the period as
    found on the Consolidated Statements of Operations, less mining
    taxes and by-product credits payable for silver, lead, and zinc
    divided by the number of ounces of gold sold during the period.                                                                                                                                                                                                                                                                                                                                                                                                                      

5



---



##### 





|                                |  |                                                                                                                                                                                                                                                                                           
|------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Doré                            |  | unrefined gold bullion bars containing various impurities such
    as silver, copper and mercury, which will be further refined to
    near pure gold.                                                                                                                                    
|                               
|Fault                           |  | a surface or zone of rock fracture along which there has been
    displacement                                                                                                                                                                                                            
|                               
|Fold                            |  | a curve or bend of a planar structure such as rock strata,
    bedding planes, foliation, or cleavage                                                                                                                                                                                     
|                               
|Formation                       |  | a distinct layer of sedimentary rock of similar composition.                                                                                                                                                                                                                              
|                               
|Geochemistry                    |  | the study of the distribution and amounts of the chemical
    elements in minerals, ores, rocks, solids, water, and the
    atmosphere.                                                                                                                                                   
|                               
|Geophysicist                    |  | one who studies the earth; in particular the physics of the
    solid earth, the atmosphere and the earths magnetosphere.                                                                                                                                                                
|                               
|Geotechnical                    |  | the study of ground stability.                                                                                                                                                                                                                                                            
|                               
|Heap Leach                      |  | a mineral processing method involving the crushing and stacking
    of an ore on an impermeable liner upon which solutions are
    sprayed that dissolve metals such as gold and copper; the
    solutions containing the metals are then collected and treated
    to recover the metals.
|                               
|Mapped or Geological            |  | the recording of geologic information such as the distribution
    and nature of rock                                                                                                                                                                                                     
|                               
|Mapping                         |  | units and the occurrence of structural features, mineral
    deposits, and fossil localities.                                                                                                                                                                                             
|                               
|Mineral                         |  | a naturally formed chemical element or compound having a
    definite chemical composition and, usually, a characteristic
    crystal form.                                                                                                                                               
|                               
|Mineralization                  |  | a natural occurrence in rocks or soil of one or more metal
    yielding minerals.                                                                                                                                                                                                         
|                               
|Outcrop                         |  | that part of a geologic formation or structure that appears at
    the surface of the earth.                                                                                                                                                                                              
|                               
|Put                             |  | a financial instrument that provides the right, but not the
    obligation, to sell a specified number of ounces of gold at a
    specified price.                                                                                                                                        
|                               
|Shear                           |  | a form of strain resulting from stresses that cause or tend to
    cause contiguous parts of a body of rock to slide relatively to
    each other in a direction parallel to their plane of contact.                                                                                      
|                               
|Strike                          |  | the direction or trend that a structural surface, e.g. a bedding
    or fault plane, takes as it intersects the horizontal.                                                                                                                                                               
|                               
|Strip                           |  | to remove overburden in order to expose ore.                                                                                                                                                                                                                                              
|                               
|Total Cash Cost per Ounce       |  | is equivalent to mining operations expense for the period, less
    by-product credits payable for silver, lead and zinc, plus
    royalty expense and mining and property taxes, divided by the
    number of ounces of gold sold during the period.                                     
|                               
|Total Production Cost per Ounce |  | is equivalent to total cash cost per ounce plus depreciation and
    amortization.                                                                                                                                                                                                        

6



---



##### 





|          |  |                                                                                             
|--------- |  | --------------------------------------------------------------------------------------------
|Vein      |  | a thin, sheet like crosscutting body of hydrothermal
    mineralization, principally quartz.
|         
|Wall Rock |  | the rock adjacent to a vein.                                                                

CONVERSION FACTORS AND ABBREVIATIONS




|                          |  |                               |  |                    |  |                                 
|------------------------- |  | ----------------------------- |  | ------------------ |  | --------------------------------
|1 acre                    |  | = 0.4047 hectare              |  | 1 mile             |  | = 1.6093 kilometers             
|1 foot                    |  | = 0.3048 meter                |  | 1 troy ounce       |  | = 31.1035 grams                 
|1 gram per metric tonne   |  | = 0.0292 troy ounce/short ton |  | 1 square mile      |  | = 2.59 square kilometers        
|1 short ton (2000 pounds) |  | = 0.9072 tonne                |  | 1 square kilometer |  | = 100 hectares                  
|1 tonne                   |  | = 1,000 kg or 2,204.6 lbs     |  | 1 kilogram         |  | = 2.204 pounds or 32.151 troy oz
|1 hectare                 |  | = 10,000 square meters        |  | 1 hectare          |  | = 2.471 acres                   



|       |  |                           |  |          |  |                             
|------ |  | ------------------------- |  | -------- |  | ----------------------------
|Au     |  | = gold                    |  | m2       |  | = square meter              
|g      |  | = gram                    |  | m3       |  | = cubic meter               
|Au g/t |  | = grams of gold per tonne |  | Mg or mg |  | = milligram                 
|ha     |  | = hectare                 |  | mg/m3    |  | = milligrams per cubic meter
|km     |  | = kilometer               |  | T        |  | = tonnes                    
|km2    |  | = square kilometers       |  | t        |  | = ton                       
|kg     |  | = kilogram                |  | Oz       |  | = troy ounce                
|lbs    |  | = pounds                  |  | Ppb      |  | = parts per billion         
|m      |  | = meter                   |  | Ma       |  | = million years             



7



---



##### 



PART I




|        |                        
|------- | -----------------------
|ITEM 1. | DESCRIPTION OF BUSINESS

OVERVIEW OF APOLLO GOLD










8



---



##### 



BACKGROUND


Apollo Gold Corporation

























| |         
| | --------
| | Products



|                              |  |              |    |   |      |  |    |      |  |  |    |  
|----------------------------- |  | ------------ | -- | - | ---- |  | -- | ---- |  |  | -- | -
|                              |  | Year Ended   |   
|                              |  | December 31, |   
|                              |  |              |   
|Product Category              |  | 2004         |    |   | 2003 |  |    | 2002 | 
|                              |  |              |    |   |      |  |    |      | 
|Gold                          |  |              | 62 | % |      |  | 79 | %    |  |  | 85 | %
|Zinc                          |  |              | 20 | % |      |  | 13 | %    |  |  | 11 | %
|Silver, lead and other metals |  |              | 18 | % |      |  | 8  | %    |  |  | 4  | %

9



---



##### 





|                      |                                        |                         |   |            |      |  |   |            |  |  |   |            | 
|--------------------- | -------------------------------------- | ----------------------- | - | ---------- | ---- |  | - | ---------- |  |  | - | ---------- | 
|                      |                                        | Year Ended December 31, |  
|                      |                                        |                         |  
|                      |                                        | 2004                    |   |            | 2003 |  |   | 2002       | 
|                      |                                        |                         |   |            |      |  |   |            | 
|Production Summary    |                                        |                         |   |            |      |  |   |            |  |  |   |           
|                      | Gold ounces                            |                         |   | 106,825    |      |  |   | 145,935    |  |  |   | 62,699     | 
|                      | Silver ounces                          |                         |   | 1,031,156  |      |  |   | 471,241    |  |  |   | 275,925    | 
|                      | Lead pounds                            |                         |   | 10,064,265 |      |  |   | 10,843,184 |  |  |   | 5,481,230  | 
|                      | Zinc pounds                            |                         |   | 26,222,805 |      |  |   | 21,792,452 |  |  |   | 15,328,392 | 
|Average metals prices |                                        |                         |   |            |      |  |   |            |  |  |   |           
|                      | Gold  London Bullion Mkt. ($/ounce)   |                         | $ | 409        |      |  | $ | 364        |  |  | $ | 310        | 
|                      | Silver  London Bullion Mkt. ($/ounce) |                         | $ | 6.66       |      |  | $ | 4.88       |  |  | $ | 4.59       | 
|                      | Lead  LME Cash ($/pound)              |                         | $ | 0.40       |      |  | $ | 0.23       |  |  | $ | 0.20       | 
|                      | Zinc  LME Cash ($/pound)              |                         | $ | 0.48       |      |  | $ | 0.38       |  |  | $ | 0.35       | 



| |     
| | ----
| | Gold



| |                
| | ---------------
| | Gold Production







| |          
| | ---------
| | Gold Uses





| |            
| | -----------
| | Gold Supply





| |                   
| | ------------------
| | Gold Price History



10



---



##### 





|     |  |      |     |  |     |   |     |         |  |   |     | 
|---- |  | ---- | --- |  | --- | - | --- | ------- |  | - | --- | 
|Year |  | High |     |  | Low |   |     | Average | 
|     |  |      |     |  |     |   |     |         | 
|1995 |  | $    | 396 |  |     | $ | 372 |         |  | $ | 384 | 
|1996 |  |      | 415 |  |     |   | 367 |         |  |   | 388 | 
|1997 |  |      | 362 |  |     |   | 283 |         |  |   | 331 | 
|1998 |  |      | 313 |  |     |   | 273 |         |  |   | 294 | 
|1999 |  |      | 326 |  |     |   | 253 |         |  |   | 279 | 
|2000 |  |      | 313 |  |     |   | 264 |         |  |   | 279 | 
|2001 |  |      | 293 |  |     |   | 256 |         |  |   | 271 | 
|2002 |  |      | 349 |  |     |   | 278 |         |  |   | 310 | 
|2003 |  |      | 416 |  |     |   | 320 |         |  |   | 364 | 
|2004 |  |      | 454 |  |     |   | 375 |         |  |   | 409 | 










| |     
| | ----
| | Zinc





|                                                         |                      |                |        |      |      |  |       |      |  |  |       |      |  |      |       |      |  |  |       |      | 
|-------------------------------------------------------- | -------------------- | -------------- | ------ | ---- | ---- |  | ----- | ---- |  |  | ----- | ---- |  | ---- | ----- | ---- |  |  | ----- | ---- | 
|Annual Global Supply/ Demand Balance for Zinc, 2000-2004 |                     
|                                                         |                     
|                                                         |                      | 2004           |        |      | 2003 |  |       | 2002 |  |  | 2001  |      |  | 2000 |      
|                                                         |                      |                |        |      |      |  |       |      |  |  |       |      |  |      |      
|                                                         |                      | (000s tonnes) |       
|Refined Consumption                                      |                      |                | 10,208 |      |      |  | 9,738 |      |  |  | 9,388 |      |  |      | 8,917 |      |  |  | 8,997 |     
|Refined Production                                       |                      |                | 10,005 |      |      |  | 9,863 |      |  |  | 9,712 |      |  |      | 9,228 |      |  |  | 8,981 |     
|Release of Inv. Stocks                                   |                      |                | 12     |      |      |  | 7     |      |  |  | 3     |      |  |      | 23    |      |  |  | 39    |     
|Increase (Decrease) World Stock                          |                      |                | -191   |      |      |  | 132   |      |  |  | 327   |      |  |      | 334   |      |  |  | 23    |     
|LME Stocks  Total                                       |                      |                | 629    |      |      |  | 740   |      |  |  | 651   |      |  |      | 433   |      |  |  | 195   |     
|                                                         |  Weeks consumption |                |        | 3.2  |      |  |       | 4.0  |  |  |       | 3.6  |  |      |       | 2.5  |  |  |       | 1.1  | 
|Reported Stocks  Total                                  |                      |                | 1,011  |      |      |  | 1,202 |      |  |  | 1,095 |      |  |      | 946   |      |  |  | 662   |     
|                                                         |  Weeks consumption |                |        | 5.2  |      |  |       | 6.4  |  |  |       | 6.1  |  |      |       | 5.5  |  |  |       | 3.8  | 
|LME cash price  $/tonne                                 |                      |                | 1,048  |      |      |  | 828   |      |  |  | 779   |      |  |      | 886   |      |  |  | 1,128 |     
|                                                         |  cents/lb           |                |        | 47.5 |      |  |       | 37.6 |  |  |       | 35.3 |  |      |       | 40.2 |  |  |       | 51.2 | 






11



---



##### 





| |                   
| | ------------------
| | Zinc Price History



|      |  |      |      |  |     |  |      | 
|----- |  | ---- | ---- |  | --- |  | ---- | 
|      |  | Zinc |     
|      |  |      |     
|Year  |  | High |      |  | Low | 
|      |  |      |      |  |     | 
|2000  |  |      | 0.58 |  |     |  | 0.46 | 
|2001  |  |      | 0.48 |  |     |  | 0.33 | 
|2002  |  |      | 0.42 |  |     |  | 0.33 | 
|2003  |  |      | 0.46 |  |     |  | 0.34 | 
|2004  |  |      | 0.56 |  |     |  | 0.42 | 
|2005* |  |      | 0.65 |  |     |  | 0.53 | 






|  |                       
|- | ----------------------
|* | Through March 10, 2005



| |       
| | ------
| | Silver









| |                     
| | --------------------
| | Silver Price History

|      |  |        |      |  |     |  |      | 
|----- |  | ------ | ---- |  | --- |  | ---- | 
|      |  | Silver |     
|      |  |        |     
|Year  |  | High   |      |  | Low | 
|      |  |        |      |  |     | 
|2000  |  |        | 5.57 |  |     |  | 4.62 | 
|2001  |  |        | 4.83 |  |     |  | 4.03 | 
|2002  |  |        | 5.13 |  |     |  | 4.22 | 
|2003  |  |        | 5.99 |  |     |  | 4.35 | 
|2004  |  |        | 8.29 |  |     |  | 5.49 | 
|2005* |  |        | 7.60 |  |     |  | 6.45 | 






|  |                       
|- | ----------------------
|* | Through March 10, 2005



| |     
| | ----
| | Lead



12



---



##### 





|                                                         |                      |                |       |      |      |  |       |      |  |  |       |      |  |      |       |      |  |  |       |      | 
|-------------------------------------------------------- | -------------------- | -------------- | ----- | ---- | ---- |  | ----- | ---- |  |  | ----- | ---- |  | ---- | ----- | ---- |  |  | ----- | ---- | 
|Annual Global Supply/ Demand Balance for Lead, 2000-2004 |                     
|                                                         |                     
|                                                         |                      | 2004           |       |      | 2003 |  |       | 2002 |  |  | 2001  |      |  | 2000 |      
|                                                         |                      |                |       |      |      |  |       |      |  |  |       |      |  |      |      
|                                                         |                      | (000s tonnes) |      
|Refined Consumption                                      |                      |                | 6,939 |      |      |  | 6,814 |      |  |  | 6,641 |      |  |      | 6,503 |      |  |  | 6,518 |     
|Refined Production                                       |                      |                | 6,726 |      |      |  | 6,761 |      |  |  | 6,665 |      |  |      | 6,575 |      |  |  | 6,655 |     
|Release of Stock                                         |                      |                | 48    |      |      |  | 60    |      |  |  | 6     |      |  |      | 41    |      |  |  | 32    |     
|Increase (Decrease) Stock                                |                      |                | -165  |      |      |  | 7     |      |  |  | 30    |      |  |      | 113   |      |  |  | 169   |     
|LME Stocks  Total                                       |                      |                | 40    |      |      |  | 109   |      |  |  | 184   |      |  |      | 98    |      |  |  | 131   |     
|                                                         |  Weeks consumption |                |       | 0.3  |      |  |       | 0.8  |  |  |       | 1.4  |  |      |       | 0.8  |  |  |       | 1.0  | 
|Reported Stocks  Total                                  |                      |                | 228   |      |      |  | 393   |      |  |  | 483   |      |  |      | 436   |      |  |  | 440   |     
|                                                         |  Weeks consumption |                |       | 1.7  |      |  |       | 3.0  |  |  |       | 3.8  |  |      |       | 3.5  |  |  |       | 3.5  | 
|LME cash price  $/tonne                                 |                      |                | 887   |      |      |  | 516   |      |  |  | 453   |      |  |      | 476   |      |  |  | 454   |     
|                                                         |  cents/lb           |                |       | 40.2 |      |  |       | 23.4 |  |  |       | 20.5 |  |      |       | 21.6 |  |  |       | 20.6 | 








| |                   
| | ------------------
| | Lead Price History



|      |  |      |      |  |     |  |      | 
|----- |  | ---- | ---- |  | --- |  | ---- | 
|      |  | Lead |     
|      |  |      |     
|Year  |  | High |      |  | Low | 
|      |  |      |      |  |     | 
|2000  |  |      | 0.26 |  |     |  | 0.18 | 
|2001  |  |      | 0.24 |  |     |  | 0.20 | 
|2002  |  |      | 0.24 |  |     |  | 0.18 | 
|2003  |  |      | 0.34 |  |     |  | 0.19 | 
|2004  |  |      | 0.45 |  |     |  | 0.29 | 
|2005* |  |      | 0.47 |  |     |  | 0.41 | 






|  |                       
|- | ----------------------
|* | Through March 10, 2005



Refining Process






13



---



##### 



2005 OPERATING OUTLOOK






|                      |                        |                                       |             |              |              |  |           |               |  |  |              |         |  |      |           |         |  |  |             |         | 
|--------------------- | ---------------------- | ------------------------------------- | ----------- | ------------ | ------------ |  | --------- | ------------- |  |  | ------------ | ------- |  | ---- | --------- | ------- |  |  | ----------- | ------- | 
|                      |                        |                                       |             | Estimate for |             
|                      |                        | Estimate for 2005 Three Months Ending |             |              | Year Ending  | 
|                      |                        |                                       |             |              | December 31, | 
|                      |                        | March 31,                             |             |              | June 30,     |  |           | September 30, |  |  | December 31, |         |  | 2005 |          
|                      |                        |                                       |             |              |              |  |           |               |  |  |              |         |  |      |          
|Montana Tunnels       |                        |                                       | 1517,000   |              |              |  | 1720,000 |               |  |  | 1721,000    |         |  |      | 1617,000 |         |  |  | 6575,000   |        
|Standard Mine         |                        |                                       | Development |              |              |  | 810,000  |               |  |  | 913,000     |         |  |      | 1317,000 |         |  |  | 3040,000   |        
|Florida Canyon        |                        |                                       | 9,000       |              |              |  | 69,000   |               |  |  | 69,000      |         |  |      | 69,000   |         |  |  | 2736,000   |        
|Total 2005 Production |                        |                                       | 2426,000   |              |              |  | 3139,000 |               |  |  | 3243,000    |         |  |      | 3543,000 |         |  |  | 122151,000 |        
|                      | Total Cash Cost ($/oz) |                                       |             | 340380      |              |  |           | 340380       |  |  |              | 320360 |  |      |           | 320360 |  |  |             | 325365 | 







Development and Exploration.






Mineral Reserves




|                                           |  |                         |           |  |      |  |           |      |  |  |         | 
|------------------------------------------ |  | ----------------------- | --------- |  | ---- |  | --------- | ---- |  |  | ------- | 
|Proven and Probable Reserves  Gold Ounces | 
|                                           | 
|                                           |  | Year Ended December 31, |          
|                                           |  |                         |          
|Mines                                      |  | 2004                    |           |  | 2003 |  |           | 2002 | 
|                                           |  |                         |           |  |      |  |           |      | 
|Montana Tunnels                            |  |                         | 643,800   |  |      |  | 692,500   |      |  |  | 291,600 | 
|Florida Canyon                             |  |                         | 263,600   |  |      |  | 374,393   |      |  |  | 330,900 | 
|Standard                                   |  |                         | 442,400   |  |      |  | 404,100   |      |  |  | 318,300 | 
|Black Fox Project                          |  |                         | 457,100   |  |      |  | 457,100   |      |  |  |        | 
|                                           |  |                         |           |  |      |  |           |      | 
|Apollo Gold  Total                        |  |                         | 1,806,900 |  |      |  | 1,928,093 |      |  |  | 940,800 | 

14



---



##### 







Employee Relations




Competition




Available Information




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.






15



---



##### 





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




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




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






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




16



---



##### 





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




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




We are dependent on certain key personnel.




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






| |   |                                                                                                
| | - | -----------------------------------------------------------------------------------------------
| |  | industrial and jewelry demand;                                                                 
|
| |  | central bank lending, sales and purchases of gold;                                             
|
| |  | forward sales of gold by producers and speculators;                                            
|
| |  | production and cost levels in major gold-producing
    regions; and                            
|
| |  | rapid short-term changes in supply and demand because of
    speculative or hedging activities.





| |   |                                                                                                                                                
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------
| |  | confidence in the global monetary system;                                                                                                      
|
| |  | expectations of the future rate of inflation (if any);                                                                                         
|
| |  | the strength of, and confidence in, the U.S. dollar (the
    currency in which the price of gold is generally quoted) and
    other currencies;
|
| |  | interest rates; and                                                                                                                            
|
| |  | global or regional political or economic events, including but
    not limited to acts of terrorism.                                           



17



---



##### 









Our reserve estimates are potentially inaccurate.








We may not achieve our production estimates.






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.




18



---



##### 











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




We are dependent upon three mining properties.




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.




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.




19



---



##### 





Possible hedging activities could expose us to losses.






We face substantial governmental regulation.


Safety.


Current Environmental Laws and Regulations.




20



---



##### 







Potential Legislation.


We are subject to environmental risks.


Environmental Liability.


Environmental Permits.


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




21



---



##### 



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








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




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






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




22



---



##### 





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.






|        |                          
|------- | -------------------------
|ITEM 2. | DESCRIPTION OF PROPERTIES

Florida Canyon




| |         
| | --------
| | Location





| |           
| | ----------
| | Production







|                               |  |                       |       |  |             |  |        |        |  |  |       |  |  |         |       |  |        |  |        |       |  |  |         |  |  |        |       |  |       |  |        |  |  |  |     |  |  |  |        | 
|------------------------------ |  | --------------------- | ----- |  | ----------- |  | ------ | ------ |  |  | ----- |  |  | ------- | ----- |  | ------ |  | ------ | ----- |  |  | ------- |  |  | ------ | ----- |  | ----- |  | ------ |  |  |  | --- |  |  |  | ------ | 
|Summary Operational Statistics | 
|                               | 
|                               |  | Total Ore             |       |  |             |  |        |        | 
|Mine Report                    |  | (from Crusher Report) |       |  | Run of Mine |  |        | Total  |  |  | Waste | 
|                               |  |                       |       |  |             |  |        |        |  |  |       | 
|                               |  | Ore                   |       |  | Grade       |  |        | Gold   |  |  | Ore   |  |  | Grade   |       |  | Gold   |  |        | Ore   |  |  | Grade   |  |  | Gold   |       |  |      
|                               |  | Tons                  |       |  | Oz          |  |        | Ounces |  |  | Tons  |  |  | Oz Au/T |       |  | Ounces |  |        | Tons  |  |  | Oz Au/T |  |  | Ounces |       |  | Tons  | 
|Year Ended December 31,        |  | 000s                 |       |  | Au/Tons     |  |        | 000s  |  |  | 000s |  |  | Tons    |       |  | 000s  |  |        | 000s |  |  | Tons    |  |  | 000s  |       |  | 000s | 
|                               |  |                       |       |  |             |  |        |        |  |  |       |  |  |         |       |  |        |  |        |       |  |  |         |  |  |        |       |  |       | 
|2004                           |  |                       | 3,256 |  |             |  | 0.0193 |        |  |  | 61    |  |  |         | 3,001 |  |        |  | 0.0136 |       |  |  | 41      |  |  |        | 6,257 |  |       |  | 0.0163 |  |  |  | 103 |  |  |  | 13,883 | 
|2003                           |  |                       | 3,803 |  |             |  | 0.0203 |        |  |  | 77    |  |  |         | 4,822 |  |        |  | 0.0114 |       |  |  | 55      |  |  |        | 8,625 |  |       |  | 0.0153 |  |  |  | 132 |  |  |  | 11,079 | 
|2002                           |  |                       | 4,221 |  |             |  | 0.0229 |        |  |  | 97    |  |  |         | 4,098 |  |        |  | 0.0119 |       |  |  | 49      |  |  |        | 8,319 |  |       |  | 0.0175 |  |  |  | 146 |  |  |  | 13,566 | 

23



---



##### 





|                          |  |                         |        |  |      |   |        |      |  |   |        | 
|------------------------- |  | ----------------------- | ------ |  | ---- | - | ------ | ---- |  | - | ------ | 
|                          |  | Year Ended December 31, |       
|                          |  |                         |       
|                          |  | 2004                    |        |  | 2003 |   |        | 2002 | 
|                          |  |                         |        |  |      |   |        |      | 
|Cash Operating Cost/oz    |  | $                       | 350.87 |  |      | $ | 275.78 |      |  | $ | 234.87 | 
|Total Cash Cost/oz        |  | $                       | 362.07 |  |      | $ | 285.37 |      |  | $ | 243.41 | 
|Total Production Cost /oz |  | $                       | 397.39 |  |      | $ | 324.75 |      |  | $ | 288.21 | 



| |                                                     
| | ----------------------------------------------------
| | Description of Land, Geology, Process, and Equipment











24



---



##### 













| |                                        
| | ---------------------------------------
| | Mineral Reserves at Florida Canyon Mine







|                                                         |  |                |                   |  |       |  |          |           |  |  |        |  |  |       |         |  |  |  |      | 
|-------------------------------------------------------- |  | -------------- | ----------------- |  | ----- |  | -------- | --------- |  |  | ------ |  |  | ----- | ------- |  |  |  | ---- | 
|Florida Canyon Reserve Statement at December 31, 2004(1) | 
|                                                         | 
|                                                         |  | Tons           |                   |  | Au oz |  |          | Ounces Au |  |  | Strip  | 
|Material                                                 |  | Classification |                   |  | 000s |  |          | Au/t      |  |  | 000s  |  |  | Ratio |        
|                                                         |  |                |                   |  |       |  |          |           |  |  |        |  |  |       |        
|Crusher Ore                                              |  |                | Proven            |  |       |  | 856.1    |           |  |  | 0.0213 |  |  |       | 18,193  |  |  |  |      | 
|ROM Ore                                                  |  |                | Proven            |  |       |  | 1,544.6  |           |  |  | 0.0092 |  |  |       | 14,220  |  |  |  |      | 
|                                                         |  |                |                   |  |       |  |          |           |  |  |        |  |  |       |        
|Subtotal Proven                                          |  |                |                   |  |       |  | 2,400.7  |           |  |  | 0.014  |  |  |       | 32.4    |  |  |  |      | 
|Crusher Ore                                              |  |                | Probable          |  |       |  | 6,775.5  |           |  |  | 0.0224 |  |  |       | 151,862 |  |  |  |      | 
|ROM Ore                                                  |  |                | Probable          |  |       |  | 7,616.2  |           |  |  | 0.0108 |  |  |       | 79,367  |  |  |  |      | 
|                                                         |  |                |                   |  |       |  |          |           |  |  |        |  |  |       |        
|Subtotal Probable                                        |  |                |                   |  |       |  | 14,391.7 |           |  |  | 0.016  |  |  |       | 231.2   |  |  |  |      | 
|Crusher Ore                                              |  |                | Proven + Probable |  |       |  | 7,631.6  |           |  |  | 0.022  |  |  |       | 170.1   |  |  |  |      | 
|ROM Ore                                                  |  |                | Proven + Probable |  |       |  | 9,160.8  |           |  |  | 0.011  |  |  |       | 93.6    |  |  |  |      | 
|                                                         |  |                |                   |  |       |  |          |           |  |  |        |  |  |       |        
|Total Proven + Probable                                  |  |                |                   |  |       |  | 16,792.4 |           |  |  | 0.016  |  |  |       | 263.6   |  |  |  | 1.84 | 






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The internal cutoff grade calculation assumes the material is
    already inside an optimum pit and must be mined. The decision is
    where to send the material. If a profit can be made by
    processing the material rather than sending it to the waste dump
    then the material should be processed. The internal cutoff grade
    calculation removes the mining cost from the cutoff calculation.
    A $375 ounce gold price is used for the cutoff grade
    calculation. Historical recovery rates of 71% for high grade ore
    and 58% for run of mine ore

25



---



##### 



| |                                                                                                                                                                                     
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | are used to calculate the ounces to be recovered by the leach
    pad. All current reserves at the Florida Canyon Mine deposit are
    subject to a 2.5% net smelter return royalty.



|                             |  |                                                                                                                       
|---------------------------- |  | ----------------------------------------------------------------------------------------------------------------------
|Royalty Agreements          
|                            
|Ranleigh International Corp. |  | 2.5% NSR +8 Square Mile Area Centered on Florida Canyon Mine                                                          
|Asarco, McCullough           |  | 2.0% NPI NE1/4 of NE1/4 Section 11 T31N R33E Hall 2.5% NSR
    Madre &Calaveras Patented Claims, Sections 2 T31N, R33E
|Muller Investments           |  | 1.0% NSR NE1/4 of NW1.4; S1/2 of NW1/4, Section 1 T30N R33E                                                           





|                                  |  |              |         |  |                         |   |         |      |  |   |         |  |  |         |         |  |  |  |     |   |  |    
|--------------------------------- |  | ------------ | ------- |  | ----------------------- | - | ------- | ---- |  | - | ------- |  |  | ------- | ------- |  |  |  | --- | - |  | ---
|Florida Canyon Land Holding Costs
|                                  |  | Year Ending  |         |  | Year Ended December 31, |   |         |      | 
|                                  |  | December 31, |         |  |                         |   |         |      | 
|Property                          |  | 2005 and On  |         |  | 2004                    |   |         | 2003 |  |   | 2002    |  |  | Royalty
|                                  |  |              |         |  |                         |   |         |      |  |   |         |  |  |         |        
|Hanna Hall                        |  | $            | 7,200   |  |                         | $ | 7,200   |      |  | $ | 7,200   |  |  | $       | 7,200   |  |  |  | 2.5 | % |  | NSR
|Asarco                            |  | $            | 10,000  |  |                         | $ | 10,000  |      |  | $ | 10,000  |  |  | $       | 10,000  |  |  |  | 1.0 | % |  | NPI
|Herbert McCullough                |  |              |        |  |                         |   |        |      |  |   |        |  |  |         |        |  |  |  | 1.0 | % |  | NPI
|Ranleigh International            |  |              |        |  |                         |   |        |      |  |   |        |  |  |         |        |  |  |  | 2.5 | % |  | NSR
|Campbell                          |  |              |        |  |                         |   |        |      |  | $ | 471,175 |  |  | $       | 40,000  |  |  |  |    |   |  |    
|Campbell                          |  |              |        |  |                         |   |        |      |  | $ | 110,000 |  |  | $       | 54,000  |  |  |  |    |   |  |    
|Rex Resources                     |  |              |        |  |                         |   |        |      |  | $ | 11,000  |  |  | $       | 6,000   |  |  |  |    |   |  |    
|Muller Investments                |  | $            | 20,000  |  |                         | $ | 20,000  |      |  | $ | 20,000  |  |  | $       | 20,000  |  |  |  | 1   | % |  | NSR
|Unpatented Claims                 |  | $            | 78,700  |  |                         | $ | 78,700  |      |  | $ | 78,700  |  |  | $       | 55,100  |  |  |  |    |   |  |    
|                                  |  |              |         |  |                         |   |         |      |  |   |         |  |  |        
|Totals                            |  | $            | 115,200 |  |                         | $ | 115,200 |      |  | $ | 708,075 |  |  | $       | 192,300 |  |  |  |    |   |  |    



| |              
| | -------------
| | Environmental

th


26



---



##### 





|                                                                                                           |  |                         |            |  |      |   |            | 
|---------------------------------------------------------------------------------------------------------- |  | ----------------------- | ---------- |  | ---- | - | ---------- | 
|                                                                                                           |  | Penal Sum at Year Ended |           
|                                                                                                           |  | December 31,            |           
|                                                                                                           |  |                         |           
|Type of Bonding                                                                                            |  | 2004                    |            |  | 2003 |  
|                                                                                                           |  |                         |            |  |      |  
|Unsecured surety bond issued by Safeco and subject to the final
    judgment described below:              |  | $                       | 16,936,130 |  |      | $ | 16,936,130 | 
|Unsecured surety bond issued by Safeco pursuant to the
    Montana Settlement Agreement described below: |  | $                       | 520,000    |  |      | $ | 520,000    | 
|Personal bond secured by irrevocable stand-by letter of credit
    issued by Sterling Saving Bank:         |  | $                       | 3,527,270  |  |      | $ | 3,703,149  | 
|Total Bonding Requirement Met                                                                              |  | $                       | 20,983,400 |  |      | $ | 21,159,279 | 











| |                     
| | --------------------
| | Development Drilling



Standard Mine




| |         
| | --------
| | Overview



27



---



##### 







| |         
| | --------
| | Location





| |           
| | ----------
| | Production





| |                                            
| | -------------------------------------------
| | Description of Land, Process, and Equipment





| |                                  
| | ---------------------------------
| | Mineral Reserves at Standard Mine







|                                                     |  |      |          |  |           |  |       |         |  |  |           |  |  |         |      |  |             |  |         |  |  |  |       | 
|---------------------------------------------------- |  | ---- | -------- |  | --------- |  | ----- | ------- |  |  | --------- |  |  | ------- | ---- |  | ----------- |  | ------- |  |  |  | ----- | 
|Standard Mine Reserve Statement at December 31, 2004 | 
|                                                     | 
|                                                     |  | Au   |          |  | Ounces Au |  |       | Ag      |  |  | Ounces Ag |  |  |        
|Pit                                                  |  | Tons |          |  | (oz/ton)  |  |       | (000s) |  |  | (oz/ton)  |  |  | (000s) |      |  | Strip Ratio | 
|                                                     |  |      |          |  |           |  |       |         |  |  |           |  |  |         |      |  |             | 
|Cordex                                               |  |      | 8,939.5  |  |           |  | 0.016 |         |  |  | 143.6     |  |  |         | 0.19 |  |             |  | 1,702.1 |  |  |  | 0.435 | 
|North Pit                                            |  |      | 3,360.9  |  |           |  | 0.018 |         |  |  | 60.7      |  |  |         | 0.12 |  |             |  | 404.5   |  |  |  | 1.113 | 
|South Pit                                            |  |      | 9,871.4  |  |           |  | 0.018 |         |  |  | 181.9     |  |  |         | 0.14 |  |             |  | 1,395.2 |  |  |  | 2.427 | 
|High Standard                                        |  |      | 2,279.8  |  |           |  | 0.012 |         |  |  | 27.1      |  |  |         | 0.03 |  |             |  | 63.1    |  |  |  | 0.687 | 
|Star                                                 |  |      | 1,304.3  |  |           |  | 0.022 |         |  |  | 29.2      |  |  |         | 0.05 |  |             |  | 63.9    |  |  |  | 2.922 | 
|                                                     |  |      |          |  |           |  |       |         |  |  |           |  |  |         |      |  |             | 
|Total                                                |  |      | 25,755.9 |  |           |  | 0.017 |         |  |  | 442.4     |  |  |         | 0.14 |  |             |  | 3,628.8 |  |  |  | 1.325 | 





28



---



##### 





| |              
| | -------------
| | Environmental





|                                                                                                                            |  |                    |         |  |      |   |         | 
|--------------------------------------------------------------------------------------------------------------------------- |  | ------------------ | ------- |  | ---- | - | ------- | 
|                                                                                                                            |  | Penal Sum at Year  |        
|                                                                                                                            |  | Ended December 31, |        
|                                                                                                                            |  |                    |        
|Type of Bonding Security                                                                                                    |  | 2004               |         |  | 2003 |  
|                                                                                                                            |  |                    |         |  |      |  
|Personal bond secured by irrevocable stand-by letter of credit
    issued by Washington Mutual Bank/ Sterling Savings Bank: |  | $                  | 96,410  |  |      | $ | 96,410  | 
|Personal bond secured by pledge of deposit account maintained
    with Washington Mutual Bank/ Sterling Savings Bank:       |  | $                  | 8,500   |  |      | $ | 8,500   | 
|Reclamation Insurance Policy established with AIG insurance in
    May of 2004                                              |  | $                  | 627,299 |  |      | $ |        | 
|                                                                                                                            |  | $                  | 732,209 |  |      | $ | 104,910 | 





| |                     
| | --------------------
| | Development Drilling





|                                                                   |  |              |     |  |                     |  |        | 
|------------------------------------------------------------------ |  | ------------ | --- |  | ------------------- |  | ------ | 
|Standard Mine Drilling Totals for the Year Ended December 31, 2004 | 
|                                                                   | 
|Area                                                               |  | No. of Holes |     |  | No. of Feet Drilled | 
|                                                                   |  |              |     |  |                     | 
|Buffalo Canyon                                                     |  |              | 32  |  |                     |  | 11,405 | 
|High Standard                                                      |  |              | 73  |  |                     |  | 19,390 | 
|North Pit                                                          |  |              | 5   |  |                     |  | 1,540  | 
|South Pit                                                          |  |              | 79  |  |                     |  | 21,040 | 
|Star                                                               |  |              | 48  |  |                     |  | 9,700  | 
|                                                                   |  |              |     |  |                     | 
|Standard Mine Total                                                |  |              | 237 |  |                     |  | 63,075 | 



| |               
| | --------------
| | Buffalo Canyon



29



---



##### 







| |              
| | -------------
| | High Standard





| |          
| | ---------
| | North Pit





| |          
| | ---------
| | South Pit





| |             
| | ------------
| | Star Deposit





| |        
| | -------
| | Valerie



Montana Tunnels Mine




| |         
| | --------
| | Location





| |           
| | ----------
| | Production



30



---



##### 







|                                        |  |        |       |  |         |  |        |       |  |  |         |  |  |       |      |  |    |  |       |         |  |  |      |  |  |         |     |  |  |  |      |  |  |  |      | 
|--------------------------------------- |  | ------ | ----- |  | ------- |  | ------ | ----- |  |  | ------- |  |  | ----- | ---- |  | -- |  | ----- | ------- |  |  | ---- |  |  | ------- | --- |  |  |  | ---- |  |  |  | ---- | 
|Montana Tunnels Mine Production History | 
|Year Ended December 31,                 | 
|                                        | 
|                                        |  | Milled |       |  | Au      |  |        | Oz Au |  |  | Ag      |  |  | Oz Ag |      |  | Pb |  |       | Tons Pb |  |  | Zn   |  |  | Tons Zn |    
|Year                                    |  | Tons   |       |  | Oz Au/T |  |        | 000s |  |  | Oz Ag/T |  |  | 000s |      |  | %  |  |       | 000s   |  |  | %    |  |  | 000s   |    
|                                        |  |        |       |  |         |  |        |       |  |  |         |  |  |       |      |  |    |  |       |         |  |  |      |  |  |         |    
|2004                                    |  |        | 5,394 |  |         |  | 0.0096 |       |  |  | 33.7    |  |  |       | 0.32 |  |    |  | 970.8 |         |  |  | 0.14 |  |  |         | 5.0 |  |  |  | 0.37 |  |  |  | 13.1 | 
|2003                                    |  |        | 4,663 |  |         |  | 0.0156 |       |  |  | 44.1    |  |  |       | 0.21 |  |    |  | 411.2 |         |  |  | 0.02 |  |  |         | 6.4 |  |  |  | 0.44 |  |  |  | 14.7 | 
|2002                                    |  |        | 2,881 |  |         |  | 0.0156 |       |  |  | 44.9    |  |  |       | 0.24 |  |    |  | 685.6 |         |  |  | 0.17 |  |  |         | 4.9 |  |  |  | 0.47 |  |  |  | 13.5 | 

|              |  |                         |            |  |      |  |            |      |  |  |            | 
|------------- |  | ----------------------- | ---------- |  | ---- |  | ---------- | ---- |  |  | ---------- | 
|              |  | Year Ended December 31, |           
|              |  |                         |           
|Payable Metal |  | 2004                    |            |  | 2003 |  |            | 2002 | 
|              |  |                         |            |  |      |  |            |      | 
|Gold (oz)     |  |                         | 33,743     |  |      |  | 44,124     |      |  |  | 26,657     | 
|Silver (oz)   |  |                         | 970,751    |  |      |  | 411,216    |      |  |  | 203,358    | 
|Lead (lb)     |  |                         | 10,064,265 |  |      |  | 10,843,184 |      |  |  | 5,481,230  | 
|Zinc (lb)     |  |                         | 26,222,805 |  |      |  | 21,792,452 |      |  |  | 15,328,392 | 

|                          |  |                         |        |  |      |   |        |      |  |   |        | 
|------------------------- |  | ----------------------- | ------ |  | ---- | - | ------ | ---- |  | - | ------ | 
|                          |  | Year Ended December 31, |       
|                          |  |                         |       
|                          |  | 2004                    |        |  | 2003 |   |        | 2002 | 
|                          |  |                         |        |  |      |   |        |      | 
|Total Cost/ Ore Processed |  | $                       | 12.37  |  |      | $ | 10.10  |      |  | $ | 19.017 | 
|Cash Operating Cost/ Oz   |  | $                       | 418.80 |  |      | $ | 272.99 |      |  | $ | 145.44 | 
|Total Cash Cost/ Oz       |  | $                       | 459.43 |  |      | $ | 297.53 |      |  | $ | 178.38 | 
|Total Production Cost/ Oz |  | $                       | 534.32 |  |      | $ | 325.89 |      |  | $ | 471.04 | 



| |                                                    
| | ---------------------------------------------------
| | Description of Land, Geology, Process and Equipment



|                                     |  |         |      |  |            |  |      | 
|------------------------------------ |  | ------- | ---- |  | ---------- |  | ---- | 
|Claims Covering Montana Tunnels Mine | 
|                                     | 
|                                     |  | Mineral |      |  | Unpatented | 
|Patented Claims                      |  | Survey  |      |  | Claims     | 
|                                     |  |         |      |  |            | 
|Geraldine C                          |  |         | 9184 |  |            |  | MF 1 | 
|P.Q.C                                |  |         | 9184 |  |            |  | F 14 | 
|Montana                              |  |         | 9184 |  |            |  | F 15 | 
|General Harris                       |  |         | 2038 |  |            |  |     | 
|Black Rock No. 2                     |  |         | 9184 |  |            |  |     | 
|Black Rock No. 3                     |  |         | 8940 |  |            |  |     | 
|D.E.D                                |  |         | 9184 |  |            |  |     | 
|Placer                               |  |         | 258  |  |            |  |     | 
|Anna                                 |  |         | 8940 |  |            |  |     | 



31



---



##### 





















32



---



##### 









| |                     
| | --------------------
| | Model Reconciliation





|                                                                    |  |           |         |  |        |  |        |     |  |    |      |  |    |   |      |    |      |  |      |         |    |  |        |    |  |      |           |  |  |  |       |  |  |  |        | 
|------------------------------------------------------------------- |  | --------- | ------- |  | ------ |  | ------ | --- |  | -- | ---- |  | -- | - | ---- | -- | ---- |  | ---- | ------- | -- |  | ------ | -- |  | ---- | --------- |  |  |  | ----- |  |  |  | ------ | 
|Summary of Operational Statics for the Year Ended December 31, 2004 | 
|                                                                    | 
|                                                                    |  | Tons      |         |  |        |  | Ag     |     |  | Pb |      |  | Zn |   |      | Au |      |  |      |         | Pb |  |        | Zn | 
|Entity                                                              |  | (x 1,000) |         |  | Au opt |  |        | opt |  |    | %    |  |    | % |      |    | Ozs. |  |      | Ag Ozs. |    |  | tons   |    |  | tons |          
|                                                                    |  |           |         |  |        |  |        |     |  |    |      |  |    |   |      |    |      |  |      |         |    |  |        |    |  |      |          
|Model                                                               |  |           | 3,084.0 |  |        |  | 0.0122 |     |  |    | 0.27 |  |    |   | 0.17 |    |      |  | 0.51 |         |    |  | 37,482 |    |  |      | 830,272   |  |  |  | 5,333 |  |  |  | 15,794 | 
|Mine                                                                |  |           | 5,865.2 |  |        |  | 0.0083 |     |  |    | 0.39 |  |    |   | 0.16 |    |      |  | 0.45 |         |    |  | 48,891 |    |  |      | 2,297,815 |  |  |  | 9,404 |  |  |  | 26,440 | 
|Mill                                                                |  |           | 5,385.4 |  |        |  | 0.0096 |     |  |    | 0.32 |  |    |   | 0.14 |    |      |  | 0.37 |         |    |  | 51,696 |    |  |      | 1,694,874 |  |  |  | 7,333 |  |  |  | 20,087 | 



| |                 
| | ----------------
| | Mineral Reserves



|                                                               |  |                   |  |       |          |  |      |       |       |      |  |  |           |  |  |      |       |  |       |  |       |  |  |  |       | 
|-------------------------------------------------------------- |  | ----------------- |  | ----- | -------- |  | ---- | ----- | ----- | ---- |  |  | --------- |  |  | ---- | ----- |  | ----- |  | ----- |  |  |  | ----- | 
|Montana Tunnels Mine Reserve Statement at December 31, 2004(1) | 
|                                                               | 
|                                                               |  | Tons              |  |       | Au oz    |  |      | Ag oz |       |      |  |  | Ounces Au | 
|Pit (Imperial Summary)                                         |  | Classification    |  | 000s |          |  | Au/t |       |       | Ag/t |  |  | Pb %      |  |  | Zn % |       |  | 000s | 
|                                                               |  |                   |  |       |          |  |      |       |       |      |  |  |           |  |  |      |       |  |       | 
|L8G                                                            |  | Proven            |  |       | 15,296.6 |  |      |       | 0.016 |      |  |  | 0.175     |  |  |      | 0.207 |  |       |  | 0.560 |  |  |  | 241.7 | 
|M2                                                             |  | Proven            |  |       |          |  |      |       |       |      |  |  |           |  |  |      |       |  |       |  |       |  |  |  |       | 
|Mill Stockpile                                                 |  | Proven            |  |       | 148.8    |  |      |       | 0.009 |      |  |  | 0.255     |  |  |      | 0.187 |  |       |  | 0.514 |  |  |  | 1.4   | 
|                                                               |  |                   |  |       |          |  |      |       |       |      |  |  |           |  |  |      |       |  |       | 
|Subtotal                                                       |  | Proven            |  |       | 15,445.4 |  |      |       | 0.016 |      |  |  | 0.176     |  |  |      | 0.207 |  |       |  | 0.560 |  |  |  | 243.1 | 
|L8G                                                            |  | Probable          |  |       | 1,048.1  |  |      |       | 0.017 |      |  |  | 0.190     |  |  |      | 0.189 |  |       |  | 0.484 |  |  |  | 18.0  | 
|M2                                                             |  | Probable          |  |       | 24,372.3 |  |      |       | 0.016 |      |  |  | 0.233     |  |  |      | 0.165 |  |       |  | 0.583 |  |  |  | 382.6 | 
|                                                               |  |                   |  |       |          |  |      |       |       |      |  |  |           |  |  |      |       |  |       | 
|Subtotal                                                       |  | Probable          |  |       | 25,420.5 |  |      |       | 0.016 |      |  |  | 0.231     |  |  |      | 0.166 |  |       |  | 0.579 |  |  |  | 400.7 | 
|Total                                                          |  | Proven + Probable |  |       | 40,865.8 |  |      |       | 0.016 |      |  |  | 0.210     |  |  |      | 0.172 |  |       |  | 0.541 |  |  |  | 643.8 | 






|    |                                                                                                    
|--- | ---------------------------------------------------------------------------------------------------
|(1) | Recovery rates are expected to be 75% for gold, 75% for silver,
    85% for lead, and 85% for zinc.



33



---



##### 





|       |  |   |          | 
|------ |  | - | -------- | 
|Gold   |  | $ | 375/oz.  | 
|Silver |  | $ | 6.00/oz. | 
|Lead   |  | $ | 0.40/lb. | 
|Zinc   |  | $ | 0.50/lb. | 



|                                      |  |                         |       |   |        |  |       |        |  |  |       |  
|------------------------------------- |  | ----------------------- | ----- | - | ------ |  | ----- | ------ |  |  | ----- | -
|Mill Recoveries                       |  | Year Ended December 31, |      
|                                      |  |                         |      
|                                      |  | 2004                    |       |   | 2003   |  |       | 2002   | 
|Parameter                             |  | Actual                  |       |   | Actual |  |       | Actual | 
|                                      |  |                         |       |   |        |  |       |        | 
|Au                                    |  |                         | 72.3  | % |        |  | 80.9  | %      |  |  | 81.0  | %
|Ag                                    |  |                         | 71.1  |   |        |  | 75.8  |        |  |  | 70.8  |  
|Pb                                    |  |                         | 85.1  |   |        |  | 86.0  |        |  |  | 85.1  |  
|Zn                                    |  |                         | 84.0  |   |        |  | 83.4  |        |  |  | 86.0  |  
|Annual Mill Production (million tons) |  |                         | 5.394 |   |        |  | 4.695 |        |  |  | 2.881 |  



| |              
| | -------------
| | Environmental







|                                                                                                                   |  |                         |            |  |      |   |            | 
|------------------------------------------------------------------------------------------------------------------ |  | ----------------------- | ---------- |  | ---- | - | ---------- | 
|                                                                                                                   |  | Penal Sum at Year Ended |           
|                                                                                                                   |  | December 31,            |           
|                                                                                                                   |  |                         |           
|Type of Bonding                                                                                                    |  | 2004                    |            |  | 2003 |  
|                                                                                                                   |  |                         |            |  |      |  
|Partially secured surety bond issued by CNA pursuant to the Term
    Bonding Agreement described immediately below |  | $                       | 15,463,466 |  |      | $ | 14,987,688 | 
|Cash bond posted directly with the State of Montana                                                                |  |                         | 128,697    |  |      |   | 128,697    | 
|Real estate bond posted directly with State of Montana                                                             |  |                         | 296,912    |  |      |   | 296,912    | 
|                                                                                                                   |  |                         |            |  |      |  
|Total Requirement met                                                                                              |  | $                       | 15,888,955 |  |      | $ | 15,413,297 | 

|                                                                                  |  |                         |         |  |      |       |         | 
|--------------------------------------------------------------------------------- |  | ----------------------- | ------- |  | ---- | ----- | ------- | 
|Bonding                                                                           | 
|                                                                                  | 
|                                                                                  |  | Penal Sum at Year Ended |        
|                                                                                  |  | December 31,            |        
|                                                                                  |  |                         |        
|Type of Bonding                                                                   |  | 2004                    |         |  | 2003 |      
|                                                                                  |  |                         |         |  |      |      
|Letter of Credit issued by TD Canada Trust secured by pledged
    deposit account |  | $                       | 644,650 |  |      | Cdn $ | 489,200 | 
|                                                                                  |  |                         |         |  |      |      
|Total Bonding Requirement met                                                     |  | $                       | 644,650 |  |      | Cdn $ | 489,200 | 



34



---



##### 











| |         
| | --------
| | Drilling











Black Fox Project




| |         
| | --------
| | Overview





35



---



##### 











Mineral Reserves.






| |   |                                                                                                  
| | - | -------------------------------------------------------------------------------------------------
| |  | Overburden mining cost  $1.00 per tonne of
    material;                                        
|
| |  | Rock mining cost  $1.25 per tonne of material;                                                  
|
| |  | Processing cost  $9.00 per tonne ore;                                                           
|
| |  | General and Administrative cost  $3.50 per tonne
    ore;                                       
|
| |  | Plant gold recovery  96%;                                                                       
|
| |  | Assume 50% of existing underground workings backfilled with
    material having a density of 2.0;
|
| |  | Pit Slopes  48 degree overall in rock with ramp; 19
    degree overburden.                      



36



---



##### 





|                                                 |  |        |         |  |         |  |       |           |  |  |              |  |  |       |          |  |  |  |       | 
|------------------------------------------------ |  | ------ | ------- |  | ------- |  | ----- | --------- |  |  | ------------ |  |  | ----- | -------- |  |  |  | ----- | 
|Black Fox Reserve Statement at December 31, 2004 | 
|                                                 | 
|                                                 |  | Tonnes |         |  | Grade   |  |       | Ounces Au |  |  | Tonnes Waste |  |  | Strip |         
|Classification                                   |  | 000s  |         |  | oz Au/t |  |       | 000s     |  |  | (000s)      |  |  | Ratio |         
|                                                 |  |        |         |  |         |  |       |           |  |  |              |  |  |       |         
|Proven                                           |  |        | 2,418.0 |  |         |  | 0.141 |           |  |  | 341.6        |  |  |       |          |  |  |  |       | 
|Probable                                         |  |        | 837.4   |  |         |  | 0.138 |           |  |  | 115.5        |  |  |       |          |  |  |  |       | 
|Total                                            |  |        | 3,255.5 |  |         |  | 0.140 |           |  |  | 457.1        |  |  |       | 60,734.5 |  |  |  | 18.66 | 







| |            
| | -----------
| | Exploration



|                                         |  |                 |     |  |        |  |         | 
|---------------------------------------- |  | --------------- | --- |  | ------ |  | ------- | 
|Drilling at Year Ended December 31, 2004 | 
|                                         | 
|                                         |  | Holes Completed |     |  | Meters | 
|                                         |  |                 |     |  |        | 
|Surface 2004                             |  |                 | 105 |  |        |  | 43,280  | 
|UG 2004                                  |  |                 | 210 |  |        |  | 41,065  | 
|Total All 2004 Drilling                  |  |                 | 315 |  |        |  | 84,344  | 
|Total Surface To Date                    |  |                 | 398 |  |        |  | 125,898 | 
|Total UG To Date                         |  |                 | 210 |  |        |  | 41,065  | 
|                                         |  |                 |     |  |        | 
|Grand Total All Drilling                 |  |                 | 608 |  |        |  | 166,963 | 



|                                      |  |        |           |  |          |  |             |        |  |  |        |  |  |  |         | 
|------------------------------------- |  | ------ | --------- |  | -------- |  | ----------- | ------ |  |  | ------ |  |  |  | ------- | 
|Black Fox Project Drill Hole Database | 
|                                      | 
|Company                               |  | Period |           |  | Location |  |             | Number |  |  | Meters | 
|                                      |  |        |           |  |          |  |             |        |  |  |        | 
|Noranda                               |  |        | 1989-1994 |  |          |  | Surface     |        |  |  | 142    |  |  |  | 27,930  | 
|Exall                                 |  |        | 1995-1999 |  |          |  | Surface     |        |  |  | 142    |  |  |  | 21,295  | 
|Exall                                 |  |        | 1996-2001 |  |          |  | Underground |        |  |  | 720    |  |  |  | 62,827  | 
|Apollo                                |  |        | 2002-2003 |  |          |  | Surface     |        |  |  | 297    |  |  |  | 82,622  | 
|Apollo                                |  |        | 2004      |  |          |  | Surface     |        |  |  | 105    |  |  |  | 43,280  | 
|Apollo                                |  |        | 2004      |  |          |  | Underground |        |  |  | 210    |  |  |  | 41,065  | 
|                                      |  |        |           |  |          |  |             |        |  |  |        | 
|Totals                                |  |        |           |  |          |  |             |        |  |  | 1,616  |  |  |  | 279,019 | 





37



---



##### 



Exploration Stage Properties




| |        
| | -------
| | Huizopa













Other Exploration Stage Properties






| |                     
| | --------------------
| | Pirate Gold Prospect



38



---



##### 











Nugget Field Prospect








Willow Creek Prospect


1 4 3 4


39



---



##### 











Diamond Hill












|        |                  
|------- | -----------------
|ITEM 3. | LEGAL PROCEEDINGS





|        |                                                    
|------- | ---------------------------------------------------
|ITEM 4. | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS



40



---



##### 



PART II  OTHER INFORMATION




|        |                                                                                                                         
|------- | ------------------------------------------------------------------------------------------------------------------------
|ITEM 5. | MARKET FOR THE REGISTRANTS COMMON EQUITY, RELATED
    STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY
    SECURITIES





|     |                |                |   |      |               |  |   |      |  |  |     |      |  |  |   |      | 
|---- | -------------- | -------------- | - | ---- | ------------- |  | - | ---- |  |  | --- | ---- |  |  | - | ---- | 
|     |                | American Stock |   |      | Toronto Stock | 
|     |                | Exchange(1)    |   |      | Exchange(2)   | 
|     |                |                |   |      |               | 
|     |                | High           |   |      | Low           |  |   | High |  |  | Low |     
|     |                |                |   |      |               |  |   |      |  |  |     |     
|     |                | ($)            |   |      | (Cdn$)        | 
|2004 |                |                |   |      |               |  |   |      |  |  |     |      |  |  |   |     
|     | First Quarter  |                | $ | 2.61 |               |  | $ | 1.80 |  |  | $   | 3.30 |  |  | $ | 2.40 | 
|     | Second Quarter |                |   | 2.11 |               |  |   | 1.25 |  |  |     | 2.76 |  |  |   | 1.72 | 
|     | Third Quarter  |                |   | 1.41 |               |  |   | 0.54 |  |  |     | 1.85 |  |  |   | 0.67 | 
|     | Fourth Quarter |                |   | 1.05 |               |  |   | 0.60 |  |  |     | 1.25 |  |  |   | 0.72 | 
|2003 |                |                |   |      |               |  |   |      |  |  |     |      |  |  |   |     
|     | First Quarter  |                |   |     |               |  |   |     |  |  |     | 4.20 |  |  |   | 2.81 | 
|     | Second Quarter |                |   |     |               |  |   |     |  |  |     | 3.45 |  |  |   | 2.25 | 
|     | Third Quarter  |                |   | 1.97 |               |  |   | 1.58 |  |  |     | 2.73 |  |  |   | 2.20 | 
|     | Fourth Quarter |                |   | 2.64 |               |  |   | 1.40 |  |  |     | 3.42 |  |  |   | 1.85 | 






|    |                                                                               
|--- | ------------------------------------------------------------------------------
|(1) | On August 26, 2003, our shares were listed on the
    American Stock Exchange.



RECENT SALES OF UNREGISTERED SECURITIES




41



---



##### 





|        |                        
|------- | -----------------------
|ITEM 6. | SELECTED FINANCIAL DATA



|                                              |                           |                                                |            |         |      |  |            |         |  |  |            |        |  |      |         |     |   |  |         |     | 
|--------------------------------------------- | ------------------------- | ---------------------------------------------- | ---------- | ------- | ---- |  | ---------- | ------- |  |  | ---------- | ------ |  | ---- | ------- | --- | - |  | ------- | --- | 
|Summary of Financial Condition                |                          
|                                              |                          
|                                              |                           | Years Ended December 31,                       |           
|                                              |                           | ($ US dollars in thousands, except share data) |           
|                                              |                           |                                                |           
|                                              |                           | 2004                                           |            |         | 2003 |  |            | 2002    |  |  | 2001       |        |  | 2000 |        
|                                              |                           |                                                |            |         |      |  |            |         |  |  |            |        |  |      |        
|Statements of Operations Data  Cdn GAAP      |                           |                                                |            |         |      |  |            |         |  |  |            |        |  |      |         |     |   |  |         |    
|Revenue on sales of minerals                  |                           |                                                | 64,741     |         |      |  | 66,841     |         |  |  | 20,410     |        |  |      |        |     |   |  |        |    
|Direct Operating Expenses                     |                           |                                                | 65,845     |         |      |  | 55,684     |         |  |  | 15,726     |        |  |      |        |     |   |  |        |    
|Depreciation and Amortization                 |                           |                                                | 5,221      |         |      |  | 4,997      |         |  |  | 3,488      |        |  |      |        |     |   |  | 38      |    
|Exploration and Development                   |                           |                                                | 1,051      |         |      |  | 2,117      |         |  |  | 451        |        |  |      | 94      |     |   |  | 116     |    
|Operating Loss                                |                           |                                                | (17,325    | )       |      |  | (3,162     | )       |  |  | (3,435     | )      |  |      | (533    | )   |   |  | (802    | )  
|Net Loss                                      |                           |                                                | (18,189    | )       |      |  | (2,186     | )       |  |  | (3,051     | )      |  |      | (454    | )   |   |  | (420    | )  
|Net Loss per share, basic and diluted         |                           |                                                | (0.23      | )       |      |  | (0.04      | )       |  |  | (0.16      | )      |  |      | (0.54   | )   |   |  | (0.50   | )  
|Weighted Average number of shares outstanding |                           |                                                | 78,716,042 |         |      |  | 54,536,679 |         |  |  | 19,297,668 |        |  |      | 834,124 |     |   |  | 832,253 |    
|Balance Sheet Data  Cdn GAAP                 |                           |                                                |            |         |      |  |            |         |  |  |            |        |  |      |         |     |   |  |         |    
|                                              | Total Assets              |                                                |            | 134,486 |      |  |            | 120,610 |  |  |            | 78,490 |  |      |         | 112 |   |  |         | 625 | 
|                                              | Total Shareholders equity |                                                |            | 84,072  |      |  |            | 81,890  |  |  |            | 41,814 |  |      |         | (28 | ) |  |         | 441 | 

|                                              |                               |                                                |            |         |      |  |            |         |  |  |            |        |  |      |         |     |   |  |         |     | 
|--------------------------------------------- | ----------------------------- | ---------------------------------------------- | ---------- | ------- | ---- |  | ---------- | ------- |  |  | ---------- | ------ |  | ---- | ------- | --- | - |  | ------- | --- | 
|Summary of Financial Condition                |                              
|                                              |                              
|                                              |                               | Years Ended December 31,                       |           
|                                              |                               | ($ US dollars in thousands, except share data) |           
|                                              |                               |                                                |           
|                                              |                               | 2004                                           |            |         | 2003 |  |            | 2002    |  |  | 2001       |        |  | 2000 |        
|                                              |                               |                                                |            |         |      |  |            |         |  |  |            |        |  |      |        
|Statements of Operations Data  U.S. GAAP     |                               |                                                |            |         |      |  |            |         |  |  |            |        |  |      |         |     |   |  |         |    
|                                              | Revenue on sales of minerals  |                                                |            | 68,761  |      |  |            | 66,841  |  |  |            | 20,410 |  |      |         |    |   |  |         |    | 
|                                              | Direct Operating Expenses     |                                                |            | 65,304  |      |  |            | 55,596  |  |  |            | 15,726 |  |      |         |    |   |  |         |    | 
|                                              | Depreciation and Amortization |                                                |            | 4,526   |      |  |            | 5,084   |  |  |            | 3,488  |  |      |         |    |   |  |         | 38  | 
|                                              | Exploration and Development   |                                                |            | 11,456  |      |  |            | 5,760   |  |  |            | 451    |  |      |         | 94  |   |  |         | 116 | 
|Operating Loss                                |                               |                                                | (26,653    | )       |      |  | (8,543     | )       |  |  | (20,323    | )      |  |      | (587    | )   |   |  | (802    | )  
|Net Loss                                      |                               |                                                | (25,125    | )       |      |  | (10,424    | )       |  |  | (42,879    | )      |  |      | (508    | )   |   |  | (366    | )  
|Net Loss per share, basic and diluted         |                               |                                                | (0.32      | )       |      |  | (0.19      | )       |  |  | (2.22      | )      |  |      | (0.61   | )   |   |  | (0.44   | )  
|Weighted Average number of shares outstanding |                               |                                                | 78,716,042 |         |      |  | 54,536,679 |         |  |  | 19,297,668 |        |  |      | 834,124 |     |   |  | 832,253 |    
|Balance Sheet Data  U.S. GAAP                |                               |                                                |            |         |      |  |            |         |  |  |            |        |  |      |         |     |   |  |         |    
|                                              | Total Assets                  |                                                |            | 106,401 |      |  |            | 102,684 |  |  |            | 64,206 |  |      |         | 58  |   |  |         | 679 | 
|                                              | Total Shareholders equity     |                                                |            | 53,666  |      |  |            | 58,604  |  |  |            | 25,207 |  |      |         | (82 | ) |  |         | 495 | 

42



---



##### 



|                               |                          |                         |   |            |      |  |   |            |  |  |   |            | 
|------------------------------ | ------------------------ | ----------------------- | - | ---------- | ---- |  | - | ---------- |  |  | - | ---------- | 
|Summary Operational Statistics |                         
|                               |                         
|                               |                          | Year Ended December 31, |  
|                               |                          |                         |  
|                               |                          | 2004                    |   |            | 2003 |  |   | 2002       | 
|                               |                          |                         |   |            |      |  |   |            | 
|Production Summary             |                          |                         |   |            |      |  |   |            |  |  |   |           
|                               | Gold ounces              |                         |   | 106,825    |      |  |   | 145,935    |  |  |   | 62,699     | 
|                               | Silver ounces            |                         |   | 1,031,156  |      |  |   | 471,241    |  |  |   | 275,925    | 
|                               | Lead pounds              |                         |   | 10,064,265 |      |  |   | 10,843,184 |  |  |   | 5,481,230  | 
|                               | Zinc pounds              |                         |   | 26,222,805 |      |  |   | 21,792,452 |  |  |   | 15,328,392 | 
|Cash Cost Per Ounce            |                          |                         |   |            |      |  |   |            |  |  |   |           
|                               | Cash Operating Cost/oz   |                         | $ | 372.09     |      |  | $ | 275.14     |  |  | $ | 232.87     | 
|                               | Total Cash Cost/oz       |                         | $ | 392.58     |      |  | $ | 288.91     |  |  | $ | 256.46     | 
|                               | Total Production Cost/oz |                         | $ | 440.40     |      |  | $ | 324.95     |  |  | $ | 312.09     | 







43



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|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|ITEM 7. | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
    CONDITION AND RESULTS OF OPERATIONS





|                                                                      |                               |                         |         |     |      |  |         |       |  |  |        |     | 
|--------------------------------------------------------------------- | ----------------------------- | ----------------------- | ------- | --- | ---- |  | ------- | ----- |  |  | ------ | --- | 
|Reconciliation of Cash Operating and Total Production Costs Per Ounce |                              
|                                                                      |                              
|                                                                      |                               | Year Ended December 31, |        
|                                                                      |                               |                         |        
|                                                                      |                               | 2004                    |         |     | 2003 |  |         | 2002* | 
|                                                                      |                               |                         |         |     |      |  |         |       | 
|                                                                      |                               | ($ in thousands)        |        
|Gold Ounces Sold                                                      |                               |                         | 106,825 |     |      |  | 145,935 |       |  |  | 62,699 |    
|Direct Operating Costs                                                |                               |                         | 65,845  |     |      |  | 55,684  |       |  |  | 15,726 |    
|Less: Mining and Property Taxes                                       |                               |                         | 1,521   |     |      |  | 2,008   |       |  |  | 971    |    
|By-Product Credits                                                    |                               |                         | 24,576  |     |      |  | 14,315  |       |  |  | 154    |    
|Cash Operating Cost                                                   |                               |                         | 39,748  |     |      |  | 39,361  |       |  |  | 14,601 |    
|                                                                      | Cash Operating Cost per Ounce |                         |         | 372 |      |  |         | 275   |  |  |        | 233 | 
|Cash Operating Cost                                                   |                               |                         |         |     |      |  |         |       |  |  |        |    
|Add: Mining and Property Taxes                                        |                               |                         | 1,521   |     |      |  | 2,008   |       |  |  | 971    |    
|Royalty Expense                                                       |                               |                         | 669     |     |      |  | 898     |       |  |  | 508    |    
|Total Cash Costs                                                      |                               |                         | 41,938  |     |      |  | 42,267  |       |  |  | 16,080 |    
|                                                                      | Total Cash Cost per Ounce     |                         |         | 393 |      |  |         | 289   |  |  |        | 256 | 
|Total Cash Costs                                                      |                               |                         |         |     |      |  |         |       |  |  |        |    
|Add: Depreciation & Amortization (operations only)                    |                               |                         | 5,221   |     |      |  | 4,997   |       |  |  | 3,488  |    
|Total Production Costs                                                |                               |                         | 47,159  |     |      |  | 47,264  |       |  |  | 19,568 |    
|Total Production Costs per Ounce                                      |                               |                         | 440     |     |      |  | 325     |       |  |  | 312    |    






|  |                                                                         
|- | ------------------------------------------------------------------------
|* | 2002 year of Apollo purchase, sales and costs prorated for
    the year.



OVERVIEW




44



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##### 















BUSINESS STRATEGY AND DEVELOPMENT


2005 Forecasted Highlights:














45



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##### 



APOLLO GOLD CORPORATION


Results of Operations




| |                                                                          
| | -------------------------------------------------------------------------
| | Year Ended December 31, 2004 Compared to Year Ended
    December 31, 2003

















46



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##### 





















47



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##### 





|                                                           |  |             |         |   |           |   |         |             |  |   |          |   |  |             |         |   |          |   |         |   |  |   |         |  
|---------------------------------------------------------- |  | ----------- | ------- | - | --------- | - | ------- | ----------- |  | - | -------- | - |  | ----------- | ------- | - | -------- | - | ------- | - |  | - | ------- | -
|                                                           |  | Quarter 1   |         |   | Quarter 2 |   |         | Quarter 3   | 
|                                                           |  |             |         |   |           |   |         |             | 
|                                                           |  | As Reported |         |   | Restated  |   |         | As Reported |  |   | Restated |   |  | As Reported |         |   | Restated |  
|                                                           |  |             |         |   |           |   |         |             |  |   |          |   |  |             |         |   |          |  
|Statement of Operations                                    |  |             |         |   |           |   |         |             |  |   |          |   |  |             |         |   |          |   |         |   |  |   |         |  
|Revenue                                                    |  | $           | 20,079  |   |           | $ | 19,979  |             |  | $ | 13,105   |   |  | $           | 13,276  |   |          | $ | 12,720  |   |  | $ | 12,350  |  
|Realized and unrealized (loss) gain on commodity contracts |  |             |        |   |           |   | (523    | )           |  |   |         |   |  |             | 1,685   |   |          |   |        |   |  |   | (646    | )
|Net loss                                                   |  |             | (993    | ) |           |   | (1,616  | )           |  |   | (6,928   | ) |  |             | (5,072  | ) |          |   | (6,116  | ) |  |   | (7,132  | )
|Deficit                                                    |  |             | (52,981 | ) |           |   | (53,604 | )           |  |   | (59,909  | ) |  |             | (58,053 | ) |          |   | (66,025 | ) |  |   | (67,041 | )
|Basic and diluted loss per share                           |  |             | (0.01   | ) |           |   | (0.02   | )           |  |   | (0.09    | ) |  |             | (0.06   | ) |          |   | (0.08   | ) |  |   | (0.09   | )
|Balance Sheet                                              |  |             |         |   |           |   |         |             |  |   |          |   |  |             |         |   |          |   |         |   |  |   |         |  
|Deferred loss on commodity contracts                       |  |             |        |   |           |   | 4,355   |             |  |   |         |   |  |             | 3,350   |   |          |   |        |   |  |   | 2,345   |  
|Accounts payable                                           |  |             | 5,420   |   |           |   | 5,200   |             |  |   | 5,313    |   |  |             | 5,238   |   |          |   | 9,959   |   |  |   | 9,959   |  
|Unrealized loss on commodity contracts                     |  |             |        |   |           |   | 5,198   |             |  |   |         |   |  |             | 2,192   |   |          |   |        |   |  |   | 2,128   |  





Results of Operations




| |                                                                          
| | -------------------------------------------------------------------------
| | Year Ended December 31, 2003 Compared to Year Ended
    December 31, 2002







48



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49



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##### 





|                                              |  |                       |        |   |                       |   |        |         |  |   |          |   |  |        |        |   |         |   |        |         |  |   |          |  |  |   |        |   |  |   |        |  
|--------------------------------------------- |  | --------------------- | ------ | - | --------------------- | - | ------ | ------- |  | - | -------- | - |  | ------ | ------ | - | ------- | - | ------ | ------- |  | - | -------- |  |  | - | ------ | - |  | - | ------ | -
|Summary of Quarterly Results (Unaudited)      | 
|                                              | 
|                                              |  | 2004 Quarter Ended In |        |   | 2003 Quarter Ended In |  
|                                              |  |                       |        |   |                       |  
|                                              |  | Dec(1)                |        |   | Sept(2)               |   |        | June(3) |  |   | March(4) |   |  | Dec(5) |        |   | Sept(6) |   |        | June(7) |  |   | March(8) | 
|                                              |  |                       |        |   |                       |   |        |         |  |   |          |   |  |        |        |   |         |   |        |         |  |   |          | 
|Revenue from the sale of minerals             |  | $                     | 19,136 |   |                       | $ | 12,350 |         |  | $ | 13,276   |   |  | $      | 19,979 |   |         |   | 20,816 |         |  | $ | 20,098   |  |  | $ | 17,111 |   |  | $ | 8,816  |  
|Operating Income (Loss)                       |  |                       | (3,582 | ) |                       |   | (6,337 | )       |  |   | (6,463   | ) |  |        | (943   | ) |         |   | (593   | )       |  |   | 639      |  |  |   | (2,048 | ) |  |   | (1,160 | )
|Net Income (Loss) for the period              |  |                       | (4,369 | ) |                       |   | (7,132 | )       |  |   | (5,072   | ) |  |        | (1,616 | ) |         |   | 270    |         |  |   | 383      |  |  |   | (2,067 | ) |  |   | (772   | )
|Net Income (Loss) per share basic and diluted |  |                       | (0.06  | ) |                       |   | (0.09  | )       |  |   | (0.06    | ) |  |        | (0.02  | ) |         |   | 0.01   |         |  |   | 0.01     |  |  |   | (0.04  | ) |  |   | (0.02  | )
|Gold production  Florida Canyon              |  |                       | 17,443 |   |                       |   | 14,820 |         |  |   | 18,442   |   |  |        | 22,387 |   |         |   | 23,863 |         |  |   | 26,158   |  |  |   | 26,733 |   |  |   | 25,057 |  
|Gold production  Montana Tunnels             |  |                       | 12,090 |   |                       |   | 4,967  |         |  |   | 5,903    |   |  |        | 10,783 |   |         |   | 14,469 |         |  |   | 16,537   |  |  |   | 13,118 |   |  |   | -0-    |  
|Total gold production                         |  |                       | 29,533 |   |                       |   | 19,787 |         |  |   | 24,345   |   |  |        | 33,170 |   |         |   | 38,332 |         |  |   | 42,695   |  |  |   | 39,852 |   |  |   | 25,057 |  
|Total cash cost per ounce  Florida Canyon    |  | $                     | 387    |   |                       | $ | 406    |         |  | $ | 362      |   |  | $      | 314    |   |         | $ | 325    |         |  | $ | 285      |  |  | $ | 275    |   |  | $ | 246    |  
|Total cash cost per ounce  Montana Tunnels   |  | $                     | 333    |   |                       | $ | 640    |         |  | $ | 899      |   |  | $      | 278    |   |         | $ | 338    |         |  | $ | 292      |  |  | $ | 343    |   |  |   | -0-    |  
|Total cash cost per ounce                     |  | $                     | 365    |   |                       | $ | 465    |         |  | $ | 492      |   |  | $      | 302    |   |         | $ | 330    |         |  | $ | 288      |  |  | $ | 299    |   |  | $ | 246    |  






|    |                                                                                                                                                                                                                                                                                                  
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Operating Costs were higher by approximately $4 million due
    to the reduction of deferred stripping capitalization and
    inventory reductions. Milling throughput at Montana Tunnels was
    17,500 tons per day.                                                                           
|   
|(2) | The mining at Florida Canyon was reduced to one crew and efforts
    to draw down the leach pad inventory commenced. Montana Tunnels
    Mine continued to operate in the transition zone between
    mineralization and the actual ore reserve.                                                 
|   
|(3) | The Florida Canyon mine grades continued to be 33% lower than
    expected. The ounces from the leach pad were coming out at a
    slow rate and requiring more cyanide and lime to extract them.
    Milling capacity increased to 15,000 tons per day.                                         
|   
|(4) | Costs continued to rise as mining moved from the Switchback pit
    at Florida Canyon to the lower grade Central and Main pits.
    Lower direct operating costs were offset by higher corporate
    costs related to financing and Section 404 compliance
    efforts.                          
|   
|(5) | The second consecutive quarter of positive earnings was
    achieved. Higher unit costs at Florida Canyon were evidenced by
    long haul profiles and lower ore grades. Montana Tunnels Mine
    began to operate in the transitional mineralized zones at the
    fringes of the pit parameter.
|   
|(6) | Additional trucks were added to Florida Canyon to make up for
    longer hauling profiles. Optimum production at Montana Tunnels
    Mine was still not achieved.                                                                                                                                
|   
|(7) | Montana Tunnels Mine commenced commercial production. However
    east wall problems continued to hamper production causing fewer
    ounces produced at a higher total cost. Lower overall ore grades
    at Florida Canyon caused a production shortfall of approximately
    5,000 ounces.    
|   
|(8) | The Montana Tunnels Mine operation was in development and
    6.5 million tons of waste was moved.                                                                                                                                                                                               

Financial Condition and Liquidity




50



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##### 



















51



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##### 





|                                                                          |  |                       |       |      |        |   |       |       |  |     |       |  |           |         |     |  |  |   |   | 
|------------------------------------------------------------------------- |  | --------------------- | ----- | ---- | ------ | - | ----- | ----- |  | --- | ----- |  | --------- | ------- | --- |  |  | - | - | 
|Table of Contractual Obligations                                         
|                                                                         
|                                                                          |  | Payment Due by Period
|                                                                          |  |                      
|                                                                          |  |                       |       | Less |        |   |      
|Contractual Obligations                                                   |  |                       |       | Than |        |   | 1-3   |       |  | 3-5 |       |  | More than
|(as of December 31, 2004)                                                 |  | Total                 |       |      | 1 Year |   |       | Years |  |     | Years |  |           | 5 Years
|                                                                          |  |                       |       |      |        |   |       |       |  |     |       |  |           |        
|                                                                          |  | (Thousands)          
|Long term debt (Convertible Debenture)                                    |  | $                     | 8,756 |      |        | $ |      |       |  | $   | 8,756 |  |           | $       |    |  |  | $ |  | 
|Capital lease obligations                                                 |  |                       | 704   |      |        |   | 444   |       |  |     | 260   |  |           |         |    |  |  |   |  | 
|Operating lease obligations                                               |  |                       | 672   |      |        |   | 295   |       |  |     | 348   |  |           |         | 29  |  |  |   |  | 
|Purchase obligations                                                      |  |                       | 3,632 |      |        |   | 2,833 |       |  |     | 674   |  |           |         | 125 |  |  |   |  | 
|Other long term liabilities reflected on the balance sheet under
    GAAP |  |                       |      |      |        |   |      |       |  |     |      |  |           |         |    |  |  |   |  | 

Off Balance Sheet Arrangements






Environmental Compliance




CRITICAL ACCOUNTING POLICIES






52



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##### 





Revenue Recognition




Deferred Stripping Costs






Depreciation and Depletion




Impairment of Long-Lived Assets




53



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##### 



Environmental Matters




Broken Ore on Leach Pad












54



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##### 













RELATED PARTY TRANSACTIONS




|                                                                                          |  |             |     |  |      |   |     |      |  |   |     | 
|----------------------------------------------------------------------------------------- |  | ----------- | --- |  | ---- | - | --- | ---- |  | - | --- | 
|                                                                                          |  | 2004        |     |  | 2003 |   |     | 2002 | 
|                                                                                          |  |             |     |  |      |   |     |      | 
|                                                                                          |  | (Thousands) |    
|Legal fees paid to two law firms, a partner of each firm is a
    director of the Company |  | $           | 549 |  |      | $ | 795 |      |  | $ | 153 | 
|Consulting services paid to a relative of an officer and
    director of the Company      |  |             | 6   |  |      |   | 64  |      |  |   | 63  | 





|         |                                                               
|-------- | --------------------------------------------------------------
|ITEM 7A. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
    RISK



Interest Rate Risk




Foreign Currency Exchange Rate Risk




55



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##### 





Commodity Price Risk






|        |                                            
|------- | -------------------------------------------
|ITEM 8. | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA



|                                                                                                          |  |     
|--------------------------------------------------------------------------------------------------------- |  | ----
|                                                                                                          |  | Page
|                                                                                                          |  |     
|Report of Independent Registered Chartered Accountants                                                    |  | F-1 
|Comments by Auditors on Canada-United States of America
    Reporting Differences                         |  | F-2 
|Consolidated Balance Sheets as of December 31, 2004 and 2003                                              |  | F-3 
|Consolidated Statements of Operations for the Years Ended
    December 31, 2004, 2003, and 2002           |  | F-4 
|Consolidated Statements of Shareholders Equity for the
    Years Ended December 31, 2004, 2003, and 2002 |  | F-5 
|Consolidated Statements of Cash Flows for the Years Ended
    December 31, 2004, 2003, and 2002           |  | F-6 
|Notes to the Consolidated Financial Statements                                                            |  | F-7 



|        |                                                                                         
|------- | ----------------------------------------------------------------------------------------
|ITEM 9. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
    ACCOUNTING AND FINANCIAL DISCLOSURE





|        |                        
|------- | -----------------------
|ITEM 9A | CONTROLS AND PROCEDURES

Disclosure Controls and Procedures






56



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##### 





Managements Report on Internal Control over Financial
Reporting












| |   |                                                                                                                                                                                                                                                                          
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Deficient inventory control and management process and lack of
    segregation of procurement and accounting duties at the Florida
    Canyon location.                                                                                                                  
|
| |  | Absence of appropriate review of non-routine or complex
    accounting matters, related accounting entries, and appropriate
    documentation, disclosure and application of Canadian and
    U.S. Generally Accepted Accounting Principles
    (GAAP) for those matters.





| |   |                                                                                                                                                                                                                                                                       
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | New staff has been added and new controls will be implemented in
    the second quarter of 2005 under the responsibility of the local
    Controller at Florida Canyon.                                                                                               
|
| |  | The Company has developed and continues to refine policies and
    procedures for the review, identification, and documentation of
    non-routine, complex transactions and application of accounting
    standards to ensure compliance with Canadian and U.S. GAAP.



REPORT OF INDEPENDENT REGISTERED CHARTERED ACCOUNTANTS






57



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##### 













| |   |                                                                                                                                                                                                                                             
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Deficient inventory control and management process and lack of
    segregation of procurement and accounting duties at the Florida
    Canyon location.                                                                                     
|
| |  | Absence of appropriate review of non-routine or complex
    accounting matters, related accounting entries, and appropriate
    documentation, disclosure and application of Canadian and U.S.
    generally accepted accounting principles.







58



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ITEM 9B     OTHER
INFORMATION




PART III


ITEM 10:     DIRECTORS AND
EXECUTIVE OFFICERS OF THE REGISTRANT




ITEM 11:     EXECUTIVE
COMPENSATION




ITEM 12:     SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT




ITEM 13:     CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS




ITEM 14:     PRINCIPAL
ACCOUNTANT FEES AND SERVICES




PART IV




|         |                                                                    
|-------- | -------------------------------------------------------------------
|ITEM 15. | EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
    FORM 8-K

Documents filed as part of this report on
Form 10-K or incorporated by reference:




| |                                                                                                                                                                                                                      
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (1) Our consolidated financial statements are listed on the
    Index to Financial Statements on Page F-1 to this
    report.                                                                                      
|
| | (2) Financial Statement Schedules (omitted because they are
    either not required, are not applicable, or the required
    information is disclosed in the notes to the financial
    statements or related notes).

59



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##### 





| |                                                                                                     
| | ----------------------------------------------------------------------------------------------------
| | (3) The following exhibits are filed with this report on
    Form 10-K or incorporated by reference.

|        |   |              |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|------- | - | ------------ |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |   |             
|No.     |   | Exhibit Name
|        |   |             
|        | 1 | .2           |  | Underwriting Agreement between Apollo Gold Corporation and
    Regent Mercantile Bancorp, Inc.(2)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|        | 1 | .3           |  | Agency Agreement between Apollo Gold Corporation and Regent
    Mercantile Bancorp, Inc., dated November 4, 2004.(3)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|        | 1 | .4           |  | Engagement Letter between Apollo Gold Corporation and Regent
    Mercantile Bancorp, Inc. dated December 29, 2004.(4)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|        | 1 | .5           |  | Agency Agreement between Apollo Gold Corporation and Regent
    Mercantile Bancorp, Inc., dated December 31, 2004.(5)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|        | 2 | .1           |  | Merger Agreement dated as of January 31, 2002, by and among
    Nevoro Gold Corporation, Nevoro Gold USA, Inc. and Apollo Gold
    Corporation.(6)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|        | 2 | .2           |  | International Pursuit Corporation and Nevoro Gold Corporation
    Arrangement Agreement dated May 13, 2002.(6)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|        | 2 | .3           |  | Purchase Agreement dated May 30, 2003 by and between Exall
    Resources Limited, Glimmer Resources, Inc. and International
    Pursuit Corporation.(6)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|        | 2 | .3(a)        |  | Amendment Agreement dated as of September 5, 2002, by and
    between Exall Resources Limited, Glimmer Resources, Inc. and
    Apollo Gold Corporation.(6)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|        | 3 | .1           |  | Letters Patent of the Registrant Brownlee Mines
    (1936) Limited from the Province of Ontario dated
    June 30, 1936; Certificate of Amendment of Articles of the
    Registrant effective July 20, 1972; Certificate of
    Amendment of Articles of the Registrant effective on
    November 28, 1975; Certificate of Amendment of Articles of
    the Registrant effective on August 14, 1978 (Change of name
    to J-Q Resources Inc.); Certificate of Articles of Amendment of
    the Registrant effective on July 15, 1983; Certificate of
    Articles of Amendment of the Registrant effective July 7,
    1986; Certificate of Articles of Amendment of the Registrant
    effective August 6, 1987 (Change of name to International
    Pursuit Corporation); Certificate of Articles of Arrangement of
    the Registrant effective June 25, 2002 (Change of name to
    Apollo Gold Corporation); Certificate of Continuance filed
    May 28, 2003.(6)
|        | 3 | .2           |  | By-Laws of the Registrant, as amended to date.(6)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|        | 4 | .1           |  | Sample Certificate of Common Shares of the Registrant.(6)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|        | 4 | .2           |  | Registration Rights Agreement dated September 13, 2002 by
    and among Registrant and BMO Nesbitt Burns Inc., acting on
    behalf of and for the benefit of each of the holders.(6)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|        | 4 | .3           |  | Registration Rights Agreement dated December 23, 2002, by
    and among Registrant and BMO Nesbitt Burns Inc., acting on
    behalf of and for the benefit of each of the holders.(6)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|        | 4 | .4           |  | Form of Subscription Agreement dated September 26, 2003, by
    and among Registrant and certain investors.(1)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|        | 4 | .5           |  | Registration Rights Agreement dated September 26, 2003, by
    and among Registrant and BMO Nesbitt Burns Inc., acting on
    behalf of and for the benefit of each of the holders.(1)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|        | 4 | .6           |  | Form of Senior Indenture.(7)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|        | 4 | .7           |  | Form of Subordinated Indenture.(7)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|        | 4 | .8           |  | Debenture between Apollo Gold Corporation and Regent Securities
    Capital Corporation.(3)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|        | 4 | .9           |  | Form of Compensation Warrant.(2)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|        | 4 | .10          |  | Form of Subscription for Special Notes.(3)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|        | 4 | .11          |  | Trust Indenture by and among Apollo Gold Corporation, Apollo
    Gold, Inc. and The Canada Trust Company.(3)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|        | 4 | .12          |  | Form of Special Note.(3)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|        | 4 | .13          |  | Form of Subscription Agreement for Special Warrants.(3)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|        | 4 | .14          |  | Form of Special Warrants.(3)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|        | 4 | .15          |  | Form of Compensation Option.(3)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

60



---



##### 



|        |    |              |  |                                                                                                                                                                                      
|------- | -- | ------------ |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |             
|No.     |    | Exhibit Name
|        |    |             
|        | 4  | .16          |  | Form of Subscription Agreement.(4)                                                                                                                                                   
|        | 4  | .17          |  | Form of Registration Rights Agreement.(4)                                                                                                                                            
|        | 10 | .1           |  | Amended and Restated Employment Agreement dated May, 2003, by
    and between Apollo Gold Corporation and R. David Russell,
    President and Chief Executive Officer.(6)            
|        | 10 | .2           |  | Amended and Restated Employment Agreement dated May, 2003, by
    and between Apollo Gold Corporation and Richard F. Nanna,
    Vice-President, Exploration.(6)                      
|        | 10 | .3           |  | Amended and Restated Employment Agreement dated May, 2003, by
    and between Apollo Gold Corporation and Donald W. Vagstad,
    Vice-President, General Counsel and Secretary.(6)   
|        | 10 | .4           |  | Amended and Restated Employment Agreement dated May, 2003, by
    and between Apollo Gold Corporation and David K. Young,
    Vice-President, Business Development.(6)               
|        | 10 | .5           |  | Apollo Gold Corporation Plan of Arrangement Stock Option
    Incentive Plan.(6)                                                                                                      
|        | 10 | .6           |  | Apollo Gold Corporation Stock Option Incentive Plan.(6)                                                                                                                              
|        | 10 | .7           |  | Form of Stock Option Agreement used for Apollo Gold Corporation
    Stock Option Incentive Plan.(6)                                                                                  
|        | 10 | .8           |  | Term Bonding Agreement dated August 1, 2002 among National
    Fire Insurance Company of Hartford, Apollo Gold Corporation,
    Apollo Gold, Inc. and Montana Tunnels Mining, Inc.(6)
|        | 10 | .9           |  | Apollo Gold, Inc. and Affiliated Companies Company Retirement
    Plan (Employee Savings Plan).(6)                                                                                   
|        | 10 | .10          |  | Installment Sales Contract between Florida Canyon Mining, Inc.
    and Caterpillar Financial Services Corporation dated
    January 9, 2002.(6)                                      
|        | 10 | .11          |  | Second Installment Sales Contract between Florida Canyon Mining,
    Inc. and Caterpillar Financial Services Corporation dated
    January 9, 2002.(6)                               
|        | 10 | .12          |  | Finance Lease between Florida Canyon Mining and Caterpillar
    Financial Services Corporation dated as of August 23,
    2002.(6)                                                   
|        | 10 | .13          |  | Form of Indemnification Agreement between Apollo Gold
    Corporation and its officers and directors.(8)                                                                             
|        | 10 | .14          |  | Form of Indemnification Agreement between Apollo Gold
    Corporation subsidiaries and their respective officers and
    directors.(8)                                               
|        | 10 | .15          |  | Employment Agreement between Apollo Gold Corporation and Melvyn
    Williams, effective as of February 16, 2004.(8)                                                                  
|        | 10 | .16          |  | Employment Agreement between Apollo Gold Corporation and Donald
    O. Miller, effective as of March 1, 2004.(8)                                                                     
|        | 10 | .17          |  | Employment Agreement between Apollo Gold Corporation and Wade
    Bristol, Vice President of United States Operations.(7)                                                            
|        | 21 | .1           |  | List of subsidiaries of the Registrant.*                                                                                                                                             
|        | 23 | .1           |  | Consent of Deloitte & Touche LLP*                                                                                                                                                    
|        | 23 | .2           |  | Consent of Mine Development Association*                                                                                                                                             
|        | 31 | .1           |  | Certification of Chief Executive Officer pursuant to
    Section 302 of the Sarbanes-Oxley Act*                                                                                      
|        | 31 | .2           |  | Certification of Chief Financial Officer pursuant to
    Section 302 of the Sarbanes-Oxley Act*                                                                                      
|        | 32 | .1           |  | Certification of Chief Executive Officer and Chief Financial
    Officer pursuant to Section 906 of the Sarbanes-Oxley Act*                                                          






| |   |                
| | - | ---------------
| | * | Filed herewith.



|    |                                                                                               
|--- | ----------------------------------------------------------------------------------------------
|(1) | Incorporated by reference to the Registration Statement on
    Form S-1 (File No. 333-109511).
|   
|(2) | Incorporated by reference to the Current Report on Form 8-K
    filed October 25, 2004.       
|   
|(3) | Incorporated by reference to the Current Report on Form 8-K
    filed on November 9, 2004.    
|   
|(4) | Incorporated by reference to the Current Report on Form 8-K
    filed on January 5, 2005.     

61



---



##### 





|    |                                                                                               
|--- | ----------------------------------------------------------------------------------------------
|(5) | Incorporated by reference to the Current Report on Form 8-K
    filed on January 6, 2005.     
|   
|(6) | Incorporated by reference to the Registration Statement on
    Form 10 (File No. 001-31593).  
|   
|(7) | Incorporated by reference to the Registration Statement on
    Form S-3 (File No. 333-119198).
|   
|(8) | Incorporated by reference to the Current Report on Form 8-K
    filed on September 24, 2004.  

62



---



##### 



SIGNATURES






| |                        
| | -----------------------
| | APOLLO GOLD CORPORATION



| |     |                     
| | --- | --------------------
| | By: | /s/ R. DAVID RUSSELL

| |                                      
| | -------------------------------------
| |                                      
| | R. David Russell                     
| | President and Chief Executive Officer



|                                           |  |                                                                                                                                            |  |                |  | 
|------------------------------------------ |  | ------------------------------------------------------------------------------------------------------------------------------------------ |  | -------------- |  | 
|Signature                                  |  | Title                                                                                                                                      |  | Date          
|                                           |  |                                                                                                                                            |  |               
|                                          
|/s/ R. DAVID RUSSELLR.
    David Russell   |  | President and Chief Executive Officer, and Director (Principal
    Executive Officer)                                                      |  | March 15, 2005
|                                          
|/s/ G.W. THOMPSONG.
    W. Thompson        |  | Chairman of the Board of Directors                                                                                                         |  | March 15, 2005
|                                          
|/s/ G. MICHAEL HOBARTG.
    Michael Hobart |  | Director                                                                                                                                   |  | March 15, 2005
|                                          
|/s/ CHARLES E. STOTTCharles
    E. Stott   |  | Director                                                                                                                                   |  | March 15, 2005
|                                          
|/s/ W.S. VAUGHANW. S.
    Vaughan          |  | Director                                                                                                                                   |  | March 15, 2005
|                                          
|/s/ ROBERT A. WATTSRobert
    A. Watts     |  | Director                                                                                                                                   |  | March 15, 2005
|                                          
|/s/ MELVYN WILLIAMSMelvyn
    Williams     |  | Chief Financial Officer and Senior Vice
    President  Finance and Corporate Development
    (Principal Financial and Accounting Officer) |  | March 15, 2005

63



---



##### 



INDEX TO CONSOLIDATED FINANCIAL STATEMENTS


|                                                                                                          |  |    
|--------------------------------------------------------------------------------------------------------- |  | ---
|Report of Independent Registered Chartered Accountants                                                    |  | F-1
|Comments by Auditors on Canada-United States of America
    Reporting Differences                         |  | F-2
|Consolidated Balance Sheets as of December 31, 2004 and 2003                                              |  | F-3
|Consolidated Statements of Operations for the Years Ended
    December 31, 2004, 2003, and 2002           |  | F-4
|Consolidated Statements of Shareholders Equity for the
    Years Ended December 31, 2004, 2003, and 2002 |  | F-5
|Consolidated Statements of Cash Flows for the Years Ended
    December 31, 2004, 2003, and 2002           |  | F-6
|Notes to the Consolidated Financial Statements                                                            |  | F-7



---



##### 



REPORT OF INDEPENDENT REGISTERED CHARTERED ACCOUNTANTS
















| |                            
| | ---------------------------
| | /s/ Deloitte & Touche LLP  
| |                            
|
| | Vancouver, British Columbia
| | March 15, 2005             

F-1



---



##### 



COMMENTS BY AUDITORS ON CANADA-UNITED STATES OF AMERICA


REPORTING DIFFERENCES








| |                            
| | ---------------------------
| | /s/ Deloitte & Touche LLP  
| |                            
|
| | Vancouver, British Columbia
| | March 15, 2005             

F-2



---



##### 



APOLLO GOLD CORPORATION


CONSOLIDATED BALANCE SHEETS


|                                                    |                                        |                         |         |        |      |   |         |        | 
|--------------------------------------------------- | -------------------------------------- | ----------------------- | ------- | ------ | ---- | - | ------- | ------ | 
|                                                    |                                        | December 31,            |        
|                                                    |                                        |                         |        
|                                                    |                                        | 2004                    |         |        | 2003 |  
|                                                    |                                        |                         |         |        |      |  
|                                                    |                                        | (In thousands of United |        
|                                                    |                                        | States dollars)         |        
|ASSETS                                             
|CURRENT                                             |                                        |                         |         |        |      |   |         |       
|                                                    | Cash and cash equivalents              |                         | $       | 6,947  |      |   | $       | 25,851 | 
|                                                    | Short-term investments                 |                         |         |       |      |   |         | 5,855  | 
|                                                    | Accounts receivable                    |                         |         | 3,088  |      |   |         | 4,647  | 
|                                                    | Prepaids                               |                         |         | 423    |      |   |         | 552    | 
|                                                    | Broken ore on leach pad                |                         |         | 8,960  |      |   |         | 9,594  | 
|                                                    | Inventories (Note 5)                   |                         |         | 3,242  |      |   |         | 2,839  | 
|                                                    |                                        |                         |         |        |      |  
|                                                    | Total current assets                   |                         |         | 22,660 |      |   |         | 49,338 | 
|BROKEN ORE ON LEACH PAD  LONG-TERM                 |                                        |                         | 4,824   |        |      |   | 1,827   |       
|PROPERTY, PLANT AND EQUIPMENT (Note 6)              |                                        |                         | 58,544  |        |      |   | 38,519  |       
|DEFERRED STRIPPING COSTS                            |                                        |                         | 36,851  |        |      |   | 24,033  |       
|RESTRICTED CERTIFICATE OF DEPOSIT (Note 7)          |                                        |                         | 9,366   |        |      |   | 6,893   |       
|DEFERRED LOSS ON COMMODITY CONTRACTS                |                                        |                         | 1,340   |        |      |   |        |       
|DEFERRED FINANCING COSTS (Note 9)                   |                                        |                         | 901     |        |      |   |        |       
|                                                    |                                        |                         |         |        |      |  
|TOTAL ASSETS                                        |                                        | $                       | 134,486 |        |      | $ | 120,610 |       
|                                                    |                                        |                         |         |        |      |  
|                                                   
|LIABILITIES                                        
|CURRENT                                             |                                        |                         |         |        |      |   |         |       
|                                                    | Accounts payable                       |                         | $       | 10,035 |      |   | $       | 5,848  | 
|                                                    | Accrued liabilities                    |                         |         | 2,447  |      |   |         | 2,781  | 
|                                                    | Unrealized loss on commodity contracts |                         |         | 1,500  |      |   |         |       | 
|                                                    | Notes payable (Note 8)                 |                         |         | 2,833  |      |   |         | 4,117  | 
|                                                    | Property and mining taxes payable      |                         |         | 1,070  |      |   |         | 1,080  | 
|                                                    |                                        |                         |         |        |      |  
|                                                    | Total current liabilities              |                         |         | 17,885 |      |   |         | 13,826 | 
|NOTES PAYABLE AND LONG-TERM LIABILITY (Note 8)      |                                        |                         | 799     |        |      |   | 3,275   |       
|CONVERTIBLE DEBENTURE (Note 9)                      |                                        |                         | 5,538   |        |      |   |        |       
|ACCRUED SITE CLOSURE COSTS (Note 11)                |                                        |                         | 26,192  |        |      |   | 21,619  |       
|                                                    |                                        |                         |         |        |      |  
|TOTAL LIABILITIES                                   |                                        |                         | 50,414  |        |      |   | 38,720  |       
|                                                    |                                        |                         |         |        |      |  
|CONTINUING OPERATIONS (Note 1)                      |                                        |                         |         |        |      |   |         |       
|COMMITMENTS AND CONTINGENCIES (Note 15)             |                                        |                         |         |        |      |   |         |       
|SHAREHOLDERS EQUITY                                |                                        |                         |         |        |      |   |         |       
|Share capital (Note 12)                             |                                        |                         | 141,795 |        |      |   | 120,624 |       
|Issuable common shares                              |                                        |                         | 231     |        |      |   | 231     |       
|Equity component of convertible debentures (Note 9) |                                        |                         | 1,815   |        |      |   |        |       
|Note warrants (Note 9)                              |                                        |                         | 781     |        |      |   |        |       
|Contributed surplus (Note 12)                       |                                        |                         | 9,627   |        |      |   | 7,172   |       
|Deficit                                             |                                        |                         | (70,177 | )      |      |   | (46,137 | )     
|                                                    |                                        |                         |         |        |      |  
|Total shareholders equity                          |                                        |                         | 84,072  |        |      |   | 81,890  |       
|                                                    |                                        |                         |         |        |      |  
|Total liabilities and shareholders equity          |                                        | $                       | 134,486 |        |      | $ | 120,610 |       
|                                                    |                                        |                         |         |        |      |  



| |                                
| | -------------------------------
| | APPROVED ON BEHALF OF THE BOARD
|
| | /s/ G.W. Thompson              
| |                                
| | G.W. Thompson, Director        
|
| | /s/ Robert Watts               
| |                                
| | Robert Watts, Director         

F-3



---



##### 



APOLLO GOLD CORPORATION


CONSOLIDATED STATEMENTS OF OPERATIONS


|                                              |                                                     |                                         |            |        |      |   |            |        |   |   |            |        |  
|--------------------------------------------- | --------------------------------------------------- | --------------------------------------- | ---------- | ------ | ---- | - | ---------- | ------ | - | - | ---------- | ------ | -
|                                              |                                                     | Year Ended December 31,                 |           
|                                              |                                                     |                                         |           
|                                              |                                                     | 2004                                    |            |        | 2003 |   |            | 2002   |  
|                                              |                                                     |                                         |            |        |      |   |            |        |  
|                                              |                                                     | (In thousands of United States dollars, |           
|                                              |                                                     | except for share amounts)               |           
|REVENUE                                       |                                                     |                                         |            |        |      |   |            |        |   |   |            |       
|                                              | Revenue from sale of minerals                       |                                         | $          | 64,741 |      |   | $          | 66,841 |   |   | $          | 20,410 |  
|                                              |                                                     |                                         |            |        |      |   |            |        |  
|OPERATING EXPENSES                            |                                                     |                                         |            |        |      |   |            |        |   |   |            |       
|                                              | Direct operating costs                              |                                         |            | 65,845 |      |   |            | 55,684 |   |   |            | 15,726 |  
|                                              | Depreciation and amortization                       |                                         |            | 5,221  |      |   |            | 4,997  |   |   |            | 3,488  |  
|                                              | General and administrative expenses                 |                                         |            | 7,095  |      |   |            | 4,651  |   |   |            | 2,286  |  
|                                              | Share-based compensation                            |                                         |            | 767    |      |   |            | 376    |   |   |            | 615    |  
|                                              | Accretion expense                                   |                                         |            | 1,418  |      |   |            | 1,280  |   |   |            | 771    |  
|                                              | Royalty expenses                                    |                                         |            | 669    |      |   |            | 898    |   |   |            | 508    |  
|                                              | Exploration and business development                |                                         |            | 1,051  |      |   |            | 2,117  |   |   |            | 451    |  
|                                              |                                                     |                                         |            |        |      |   |            |        |  
|                                              |                                                     |                                         | 82,066     |        |      |   | 70,003     |        |   |   | 23,845     |       
|                                              |                                                     |                                         |            |        |      |   |            |        |  
|OPERATING LOSS                                |                                                     |                                         | (17,325    | )      |      |   | (3,162     | )      |   |   | (3,435     | )     
|OTHER INCOME (EXPENSES)                       |                                                     |                                         |            |        |      |   |            |        |   |   |            |       
|                                              | Interest income                                     |                                         |            | 313    |      |   |            | 213    |   |   |            | 76     |  
|                                              | Interest expense                                    |                                         |            | (468   | )    |   |            | (544   | ) |   |            | (991   | )
|                                              | Foreign exchange (loss) gain and other              |                                         |            | (941   | )    |   |            | 1,307  |   |   |            | 1,299  |  
|                                              | Realized and unrealized gain on commodity contracts |                                         |            | 232    |      |   |            |       |   |   |            |       |  
|                                              |                                                     |                                         |            |        |      |   |            |        |  
|NET LOSS FOR THE YEAR                         |                                                     | $                                       | (18,189    | )      |      | $ | (2,186     | )      |   | $ | (3,051     | )     
|                                              |                                                     |                                         |            |        |      |   |            |        |  
|NET LOSS PER SHARE, BASIC AND DILUTED         |                                                     | $                                       | (0.23      | )      |      | $ | (0.04      | )      |   | $ | (0.16      | )     
|                                              |                                                     |                                         |            |        |      |   |            |        |  
|WEIGHTED-AVERAGE NUMBER OF SHARES OUTSTANDING |                                                     |                                         | 78,716,042 |        |      |   | 54,536,679 |        |   |   | 19,297,668 |       
|                                              |                                                     |                                         |            |        |      |   |            |        |  

F-4



---



##### 



APOLLO GOLD CORPORATION


CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY


|                                                                                                 |  |                                         |            |   |          |   |         |              |  |             |            |  |      |         |       |         |          |   |             |         |  |   |         |   |  |       |        |   |  |   |         |   |  |   |         |  
|------------------------------------------------------------------------------------------------ |  | --------------------------------------- | ---------- | - | -------- | - | ------- | ------------ |  | ----------- | ---------- |  | ---- | ------- | ----- | ------- | -------- | - | ----------- | ------- |  | - | ------- | - |  | ----- | ------ | - |  | - | ------- | - |  | - | ------- | -
|                                                                                                 |  | Share Capital                           |            |   |          |   | Equity  |              |  |             |            |  |      |         |       |         |          |  
|                                                                                                 |  |                                         |            |   | Issuable |   |         | Component of |  |             |            |  |      |         |       |         |          |   |            
|                                                                                                 |  | Number                                  |            |   |          |   | Common  |              |  | Convertible |            |  | Note |         |       | Special |          |   | Contributed |         |  |   |         |  
|                                                                                                 |  | of Shares                               |            |   | Amount   |   |         | Shares       |  |             | Debentures |  |      | Warrant |       |         | Warrants |   |             | Surplus |  |   | Deficit |   |  | Total |       
|                                                                                                 |  |                                         |            |   |          |   |         |              |  |             |            |  |      |         |       |         |          |   |             |         |  |   |         |   |  |       |       
|                                                                                                 |  | (In thousands of United States dollars) |           
|Balance, December 31, 2001                                                                       |  |                                         | 834,124    |   |          | $ | 41,186  |              |  | $           | 231        |  |      | $       |      |         |          | $ |            |         |  | $ |        |   |  | $     | 177    |   |  | $ | (40,900 | ) |  | $ | 694     |  
|                                                                                                 |  |                                         |            |   |          |   |         |              |  |             |            |  |      |         |       |         |          |   |             |         |  |   |         |   |  |       |       
|Conversion of debentures (Note 12(c)(i))                                                         |  |                                         | 28,750,000 |   |          |   | 16,623  |              |  |             |           |  |      |         |      |         |          |   |            |         |  |   |        |   |  |       | 4,149  |   |  |   |        |   |  |   | 20,772  |  
|Issuance of shares on Nevoro acquisition (Note 4(a))                                             |  |                                         | 1,970,000  |   |          |   | 2,349   |              |  |             |           |  |      |         |      |         |          |   |            |         |  |   |        |   |  |       |       |   |  |   |        |   |  |   | 2,349   |  
|Black Fox purchase (Note 4(b))                                                                   |  |                                         | 2,080,000  |   |          |   | 2,949   |              |  |             |           |  |      |         |      |         |          |   |            |         |  |   |        |   |  |       |       |   |  |   |        |   |  |   | 2,949   |  
|Conversion of special warrants private placement issued
    September 13, 2002 (Note 12(c) (ii)) |  |                                         | 4,963,000  |   |          |   | 6,224   |              |  |             |           |  |      |         |      |         |          |   |            |         |  |   |        |   |  |       |       |   |  |   |        |   |  |   | 6,224   |  
|Flow-through common shares (Note 12(c) (iii))                                                    |  |                                         | 1,593,750  |   |          |   | 2,875   |              |  |             |           |  |      |         |      |         |          |   |            |         |  |   |        |   |  |       |       |   |  |   |        |   |  |   | 2,875   |  
|Share compensation                                                                               |  |                                         |           |   |          |   |        |              |  |             |           |  |      |         |      |         |          |   |            |         |  |   |        |   |  |       | 615    |   |  |   |        |   |  |   | 615     |  
|Special warrants private placement issued December 23, 2002
    (Note 12(c) (iv))                |  |                                         |           |   |          |   |        |              |  |             |           |  |      |         |      |         |          |   |            |         |  |   | 6,305   |   |  |       | 2,082  |   |  |   |        |   |  |   | 8,387   |  
|Net loss                                                                                         |  |                                         |           |   |          |   |        |              |  |             |           |  |      |         |      |         |          |   |            |         |  |   |        |   |  |       |       |   |  |   | (3,051  | ) |  |   | (3,051  | )
|                                                                                                 |  |                                         |            |   |          |   |         |              |  |             |            |  |      |         |       |         |          |   |             |         |  |   |         |   |  |       |       
|Balance, December 31, 2002                                                                       |  |                                         | 40,190,874 |   |          |   | 72,206  |              |  |             | 231        |  |      |         |      |         |          |   |            |         |  |   | 6,305   |   |  |       | 7,023  |   |  |   | (43,951 | ) |  |   | 41,814  |  
|Shares issued for cash (Note 12(b))                                                              |  |                                         | 24,432,300 |   |          |   | 37,314  |              |  |             |           |  |      |         |      |         |          |   |            |         |  |   |        |   |  |       | 388    |   |  |   |        |   |  |   | 37,702  |  
|Conversion of special warrants                                                                   |  |                                         | 6,000,000  |   |          |   | 6,305   |              |  |             |           |  |      |         |      |         |          |   |            |         |  |   | (6,305  | ) |  |       |       |   |  |   |        |   |  |   |        |  
|Warrants exercised                                                                               |  |                                         | 2,381,500  |   |          |   | 3,810   |              |  |             |           |  |      |         |      |         |          |   |            |         |  |   |        |   |  |       |       |   |  |   |        |   |  |   | 3,810   |  
|Options exercised                                                                                |  |                                         | 158,616    |   |          |   | 127     |              |  |             |           |  |      |         |      |         |          |   |            |         |  |   |        |   |  |       |       |   |  |   |        |   |  |   | 127     |  
|Nevoro acquisition, senior executive share compensation                                          |  |                                         |           |   |          |   |        |              |  |             |           |  |      |         |      |         |          |   |            |         |  |   |        |   |  |       | 376    |   |  |   |        |   |  |   | 376     |  
|Shares issued to supplier                                                                        |  |                                         | 50,000     |   |          |   | 113     |              |  |             |           |  |      |         |      |         |          |   |            |         |  |   |        |   |  |       |       |   |  |   |        |   |  |   | 113     |  
|Shares issued for land                                                                           |  |                                         | 61,500     |   |          |   | 134     |              |  |             |           |  |      |         |      |         |          |   |            |         |  |   |        |   |  |       |       |   |  |   |        |   |  |   | 134     |  
|Fiscal 2002 stock-based compensation issued in 2003                                              |  |                                         | 265,000    |   |          |   | 615     |              |  |             |           |  |      |         |      |         |          |   |            |         |  |   |        |   |  |       | (615   | ) |  |   |        |   |  |   |        |  
|Net loss                                                                                         |  |                                         |           |   |          |   |        |              |  |             |           |  |      |         |      |         |          |   |            |         |  |   |        |   |  |       |       |   |  |   | (2,186  | ) |  |   | (2,186  | )
|                                                                                                 |  |                                         |            |   |          |   |         |              |  |             |            |  |      |         |       |         |          |   |             |         |  |   |         |   |  |       |       
|Balance, December 31, 2003 as previously reported                                                |  |                                         | 73,539,790 |   |          |   | 120,624 |              |  |             | 231        |  |      |         |      |         |          |   |            |         |  |   |        |   |  |       | 7,172  |   |  |   | (46,137 | ) |  |   | 81,890  |  
|Cumulative effect of change in accounting policy (Note 3(p))                                     |  |                                         |           |   |          |   | 257     |              |  |             |           |  |      |         |      |         |          |   |            |         |  |   |        |   |  |       | 5,594  |   |  |   | (5,851  | ) |  |   |        |  
|                                                                                                 |  |                                         |            |   |          |   |         |              |  |             |            |  |      |         |       |         |          |   |             |         |  |   |         |   |  |       |       
|Adjusted balance, December 31, 2003                                                              |  |                                         | 73,539,790 |   |          |   | 120,881 |              |  |             | 231        |  |      |         |      |         |          |   |            |         |  |   |        |   |  |       | 12,766 |   |  |   | (51,988 | ) |  |   | 81,890  |  
|Units issued for cash (Note 12(a) (ii))                                                          |  |                                         | 8,299,999  |   |          |   | 4,873   |              |  |             |           |  |      |         |      |         |          |   |            |         |  |   |        |   |  |       | 622    |   |  |   |        |   |  |   | 5,495   |  
|Conversion of special warrants (Note 12(a)(i))                                                   |  |                                         | 2,326,666  |   |          |   | 1,449   |              |  |             |           |  |      |         |      |         |          |   |            |         |  |   |        |   |  |       | 50     |   |  |   |        |   |  |   | 1,499   |  
|Flow-through common shares                                                                       |  |                                         | 714,285    |   |          |   | 515     |              |  |             |           |  |      |         |      |         |          |   |            |         |  |   |        |   |  |       |       |   |  |   |        |   |  |   | 515     |  
|Warrants exercised                                                                               |  |                                         | 5,399,848  |   |          |   | 12,695  |              |  |             |           |  |      |         |      |         |          |   |            |         |  |   |        |   |  |       | (4,083 | ) |  |   |        |   |  |   | 8,612   |  
|Options exercised                                                                                |  |                                         | 399,054    |   |          |   | 966     |              |  |             |           |  |      |         |      |         |          |   |            |         |  |   |        |   |  |       | (647   | ) |  |   |        |   |  |   | 319     |  
|Shares reacquired and cancelled                                                                  |  |                                         | (20,500    | ) |          |   | (48     | )            |  |             |           |  |      |         |      |         |          |   |            |         |  |   |        |   |  |       |       |   |  |   |        |   |  |   | (48     | )
|Shares issued for Huizopa interest                                                               |  |                                         | 48,978     |   |          |   | 88      |              |  |             |           |  |      |         |      |         |          |   |            |         |  |   |        |   |  |       |       |   |  |   |        |   |  |   | 88      |  
|Shares issued for 2003 share-based compensation                                                  |  |                                         | 265,000    |   |          |   | 376     |              |  |             |           |  |      |         |      |         |          |   |            |         |  |   |        |   |  |       | (376   | ) |  |   |        |   |  |   |        |  
|Bridge loan compensation warrants                                                                |  |                                         |           |   |          |   |        |              |  |             |           |  |      |         |      |         |          |   |            |         |  |   |        |   |  |       | 275    |   |  |   |        |   |  |   | 275     |  
|Equity component of convertible debenture                                                        |  |                                         |           |   |          |   |        |              |  |             |           |  |      |         | 1,815 |         |          |   |            |         |  |   |        |   |  |       | 63     |   |  |   |        |   |  |   | 1,878   |  
|Note warrant                                                                                     |  |                                         |           |   |          |   |        |              |  |             |           |  |      |         |      |         |          |   | 781         |         |  |   |        |   |  |       | 27     |   |  |   |        |   |  |   | 808     |  
|Debenture compensation warrants                                                                  |  |                                         |           |   |          |   |        |              |  |             |           |  |      |         |      |         |          |   |            |         |  |   |        |   |  |       | 163    |   |  |   |        |   |  |   | 163     |  
|Stock-based compensation                                                                         |  |                                         |           |   |          |   |        |              |  |             |           |  |      |         |      |         |          |   |            |         |  |   |        |   |  |       | 767    |   |  |   |        |   |  |   | 767     |  
|Net loss                                                                                         |  |                                         |           |   |          |   |        |              |  |             |           |  |      |         |      |         |          |   |            |         |  |   |        |   |  |       |       |   |  |   | (18,189 | ) |  |   | (18,189 | )
|                                                                                                 |  |                                         |            |   |          |   |         |              |  |             |            |  |      |         |       |         |          |   |             |         |  |   |         |   |  |       |       
|Balance, December 31, 2004                                                                       |  |                                         | 90,973,120 |   |          | $ | 141,795 |              |  | $           | 231        |  |      | $       | 1,815 |         |          | $ | 781         |         |  | $ |        |   |  | $     | 9,627  |   |  | $ | (70,177 | ) |  | $ | 84,072  |  
|                                                                                                 |  |                                         |            |   |          |   |         |              |  |             |            |  |      |         |       |         |          |   |             |         |  |   |         |   |  |       |       

F-5



---



##### 



APOLLO GOLD CORPORATION


CONSOLIDATED STATEMENTS OF CASH FLOWS


|                                                    |                                                                      |                                                    |         |         |        |   |         |         |       |   |         |         |       | 
|--------------------------------------------------- | -------------------------------------------------------------------- | -------------------------------------------------- | ------- | ------- | ------ | - | ------- | ------- | ----- | - | ------- | ------- | ----- | 
|                                                    |                                                                      | Year Ended December 31,                            |        
|                                                    |                                                                      |                                                    |        
|                                                    |                                                                      | 2004                                               |         |         | 2003   |   |         | 2002    |      
|                                                    |                                                                      |                                                    |         |         |        |   |         |         |      
|                                                    |                                                                      | (In thousands of                                   |        
|                                                    |                                                                      | United States dollars)                             |        
|OPERATING ACTIVITIES                                |                                                                      |                                                    |         |         |        |   |         |         |       |   |         |        
|                                                    | Net loss for the year                                                |                                                    | $       | (18,189 | )      |   | $       | (2,186  | )     |   | $       | (3,051  | )    
|                                                    | Items not affecting cash:                                            |                                                    |         |         |        |   |         |         |       |   |         |         |      
|                                                    |                                                                      | Depreciation and amortization                      |         |         | 5,221  |   |         |         | 4,997 |   |         |         | 3,488 | 
|                                                    |                                                                      | Amortization of deferred stripping                 |         |         |       |   |         |         | 1,699 |   |         |         |      | 
|                                                    |                                                                      | Amortization of deferred financing costs           |         |         | 53     |   |         |         |      |   |         |         |      | 
|                                                    |                                                                      | Share-based compensation                           |         |         | 767    |   |         |         | 376   |   |         |         | 615   | 
|                                                    |                                                                      | Accretion expense  accrued site closure costs     |         |         | 1,418  |   |         |         | 1,280 |   |         |         | 771   | 
|                                                    |                                                                      | Accretion expense  convertible debenture          |         |         | 71     |   |         |         |      |   |         |         |      | 
|                                                    |                                                                      | Gain on sale of property, plant and equipment      |         |         |       |   |         |         | (339  | ) |         |         |      | 
|                                                    |                                                                      | Reclamation and closure costs                      |         |         | (225   | ) |         |         | (56   | ) |         |         |      | 
|                                                    |                                                                      | Decrease in unrealized loss on commodity contracts |         |         | (3,860 | ) |         |         |      |   |         |         |      | 
|                                                    |                                                                      | Decrease in deferred loss on commodity contracts   |         |         | 4,020  |   |         |         |      |   |         |         |      | 
|                                                    |                                                                      | Bridge loan compensation warrants                  |         |         | 275    |   |         |         |      |   |         |         |      | 
|                                                    | Net change in non-cash operating working capital items
    (Note 17) |                                                    |         | 2,765   |        |   |         | (168    | )     |   |         | (1,206  | )    
|                                                    |                                                                      |                                                    |         |         |        |   |         |         |      
|Net cash (used in) provided by operating activities |                                                                      |                                                    | (7,684  | )       |        |   | 5,603   |         |       |   | 617     |        
|                                                    |                                                                      |                                                    |         |         |        |   |         |         |      
|INVESTING ACTIVITIES                                |                                                                      |                                                    |         |         |        |   |         |         |       |   |         |        
|                                                    | Property, plant and equipment expenditures                           |                                                    |         | (21,419 | )      |   |         | (11,507 | )     |   |         | (2,932  | )    
|                                                    | Deferred stripping costs                                             |                                                    |         | (12,818 | )      |   |         | (8,734  | )     |   |         | (12,129 | )    
|                                                    | Short-term investments                                               |                                                    |         | 5,855   |        |   |         | (5,855  | )     |   |         |        |      
|                                                    | Proceeds from disposal of property, plant and equipment              |                                                    |         |        |        |   |         | 339     |       |   |         |        |      
|                                                    | Restricted Certificate of Deposit and other assets                   |                                                    |         | (2,473  | )      |   |         | (1,591  | )     |   |         | (1,569  | )    
|                                                    | Acquisition of Nevoro (Note 4(a))                                    |                                                    |         |        |        |   |         |        |       |   |         | (11,061 | )    
|                                                    | Black Fox acquisition (Note 4(b))                                    |                                                    |         |        |        |   |         |        |       |   |         | (2,028  | )    
|                                                    |                                                                      |                                                    |         |         |        |   |         |         |      
|Net cash used in investing activities               |                                                                      |                                                    | (30,855 | )       |        |   | (27,348 | )       |       |   | (29,719 | )      
|                                                    |                                                                      |                                                    |         |         |        |   |         |         |      
|FINANCING ACTIVITIES                                |                                                                      |                                                    |         |         |        |   |         |         |       |   |         |        
|                                                    | Proceeds on issuance of shares                                       |                                                    |         | 6,994   |        |   |         | 37,702  |       |   |         |        |      
|                                                    | Proceeds from exercise of warrants and options                       |                                                    |         | 8,931   |        |   |         | 3,937   |       |   |         |        |      
|                                                    | Proceeds from bridge loan                                            |                                                    |         | 3,000   |        |   |         |        |       |   |         |        |      
|                                                    | Repayment of bridge loan                                             |                                                    |         | (3,000  | )      |   |         |        |       |   |         |        |      
|                                                    | Acquisition and cancellation of shares                               |                                                    |         | (48     | )      |   |         |         |       |   |         |        |      
|                                                    | Issuance of special warrants                                         |                                                    |         |        |        |   |         |        |       |   |         | 14,611  |      
|                                                    | Issuance of flow-through common shares                               |                                                    |         | 515     |        |   |         |        |       |   |         | 2,875   |      
|                                                    | Proceeds on issuance of convertible debentures, net                  |                                                    |         | 7,525   |        |   |         |        |       |   |         | 20,772  |      
|                                                    | Convertible debenture interest paid                                  |                                                    |         | (163    | )      |   |         |        |       |   |         |        |      
|                                                    | Proceeds from notes payable                                          |                                                    |         |        |        |   |         | 1,259   |       |   |         | 1,790   |      
|                                                    | Payments of notes payable                                            |                                                    |         | (4,119  | )      |   |         | (3,728  | )     |   |         | (2,602  | )    
|                                                    |                                                                      |                                                    |         |         |        |   |         |         |      
|Net cash provided by financing activities           |                                                                      |                                                    | 19,635  |         |        |   | 39,170  |         |       |   | 37,446  |        
|                                                    |                                                                      |                                                    |         |         |        |   |         |         |      
|NET (DECREASE) INCREASE IN CASH                     |                                                                      |                                                    | (18,904 | )       |        |   | 17,425  |         |       |   | 8,344   |        
|CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR        |                                                                      |                                                    | 25,851  |         |        |   | 8,426   |         |       |   | 82      |        
|                                                    |                                                                      |                                                    |         |         |        |   |         |         |      
|CASH AND CASH EQUIVALENTS, END OF YEAR              |                                                                      | $                                                  | 6,947   |         |        | $ | 25,851  |         |       | $ | 8,426   |        
|                                                    |                                                                      |                                                    |         |         |        |   |         |         |      
|SUPPLEMENTAL CASH FLOW INFORMATION                  |                                                                      |                                                    |         |         |        |   |         |         |       |   |         |        
|Interest paid                                       |                                                                      | $                                                  | 560     |         |        | $ | 544     |         |       | $ | 991     |        
|                                                    |                                                                      |                                                    |         |         |        |   |         |         |      
|Income taxes paid                                   |                                                                      | $                                                  |        |         |        | $ |        |         |       | $ |        |        
|                                                    |                                                                      |                                                    |         |         |        |   |         |         |      







F-6



---



##### 



APOLLO GOLD CORPORATION


Notes to the Consolidated Financial Statements


Year ended December 31, 2004, 2003 and 2002


(stated in United States dollars; tabular amounts in
thousands)




|   |                      
|-- | ---------------------
|1. | CONTINUING OPERATIONS





|   |                     
|-- | --------------------
|2. | NATURE OF OPERATIONS















F-7



---



##### 



APOLLO GOLD CORPORATION


Notes to the Consolidated Financial
Statements  (Continued)




|   |                                 
|-- | --------------------------------
|2. | NATURE OF OPERATIONS (continued)





|   |                                
|-- | -------------------------------
|3. | SIGNIFICANT ACCOUNTING POLICIES





|    |                            
|--- | ---------------------------
|(a) | Principles of consolidation





|    |                 
|--- | ----------------
|(b) | Use of estimates





|    |                              
|--- | -----------------------------
|(c) | Foreign currency transactions





|    |                          
|--- | -------------------------
|(d) | Cash and cash equivalents





|    |                       
|--- | ----------------------
|(e) | Short-term investments





|    |                         
|--- | ------------------------
|(f) | Broken ore on leach pads



F-8



---



##### 



APOLLO GOLD CORPORATION


Notes to the Consolidated Financial
Statements  (Continued)




|   |                                            
|-- | -------------------------------------------
|3. | SIGNIFICANT ACCOUNTING POLICIES (continued)



|    |                                     
|--- | ------------------------------------
|(f) | Broken ore on leach pads (continued)







|    |            
|--- | -----------
|(g) | Inventories





|    |                              
|--- | -----------------------------
|(h) | Property, plant and equipment









|    |               
|--- | --------------
|(i) | Mineral rights





|    |                         
|--- | ------------------------
|(j) | Deferred stripping costs



F-9



---



##### 



APOLLO GOLD CORPORATION


Notes to the Consolidated Financial
Statements  (Continued)




|   |                                            
|-- | -------------------------------------------
|3. | SIGNIFICANT ACCOUNTING POLICIES (continued)



|    |                                     
|--- | ------------------------------------
|(j) | Deferred stripping costs (continued)





|    |                         
|--- | ------------------------
|(k) | Exploration expenditures





|    |                     
|--- | --------------------
|(l) | Property evaluations





|    |                              
|--- | -----------------------------
|(m) | Reclamation and closure costs







|    |                    
|--- | -------------------
|(n) | Revenue recognition

Accounting for Derivative Instruments
and Hedging Activities


F-10



---



##### 



APOLLO GOLD CORPORATION


Notes to the Consolidated Financial
Statements  (Continued)




|   |                                            
|-- | -------------------------------------------
|3. | SIGNIFICANT ACCOUNTING POLICIES (continued)



|    |                    
|--- | -------------------
|(o) | Commodity contracts





Hedging Relationships




|    |                      
|--- | ---------------------
|(p) | Stock incentive plans

Stock-based Compensation and Other Stock-based Payments.




|                    |  |                |        |  
|------------------- |  | -------------- | ------ | -
|                    |  | Increase as at |       
|                    |  | January 1,     |       
|                    |  | 2004           |       
|                    |  |                |       
|Share capital       |  | $              | 257    |  
|Contributed surplus |  |                | 5,594  |  
|Deficit             |  |                | (5,851 | )



|    |             
|--- | ------------
|(q) | Income taxes



F-11



---



##### 



APOLLO GOLD CORPORATION


Notes to the Consolidated Financial
Statements  (Continued)




|   |                                            
|-- | -------------------------------------------
|3. | SIGNIFICANT ACCOUNTING POLICIES (continued)



|    |               
|--- | --------------
|(r) | Loss per share





|    |                    
|--- | -------------------
|(s) | Comparative figures





|   |            
|-- | -----------
|4. | ACQUISITION



|    |                    
|--- | -------------------
|(a) | Plan of arrangement











|    |                               
|--- | ------------------------------
|(b) | Purchase of Black Fox property



F-12



---



##### 



APOLLO GOLD CORPORATION


Notes to the Consolidated Financial
Statements  (Continued)




|   |                        
|-- | -----------------------
|4. | ACQUISITION (continued)



|    |                                           
|--- | ------------------------------------------
|(b) | Purchase of Black Fox property (continued)







|   |            
|-- | -----------
|5. | INVENTORIES



|                       |  |      |       |  |      |   |       | 
|---------------------- |  | ---- | ----- |  | ---- | - | ----- | 
|                       |  | 2004 |       |  | 2003 |  
|                       |  |      |       |  |      |  
|Concentrate inventory  |  | $    | 729   |  |      | $ | 98    | 
|Dore inventory         |  |      | 70    |  |      |   | 56    | 
|Materials and supplies |  |      | 2,443 |  |      |   | 2,685 | 
|                       |  |      |       |  |      |  
|                       |  | $    | 3,242 |  |      | $ | 2,839 | 
|                       |  |      |       |  |      |  

6.     PROPERTY, PLANT AND
EQUIPMENT




|                                    |                                         |      |        |             |              |   |          |       |  |          |        |        |  |   |        |        | 
|----------------------------------- | --------------------------------------- | ---- | ------ | ----------- | ------------ | - | -------- | ----- |  | -------- | ------ | ------ |  | - | ------ | ------ | 
|                                    |                                         | 2004 |        |             | 2003         |  
|                                    |                                         |      |        |             |              |  
|                                    |                                         |      |        | Accumulated |              |   | Net Book |       |  | Net Book |       
|                                    |                                         | Cost |        |             | Depreciation |   |          | Value |  |          | Value  |       
|                                    |                                         |      |        |             |              |   |          |       |  |          |        |       
|Mine assets                         |                                         |      |        |             |              |   |          |       |  |          |        |        |  |   |        |       
|Building, plant and equipment       |                                         | $    | 22,037 |             |              | $ | 6,060    |       |  | $        | 15,977 |        |  | $ | 10,643 |       
|                                    | Mining properties and development costs |      |        | 42,688      |              |   |          | 7,588 |  |          |        | 35,100 |  |   |        | 20,412 | 
|                                    |                                         |      |        |             |              |   |          |       |  |          |        |       
|                                    |                                         |      | 64,725 |             |              |   | 13,648   |       |  |          | 51,077 |        |  |   | 31,055 |       
|                                    | Mineral rights                          |      |        | 7,467       |              |   |          |      |  |          |        | 7,467  |  |   |        | 7,464  | 
|                                    |                                         |      |        |             |              |   |          |       |  |          |        |       
|Total property, plant and equipment |                                         | $    | 72,192 |             |              | $ | 13,648   |       |  | $        | 58,544 |        |  | $ | 38,519 |       
|                                    |                                         |      |        |             |              |   |          |       |  |          |        |       





|   |                                  
|-- | ---------------------------------
|7. | RESTRICTED CERTIFICATE OF DEPOSIT





F-13



---



##### 



APOLLO GOLD CORPORATION


Notes to the Consolidated Financial
Statements  (Continued)




|   |                                              
|-- | ---------------------------------------------
|7. | RESTRICTED CERTIFICATE OF DEPOSIT (continued)







|   |              
|-- | -------------
|8. | NOTES PAYABLE



|                            |  |   |        |  
|--------------------------- |  | - | ------ | -
|2005                        |  | $ | 2,833  |  
|2006                        |  |   | 674    |  
|                            |  |   |       
|Total notes payable         |  |   | 3,507  |  
|Less current portion        |  |   | (2,833 | )
|                            |  |   |       
|Total long-term obligations |  | $ | 674    |  
|                            |  |   |       



|   |                      
|-- | ---------------------
|9. | CONVERTIBLE DEBENTURE









F-14



---



##### 



APOLLO GOLD CORPORATION


Notes to the Consolidated Financial
Statements  (Continued)




|   |                                  
|-- | ---------------------------------
|9. | CONVERTIBLE DEBENTURE (continued)









|    |                      
|--- | ---------------------
|10. | EMPLOYEE BENEFIT PLAN









|    |                           
|--- | --------------------------
|11. | ACCRUED SITE CLOSURE COSTS







F-15



---



##### 



APOLLO GOLD CORPORATION


Notes to the Consolidated Financial
Statements  (Continued)




|    |                                       
|--- | --------------------------------------
|11. | ACCRUED SITE CLOSURE COSTS (continued)



|                                                                  |  |   |        |  
|----------------------------------------------------------------- |  | - | ------ | -
|Balance, December 31, 2001                                        |  | $ |       |  
|Additions during the year upon acquisition of Nevoro
    (Note 4) |  |   | 20,876 |  
|Accretion                                                         |  |   | 771    |  
|Expenditures                                                      |  |   | (1,139 | )
|                                                                  |  |   |       
|Balance, December 31, 2002                                        |  |   | 20,508 |  
|Accretion                                                         |  |   | 1,280  |  
|Expenditures                                                      |  |   | (169   | )
|                                                                  |  |   |       
|Balance, December 31, 2003                                        |  |   | 21,619 |  
|Accretion                                                         |  |   | 1,418  |  
|Increase in reclamation assets                                    |  |   | 3,380  |  
|Expenditures                                                      |  |   | (225   | )
|                                                                  |  |   |       
|Balance, December 31, 2004                                        |  | $ | 26,192 |  
|                                                                  |  |   |       





|    |              
|--- | -------------
|12. | SHARE CAPITAL



|    |                      
|--- | ---------------------
|(a) | Shares issued in 2004











F-16



---



##### 



APOLLO GOLD CORPORATION


Notes to the Consolidated Financial
Statements  (Continued)




|    |                          
|--- | -------------------------
|12. | SHARE CAPITAL (continued)





|    |                      
|--- | ---------------------
|(b) | Shares issued in 2003









|    |                      
|--- | ---------------------
|(c) | Shares issued in 2002









F-17



---



##### 



APOLLO GOLD CORPORATION


Notes to the Consolidated Financial
Statements  (Continued)




|    |                          
|--- | -------------------------
|12. | SHARE CAPITAL (continued)



|    |         
|--- | --------
|(d) | Warrants



|         |            |           |        |  |            |       |  |   |             |  |  |                   
|-------- | ---------- | --------- | ------ |  | ---------- | ----- |  | - | ----------- |  |  | ------------------
|         |            | Number of |        |  | Exercise   |       |  |  
|Warrants |            |           | Shares |  |            | Price |  |   | Expiry Date
|         |            |           |        |  |            |       |  |   |            
|         | 653,277    |           |        |  | 653,277    |       |  | $ | 1.67        |  |  | September 26, 2005
|         | 63,969     |           |        |  | 63,969     |       |  |   | 1.67        |  |  | October 26, 2005  
|         | 1,000,000  |           |        |  | 1,000,000  |       |  |   | 0.80        |  |  | October 7, 2006   
|         | 232,667    |           |        |  | 232,667    |       |  |   | 0.80        |  |  | November 4, 2006  
|         | 1,167,500  |           |        |  | 1,167,500  |       |  |   | 0.80        |  |  | November 4, 2006  
|         | 3,000,000  |           |        |  | 3,000,000  |       |  |   | 2.10        |  |  | December 23, 2006 
|         | 622,499    |           |        |  | 622,499    |       |  |   | 1.00        |  |  | December 31, 2006 
|         | 6,224,999  |           |        |  | 6,224,999  |       |  |   | 1.00        |  |  | December 31, 2006 
|         | 5,253,600  |           |        |  | 5,253,600  |       |  |   | 0.80        |  |  | November 4, 2007  
|         | 1,396,000  |           |        |  | 1,396,000  |       |  |   | 0.80        |  |  | November 4, 2007  
|         |            |           |        |  |            |       |  |   |            
|         | 19,614,511 |           |        |  | 19,614,511 |       |  |   |             |  |  |                   
|         |            |           |        |  |            |       |  |   |            



|    |        
|--- | -------
|(e) | Options



|                            |                   |                     |           |                   |               |   |       |           |          |  |           |           |   |   |      |      | 
|--------------------------- | ----------------- | ------------------- | --------- | ----------------- | ------------- | - | ----- | --------- | -------- |  | --------- | --------- | - | - | ---- | ---- | 
|                            |                   |                     |           | Performance-based |              
|                            |                   | Fixed Stock Options |           |                   | Stock Options |  
|                            |                   |                     |           |                   |               |  
|                            |                   |                     |           | Weighted          |               |   |       |           | Weighted | 
|                            |                   | Number of           |           |                   | Average       |   |       | Number of |          |  | Average   |          
|                            |                   | Common              |           |                   | Exercise      |   |       | Common    |          |  | Exercise  |          
|                            |                   | Shares              |           |                   | Price         |   |       | Shares    |          |  | Price     |          
|                            |                   |                     |           |                   |               |   |       |           |          |  |           |          
|Balances, December 31, 2001 |                   |                     | 68,855    |                   |               | $ | 44.14 |           |          |  |          |           |   | $ |     |     
|                            | Options granted   |                     |           |                  |               |   |       |          |          |  |           | 2,780,412 |   |   |      | 0.80 | 
|                            | Options cancelled |                     |           | (68,855           | )             |   |       | 44.14     |          |  |           |          |   |   |      |     | 
|                            |                   |                     |           |                   |               |   |       |           |          |  |           |          
|Balances, December 31, 2002 |                   |                     |          |                   |               |   |      |           |          |  | 2,780,412 |           |   |   | 0.80 |     
|                            | Options granted   |                     |           | 2,039,100         |               |   |       | 2.20      |          |  |           |          |   |   |      |     | 
|                            | Options exercised |                     |           |                  |               |   |       |          |          |  |           | (158,616  | ) |   |      | 0.80 | 
|                            | Options cancelled |                     |           | (151,800          | )             |   |       | 2.24      |          |  |           | (121,642  | ) |   |      | 0.80 | 
|                            |                   |                     |           |                   |               |   |       |           |          |  |           |          
|Balances, December 31, 2003 |                   |                     | 1,887,300 |                   |               |   | 2.20  |           |          |  | 2,500,154 |           |   |   | 0.80 |     
|                            | Options granted   |                     |           | 689,300           |               |   |       | 1.84      |          |  |           |          |   |   |      |     | 
|                            | Options exercised |                     |           |                  |               |   |       |          |          |  |           | (399,054  | ) |   |      | 0.80 | 
|                            | Options cancelled |                     |           | (380,300          | )             |   |       | 2.22      |          |  |           | (196,344  | ) |   |      | 0.80 | 
|                            |                   |                     |           |                   |               |   |       |           |          |  |           |          
|Balances, December 31, 2004 |                   |                     | 2,196,300 |                   |               | $ | 2.10  |           |          |  | 1,904,756 |           |   | $ | 0.80 |     
|                            |                   |                     |           |                   |               |   |       |           |          |  |           |          



|    |                        
|--- | -----------------------
|(i) | Fixed stock option plan



F-18



---



##### 



APOLLO GOLD CORPORATION


Notes to the Consolidated Financial
Statements  (Continued)




|    |                          
|--- | -------------------------
|12. | SHARE CAPITAL (continued)



|    |                                    
|--- | -----------------------------------
|(i) | Fixed stock option plan (continued)



|                    |           |                  |                     |                   |                 |   |                  |             |  |  |                 |  |  |   |      | 
|------------------- | --------- | ---------------- | ------------------- | ----------------- | --------------- | - | ---------------- | ----------- |  |  | --------------- |  |  | - | ---- | 
|Options Outstanding |           |                  | Options Exercisable |                  
|                    |           |                  |                     |                  
|                    |           | Weighted Average |                     |                   |                 |   | Weighted Average |            
|Number              |           | Exercise         |                     |                   | Number          |   |                  | Exercise    | 
|Outstanding         |           |                  | Expiry Date         |                   | Price per Share |   |                  | Exercisable |  |  | Price per Share | 
|                    |           |                  |                     |                   |                 |   |                  |             |  |  |                 | 
|                    | 1,505,200 |                  |                     | February 18, 2013 |                 | $ | 2.24             |             |  |  | 752,600         |  |  | $ | 2.24 | 
|                    | 2,600     |                  |                     | March 28, 2013    |                 |   | 2.34             |             |  |  | 1,300           |  |  |   | 2.34 | 
|                    | 70,000    |                  |                     | August 22, 2013   |                 |   | 2.12             |             |  |  | 35,000          |  |  |   | 2.12 | 
|                    | 100,000   |                  |                     | November 13, 2013 |                 |   | 1.67             |             |  |  | 50,000          |  |  |   | 1.67 | 
|                    | 347,000   |                  |                     | March 10, 2014    |                 |   | 2.05             |             |  |  |                |  |  |   |     | 
|                    | 119,900   |                  |                     | May 19, 2014      |                 |   | 1.44             |             |  |  |                |  |  |   |     | 
|                    | 42,800    |                  |                     | August 10, 2014   |                 |   | 0.95             |             |  |  |                |  |  |   |     | 
|                    | 8,800     |                  |                     | November 10, 2014 |                 |   | 0.60             |             |  |  |                |  |  |   |     | 
|                    |           |                  |                     |                   |                 |   |                  |             |  |  |                 | 
|                    | 2,196,300 |                  |                     |                   |                 | $ | 2.10             |             |  |  | 838,900         |  |  | $ | 2.20 | 
|                    |           |                  |                     |                   |                 |   |                  |             |  |  |                 | 



| |                                         
| | ----------------------------------------
| | (ii) Performance-based stock option plan







|    |                         
|--- | ------------------------
|(f) | Stock-based compensation



|                        |  |      |       |   |      |  |       |      |  |  |       |  
|----------------------- |  | ---- | ----- | - | ---- |  | ----- | ---- |  |  | ----- | -
|                        |  | 2004 |       |   | 2003 |  |       | 2002 | 
|                        |  |      |       |   |      |  |       |      | 
|Risk free interest rate |  |      | 3.141 | % |      |  | 3.534 | %    |  |  | 3.550 | %
|Dividend yield          |  |      | 0     | % |      |  | 0     | %    |  |  | 0     | %
|Volatility              |  |      | 57    | % |      |  | 75    | %    |  |  | 92    | %
|Expected life in years  |  |      | 5     |   |      |  | 5     |      |  |  | 2     |  



F-19



---



##### 



APOLLO GOLD CORPORATION


Notes to the Consolidated Financial
Statements  (Continued)




|    |                          
|--- | -------------------------
|12. | SHARE CAPITAL (continued)



|    |                                     
|--- | ------------------------------------
|(f) | Stock-based compensation (continued)



|                                 |                                    |      |   |        |      |  |   |        |  
|-------------------------------- | ---------------------------------- | ---- | - | ------ | ---- |  | - | ------ | -
|                                 |                                    | 2003 |   |        | 2002 | 
|                                 |                                    |      |   |        |      | 
|Net loss                         |                                    |      |   |        |      |  |   |       
|                                 | As reported                        |      | $ | (2,186 | )    |  | $ | (3,051 | )
|                                 | Compensatory fair value of options |      |   | (3,871 | )    |  |   | (1,980 | )
|                                 |                                    |      |   |        |      | 
|                                 | Pro forma                          |      | $ | (6,057 | )    |  | $ | (5,031 | )
|                                 |                                    |      |   |        |      | 
|Basic and diluted loss per share |                                    |      |   |        |      |  |   |       
|                                 | As reported                        |      | $ | (0.04  | )    |  | $ | (0.16  | )
|                                 | Pro forma                          |      |   | (0.11  | )    |  |   | (0.26  | )
|                                 |                                    |      |   |        |      | 





|    |                       
|--- | ----------------------
|(g) | Issuable common shares





|    |             
|--- | ------------
|13. | INCOME TAXES





|                                                               |  |      |        |   |      |   |       |      |  |   |        |  
|-------------------------------------------------------------- |  | ---- | ------ | - | ---- | - | ----- | ---- |  | - | ------ | -
|                                                               |  | 2004 |        |   | 2003 |   |       | 2002 | 
|                                                               |  |      |        |   |      |   |       |      | 
|Statutory tax rate                                             |  |      | 35.62  | % |      |   | 37.62 | %    |  |   | 39.62  | %
|                                                               |  |      |        |   |      |   |       |      | 
|Recovery of income taxes computed at standard rates            |  | $    | 6,479  |   |      | $ | 822   |      |  | $ | 1,209  |  
|Lower foreign tax rates                                        |  |      | (78    | ) |      |   | (10   | )    |  |   | (34    | )
|Tax losses not recognized in the period that the benefit arose |  |      | (6,401 | ) |      |   | (812  | )    |  |   | (1,175 | )
|                                                               |  |      |        |   |      |   |       |      | 
|                                                               |  | $    |       |   |      | $ |      |      |  | $ |       |  
|                                                               |  |      |        |   |      |   |       |      | 

F-20



---



##### 



APOLLO GOLD CORPORATION


Notes to the Consolidated Financial
Statements  (Continued)




|    |                         
|--- | ------------------------
|13. | INCOME TAXES (continued)



|                                       |                                              |      |         |        |      |  |         |        | 
|-------------------------------------- | -------------------------------------------- | ---- | ------- | ------ | ---- |  | ------- | ------ | 
|                                       |                                              | 2004 |         |        | 2003 | 
|                                       |                                              |      |         |        |      | 
|Future income tax assets (liabilities) |                                              |      |         |        |      |  |         |       
|                                       | Net operating losses carried forward         |      | $       | 50,348 |      |  | $       | 35,217 | 
|                                       | Foreign exploration and development expenses |      |         | 1,871  |      |  |         | 1,784  | 
|                                       | Accrued site closure costs                   |      |         | 9,578  |      |  |         | 7,552  | 
|                                       | Other                                        |      |         | 3,231  |      |  |         | 2,362  | 
|                                       |                                              |      |         |        |      | 
|                                       |                                              |      | 65,028  |        |      |  | 46,915  |       
|Less: Valuation allowance              |                                              |      | (50,984 | )      |      |  | (39,636 | )     
|                                       |                                              |      |         |        |      | 
|Net future income tax asset            |                                              |      | 14,044  |        |      |  | 7,279   |       
|Property, plant and equipment          |                                              |      | (14,044 | )      |      |  | (7,279  | )     
|                                       |                                              |      |         |        |      | 
|                                       |                                              |      | $       |       |      |  | $       |       | 
|                                       |                                              |      |         |        |      | 





|              |  |        |         |  |        |  |           | 
|------------- |  | ------ | ------- |  | ------ |  | --------- | 
|Country       |  | Amount |         |  | Expiry | 
|              |  |        |         |  |        | 
|Canada        |  | $      | 18,047  |  |        |  | 2005-2011 | 
|United States |  |        | 121,439 |  |        |  | 2011-2024 | 



|    |                                          
|--- | -----------------------------------------
|14. | FINANCIAL INSTRUMENTS AND RISK MANAGEMENT



|    |            
|--- | -----------
|(a) | Market risk





F-21



---



##### 



APOLLO GOLD CORPORATION


Notes to the Consolidated Financial
Statements  (Continued)




|    |                                                      
|--- | -----------------------------------------------------
|14. | FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (continued)



|    |                                                                                    
|--- | -----------------------------------------------------------------------------------
|(b) | The estimated fair value of the Companys financial
    instruments was as follows:

|                                    |             |              |        |       |       |   |        |          |  |   |        |       |  |   |        |       | 
|----------------------------------- | ----------- | ------------ | ------ | ----- | ----- | - | ------ | -------- |  | - | ------ | ----- |  | - | ------ | ----- | 
|                                    |             | December 31, |       
|                                    |             |              |       
|                                    |             | 2004         |        |       | 2003  |  
|                                    |             |              |        |       |       |  
|                                    |             | Carrying     |        |       | Fair  |   |        | Carrying |  |   | Fair   |      
|                                    |             | Amount       |        |       | Value |   |        | Amount   |  |   | Value  |      
|                                    |             |              |        |       |       |   |        |          |  |   |        |      
|Cash and cash equivalents           |             | $            | 6,947  |       |       | $ | 6,947  |          |  | $ | 25,851 |       |  | $ | 25,851 |      
|Short-term investments              |             |              |       |       |       |   |       |          |  |   | 5,855  |       |  |   | 5,855  |      
|Accounts receivable                 |             |              | 3,088  |       |       |   | 3,088  |          |  |   | 4,647  |       |  |   | 4,647  |      
|Accounts payable                    |             |              | 10,035 |       |       |   | 10,035 |          |  |   | 5,848  |       |  |   | 5,848  |      
|Accrued liabilities                 |             |              | 2,447  |       |       |   | 2,447  |          |  |   | 2,781  |       |  |   | 2,781  |      
|Notes payable and other liabilities |             |              |        |       |       |   |        |          |  |   |        |       |  |   |        |      
|                                    | Current     |              |        | 2,833 |       |   |        | 2,833    |  |   |        | 4,117 |  |   |        | 4,117 | 
|                                    | Non-current |              |        | 799   |       |   |        | 799      |  |   |        | 3,275 |  |   |        | 3,275 | 
|Convertible debenture               |             |              | 5,538  |       |       |   | 5,538  |          |  |   |       |       |  |   |       |      





|    |                    
|--- | -------------------
|(c) | Commodity contracts





F-22



---



##### 



APOLLO GOLD CORPORATION


Notes to the Consolidated Financial
Statements  (Continued)




|    |                                                      
|--- | -----------------------------------------------------
|14. | FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (continued)



|    |                                
|--- | -------------------------------
|(c) | Commodity contracts (continued)



|                                                           |  |             |         |   |           |   |         |             |  |   |          |   |  |             |         |   |          |   |         |   |  |   |         |  
|---------------------------------------------------------- |  | ----------- | ------- | - | --------- | - | ------- | ----------- |  | - | -------- | - |  | ----------- | ------- | - | -------- | - | ------- | - |  | - | ------- | -
|                                                           |  | Quarter 1   |         |   | Quarter 2 |   |         | Quarter 3   | 
|                                                           |  |             |         |   |           |   |         |             | 
|                                                           |  | As Reported |         |   | Restated  |   |         | As Reported |  |   | Restated |   |  | As Reported |         |   | Restated |  
|                                                           |  |             |         |   |           |   |         |             |  |   |          |   |  |             |         |   |          |  
|Statement of Operations                                    |  |             |         |   |           |   |         |             |  |   |          |   |  |             |         |   |          |   |         |   |  |   |         |  
|Revenue                                                    |  | $           | 20,079  |   |           | $ | 19,979  |             |  | $ | 13,105   |   |  | $           | 13,276  |   |          | $ | 12,720  |   |  | $ | 12,350  |  
|Realized and unrealized (loss) gain on commodity contracts |  |             |        |   |           |   | (523    | )           |  |   |         |   |  |             | 1,685   |   |          |   |        |   |  |   | (646    | )
|Net loss                                                   |  |             | (993    | ) |           |   | (1,616  | )           |  |   | (6,928   | ) |  |             | (5,072  | ) |          |   | (6,116  | ) |  |   | (7,132  | )
|Deficit                                                    |  |             | (52,981 | ) |           |   | (53,604 | )           |  |   | (59,909  | ) |  |             | (58,053 | ) |          |   | (66,025 | ) |  |   | (67,041 | )
|Basic and diluted loss per share                           |  |             | (0.01   | ) |           |   | (0.02   | )           |  |   | (0.09    | ) |  |             | (0.06   | ) |          |   | (0.08   | ) |  |   | (0.09   | )
|Balance Sheet                                              |  |             |         |   |           |   |         |             |  |   |          |   |  |             |         |   |          |   |         |   |  |   |         |  
|Deferred loss on commodity contracts                       |  |             |        |   |           |   | 4,355   |             |  |   |         |   |  |             | 3,350   |   |          |   |        |   |  |   | 2,345   |  
|Accounts payable                                           |  |             | 5,420   |   |           |   | 5,200   |             |  |   | 5,313    |   |  |             | 5,238   |   |          |   | 9,959   |   |  |   | 9,959   |  
|Unrealized loss on commodity contracts                     |  |             |        |   |           |   | 5,198   |             |  |   |         |   |  |             | 2,192   |   |          |   |        |   |  |   | 2,128   |  



|    |                              
|--- | -----------------------------
|15. | COMMITMENTS AND CONTINGENCIES



|    |          
|--- | ---------
|(a) | Royalties





|    |              
|--- | -------------
|(b) | Environmental





|    |                      
|--- | ---------------------
|(c) | Litigation and claims



F-23



---



##### 



APOLLO GOLD CORPORATION


Notes to the Consolidated Financial
Statements  (Continued)




|    |                  
|--- | -----------------
|16. | LEASE COMMITMENTS



|                                                    |  |         |     |  |           |   |     | 
|--------------------------------------------------- |  | ------- | --- |  | --------- | - | --- | 
|                                                    |  | Capital |     |  | Operating |  
|                                                    |  | Leases  |     |  | Leases    |  
|                                                    |  |         |     |  |           |  
|2005                                                |  | $       | 444 |  |           | $ | 295 | 
|2006                                                |  |         | 260 |  |           |   | 249 | 
|2007                                                |  |         |    |  |           |   | 99  | 
|2008                                                |  |         |    |  |           |   | 27  | 
|2009                                                |  |         |    |  |           |   | 2   | 
|                                                    |  |         |     |  |           |  
|Total                                               |  | $       | 704 |  |           | $ | 672 | 
|                                                    |  |         |     |  |           |  
|Less imputed interest                               |  |         | 20  |  |           |   |     | 
|                                                    |  |         |     |  |           |  
|Total present value of minimum capitalized payments |  |         | 684 |  |           |   |     | 
|Less current portion of capital lease obligations   |  |         | 426 |  |           |   |     | 
|                                                    |  |         |     |  |           |  
|Long-term capital lease obligations                 |  | $       | 258 |  |           |   |     | 
|                                                    |  |         |     |  |           |  





|    |                                                       
|--- | ------------------------------------------------------
|17. | NET CHANGE IN NON-CASH OPERATING WORKING CAPITAL ITEMS

|                        |                                   |      |   |        |      |  |   |        |   |  |   |        |  
|----------------------- | --------------------------------- | ---- | - | ------ | ---- |  | - | ------ | - |  | - | ------ | -
|                        |                                   | 2004 |   |        | 2003 |  |   | 2002   |  
|                        |                                   |      |   |        |      |  |   |        |  
|(Increase) decrease in: |                                   |      |   |        |      |  |   |        |   |  |   |       
|                        | Accounts receivable               |      | $ | 1,559  |      |  | $ | (1,419 | ) |  | $ | (1,716 | )
|                        | Prepaids                          |      |   | 129    |      |  |   | (20    | ) |  |   | (346   | )
|                        | Broken ore on leach pad           |      |   | (2,363 | )    |  |   | (718   | ) |  |   | 1,752  |  
|                        | Inventories                       |      |   | (403   | )    |  |   | 87     |   |  |   | (259   | )
|Increase (decrease) in: |                                   |      |   |        |      |  |   |        |   |  |   |       
|                        | Accounts payable                  |      |   | 4,187  |      |  |   | 913    |   |  |   | (668   | )
|                        | Accrued liabilities               |      |   | (334   | )    |  |   | 820    |   |  |   | 95     |  
|                        | Property and mining taxes payable |      |   | (10    | )    |  |   | 169    |   |  |   | (64    | )
|                        |                                   |      |   |        |      |  |   |        |  
|                        |                                   |      | $ | 2,765  |      |  | $ | (168   | ) |  | $ | (1,206 | )
|                        |                                   |      |   |        |      |  |   |        |  



|    |                           
|--- | --------------------------
|18. | RELATED PARTY TRANSACTIONS



|                                                                                          |  |      |     |  |      |   |     |      |  |   |     | 
|----------------------------------------------------------------------------------------- |  | ---- | --- |  | ---- | - | --- | ---- |  | - | --- | 
|                                                                                          |  | 2004 |     |  | 2003 |   |     | 2002 | 
|                                                                                          |  |      |     |  |      |   |     |      | 
|Legal fees paid to two law firms, a partner of each firm is a
    director of the Company |  | $    | 549 |  |      | $ | 795 |      |  | $ | 153 | 
|Consulting services paid to a relative of an officer and
    director of the Company      |  |      | 6   |  |      |   | 64  |      |  |   | 63  | 

F-24



---



##### 



APOLLO GOLD CORPORATION


Notes to the Consolidated Financial
Statements  (Continued)




|    |                                       
|--- | --------------------------------------
|18. | RELATED PARTY TRANSACTIONS (continued)





|    |                      
|--- | ---------------------
|19. | SEGMENTED INFORMATION





|                                        |  |         |        |   |         |   |        |       |  |   |           |  |  |       |       |  |  |   |         | 
|--------------------------------------- |  | ------- | ------ | - | ------- | - | ------ | ----- |  | - | --------- |  |  | ----- | ----- |  |  | - | ------- | 
|                                        |  | Montana |        |   | Florida |   |        | Black |  |   | Corporate |  |  |      
|                                        |  | Tunnels |        |   | Canyon  |   |        | Fox   |  |   | and Other |  |  | Total |      
|                                        |  |         |        |   |         |   |        |       |  |   |           |  |  |       |      
|Cash and cash equivalents               |  | $       | (260   | ) |         | $ | 61     |       |  | $ | 53        |  |  | $     | 7,093 |  |  | $ | 6,947   | 
|Broken ore on leach pad  current       |  |         |       |   |         |   | 8,960  |       |  |   |          |  |  |       |      |  |  |   | 8,960   | 
|Other non-cash current assets           |  |         | 4,985  |   |         |   | 1,489  |       |  |   | 151       |  |  |       | 128   |  |  |   | 6,753   | 
|                                        |  |         |        |   |         |   |        |       |  |   |           |  |  |       |      
|                                        |  |         | 4,725  |   |         |   | 10,510 |       |  |   | 204       |  |  |       | 7,221 |  |  |   | 22,660  | 
|Broken ore on leach pad  long-term     |  |         |       |   |         |   | 4,824  |       |  |   |          |  |  |       |      |  |  |   | 4,824   | 
|Property, plant and equipment           |  |         | 17,239 |   |         |   | 20,945 |       |  |   | 19,560    |  |  |       | 800   |  |  |   | 58,544  | 
|Deferred stripping costs                |  |         | 36,851 |   |         |   |       |       |  |   |          |  |  |       |      |  |  |   | 36,851  | 
|Restricted certificate of deposit       |  |         | 3,752  |   |         |   | 4,995  |       |  |   | 562       |  |  |       | 57    |  |  |   | 9,366   | 
|Deferred costs and losses               |  |         |       |   |         |   | 1,340  |       |  |   |          |  |  |       | 901   |  |  |   | 2,241   | 
|                                        |  |         |        |   |         |   |        |       |  |   |           |  |  |       |      
|Total assets                            |  | $       | 62,567 |   |         | $ | 42,614 |       |  | $ | 20,326    |  |  | $     | 8,979 |  |  | $ | 134,486 | 
|                                        |  |         |        |   |         |   |        |       |  |   |           |  |  |       |      
|Current liabilities                     |  | $       | 6,943  |   |         | $ | 6,724  |       |  | $ | 481       |  |  | $     | 3,737 |  |  | $ | 17,885  | 
|Notes payable and convertible debenture |  |         | 423    |   |         |   | 376    |       |  |   |          |  |  |       | 5,538 |  |  |   | 6,337   | 
|Accrued site closure costs              |  |         | 11,753 |   |         |   | 14,439 |       |  |   |          |  |  |       |      |  |  |   | 26,192  | 
|                                        |  |         |        |   |         |   |        |       |  |   |           |  |  |       |      
|Total liabilities                       |  | $       | 19,119 |   |         | $ | 21,539 |       |  | $ | 481       |  |  | $     | 9,275 |  |  | $ | 50,414  | 
|                                        |  |         |        |   |         |   |        |       |  |   |           |  |  |       |      

F-25



---



##### 



APOLLO GOLD CORPORATION


Notes to the Consolidated Financial
Statements  (Continued)




|    |                                  
|--- | ---------------------------------
|19. | SEGMENTED INFORMATION (continued)



|                                    |  |         |        |  |         |   |        |       |  |   |           |  |  |       |        |  |  |   |         | 
|----------------------------------- |  | ------- | ------ |  | ------- | - | ------ | ----- |  | - | --------- |  |  | ----- | ------ |  |  | - | ------- | 
|                                    |  | Montana |        |  | Florida |   |        | Black |  |   | Corporate |  |  |      
|                                    |  | Tunnels |        |  | Canyon  |   |        | Fox   |  |   | and Other |  |  | Total |       
|                                    |  |         |        |  |         |   |        |       |  |   |           |  |  |       |       
|Cash and cash equivalents           |  | $       | 754    |  |         | $ | 19     |       |  | $ | 95        |  |  | $     | 24,983 |  |  | $ | 25,851  | 
|Short-term investments              |  |         |       |  |         |   |       |       |  |   |          |  |  |       | 5,855  |  |  |   | 5,855   | 
|Broken ore on leach pad  current   |  |         |       |  |         |   | 9,594  |       |  |   |          |  |  |       |       |  |  |   | 9,594   | 
|Other non-cash current assets       |  |         | 5,345  |  |         |   | 2,263  |       |  |   | 71        |  |  |       | 359    |  |  |   | 8,038   | 
|                                    |  |         |        |  |         |   |        |       |  |   |           |  |  |       |       
|                                    |  |         | 6,099  |  |         |   | 11,876 |       |  |   | 166       |  |  |       | 31,197 |  |  |   | 49,338  | 
|Broken ore on leach pad  long-term |  |         |       |  |         |   | 1,827  |       |  |   |          |  |  |       |       |  |  |   | 1,827   | 
|Property, plant and equipment       |  |         | 15,559 |  |         |   | 13,529 |       |  |   | 8,914     |  |  |       | 517    |  |  |   | 38,519  | 
|Deferred stripping costs            |  |         | 24,033 |  |         |   |       |       |  |   |          |  |  |       |       |  |  |   | 24,033  | 
|Restricted certificate of deposit   |  |         | 2,663  |  |         |   | 3,809  |       |  |   | 377       |  |  |       | 44     |  |  |   | 6,893   | 
|                                    |  |         |        |  |         |   |        |       |  |   |           |  |  |       |       
|Total assets                        |  | $       | 48,354 |  |         | $ | 31,041 |       |  | $ | 9,457     |  |  | $     | 31,758 |  |  | $ | 120,610 | 
|                                    |  |         |        |  |         |   |        |       |  |   |           |  |  |       |       
|Current liabilities                 |  | $       | 6,140  |  |         | $ | 6,515  |       |  | $ | 507       |  |  | $     | 664    |  |  | $ | 13,826  | 
|Notes payable                       |  |         | 980    |  |         |   | 2,295  |       |  |   |          |  |  |       |       |  |  |   | 3,275   | 
|Accrued site closure costs          |  |         | 9,148  |  |         |   | 12,471 |       |  |   |          |  |  |       |       |  |  |   | 21,619  | 
|                                    |  |         |        |  |         |   |        |       |  |   |           |  |  |       |       
|Total liabilities                   |  | $       | 16,268 |  |         | $ | 21,281 |       |  | $ | 507       |  |  | $     | 664    |  |  | $ | 38,720  | 
|                                    |  |         |        |  |         |   |        |       |  |   |           |  |  |       |       

F-26



---



##### 



APOLLO GOLD CORPORATION


Notes to the Consolidated Financial
Statements  (Continued)




|    |                                  
|--- | ---------------------------------
|19. | SEGMENTED INFORMATION (continued)



|                                                    |                                            |                              |        |        |         |   |        |       |  |   |           |        |  |       |        |     |  |   |         |        | 
|--------------------------------------------------- | ------------------------------------------ | ---------------------------- | ------ | ------ | ------- | - | ------ | ----- |  | - | --------- | ------ |  | ----- | ------ | --- |  | - | ------- | ------ | 
|                                                    |                                            | Year Ended December 31, 2004 |       
|                                                    |                                            |                              |       
|                                                    |                                            | Montana                      |        |        | Florida |   |        | Black |  |   | Corporate |        |  |      
|                                                    |                                            | Tunnels                      |        |        | Canyon  |   |        | Fox   |  |   | and Other |        |  | Total |       
|                                                    |                                            |                              |        |        |         |   |        |       |  |   |           |        |  |       |       
|Revenue from sale of minerals                       |                                            | $                            | 38,254 |        |         | $ | 26,487 |       |  | $ |          |        |  | $     |       |     |  | $ | 64,741  |       
|                                                    |                                            |                              |        |        |         |   |        |       |  |   |           |        |  |       |       
|Direct operating costs                              |                                            |                              | 39,655 |        |         |   | 26,190 |       |  |   |          |        |  |       |       |     |  |   | 65,845  |       
|Depreciation and amortization                       |                                            |                              | 2,527  |        |         |   | 2,581  |       |  |   |          |        |  |       | 113    |     |  |   | 5,221   |       
|General and administrative                          |                                            |                              |       |        |         |   |       |       |  |   |          |        |  |       | 7,095  |     |  |   | 7,095   |       
|Share-based compensation                            |                                            |                              |       |        |         |   |       |       |  |   |          |        |  |       | 767    |     |  |   | 767     |       
|Accrued site closure costs  accretion expense      |                                            |                              | 820    |        |         |   | 598    |       |  |   |          |        |  |       |       |     |  |   | 1,418   |       
|Royalties                                           |                                            |                              |       |        |         |   | 669    |       |  |   |          |        |  |       |       |     |  |   | 669     |       
|Exploration and development                         |                                            |                              |       |        |         |   |       |       |  |   |          |        |  |       | 1,051  |     |  |   | 1,051   |       
|                                                    |                                            |                              |        |        |         |   |        |       |  |   |           |        |  |       |       
|                                                    |                                            |                              | 43,002 |        |         |   | 30,038 |       |  |   |          |        |  |       | 9,026  |     |  |   | 82,066  |       
|                                                    |                                            |                              |        |        |         |   |        |       |  |   |           |        |  |       |       
|Operating loss                                      |                                            |                              | (4,748 | )      |         |   | (3,551 | )     |  |   |          |        |  |       | (9,026 | )   |  |   | (17,325 | )     
|Interest income                                     |                                            |                              |       |        |         |   |       |       |  |   |          |        |  |       | 313    |     |  |   | 313     |       
|Interest expense                                    |                                            |                              | (141   | )      |         |   | (216   | )     |  |   |          |        |  |       | (111   | )   |  |   | (468    | )     
|Realized and unrealized gain on commodity contracts |                                            |                              |       |        |         |   |       |       |  |   |          |        |  |       | 232    |     |  |   | 232     |       
|Foreign exchange gain (loss) and other              |                                            |                              | (111   | )      |         |   | (177   | )     |  |   |          |        |  |       | (653   | )   |  |   | (941    | )     
|                                                    |                                            |                              |        |        |         |   |        |       |  |   |           |        |  |       |       
|Net loss                                            |                                            | $                            | (5,000 | )      |         | $ | (3,944 | )     |  | $ |          |        |  | $     | (9,245 | )   |  | $ | (18,189 | )     
|                                                    |                                            |                              |        |        |         |   |        |       |  |   |           |        |  |       |       
|Investing activities                                |                                            |                              |        |        |         |   |        |       |  |   |           |        |  |       |        |     |  |   |         |       
|                                                    | Property, plant and equipment expenditures |                              | $      | 4,207  |         |   | $      | 9,997 |  |   | $         | 10,646 |  |       | $      | 394 |  |   | $       | 25,244 | 
|                                                    | Deferred stripping expenditures            |                              |        | 12,818 |         |   |        |      |  |   |           |       |  |       |        |    |  |   |         | 12,818 | 

F-27



---



##### 



APOLLO GOLD CORPORATION


Notes to the Consolidated Financial
Statements  (Continued)




|    |                                  
|--- | ---------------------------------
|19. | SEGMENTED INFORMATION (continued)

|                                               |                                            |                              |        |       |         |   |        |       |  |   |           |       |  |       |        |     |  |   |        |        | 
|---------------------------------------------- | ------------------------------------------ | ---------------------------- | ------ | ----- | ------- | - | ------ | ----- |  | - | --------- | ----- |  | ----- | ------ | --- |  | - | ------ | ------ | 
|                                               |                                            | Year Ended December 31, 2003 |       
|                                               |                                            |                              |       
|                                               |                                            | Montana                      |        |       | Florida |   |        | Black |  |   | Corporate |       |  |      
|                                               |                                            | Tunnels                      |        |       | Canyon  |   |        | Fox   |  |   | and Other |       |  | Total |       
|                                               |                                            |                              |        |       |         |   |        |       |  |   |           |       |  |       |       
|Revenue from sale of minerals                  |                                            | $                            | 30,858 |       |         | $ | 35,983 |       |  | $ |          |       |  | $     |       |     |  | $ | 66,841 |       
|                                               |                                            |                              |        |       |         |   |        |       |  |   |           |       |  |       |       
|Direct operating costs                         |                                            |                              | 27,149 |       |         |   | 28,535 |       |  |   |          |       |  |       |       |     |  |   | 55,684 |       
|Depreciation and amortization                  |                                            |                              | 1,251  |       |         |   | 3,731  |       |  |   |          |       |  |       | 15     |     |  |   | 4,997  |       
|General and administrative                     |                                            |                              |       |       |         |   |       |       |  |   |          |       |  |       | 4,651  |     |  |   | 4,651  |       
|Share-based compensation                       |                                            |                              |       |       |         |   |       |       |  |   |          |       |  |       | 376    |     |  |   | 376    |       
|Accrued site closure costs  accretion expense |                                            |                              | 500    |       |         |   | 780    |       |  |   |          |       |  |       |       |     |  |   | 1,280  |       
|Royalties                                      |                                            |                              |       |       |         |   | 898    |       |  |   |          |       |  |       |       |     |  |   | 898    |       
|Exploration and development                    |                                            |                              |       |       |         |   |       |       |  |   | 1,553     |       |  |       | 564    |     |  |   | 2,117  |       
|                                               |                                            |                              |        |       |         |   |        |       |  |   |           |       |  |       |       
|                                               |                                            |                              | 28,900 |       |         |   | 33,944 |       |  |   | 1,553     |       |  |       | 5,606  |     |  |   | 70,003 |       
|                                               |                                            |                              |        |       |         |   |        |       |  |   |           |       |  |       |       
|Operating income (loss)                        |                                            |                              | 1,958  |       |         |   | 2,039  |       |  |   | (1,553    | )     |  |       | (5,606 | )   |  |   | (3,162 | )     
|Interest income                                |                                            |                              |       |       |         |   |       |       |  |   |          |       |  |       | 213    |     |  |   | 213    |       
|Interest expense                               |                                            |                              | (152   | )     |         |   | (339   | )     |  |   |          |       |  |       | (53    | )   |  |   | (544   | )     
|Foreign exchange gain (loss) and other         |                                            |                              |       |       |         |   |       |       |  |   | (271      | )     |  |       | 1,578  |     |  |   | 1,307  |       
|                                               |                                            |                              |        |       |         |   |        |       |  |   |           |       |  |       |       
|Net (loss) income                              |                                            | $                            | 1,806  |       |         | $ | 1,700  |       |  | $ | (1,824    | )     |  | $     | (3,868 | )   |  | $ | (2,186 | )     
|                                               |                                            |                              |        |       |         |   |        |       |  |   |           |       |  |       |       
|Investing activities                           |                                            |                              |        |       |         |   |        |       |  |   |           |       |  |       |        |     |  |   |        |       
|                                               | Property, plant and equipment expenditures |                              | $      | 4,184 |         |   | $      | 4,489 |  |   | $         | 3,937 |  |       | $      | 531 |  |   | $      | 13,141 | 
|                                               | Deferred stripping expenditures            |                              |        | 8,734 |         |   |        |      |  |   |           |      |  |       |        |    |  |   |        | 8,734  | 

F-28



---



##### 



APOLLO GOLD CORPORATION


Notes to the Consolidated Financial
Statements  (Continued)




|    |                                  
|--- | ---------------------------------
|19. | SEGMENTED INFORMATION (continued)

|                                                                |  |                              |        |   |         |   |        |       |  |   |           |   |  |       |        |   |  |   |        |  
|--------------------------------------------------------------- |  | ---------------------------- | ------ | - | ------- | - | ------ | ----- |  | - | --------- | - |  | ----- | ------ | - |  | - | ------ | -
|                                                                |  | Year Ended December 31, 2002 |       
|                                                                |  |                              |       
|                                                                |  | Montana                      |        |   | Florida |   |        | Black |  |   | Corporate |   |  |      
|                                                                |  | Tunnels                      |        |   | Canyon  |   |        | Fox   |  |   | and Other |   |  | Total |       
|                                                                |  |                              |        |   |         |   |        |       |  |   |           |   |  |       |       
|Revenue from sale of minerals                                   |  | $                            |       |   |         | $ | 20,410 |       |  | $ |          |   |  | $     |       |   |  | $ | 20,410 |  
|                                                                |  |                              |        |   |         |   |        |       |  |   |           |   |  |       |       
|Direct operating costs                                          |  |                              |       |   |         |   | 15,696 |       |  |   |          |   |  |       | 30     |   |  |   | 15,726 |  
|Depreciation and amortization                                   |  |                              |       |   |         |   | 3,488  |       |  |   |          |   |  |       |       |   |  |   | 3,488  |  
|General and administrative                                      |  |                              |       |   |         |   |       |       |  |   |          |   |  |       | 2,286  |   |  |   | 2,286  |  
|Share-based compensation                                        |  |                              |       |   |         |   |       |       |  |   |          |   |  |       | 615    |   |  |   | 615    |  
|Accrued site closure costs  accretion expense                  |  |                              | 300    |   |         |   | 471    |       |  |   |          |   |  |       |       |   |  |   | 771    |  
|Royalties                                                       |  |                              |       |   |         |   | 508    |       |  |   |          |   |  |       |       |   |  |   | 508    |  
|Exploration and development                                     |  |                              | 114    |   |         |   |       |       |  |   |          |   |  |       | 337    |   |  |   | 451    |  
|                                                                |  |                              |        |   |         |   |        |       |  |   |           |   |  |       |       
|                                                                |  |                              | 414    |   |         |   | 20,163 |       |  |   |          |   |  |       | 3,268  |   |  |   | 23,845 |  
|                                                                |  |                              |        |   |         |   |        |       |  |   |           |   |  |       |       
|Operating income (loss)                                         |  |                              | (414   | ) |         |   | 247    |       |  |   |          |   |  |       | (3,268 | ) |  |   | (3,435 | )
|Interest income                                                 |  |                              | 29     |   |         |   |       |       |  |   |          |   |  |       | 47     |   |  |   | 76     |  
|Interest expense                                                |  |                              | (260   | ) |         |   | (463   | )     |  |   |          |   |  |       | (268   | ) |  |   | (991   | )
|Foreign exchange gain (loss) and other                          |  |                              | 236    |   |         |   | 621    |       |  |   | (99       | ) |  |       | 541    |   |  |   | 1,299  |  
|                                                                |  |                              |        |   |         |   |        |       |  |   |           |   |  |       |       
|Net (loss) income                                               |  | $                            | (409   | ) |         | $ | 405    |       |  | $ | (99       | ) |  | $     | (2,948 | ) |  | $ | (3,051 | )
|                                                                |  |                              |        |   |         |   |        |       |  |   |           |   |  |       |       
|Investing activities Property, plant and equipment expenditures |  | $                            | 1,967  |   |         | $ | 2,515  |       |  | $ | 4,977     |   |  | $     |       |   |  | $ | 9,459  |  
|Deferred stripping expenditures                                 |  |                              | 12,129 |   |         |   |       |       |  |   |          |   |  |       |       |   |  |   | 12,129 |  

20.     DIFFERENCES BETWEEN CANADIAN
AND U.S. GAAP




F-29



---



##### 



APOLLO GOLD CORPORATION


Notes to the Consolidated Financial
Statements  (Continued)




|    |                                                           
|--- | ----------------------------------------------------------
|20. | DIFFERENCES BETWEEN CANADIAN AND U.S. GAAP
    (continued)



Consolidated Balance Sheets as at December 31, 2004 and
2003


|                                                                                                                                         |  |           |         |   |           |          |        |           |  |   |           |   |  |             |        |  |              |   |       |             |  |   |             |   |  |         |        |   |  |   |        |  |  |   |          |  
|---------------------------------------------------------------------------------------------------------------------------------------- |  | --------- | ------- | - | --------- | -------- | ------ | --------- |  | - | --------- | - |  | ----------- | ------ |  | ------------ | - | ----- | ----------- |  | - | ----------- | - |  | ------- | ------ | - |  | - | ------ |  |  | - | -------- | -
|                                                                                                                                         |  |           |         |   |           | Deferred |        |           |  |   |           |   |  |             | Equity |  |              |   |       |            
|                                                                                                                                         |  | Property, |         |   | Deferred  |          |        | Loss on   |  |   |           |   |  |             |        |  | Component of |   |       |             |  |  
|                                                                                                                                         |  | Plant and |         |   | Stripping |          |        | Commodity |  |   | Deferred  |   |  | Convertible |        |  | Share        |   |       | Convertible |  |   | Contributed |   |  |        
|                                                                                                                                         |  | Equipment |         |   | Costs     |          |        | Contracts |  |   | Financing |   |  | Debentures  |        |  | Capital      |   |       | Debenture   |  |   | Surplus     |   |  | Deficit |       
|                                                                                                                                         |  |           |         |   |           |          |        |           |  |   |           |   |  |             |        |  |              |   |       |             |  |   |             |   |  |         |       
|As at December 31, 2004, Canadian GAAP                                                                                                   |  | $         | 58,544  |   |           | $        | 36,851 |           |  | $ | 1,340     |   |  | $           | 901    |  |              | $ | 5,538 |             |  | $ | 141,795     |   |  | $       | 1,815  |   |  | $ | 9,627  |  |  | $ | (70,177  | )
|Impairment of property, plant and equipment, capitalized
    deferred stripping costs and change in depreciation and
    amortization(b) |  |           | (4,848  | ) |           |          | (8,199 | )         |  |   |          |   |  |             |       |  |              |   |      |             |  |   |            |   |  |         |       |   |  |   |       |  |  |   | (13,047  | )
|Black Fox development costs(c)                                                                                                           |  |           | (14,048 | ) |           |          |       |           |  |   |          |   |  |             |       |  |              |   |      |             |  |   |            |   |  |         |       |   |  |   |       |  |  |   | (14,048  | )
|Convertible debenture(d)(i)                                                                                                              |  |           |        |   |           |          |       |           |  |   |          |   |  |             | 350    |  |              |   | 2,321 |             |  |   |            |   |  |         | (1,815 | ) |  |   | 123    |  |  |   | (279     | )
|Convertible debenture(d)(ii)                                                                                                             |  |           |        |   |           |          |       |           |  |   |          |   |  |             |       |  |              |   |      |             |  |   |            |   |  |         |       |   |  |   | 20,675 |  |  |   | (20,675  | )
|Commodity contracts(e)                                                                                                                   |  |           |        |   |           |          |       |           |  |   | (1,340    | ) |  |             |       |  |              |   |      |             |  |   |            |   |  |         |       |   |  |   |       |  |  |   | (1,340   | )
|Flow-through common shares(f)                                                                                                            |  |           |        |   |           |          |       |           |  |   |           |   |  |             |       |  |              |   |      |             |  |   | (238        | ) |  |         |       |   |  |   |       |  |  |   | 238      |  
|                                                                                                                                         |  |           |         |   |           |          |        |           |  |   |           |   |  |             |        |  |              |   |       |             |  |   |             |   |  |         |       
|As at December 31, 2004, U.S. GAAP                                                                                                       |  | $         | 39,648  |   |           | $        | 28,652 |           |  | $ |          |   |  | $           | 1,251  |  |              | $ | 7,859 |             |  | $ | 141,557     |   |  | $       |       |   |  | $ | 30,425 |  |  | $ | (119,328 | )
|                                                                                                                                         |  |           |         |   |           |          |        |           |  |   |           |   |  |             |        |  |              |   |       |             |  |   |             |   |  |         |       

|                                                                                                                                         |  |           |        |   |           |   |        |          |  |   |             |   |  |         |       |  |             |   |         |         |  |   |        |  |  |   |         |  
|---------------------------------------------------------------------------------------------------------------------------------------- |  | --------- | ------ | - | --------- | - | ------ | -------- |  | - | ----------- | - |  | ------- | ----- |  | ----------- | - | ------- | ------- |  | - | ------ |  |  | - | ------- | -
|                                                                                                                                         |  | Property, |        |   | Deferred  |   |        |          |  |   |             |   |  |         |       | 
|                                                                                                                                         |  | Plant and |        |   | Stripping |   |        | Accounts |  |   | Other       |   |  | Share   |       |  | Contributed |   |         |        
|                                                                                                                                         |  | Equipment |        |   | Costs     |   |        | Payable  |  |   | Liabilities |   |  | Capital |       |  | Surplus     |   |         | Deficit | 
|                                                                                                                                         |  |           |        |   |           |   |        |          |  |   |             |   |  |         |       |  |             |   |         |         | 
|As at December 31, 2003, Canadian GAAP                                                                                                   |  | $         | 38,519 |   |           | $ | 24,033 |          |  | $ | 5,848       |   |  | $       |      |  |             | $ | 120,624 |         |  | $ | 7,172  |  |  | $ | (46,137 | )
|Share-based compensation(a)                                                                                                              |  |           |       |   |           |   |       |          |  |   |            |   |  |         |      |  |             |   |        |         |  |   | 4,343  |  |  |   | (4,343  | )
|Impairment of property, plant and equipment, capitalized
    deferred stripping costs and change in depreciation and
    amortization(b) |  |           | (5,543 | ) |           |   | (8,740 | )        |  |   |            |   |  |         |      |  |             |   |        |         |  |   |       |  |  |   | (14,283 | )
|Black Fox development costs(c)                                                                                                           |  |           | (3,643 | ) |           |   |       |          |  |   |            |   |  |         |      |  |             |   |        |         |  |   |       |  |  |   | (3,643  | )
|Convertible debenture((d)(ii))                                                                                                           |  |           |       |   |           |   |       |          |  |   |            |   |  |         |      |  |             |   |        |         |  |   | 20,675 |  |  |   | (20,675 | )
|Commodity contracts(e)                                                                                                                   |  |           |       |   |           |   |       |          |  |   | (551        | ) |  |         | 5,911 |  |             |   |        |         |  |   |       |  |  |   | (5,360  | )
|Flow-through common shares(f)                                                                                                            |  |           |       |   |           |   |       |          |  |   |            |   |  |         |      |  |             |   | (238    | )       |  |   |       |  |  |   | 238     |  
|                                                                                                                                         |  |           |        |   |           |   |        |          |  |   |             |   |  |         |       |  |             |   |         |         | 
|As at December 31, 2003, U.S. GAAP                                                                                                       |  | $         | 29,333 |   |           | $ | 15,293 |          |  | $ | 5,297       |   |  | $       | 5,911 |  |             | $ | 120,386 |         |  | $ | 32,190 |  |  | $ | (94,203 | )
|                                                                                                                                         |  |           |        |   |           |   |        |          |  |   |             |   |  |         |       |  |             |   |         |         | 

F-30



---



##### 



APOLLO GOLD CORPORATION


Notes to the Consolidated Financial
Statements  (Continued)




|    |                                                           
|--- | ----------------------------------------------------------
|20. | DIFFERENCES BETWEEN CANADIAN AND U.S. GAAP
    (continued)



|                                                                                     |  |      |         |   |      |   |         |      |  |   |         |  
|------------------------------------------------------------------------------------ |  | ---- | ------- | - | ---- | - | ------- | ---- |  | - | ------- | -
|                                                                                     |  | 2004 |         |   | 2003 |   |         | 2002 | 
|                                                                                     |  |      |         |   |      |   |         |      | 
|Net loss for the year ended December 31, based on Canadian
    GAAP                  |  | $    | (18,189 | ) |      | $ | (2,186  | )    |  | $ | (3,051  | )
|Cumulative effect of change in accounting policy(a)                                  |  |      | (1,508  | ) |      |   |        |      |  |   |        |  
|Share-based compensation(a)                                                          |  |      |        |   |      |   | (1,739  | )    |  |   | (2,604  | )
|Impairment of property, plant and equipment and change in
    depreciation(b)        |  |      | 695     |   |      |   | (87     | )    |  |   | (5,456  | )
|Impairment of capitalized deferred stripping costs and change in
    amortization(b) |  |      | 541     |   |      |   | 88      |      |  |   | (8,828  | )
|Black Fox development costs(c)                                                       |  |      | (10,405 | ) |      |   | (3,643  | )    |  |   |        |  
|Convertible debenture ((d)(i))                                                       |  |      | (279    | ) |      |   |        |      |  |   |        |  
|Convertible debenture ((d)(ii))                                                      |  |      |        |   |      |   |        |      |  |   | (20,675 | )
|Commodity contracts loss(e)                                                          |  |      | 4,020   |   |      |   | (3,095  | )    |  |   | (2,265  | )
|Flow-through shares premium paid in excess of market value(e)                        |  |      |        |   |      |   | 238     |      |  |   |        |  
|                                                                                     |  |      |         |   |      |   |         |      | 
|Net loss for the year based on U.S. GAAP                                             |  | $    | (25,125 | ) |      | $ | (10,424 | )    |  | $ | (42,879 | )
|                                                                                     |  |      |         |   |      |   |         |      | 
|Comprehensive loss                                                                   |  | $    | (25,125 | ) |      | $ | (10,424 | )    |  | $ | (42,879 | )
|                                                                                     |  |      |         |   |      |   |         |      | 
|Net loss per share  U.S. GAAP  basic
    and diluted                               |  | $    | (0.32   | ) |      | $ | (0.19   | )    |  | $ | (2.22   | )
|                                                                                     |  |      |         |   |      |   |         |      | 



|    |                         
|--- | ------------------------
|(a) | Share-based compensation

Accounting for Stock-Based
Compensation  Transition and Disclosure Accounting for Stock Issued to Employees.


|                                      |  |      |         |   |      |   |         |      |  |   |         |  
|------------------------------------- |  | ---- | ------- | - | ---- | - | ------- | ---- |  | - | ------- | -
|                                      |  | 2004 |         |   | 2003 |   |         | 2002 | 
|                                      |  |      |         |   |      |   |         |      | 
|Net loss based on U.S. GAAP           |  | $    | (25,125 | ) |      | $ | (10,424 | )    |  | $ | (42,879 | )
|Stock option expense as reported      |  |      | 767     |   |      |   | 2,115   |      |  |   | 3,219   |  
|Pro forma stock option expense        |  |      | (767    | ) |      |   | (4,247  | )    |  |   | (2,595  | )
|                                      |  |      |         |   |      |   |         |      | 
|Net loss  pro forma                  |  | $    | (25,125 | ) |      | $ | (12,556 | )    |  | $ | (42,255 | )
|                                      |  |      |         |   |      |   |         |      | 
|Net loss                              |  | $    | (0.32   | ) |      | $ | (0.19   | )    |  | $ | (2.22   | )
|Stock option expense as reported      |  |      | 0.01    |   |      |   | 0.04    |      |  |   | 0.17    |  
|Pro forma stock option expense        |  |      | (0.01   | ) |      |   | (0.08   | )    |  |   | (0.14   | )
|                                      |  |      |         |   |      |   |         |      | 
|Net loss per share, basic  pro forma |  | $    | (0.32   | ) |      | $ | (0.23   | )    |  | $ | (2.19   | )
|                                      |  |      |         |   |      |   |         |      | 

F-31



---



##### 



APOLLO GOLD CORPORATION


Notes to the Consolidated Financial
Statements  (Continued)




|    |                                                           
|--- | ----------------------------------------------------------
|20. | DIFFERENCES BETWEEN CANADIAN AND U.S. GAAP
    (continued)



|    |                                                                                         
|--- | ----------------------------------------------------------------------------------------
|(b) | Impairment of property, plant and equipment and
    capitalized deferred stripping costs





|    |                  
|--- | -----------------
|(c) | Black Fox Project





|    |                      
|--- | ---------------------
|(d) | Convertible debenture







|    |                    
|--- | -------------------
|(e) | Commodity contracts



F-32



---



##### 



APOLLO GOLD CORPORATION


Notes to the Consolidated Financial
Statements  (Continued)




|    |                                                           
|--- | ----------------------------------------------------------
|20. | DIFFERENCES BETWEEN CANADIAN AND U.S. GAAP
    (continued)



|    |                                
|--- | -------------------------------
|(e) | Commodity contracts (continued)



|                                                           |  |           |        |   |           |   |        |           |  |   |          |    |  |          |        |   |          |   |        |   |  |   |        |  
|---------------------------------------------------------- |  | --------- | ------ | - | --------- | - | ------ | --------- |  | - | -------- | -- |  | -------- | ------ | - | -------- | - | ------ | - |  | - | ------ | -
|                                                           |  | Quarter 1 |        |   | Quarter 2 |   |        | Quarter 3 | 
|                                                           |  |           |        |   |           |   |        |           | 
|                                                           |  | As        |        |   |           |   | As     |           |  |   |          | As |  |          |       
|                                                           |  | reported  |        |   | Restated  |   |        | reported  |  |   | Restated |    |  | reported |        |   | Restated |  
|                                                           |  |           |        |   |           |   |        |           |  |   |          |    |  |          |        |   |          |  
|Realized and unrealized gain (loss) on commodity contracts |  | $         | 819    |   |           | $ | 1,005  |           |  | $ | 1,431    |    |  | $        | 1,005  |   |          | $ | 916    |   |  | $ | 1,005  |  
|                                                           |  |           |        |   |           |   |        |           |  |   |          |    |  |          |        |   |          |  
|Net loss                                                   |  | $         | (3,380 | ) |           | $ | (3,817 | )         |  | $ | (9,484   | )  |  | $        | (8,054 | ) |          | $ | (7,754 | ) |  | $ | (8,681 | )
|Unrealized gain (loss) on cash flow hedges                 |  |           | (437   | ) |           |   |       |           |  |   | 1,430    |    |  |          |       |   |          |   | (927   | ) |  |   |       |  
|                                                           |  |           |        |   |           |   |        |           |  |   |          |    |  |          |        |   |          |  
|Comprehensive loss                                         |  | $         | (3,817 | ) |           | $ | (3,817 | )         |  | $ | (8,054   | )  |  | $        | (8,054 | ) |          | $ | (8,681 | ) |  | $ | (8,681 | )
|                                                           |  |           |        |   |           |   |        |           |  |   |          |    |  |          |        |   |          |  



|    |                           
|--- | --------------------------
|(f) | Flow-through common shares







|    |                        
|--- | -----------------------
|(g) | Statement of cash flows





|    |                     
|--- | --------------------
|(h) | Comprehensive income



F-33



---



##### 



APOLLO GOLD CORPORATION


Notes to the Consolidated Financial
Statements  (Continued)




|    |                                                           
|--- | ----------------------------------------------------------
|20. | DIFFERENCES BETWEEN CANADIAN AND U.S. GAAP
    (continued)



|    |                                          
|--- | -----------------------------------------
|(i) | Recently issued accounting pronouncements











F-34



---



##### 



APOLLO GOLD CORPORATION


Notes to the Consolidated Financial
Statements  (Continued)




|    |                                                           
|--- | ----------------------------------------------------------
|20. | DIFFERENCES BETWEEN CANADIAN AND U.S. GAAP
    (continued)



|    |                                                          
|--- | ---------------------------------------------------------
|(i) | Recently issued accounting pronouncements
    (continued)











|    |                  
|--- | -----------------
|21. | SUBSEQUENT EVENTS



F-35



---



##### 



INDEX TO EXHIBITS


|        |    |              |  |                                                                                                                           
|------- | -- | ------------ |  | --------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |             
|No.     |    | Exhibit Name
|        |    |             
|        | 21 | .1           |  | List of subsidiaries of the Registrant.                                                                                   
|        | 23 | .1           |  | Consent of Deloitte & Touche LLP                                                                                          
|        | 23 | .2           |  | Consent of Mine Development Associates                                                                                    
|        | 31 | .1           |  | Certification of Chief Executive Officer pursuant to
    Section 302 of the Sarbanes-Oxley Act                            
|        | 31 | .2           |  | Certification of Chief Financial Officer pursuant to
    Section 302 of the Sarbanes-Oxley Act                            
|        | 32 | .1           |  | Certification of Chief Executive Officer and Chief Financial
    Officer pursuant to Section 906 of the Sarbanes-Oxley Act