UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                            Washington, D. C.  20549

                                    FORM 10-Q


        [ X ]     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
                For the quarterly period ended September 30, 2003
                                       Or
        [   ]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934


                       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                              (I.R.S. Employer
Incorporation or Organization)                              Identification No.)


                           Suite 300, 204 Black Street
                   Whitehorse, Yukon Territory, Canada Y1A 2M9
              (Address of Principal Executive Offices)  (Zip Code)

        Registrant's telephone number, including area code (720) 886-9656

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

Indicate  by  check  mark  whether  the  registrant is an accelerated filer ( as
defined  in  Rule  12-b2  of  the  Exchange  Act).    Yes     No  X

At  October  31,  2003, there were 73,721,838 shares of  Apollo Gold Corporation
common  stock  outstanding.


<PAGE>
<TABLE>
<CAPTION>
                             APOLLO GOLD CORPORATION

                                TABLE OF CONTENTS

<S>                                                                          <C>
                                                                             Page
PART I - FINANCIAL INFORMATION

  ITEM 1.  FINANCIAL STATEMENTS

APOLLO GOLD CORPORATION
  CONSOLIDATED BALANCE SHEET (UNAUDITED) -- as of September 30, 2003            2

  CONOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
    For the Three and Nine Month Periods Ended September 30, 2003 and 2002      3

  CONDENSED STATEMENT OF DEFICIT (UNAUDITED)
   For the Three and Nine Month Periods Ended September 30, 2003 and 2002       4

  CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
   For the Nine Months Ended September 30, 2003 and 2002                        5

  NOTES TO FINANCIAL STATEMENTS (UNAUDITED)                                     6

  ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
    CONDITION AND RESULTS OF OPERATION                                         27

  ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES
      ABOUT MARKET RISK                                                        55

  ITEM 4.   CONTROLS AND PROCEDURES                                            56

PART II - OTHER INFORMATION                                                    56

  ITEM 1.  LEGAL PROCEEDINGS                                                   56

  ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS                           56

  ITEM 3.  DEFAULTS UPON SENIOR SECURITIES                                     56

  ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                 56

  ITEM 5.  OTHER INFORMATION                                                   56

  ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K                                    56

  SIGNATURES

  CERTIFICATION
</TABLE>


                                       ii
<PAGE>
PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

     The  following  unaudited  consolidated   financial  statements  have  been
prepared by Apollo Gold Corporation pursuant to the rules and regulations of the
Securities  and Exchange Commission ("SEC"). In this document unless the context
otherwise  requires,  "we",  "our",  "us", the "Company" or "Apollo" mean Apollo
Gold  Corporation  and  its  subsidiaries.  Certain   information  and  footnote
disclosures  normally  included  in  financial statements prepared in accordance
with  generally  accepted  accounting  principles have been condensed or omitted
pursuant  to  such  SEC  rules  and  regulations.

     These  consolidated financial statements should be read in conjunction with
the  financial  statements,  accompanying  notes  and other relevant information
included  in  the  Company's  Form  10 Registration Statement (the "Registration
Statement")  which  was  declared  effective  with  the  Securities and Exchange
Commission  on  August  13,  2003.


<PAGE>
<TABLE>
<CAPTION>
APOLLO GOLD CORPORATION
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS OF CANADIAN DOLLARS)
----------------------------------------------------------------------------------------

                                                           SEPTEMBER 30,   December 31,
                                                                   2003            2002
                                                        ---------------  --------------
ASSETS                                                    (UNAUDITED)      (Audited)
<S>                                                     <C>              <C>
CURRENT
   Cash and cash equivalents                            $       44,336   $      13,293
   Accounts receivable                                           5,925           5,093
   Prepaids                                                        778             840
   Broken ore on leach pad - current                            13,259          14,352
   Materials and supplies                                        4,196           4,615
---------------------------------------------------------------------------------------
Total current assets                                            68,494          38,193
BROKEN ORE ON LEACH PAD - LONG TERM                              2,526           2,533
PROPERTY, PLANT AND EQUIPMENT (Note 3)                          46,525          47,920
DEFERRED STRIPPING COSTS                                        29,485          26,815
RESTRICTED CERTIFICATE OF DEPOSIT                                8,636           8,365
---------------------------------------------------------------------------------------
TOTAL ASSETS                                            $      155,666   $     123,826
=======================================================================================

LIABILITIES

CURRENT
   Accounts payable and accrued liabilities             $       11,031   $      10,755
   Notes payable                                                 5,228           4,912
   Property and mining taxes payable                             1,099           1,562
---------------------------------------------------------------------------------------
Total current liabilities                                       17,358          17,229
NOTES PAYABLE                                                    4,472           8,277
ACCRUED SITE CLOSURE COSTS                                      28,865          32,354
---------------------------------------------------------------------------------------
TOTAL LIABILITIES                                               50,695          57,860
---------------------------------------------------------------------------------------

COMMITMENTS AND CONTINGENCIES (Note 8)

SHAREHOLDERS' EQUITY (DEFICIT)

Share capital (Note 4)                                         172,546         110,252
Issuable common shares                                             350             350
Special warrants (Note 4)                                            -           9,768
Contributed surplus (Note 4)                                    10,782          10,998
Cumulative translation adjustment                               (8,377)          1,393
Accumulated deficit                                            (70,330)        (66,795)
---------------------------------------------------------------------------------------
Total shareholders' equity                                     104,971          65,966
---------------------------------------------------------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY              $      155,666   $     123,826
=======================================================================================
</TABLE>


                                        2
<PAGE>
<TABLE>
<CAPTION>
APOLLO GOLD CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS OF CANADIAN DOLLARS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
-----------------------------------------------------------------------------------------

                                      Three months ended           Nine months ended
                                         September 30,               September 30,
                                   --------------------------  --------------------------
                                       2003          2002          2003          2002
                                   ------------  ------------  ------------  ------------
<S>                                <C>           <C>           <C>           <C>
REVENUE
   Revenue from sale of minerals   $    27,738   $    17,008   $    64,976   $    17,008
-----------------------------------------------------------------------------------------

OPERATING EXPENSES
   Direct operating costs               22,488        12,254        52,025        12,254
   Depreciation and amortization         2,000         2,825         6,035         2,825
   General and administrative            1,502         1,409         4,795         1,827
   Share-based compensation                 27             -           534             -
   Accrued site closure costs -
     accretion expense                     442           609         1,373           609
   Royalties                               327           425           981           425
   Exploration and development              72         1,140         2,977         1,140
-----------------------------------------------------------------------------------------
                                        26,858        18,662        68,720        19,080
-----------------------------------------------------------------------------------------
OPERATING INCOME (LOSS)                    880        (1,654)       (3,744)       (2,072)
OTHER INCOME (EXPENSES)
   Interest income                          14             -            73             -
   Interest expense                       (175)         (842)         (629)         (842)
   Foreign exchange (loss) gain           (191)            -           765             -
-----------------------------------------------------------------------------------------
NET INCOME (LOSS) FOR
   THE PERIOD                      $       528   $    (2,496)  $    (3,535)  $    (2,914)
=========================================================================================

NET INCOME (LOSS) PER
   SHARE, BASIC AND DILUTED        $      0.01   $     (0.08)  $     (0.07)  $     (0.24)
=========================================================================================

WEIGHTED AVERAGE NUMBER
   OF SHARES OUTSTANDING            49,843,353    33,022,537    48,480,820    12,356,666
=========================================================================================
</TABLE>


      The accompanying notes are an integral part of these interim financial
                                   statements.


                                        3
<PAGE>
<TABLE>
<CAPTION>
APOLLO GOLD CORPORATION
CONSOLIDATED STATEMENTS OF DEFICIT
(IN THOUSANDS OF CANADIAN DOLLARS)
(UNAUDITED)
------------------------------------------------------------------------------


                                Three months ended       Nine months ended
                                    September 30,           September 30,
                              ------------------------  ----------------------
                                 2003         2002         2003        2002
                              -----------  -----------  -----------  ---------
<S>                           <C>          <C>          <C>          <C>
Deficit, beginning of period  $  (70,858)  $  (62,432)  $  (66,795)  $(62,014)
Net income (loss) for
   the period                        528       (2,496)      (3,535)    (2,914)
------------------------------------------------------------------------------
Deficit, end of period        $  (70,330)  $  (64,928)  $  (70,330)  $(64,928)
==============================================================================
</TABLE>


      The accompanying notes are an integral part of these interim financial
                                   statements.


                                        4
<PAGE>
<TABLE>
<CAPTION>
APOLLO  GOLD  CORPORATION
CONSOLIDATED  STATEMENTS  OF  CASH  FLOWS
(IN  THOUSANDS  OF  CANADIAN  DOLLARS)
(UNAUDITED)
---------------------------------------------------------------------------------------------

                                             Three months ended         Nine months ended
                                                 September 30,            September 30,
                                           ------------------------  ------------------------
                                              2003         2002         2003         2002
                                           -----------  -----------  -----------  -----------
<S>                                        <C>          <C>          <C>          <C>
OPERATING ACTIVITIES
   Net income (loss) for the period        $      528   $   (2,496)  $   (3,535)  $   (2,914)
   Items not affecting cash
     Depreciation and amortization              2,000        2,825        6,035        2,825
     Amortization of deferred stripping         4,577            -        6,758            -
     Share-based compensation                      27            -          534            -
     Accrued site closure costs -
      accretion expense                           442          609        1,373          609
     Gain on sale of property, plant and
      equipment                                   (57)           -          (57)           -
   Changes in non-cash operating
     assets and liabilities                      (751)        (987)      (1,233)        (536)
---------------------------------------------------------------------------------------------
Net cash flows from (used in)
   operating activities                         6,766          (49)       9,875          (16)
---------------------------------------------------------------------------------------------

INVESTING ACTIVITIES
   Deferred stripping costs                    (5,193)           -      (13,914)           -
   Property, plant and equipment
     expenditures                              (5,918)     (22,577)     (12,016)     (22,577)
   Proceeds from disposal of
     property, plant and equipment                237            -          237            -
   Acquisition of Nevoro                            -            -            -      (16,756)
   Restricted Certificate of Deposit             (295)      (1,513)      (1,604)      (1,513)
---------------------------------------------------------------------------------------------
Net cash flows used in investing
   activities                                 (11,169)     (24,090)     (27,297)     (40,846)
---------------------------------------------------------------------------------------------

FINANCING ACTIVITIES
   Capital lease repayments                         -       (1,149)           -       (1,149)
   Proceeds from exercise of warrants
     and options                                  977        9,864        5,140        9,864
   Proceeds on issuance of shares              46,450            -       46,450            -
   Notes payable                               (1,292)       4,762       (1,548)       4,762
   Proceeds on issuance of
    convertible debentures, net                     -       12,907            -       32,820
---------------------------------------------------------------------------------------------
Net cash flows from financing
   activities                                  46,135       26,384       50,042       46,297
---------------------------------------------------------------------------------------------
Effect of exchange rate changes on cash           122        1,684       (1,577)       1,685
---------------------------------------------------------------------------------------------
NET INCREASE IN CASH                           41,854        3,929       31,043        7,120
CASH AND CASH EQUIVALENTS,
   BEGINNING OF PERIOD                          2,482        3,321       13,293          130
---------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS,
   END OF PERIOD                           $   44,336   $    7,250   $   44,336   $    7,250
=============================================================================================

SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for:
   Interest                                $      175   $        -   $      620   $        -
=============================================================================================
   Income taxes                            $        -   $        -   $        -   $        -
=============================================================================================
</TABLE>

During  the  quarter  ended  June  30, 2003, the Company issued 61,500 shares to
acquire  certain parcels of land located in Nevada.  Share capital and property,
plant  and  equipment  both increased by $187 as a result of these transactions.

      The accompanying notes are an integral part of these interim financial
                                   statements.


                                        5
<PAGE>
APOLLO GOLD CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
THREE AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 2003
(IN THOUSANDS OF CANADIAN DOLLARS, EXCEPT FOR PER SHARE AMOUNTS)
(UNAUDITED)
--------------------------------------------------------------------------------


1.   NATURE  OF  OPERATIONS

     On  June 25, 2002, pursuant to a statutory Plan of Arrangement, Apollo Gold
     Corporation  ("Apollo"  or  the  "Company") acquired the business of Nevoro
     Gold  Corporation ("Nevoro"). This acquisition has been accounted for using
     the  purchase method of accounting. Prior to the acquisition of Nevoro, the
     Company  had  interests  in  exploration  projects  in  Indonesia  and  the
     Philippines.

     Apollo,  through  its  acquisition  of  Nevoro,  is  engaged in gold mining
     including  extraction,  processing and refining and the production of other
     by-product  metals, as well as related activities including exploration and
     development.  The  Company  currently  owns  and  has rights to operate the
     following  facilities:  the  Florida  Canyon  Mine  through  Florida Canyon
     Mining,  Inc.  ("FCMI") located in the State of Nevada, the Montana Tunnels
     Mine  through Montana Tunnels Mining, Inc. ("MTMI") located in the State of
     Montana  and  the  Diamond  Hill Mine also located in the State of Montana.

     Apollo  Gold  also  purchased  the  Black Fox Project (former Glimmer Mine)
     which  is located in the Province of Ontario near the Township of Mattheson
     in  September  of  2002.  This  project  is  now  considered  a development
     property.

     Currently  the Company is operating the Florida Canyon Mine at its designed
     capacity  (approximately 110,000 gold ounces per year). The Montana Tunnels
     Mine recommenced commercial  production  in  April  2003.

2.   ACCOUNTING  POLICIES

     These  consolidated  interim  financial  statements  have  been prepared in
     accordance  with  Canadian  generally  accepted  accounting principles. The
     accounting  policies  followed  in preparing these financial statements are
     those  used  by  the Company as set out in the audited financial statements
     for  the  year  ended  December  31,  2002.  Certain  information  and note
     disclosure  normally included in consolidated financial statements prepared
     in  accordance  with  generally  accepted  accounting  principles have been
     omitted.  These  interim  financial statements should be read together with
     the  Company's audited financial statements for the year ended December 31,
     2002.

     In the opinion of management, all adjustments considered necessary for fair
     presentation  have  been  included  in  these financial statements. Interim
     results  are  not  necessarily  indicative  of the results expected for the
     fiscal  year.

     Certain  of  the comparative figures have been reclassified to conform with
     the  current  period  presentation.


--------------------------------------------------------------------------------

                                        6
<PAGE>
APOLLO GOLD CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
THREE AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 2003
(IN THOUSANDS OF CANADIAN DOLLARS, EXCEPT FOR PER SHARE AMOUNTS)
(UNAUDITED)
--------------------------------------------------------------------------------


2.   ACCOUNTING  POLICIES  (CONTINUED)

     In  April 2003 the Company recommenced commercial production at the Montana
     Tunnels  Mine  and now amortizes the deferred stripping costs in accordance
     with  the  following  accounting  policy:

     Deferred  stripping  costs

     Mining costs associated with open-pit deposits that have diverse ore grades
     and  waste-to-ore ton ratios are deferred and amortized over the mine life.
     These  mining  costs arise from the removal of waste rock commonly referred
     to as "deferred stripping costs". Amortization of amounts deferred is based
     on  a  ratio,  calculated  as  estimated  total mining costs divided by the
     current  proven  and probable reserves and mineral resources expected to be
     converted  into  mineral  reserves.  This  ratio  is  used to calculate the
     current  period production cost charged against earnings by multiplying the
     ratio  times the reserves mined during the period. Amortization of deferred
     stripping  costs is included within direct operating costs in our statement
     of  operations.  This  accounting  method results in the smoothing of these
     costs  over  the  life of the mine, rather than expensing them as incurred.
     The  full  amount of deferred stripping costs may not be expensed until the
     end  of  the life of the mine. Some mining companies expense these costs as
     incurred, which may result in the reporting of greater volatility in period
     to period results of operations. Deferred stripping costs are included with
     related  mining  property,  plant  and  equipment  for  impairment  testing
     purposes.

3.   PROPERTY,  PLANT  AND  EQUIPMENT

     The  components  of  property,  plant  and  equipment  are  as  follows:

<TABLE>
<CAPTION>
                                                   SEPTEMBER 30,              December 31,
                                                       2003                       2002
                                     --------------------------------------  ---------------
                                                   Accumulated     Net Book     Net Book
                                         Cost      Depreciation     Value         Value
                                     ------------  -------------  ---------  ---------------
<S>                                  <C>           <C>            <C>        <C>
Mine assets
   Building, plant and equipment     $     16,142  $       2,906  $  13,236  $        11,506
   Mining properties and
     development costs                     31,049          7,560     23,489           25,207
--------------------------------------------------------------------------------------------
                                           47,191         10,466     36,725           36,713
   Mineral rights                           9,800              -      9,800           11,207
--------------------------------------------------------------------------------------------
Total property, plant and equipment  $     56,991  $      10,466  $  46,525  $        47,920
============================================================================================
</TABLE>


--------------------------------------------------------------------------------

                                        7
<PAGE>
APOLLO GOLD CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
THREE AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 2003
(IN THOUSANDS OF CANADIAN DOLLARS, EXCEPT FOR PER SHARE AMOUNTS)
(UNAUDITED)
--------------------------------------------------------------------------------


4.   SHARE  CAPITAL

     (a)  Authorized

          Unlimited  number  of  common  shares  with  no  par  value.

     (b)  Issued  and  outstanding

<TABLE>
<CAPTION>

                                                     Contributed    Special
                               Shares      Amount      Surplus     Warrants
                             -----------  --------  -------------  ----------
<S>                          <C>          <C>       <C>            <C>
Balance, December 31, 2002    40,190,874  $110,252  $     10,998   $   9,768
Shares issued for cash        22,300,000    45,973           477           -
Conversion of units            6,000,000     9,768             -      (9,768)
Warrants exercised             2,156,500     5,048             -           -
Options exercised                 83,412        92             -           -
Nevoro acquisition, senior
   executive share
   compensation                        -         -           271           -
Shares issued to supplier         50,000       262             -           -
Shares issued for land            61,500       187             -           -
Fiscal 2002 stock-based
   compensation issued
   in 2003                       265,000       964          (964)          -
-----------------------------------------------------------------------------
Balance, September 30, 2003   71,107,286  $172,546  $     10,782   $       -
=============================================================================
</TABLE>


     (c)  Shares  issued  for  cash

          During  the  three months ended September 30, 2003, the Company issued
          22,300,000  shares for proceeds of $50,175, net of agent's commissions
          of $3,010, expenses of $715 and fair value of agent's options of $477.

          The  Company  granted  the  agents  669,000  agent's  options  with an
          exercise  price  of $2.25 per option in connection with this issuance.
          These  agent's options expire in two years and vest immediately. Using
          the  fair  value  based  method  for  stock-based  compensation, share
          issuance  costs of approximately $477 were recognized. This amount was
          determined  using  an  option pricing model assuming no dividends were
          paid,  a  volatility  of the Company's share price of 53%, an expected
          life  of the options of two years, and annual risk-free rate of 3.52%.

          Subsequent  to  September  30,  2003,  the  agents  exercised  their
          over-allotment  option  and  the  Company  issued  a further 2,132,300
          shares  at  an  offering  price  of $2.25 and granted a further 63,969
          agent's  options  with  similar  terms  to  those  previously granted.


--------------------------------------------------------------------------------

                                        8
<PAGE>
APOLLO GOLD CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
THREE AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 2003
(IN THOUSANDS OF CANADIAN DOLLARS, EXCEPT FOR PER SHARE AMOUNTS)
(UNAUDITED)
--------------------------------------------------------------------------------


4.   SHARE  CAPITAL  (CONTINUED)

     (d)  Warrants

          The  following  summarizes  outstanding  warrants  as at September 30,
          2003:

<TABLE>
<CAPTION>
                     Number of      Exercise            Expiry
          Warrants    Shares          Price              Date
          ----------  ---------  -----------------  -----------------
<C>                  <C>        <C>                <S>

          5,749,750  5,749,750  $2.16 (U.S.$1.60)  March 24, 2004
          3,000,000  3,000,000  $           3.25   December 23, 2006
          -----------------------------------------------------------
          8,749,750  8,749,750
          ===========================================================
</TABLE>


     (e)  Share  purchase  options

          (i)  Fixed  stock  option  plan

               The  Company  has  a  stock  option  plan  that  provides for the
               granting of options to directors, officers, employees and service
               providers  of  the  Company.

               At  September  30, 2003, there were 1,939,100 options outstanding
               with  a  weighted average price of $3.38 and expiry dates ranging
               from  February  2013  to  August  2013.

          (ii) Performance-based  stock  option  plan

               As part of the Nevoro acquisition, 2,780,412 options were granted
               to  certain directors, officers and employees, and are subject to
               a  reduction  if  certain  performance  criteria  are  not  met.
               Furthermore,  certain  senior  executives are entitled to receive
               530,000  common  shares  subject  to  a  reduction  if  certain
               performance  criteria  are  not  met.

               In  fiscal 2002, one-half of the options and common shares vested
               based  upon  the established performance criteria. The balance of
               the  options  vest   based  upon   the  established  fiscal  2003
               performance criteria. Furthermore, one half of the related common
               shares  were  approved for issuance in 2003 based upon the fiscal
               2002  performance  and  the balance of the shares vest based upon
               the  established  fiscal 2003 performance criteria. An expense of
               $271 has been recorded in the statement of operations relating to
               the  fair  value  expense  of the common shares vesting in fiscal
               2003  and  credited  to  contributed  surplus.


--------------------------------------------------------------------------------

                                        9
<PAGE>
APOLLO GOLD CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
THREE AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 2003
(IN THOUSANDS OF CANADIAN DOLLARS, EXCEPT FOR PER SHARE AMOUNTS)
(UNAUDITED)
--------------------------------------------------------------------------------


4.   SHARE  CAPITAL  (CONTINUED)

     (e)  Share  purchase  options  (continued)

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

               As  at September 30, 2003, there were 2,660,160 performance-based
               options  outstanding  with  a  weighted  average  price  of $1.08
               (U.S.$0.80)  and  an  expiry  date of June 25, 2007. In addition,
               there  is  an  entitlement  to  265,000  performance-based common
               shares  outstanding.

     (f)  Stock-based  compensation

          The  following  pro  forma financial information presents the net loss
          for the period and the basic and diluted loss per common share had the
          Company  adopted the fair value method of accounting for stock options
          as set out in CICA Handbook Section 3870, Stock-Based Compensation and
          Other  Stock-Based  Payments:

<TABLE>
<CAPTION>
                                                       THREE MONTHS      Nine months
                                                           ENDED            ended
                                                       SEPTEMBER 30,    September 30,
                                                           2003             2003
                                                      ---------------  ---------------
<S>                                                   <C>              <C>
          Net income (loss)
             As reported                              $          528   $       (3,535)
             Compensatory fair value of options                  826            3,407
          ----------------------------------------------------------------------------
             Pro forma                                $         (298)  $       (6,942)
          ============================================================================

          Basic and diluted income (loss) per share
             As reported                              $         0.01   $        (0.07)
             Pro forma                                         (0.01)           (0.14)
          ============================================================================
</TABLE>

          Using  the  fair  value  based  method  for  stock-based compensation,
          additional  costs  of  approximately  $826  and $3,407 would have been
          recorded  for  the  three  and  nine month periods ended September 30,
          2003, respectively. This amount was determined using an option pricing
          model  assuming  no dividends were paid, a weighted average volatility
          of  the Company's share price of 52%, a weighted average expected life
          of  the options of 2 to 5 years, and weighted average annual risk-free
          rate  of  3.52%.


--------------------------------------------------------------------------------

                                       10
<PAGE>
APOLLO GOLD CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
THREE AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 2003
(IN THOUSANDS OF CANADIAN DOLLARS, EXCEPT FOR PER SHARE AMOUNTS)
(UNAUDITED)
--------------------------------------------------------------------------------


4.   SHARE  CAPITAL  (CONTINUED)

     (g)  Earnings  (loss)  per  share

          Basic  earnings  (loss) per common share is calculated by dividing net
          income  (loss)  by  the  weighted  average  number  of  common  shares
          outstanding  during  the  period. Diluted earnings (loss) per share is
          calculated  by  dividing  net income (loss) by the sum of the weighted
          average number of common shares outstanding plus all additional common
          shares that would have been outstanding if potentially dilutive common
          shares  had  been issued. In periods for which there is a reported net
          loss,  potentially  dilutive  securities  have  been excluded from the
          calculation,  as  their  effect  would  be  anti-dilutive.

          The  following  table  reconciles the number of shares utilized in the
          earnings  (loss)  per  common  share  calculations  for  the  periods
          indicated:

<TABLE>
<CAPTION>
                                Three months ended       Nine months ended
                                   September 30,           September 30,
                              ----------------------  ----------------------
                                 2003        2002        2003        2002
                              ----------  ----------  ----------  ----------
<S>                           <C>         <C>         <C>         <C>
          Basic weighted
            average shares
            outstanding       49,843,353  33,022,537  48,480,820  12,356,666
          Effect of dilutive
            securities,
            stock options        760,841           -           -           -
          ------------------------------------------------------------------
          Diluted weighted
            average shares
            outstanding       50,604,194  33,022,537  48,480,820  12,356,666
          ==================================================================
</TABLE>

5.   INCOME  TAXES

     The Company did not record a recovery for income taxes for the period ended
     September  30,  2003  due  to  the availability of net operating loss carry
     forwards  and  the  uncertainty  of  their  future  realization.

6.   SEGMENTED  INFORMATION

     Apollo  operates the Montana Tunnels and Florida Canyon Mines in the United
     States and the Black Fox exploration project in Canada. As the products and
     services  of  the  Company's  largest segments, Montana Tunnels and Florida
     Canyon,  are  essentially  the  same,  the  reportable  segments  have been
     determined  at  the  level  where  decisions  are made on the allocation of
     resources  and  capital  and  where performance is measured. The accounting
     policies  for  these segments are the same as those followed by the Company
     as  a  whole.


--------------------------------------------------------------------------------

                                       11
<PAGE>
APOLLO GOLD CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
THREE AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 2003
(IN THOUSANDS OF CANADIAN DOLLARS, EXCEPT FOR PER SHARE AMOUNTS)
(UNAUDITED)
--------------------------------------------------------------------------------


6.   SEGMENTED  INFORMATION  (CONTINUED)

     Amounts  as  at  September  30,  2003  are  as  follows:

<TABLE>
<CAPTION>
                                        Montana   Florida    Black   Corporate
                                        Tunnels    Canyon     Fox    and Other    Total
                                        --------  --------  -------  ----------  --------
<S>                                     <C>       <C>       <C>      <C>         <C>
     Cash and cash equivalents          $     12  $     19  $   825  $   43,480  $ 44,336
     Broken ore on leach pad -
       current                                 -    13,259        -           -    13,259
     Other non-cash current assets         7,069     3,267      183         380    10,899
     ------------------------------------------------------------------------------------
                                           7,081    16,545    1,008      43,860    68,494
     Broken ore on leach pad -
       long-term                               -     2,526        -           -     2,526
     Property, plant and equipment        15,836    17,410    8,948       4,331    46,525
     Deferred stripping costs             29,485         -        -           -    29,485
     Restricted certificate of deposit     3,055     4,999      437         145     8,636
     ------------------------------------------------------------------------------------
     Total assets                       $ 55,457  $ 41,480  $10,393  $   48,336  $155,666
     ====================================================================================

     Current liabilities                $  7,265  $  9,425  $    22  $      646  $ 17,358
     Notes payable                           444     4,028        -           -     4,472
     Accrued site closure costs           11,992    16,873        -           -    28,865
     ------------------------------------------------------------------------------------
     Total liabilities                  $ 19,701  $ 30,326  $    22  $      646  $ 50,695
     ====================================================================================
</TABLE>


--------------------------------------------------------------------------------

                                       12
<PAGE>
APOLLO GOLD CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
THREE AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 2003
(IN THOUSANDS OF CANADIAN DOLLARS, EXCEPT FOR PER SHARE AMOUNTS)
(UNAUDITED)
--------------------------------------------------------------------------------


6.   SEGMENTED  INFORMATION  (CONTINUED)

     Amounts  as  at  December  31,  2002  are  as  follows:

<TABLE>
<CAPTION>
                                        Montana   Florida    Black   Corporate
                                        Tunnels    Canyon     Fox    and Other    Total
                                        --------  --------  -------  ----------  --------
<S>                                     <C>       <C>       <C>      <C>         <C>
     Cash and cash equivalents          $    139  $     31  $ 4,439  $    8,684  $ 13,293
     Broken ore on leach pad -
       current                                 -    14,352        -           -    14,352
     Other non-cash current assets         5,632     4,470       23         423    10,548
     ------------------------------------------------------------------------------------
                                           5,771    18,853    4,462       9,107    38,193
     Broken ore on leach pad -
       long-term                               -     2,533        -           -     2,533
     Property, plant and equipment        16,724    20,026    7,852       3,318    47,920
     Deferred stripping costs             26,815         -        -           -    26,815
     Restricted certificate of deposit     2,459     5,581      158         167     8,365
     ------------------------------------------------------------------------------------
     Total assets                       $ 51,769  $ 46,993  $12,472  $   12,592  $123,826
     ====================================================================================

     Current liabilities                $  6,950  $  7,571  $     -  $    2,708  $ 17,229
     Notes payable                         2,168     6,109        -           -     8,277
     Accrued site closure costs           13,691    18,663        -           -    32,354
     ------------------------------------------------------------------------------------
     Total liabilities                  $ 22,809  $ 32,343  $     -  $    2,708  $ 57,860
     ====================================================================================
</TABLE>


--------------------------------------------------------------------------------

                                       13
<PAGE>
APOLLO GOLD CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
THREE AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 2003
(IN THOUSANDS OF CANADIAN DOLLARS, EXCEPT FOR PER SHARE AMOUNTS)
(UNAUDITED)
--------------------------------------------------------------------------------


6.   SEGMENTED  INFORMATION  (CONTINUED)

     Amounts  for  the three and nine month periods ended September 30, 2003 and
     2002,  respectively,  are  as  follows:

<TABLE>
<CAPTION>
                                            THREE MONTHS ENDED SEPTEMBER 30, 2003
                                     ---------------------------------------------------
                                      Montana    Florida   Black    Corporate
                                      Tunnels    Canyon     Fox     and Other    Total
                                     ---------  ---------  ------  -----------  --------
<S>                             <C>        <C>        <C>     <C>          <C>
     Revenue from sale of minerals   $ 14,934   $ 12,804   $    -  $        -   $27,738
     -----------------------------------------------------------------------------------

     Direct operating costs            12,292     10,196        -           -    22,488
     Depreciation and amortization        750      1,203        -          47     2,000
     General and administrative             -          -        -       1,502     1,502
     Share-based compensation               -          -        -          27        27
     Accrued site closure costs
       - accretion expense                109        333        -           -       442
     Royalties                              -        327        -           -       327
     Exploration and development            -          -        -          72        72
     -----------------------------------------------------------------------------------
                                       13,151     12,059        -       1,648    26,858
     -----------------------------------------------------------------------------------
     Operating income (loss)            1,783        745        -      (1,648)      880
     Interest income                        4          -        -          10        14
     Interest expense                     (49)      (112)       -         (14)     (175)
     Foreign exchange loss                  -          -        -        (191)     (191)
     -----------------------------------------------------------------------------------
     Net income (loss)               $  1,738   $    633   $    -  $   (1,843)  $   528
     ===================================================================================

     Investing activities
       Property, plant and
         equipment
     expenditures                    $  2,831   $    350   $2,086  $      651   $ 5,918
       Deferred stripping
         expenditures                   5,193          -        -           -     5,193
</TABLE>


--------------------------------------------------------------------------------

                                       14
<PAGE>
APOLLO GOLD CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
THREE AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 2003
(IN THOUSANDS OF CANADIAN DOLLARS, EXCEPT FOR PER SHARE AMOUNTS)
(UNAUDITED)
--------------------------------------------------------------------------------


6.   SEGMENTED  INFORMATION  (CONTINUED)

<TABLE>
<CAPTION>
                                              NINE MONTHS ENDED SEPTEMBER 30, 2003
                                     -----------------------------------------------------
                                      Montana    Florida    Black     Corporate
                                      Tunnels    Canyon      Fox      and Other    Total
                                     ---------  ---------  --------  -----------  --------
<S>                                  <C>        <C>        <C>       <C>          <C>
     Revenue from sale of minerals   $ 25,906   $ 39,070   $     -   $        -   $64,976
     -------------------------------------------------------------------------------------

     Direct operating costs            22,630     29,395         -            -    52,025
     Depreciation and amortization      2,138      3,781         -          116     6,035
     General and administrative             -          -         -        4,795     4,795
     Share-based compensation               -          -         -          534       534
     Accrued site closure costs
       - accretion expense                109      1,264         -            -     1,373
     Royalties                              -        981         -            -       981
     Exploration and development            -          -     2,324          653     2,977
     -------------------------------------------------------------------------------------
                                       24,877     35,421     2,324        6,098    68,720
     -------------------------------------------------------------------------------------
     Operating income (loss)            1,029      3,649    (2,324)      (6,098)   (3,744)
     Interest income                        4          -         -           69        73
     Interest expense                    (166)      (381)        -          (82)     (629)
     Foreign exchange gain                  -          -       535          230       765
     -------------------------------------------------------------------------------------
     Net income (loss)               $    867   $  3,268   $(1,789)  $   (5,881)  $(3,535)
     =====================================================================================

     Investing activities
       Property, plant and
         equipment
     expenditures                    $  4,117   $  4,255   $ 2,297   $    1,534   $12,203
       Deferred stripping
         expenditures                  13,914          -         -            -    13,914
</TABLE>


--------------------------------------------------------------------------------

                                       15
<PAGE>
APOLLO GOLD CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
THREE AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 2003
(IN THOUSANDS OF CANADIAN DOLLARS, EXCEPT FOR PER SHARE AMOUNTS)
(UNAUDITED)
--------------------------------------------------------------------------------


6.   SEGMENTED  INFORMATION  (CONTINUED)

<TABLE>
<CAPTION>
                                          Three months ended September 30, 2002
                                    ---------------------------------------------------
                                     Montana    Florida   Black    Corporate
                                     Tunnels    Canyon     Fox     and Other    Total
                                    ---------  ---------  ------  -----------  --------
<S>                                 <C>        <C>        <C>     <C>          <C>
     Revenue from sale of minerals  $      -   $ 17,008   $    -  $        -   $17,008
     ----------------------------------------------------------------------------------

     Direct operating costs                -     12,254        -           -    12,254
     Depreciation and amortization         -      2,811        -          14     2,825
     General and administrative            -          -        -       1,409     1,409
     Share-based compensation              -          -        -           -         -
     Accrued site closure costs
       - accretion expense                 -        609        -           -       609
     Royalties                             -        425        -           -       425
     Exploration and development           -          -        -       1,140     1,140
     ----------------------------------------------------------------------------------
                                           -     16,099        -       2,563    18,662
     ----------------------------------------------------------------------------------
     Operating (loss) income               -        909        -      (2,563)   (1,654)
     Interest income                       -          -        -           -         -
     Interest expense                   (264)      (516)       -         (62)     (842)
     Foreign exchange gain                 -          -        -           -         -
     ----------------------------------------------------------------------------------
     Net (loss) income              $   (264)  $    393   $    -  $   (2,625)  $(2,496)
     ==================================================================================
</TABLE>


--------------------------------------------------------------------------------

                                       16
<PAGE>
APOLLO GOLD CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
THREE AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 2003
(IN THOUSANDS OF CANADIAN DOLLARS, EXCEPT FOR PER SHARE AMOUNTS)
(UNAUDITED)
--------------------------------------------------------------------------------


6.   SEGMENTED  INFORMATION  (CONTINUED)

<TABLE>
<CAPTION>
                                       Nine months ended September 30, 2002
                               ---------------------------------------------------
                                Montana    Florida   Black    Corporate
                                Tunnels    Canyon     Fox     and Other    Total
                               ---------  ---------  ------  -----------  --------
<S>                            <C>        <C>        <C>     <C>          <C>
Revenue from sale of minerals  $      -   $ 17,008   $    -  $        -   $17,008
----------------------------------------------------------------------------------

Direct operating costs                -     12,254        -           -    12,254
Depreciation and amortization         -      2,811        -          14     2,825
General and administrative            -          -        -       1,827     1,827
Share-based compensation              -          -        -           -         -
Accrued site closure costs
  - accretion expense                 -        609        -           -       609
Royalties                             -        425        -           -       425
Exploration and development           -          -        -       1,140     1,140
----------------------------------------------------------------------------------
                                      -     16,099        -       2,981    19,080
----------------------------------------------------------------------------------
Operating (loss) income               -        909        -      (2,981)   (2,072)
Interest income                       -          -        -           -         -
Interest expense                   (264)      (516)       -         (62)     (842)
Foreign exchange gain                 -          -        -           -         -
----------------------------------------------------------------------------------
Net (loss) income              $   (264)  $    393   $    -  $   (3,043)  $(2,914)
==================================================================================
</TABLE>


--------------------------------------------------------------------------------

                                       17
<PAGE>
APOLLO GOLD CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
THREE AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 2003
(IN THOUSANDS OF CANADIAN DOLLARS, EXCEPT FOR PER SHARE AMOUNTS)
(UNAUDITED)
--------------------------------------------------------------------------------


7.   FINANCIAL  INSTRUMENTS  AND  RISK  MANAGEMENT

     Gold  hedges

     The  Company  has entered into hedging contracts, with Standard Bank London
     Limited,  for  gold in the aggregate amount of 100,000 ounces involving the
     use  of  combinations  of put and call options. As of October 1, 2003 there
     are  76,000  ounces  remaining  on  these contracts. The contracts give the
     holder  the  right  to  buy,  and the Company the right to sell, stipulated
     amounts  of  gold at the upper and lower exercise prices, respectively. The
     contracts continue through April 25, 2005 with a put option strike price of
     two hundred and ninety-five U.S. dollars per ounce and a call option strike
     price  of  three hundred and forty-five U.S. dollars per ounce. The Company
     has  also  entered  into  certain  spot  deferred forward contracts for the
     delivery  of  16,400 ounces of gold. Gains or losses on these spot deferred
     forward  contracts are recognized as an adjustment of revenue in the period
     when  the  originally  designated  production  is sold. As at September 30,
     2003,  the  fair  value  of the contracts is a loss of $5,819 (December 31,
     2002  -  $3,573).

--------------------------------------------------------------------------------

                                       18
<PAGE>
APOLLO GOLD CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
THREE AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 2003
(IN THOUSANDS OF CANADIAN DOLLARS, EXCEPT FOR PER SHARE AMOUNTS)
(UNAUDITED)
--------------------------------------------------------------------------------


7.   FINANCIAL  INSTRUMENTS  AND  RISK  MANAGEMENT  (CONTINUED)

     Gold  hedges  (continued)

     The  contracts  mature  as  follows:

                                                   Ounces
                                                  of Gold
                                         ----------------

              2003 (as of October 1)               18,400
              2004                                 58,000
              2005                                 16,000
              -------------------------------------------
                                                   92,400
              ===========================================

8.   COMMITMENTS  AND  CONTINGENCIES

     (a)  Environmental

          The Company's mining and exploration activities are subject to various
          federal,  provincial  and  state  laws  and  regulations governing the
          protection  of  the   environment.  These  laws  and  regulations  are
          continually  changing  and  generally  becoming  more restrictive. The
          Company conducts its operations so as to protect public health and the
          environment  and  believes its operations are materially in compliance
          with  all  applicable  laws and regulations. The Company has made, and
          expects  to  make in the future, expenditures to comply with such laws
          and  regulations.

     (b)  Litigation  and  claims

          The  Company  is  from  time to time involved in various claims, legal
          proceedings and complaints arising in the ordinary course of business.
          The  Company does not believe that adverse decisions in any pending or
          threatened  proceedings  related to any matter, or any amount which it
          may  be required to pay by reason thereof, will have a material effect
          on  the  financial  conditions  or future results of operations of the
          Company.


--------------------------------------------------------------------------------

                                       19
<PAGE>
APOLLO GOLD CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
THREE AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 2003
(IN THOUSANDS OF CANADIAN DOLLARS, EXCEPT FOR PER SHARE AMOUNTS)
(UNAUDITED)
--------------------------------------------------------------------------------


9.   DIFFERENCES  BETWEEN  CANADIAN  AND  UNITED  STATES  GENERALLY  ACCEPTED
     ACCOUNTING  PRINCIPLES  ("GAAP")

     The  Company  prepares  its consolidated financial statements in accordance
     with  accounting  principles  generally  accepted  in Canada. The following
     adjustments  and/or  additional  disclosures  would be required in order to
     present  the  financial  statements  in  accordance with U.S. GAAP and with
     practices  prescribed   by  the   United  States  Securities  and  Exchange
     Commission  for  the  three and nine month periods ended September 30, 2003
     and  2002.

     Material  variances  between  financial statement items under Canadian GAAP
     and  the  amounts  determined  under  U.S.  GAAP  are  as  follows:

<TABLE>
<CAPTION>
CONSOLIDATED  BALANCE  SHEET
SEPTEMBER  30,  2003

                                                                                 Accounts
                                                      Property,    Deferred     Payable and
                                        Restricted    Plant and    Stripping      Accrued        Other        Share
                                Cash       Cash       Equipment      Costs      Liabilities   Liabilities    Capital
                              --------  -----------  -----------  -----------  -------------  ------------  ---------
<S>                           <C>       <C>          <C>          <C>          <C>            <C>           <C>
As at September 30, 2003
  Canadian GAAP               $44,336   $         -  $   46,525   $   29,485   $     11,031   $          -  $172,546
Convertible debenture (a)           -             -           -            -              -              -         -
Share-based compensation (b)        -             -           -            -              -              -         -
Gold hedge loss (c)                 -             -           -            -           (305)         5,819         -
Impairment of property,
  plant and equipment
  and capitalized deferred
  stripping costs (d)               -             -      (8,608)     (13,927)             -              -         -
Amortization of deferred
  stripping costs (e)               -             -           -       (1,144)             -              -         -
Flow-through common
  shares (f)                     (825)          825           -            -              -             69      (375)
Black Fox development
  costs (g)                         -             -      (1,943)           -              -              -         -
---------------------------------------------------------------------------------------------------------------------
As at September 30, 2003
  U.S. GAAP                   $43,511   $       825  $   35,974   $   14,414   $     10,726   $      5,888  $172,171
=====================================================================================================================


                              Contributed
                                Surplus      Deficit
                              ------------  ----------
<S>                           <C>           <C>
As at September 30, 2003
  Canadian GAAP               $     10,782  $ (70,330)
Convertible debenture (a)           32,666    (32,666)
Share-based compensation (b)         5,265     (5,265)
Gold hedge loss (c)                      -     (5,514)
Impairment of property,
  plant and equipment
  and capitalized deferred
  stripping costs (d)                    -    (22,535)
Amortization of deferred
  stripping costs (e)                    -     (1,144)
Flow-through common
  shares (f)                             -        306
Black Fox development
  costs (g)                              -     (1,943)
------------------------------------------------------
As at September 30, 2003
  U.S. GAAP                   $     48,713  $(139,091)
======================================================
</TABLE>


--------------------------------------------------------------------------------

                                       20
<PAGE>
APOLLO GOLD CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
THREE AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 2003
(IN THOUSANDS OF CANADIAN DOLLARS, EXCEPT FOR PER SHARE AMOUNTS)
(UNAUDITED)
--------------------------------------------------------------------------------


9.   DIFFERENCES  BETWEEN  CANADIAN  AND  UNITED  STATES  GENERALLY  ACCEPTED
     ACCOUNTING  PRINCIPLES  ("GAAP")  (CONTINUED)

CONSOLIDATED BALANCE SHEET
DECEMBER 31, 2002

<TABLE>
<CAPTION>
                                                        Property,    Deferred
                                          Restricted    Plant and    Stripping      Other        Share    Contributed
                                  Cash       Cash       Equipment      Costs     Liabilities    Capital     Surplus      Deficit
                                --------  -----------  -----------  -----------  ------------  ---------  ------------  ----------
<S>                             <C>       <C>          <C>          <C>          <C>           <C>        <C>           <C>
As at December 31, 2002
  Canadian GAAP                 $13,293   $         -  $   47,920   $   26,815   $          -  $110,252   $     10,998  $ (66,795)
Convertible debenture (a)             -             -           -            -              -         -         32,666    (32,666)
Share-based compensation (b)          -             -           -            -              -         -          4,079     (4,079)
Gold hedge loss (c)                   -             -           -            -          3,573         -              -     (3,573)
Impairment of property, plant
  and equipment and
capitalized deferred
   stripping costs (d)                -             -      (8,608)     (13,927)             -         -              -    (22,535)
Flow-through common
  shares (f)                     (4,488)        4,488           -            -            375      (375)             -          -
----------------------------------------------------------------------------------------------------------------------------------
As at December 31, 2002 U.S.
  GAAP                          $ 8,805   $     4,488  $   39,312   $   12,888   $      3,948  $109,877   $     47,743  $(129,648)
==================================================================================================================================
</TABLE>


     Under  U.S.  GAAP, the net loss and net loss per share would be adjusted as
     follows:

<TABLE>
<CAPTION>
                                                            2003      2002
                                                          --------  --------
<S>                                                       <C>       <C>
     Net income (loss) for the three month period ended
        September 30, based on Canadian GAAP              $   528   $(2,496)
     Convertible debenture (a)                                  -         -
     Share-based compensation (b)                             (63)        -
     Gold hedge loss (c)                                   (3,910)        -
     Amortization of deferred stripping costs (e)          (1,144)        -
     Flow through shares premium paid in excess of
        market value (f)                                      306         -
     Black Fox development costs (g)                       (1,943)        -
     -----------------------------------------------------------------------
     Net loss for the period based on U.S. GAAP           $(6,226)  $(2,496)
     =======================================================================
     Other comprehensive income:
        Currency translation adjustment                   $    76   $     -
     -----------------------------------------------------------------------
     Comprehensive loss                                   $(6,150)  $(2,496)
     =======================================================================
     Net loss per share - U.S. GAAP basic                 $ (0.12)  $ (0.08)
     =======================================================================
</TABLE>


--------------------------------------------------------------------------------

                                       21
<PAGE>
APOLLO GOLD CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
THREE AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 2003
(IN THOUSANDS OF CANADIAN DOLLARS, EXCEPT FOR PER SHARE AMOUNTS)
(UNAUDITED)
--------------------------------------------------------------------------------


9.   DIFFERENCES  BETWEEN  CANADIAN  AND  UNITED  STATES  GENERALLY  ACCEPTED
     ACCOUNTING  PRINCIPLES  ("GAAP")  (CONTINUED)

<TABLE>
<CAPTION>
                                                       2003       2002
                                                     ---------  ---------
<S>                                                  <C>        <C>
     Net loss for the nine month period ended
        September 30, based on Canadian GAAP         $ (3,535)  $ (2,914)
     Convertible debenture (a)                              -    (32,666)
     Share-based compensation (b)                      (1,186)         -
     Gold hedge loss (c)                               (1,941)         -
     Amortization of deferred stripping costs (e)      (1,144)         -
     Flow through shares premium paid in excess of
        market value (f)                                  306          -
     Black Fox development costs (g)                   (1,943)         -
     --------------------------------------------------------------------
     Net loss for the period based on U.S. GAAP      $ (9,443)  $(35,580)
     ====================================================================
     Other comprehensive income:
        Currency translation adjustment              $ (9,770)  $      -
     --------------------------------------------------------------------
     Comprehensive loss                              $(19,213)  $(35,580)
     ====================================================================
     Net loss per share - U.S. GAAP basic            $  (0.19)  $  (2.88)
     ====================================================================
</TABLE>

     (a)  Convertible  debenture

          Under  Canadian  GAAP,  the  convertible  debenture was recorded as an
          equity  instrument  on  issuance  in  March  2002. Under U.S. GAAP, on
          issuance,  the  convertible  debenture  would  have been recorded as a
          liability  and  reclassified  to equity only upon conversion. Further,
          under  U.S. GAAP, the beneficial conversion feature represented by the
          excess  of  the  fair  value  of  the  shares and warrants issuable on
          conversion of the debenture, measured on the commitment date, over the
          amount  of  the  proceeds  to  be  allocated  to the common shares and
          warrants  upon  conversion, would be allocated to contributed surplus.
          This  results  in  a  discount  on the debenture that is recognized as
          additional  interest  expense  over  the term of the debenture and any
          unamortized  balance  is  expensed  immediately upon conversion of the
          debenture.  Accordingly,  for  U.S.  GAAP  purposes,  the  Company has
          recognized  a  beneficial  conversion  feature  and debenture issuance
          costs  of  $32,666  for the year ended December 31, 2002 ($Nil for the
          three months ended September 30, 2002). Canadian GAAP does not require
          the  recognition  of  any  beneficial  conversion  feature.

     (b)  Share-based  compensation

          In  accordance  with  Canadian  GAAP, the Company has not recorded any
          expense with respect to stock options granted to employees. Under U.S.
          GAAP,  the  Company  has  elected  to continue to measure its employee
          stock-based  awards  using  the  intrinsic  value method prescribed by
          Accounting  Principles  Board  Opinion  No.  25,  Accounting for Stock
          Issued  to  Employees  ("APB  No.  25").


--------------------------------------------------------------------------------

                                       22
<PAGE>
APOLLO GOLD CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
THREE AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 2003
(IN THOUSANDS OF CANADIAN DOLLARS, EXCEPT FOR PER SHARE AMOUNTS)
(UNAUDITED)
--------------------------------------------------------------------------------


9.   DIFFERENCES  BETWEEN  CANADIAN  AND  UNITED  STATES  GENERALLY  ACCEPTED
     ACCOUNTING  PRINCIPLES  ("GAAP")  (CONTINUED)

     (b)  Share-based  compensation  (continued)

          In  the  fourth  quarter of fiscal 2002, an expense of $4,079 has been
          recorded under APB No. 25 with respect to the intrinsic value of stock
          options  granted  in the year and for the three and nine month periods
          ended  September 30, 2003, an expense of $63 and $1,186, respectively,
          has been recorded under APB No. 25. In addition, under APB No. 25, the
          performance  shares  granted during 2002 are accounted for as variable
          awards  until  the  performance  targets  are  met.

     (c)  Gold  hedge  gain  (loss)

          Under  Canadian  GAAP,  gains  or  losses  on  spot  deferred  forward
          contracts  are  recognized  as  an adjustment of revenue in the period
          when  the  originally  designated production is sold. Under U.S. GAAP,
          SFAS  133 requires that for hedge accounting to be achieved, a company
          must  provide  detailed  documentation and must specifically designate
          the  effectiveness  of  a  hedge. Furthermore, U.S. GAAP also requires
          fair  value accounting to be used for all types of derivatives. As the
          Company  has  chosen  not  to  meet  these  requirements for U.S. GAAP
          purposes,  a  charge of $3,573 has been recorded in the fourth quarter
          of  fiscal  2002  to  reflect  the  fair  value  loss on the contracts
          outstanding at December 31, 2002, and an additional loss of $3,910 and
          $1,941  has  been  recorded  in the three and nine month periods ended
          September  30,  2003,  respectively, to reflect the fair value loss on
          the  contracts  between  December 31, 2002 and September 30, 2003. The
          gold  hedge  loss on outstanding hedge contracts amounted to $5,819 at
          September  30,  2003.

     (d)  Impairment  of  property, plant and equipment and capitalized deferred
          stripping  costs

          Under Canadian GAAP, write-downs for impairment of property, plant and
          equipment  and  capitalized  deferred  stripping  costs are determined
          using  current  proven  and  probable  reserves  and mineral resources
          expected  to  be  converted  into  mineral  reserves. Under U.S. GAAP,
          write-downs are determined using current proven and probable reserves.
          In  addition,  under  U.S.  GAAP,  future  cash  flows  from  impaired
          properties  are  discounted.  Accordingly,  for  U.S. GAAP purposes, a
          reduction  in  property,  plant and equipment and capitalized deferred
          stripping  costs  of $22,535 has been recorded as an impairment in the
          fourth  quarter  of  fiscal  2002.


--------------------------------------------------------------------------------

                                       23
<PAGE>
APOLLO GOLD CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
THREE AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 2003
(IN THOUSANDS OF CANADIAN DOLLARS, EXCEPT FOR PER SHARE AMOUNTS)
(UNAUDITED)
--------------------------------------------------------------------------------


9.   DIFFERENCES  BETWEEN  CANADIAN  AND  UNITED  STATES  GENERALLY  ACCEPTED
     ACCOUNTING  PRINCIPLES  ("GAAP")  (CONTINUED)

     (e)  Amortization  of  deferred  stripping  costs

          Under Canadian GAAP, amortization of deferred stripping costs is based
          on  a  stripping  ratio  calculated  as  estimated  total mining costs
          divided  by  the  current  proven  and  probable  reserves and mineral
          resources  expected  to be converted into mineral reserves. Under U.S.
          GAAP, current proven and probable reserves are used in determining the
          stripping  ratio.  Accordingly, for U.S. GAAP purposes, a reduction in
          capitalized deferred stripping costs of $1,144 has been recorded as at
          September  30,  2003.

     (f)  Flow-through  common  shares

          Under Canadian income tax legislation, a company is permitted to issue
          shares whereby the company agrees to incur qualifying expenditures and
          renounce  the  related  income  tax  deductions  to the investors. The
          Company  has  accounted for the issue of flow-through shares using the
          deferral  method  in  accordance  with  Canadian  GAAP. At the time of
          issue,  the  funds  received  are  recorded as share capital. For U.S.
          GAAP,  the  premium  paid  in  excess  of  the market value of $375 is
          credited to other liabilities and included in income as the qualifying
          expenditures  are  made.

          Also,  notwithstanding  whether  there  is  a  specific requirement to
          segregate  the  funds,  the flow-through funds which are unexpended at
          the  consolidated  balance sheet dates are considered to be restricted
          and are not considered to be cash or cash equivalents under U.S. GAAP.

          As  at  September  30,  2003,  unexpended flow-through funds were $825
          (December  31,  2002  -  $4,488).

     (g)  Black  Fox  Project

          Under Canadian GAAP, mining development costs at the Black Fox Project
          have  been  capitalized.  Under  U.S.  GAAP,  these  expenditures  are
          expensed as incurred. Accordingly, for U.S. GAAP purposes, a reduction
          in  property,  plant  and  equipment of $1,943 has been recorded as at
          September  30,  2003.


--------------------------------------------------------------------------------

                                       24
<PAGE>
APOLLO GOLD CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
THREE AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 2003
(IN THOUSANDS OF CANADIAN DOLLARS, EXCEPT FOR PER SHARE AMOUNTS)
(UNAUDITED)
--------------------------------------------------------------------------------


9.   DIFFERENCES  BETWEEN  CANADIAN  AND  UNITED  STATES  GENERALLY  ACCEPTED
     ACCOUNTING  PRINCIPLES  ("GAAP")  (CONTINUED)

     STATEMENT  OF  CASH  FLOWS

     Under Canadian GAAP, expenditures incurred for deferred stripping costs are
     included  in  cash  flows  from  investing  activities  in the consolidated
     statement  of  cash flows. Under U.S. GAAP, these expenditures are included
     in  cash flows from operating activities. Accordingly, under U.S. GAAP, the
     consolidated  statement  of  cash  flows for the period ended September 30,
     2003  would reflect a reduction in cash utilized in investing activities of
     $5,193 and $13,914 for the three and nine month periods ended September 30,
     2003,  respectively,  and  a  corresponding  increase  in  cash utilized in
     operating  activities.

     COMPREHENSIVE  INCOME

     Statement  of  Financial  Accounting  Standards ("SFAS") No. 130, Reporting
     Comprehensive  Income  ("SFAS 130") establishes standards for the reporting
     and  display  of  comprehensive  income and its components in a full set of
     general purpose financial statements. SFAS 130 requires that all items that
     are  required  to be recognized under accounting standards as components of
     comprehensive income be reported in a financial statement. For the Company,
     the  only  components of comprehensive loss are the net loss for the period
     and  the  changes   in  the  foreign   currency  translation  component  of
     shareholders' equity as reported in the consolidated balance sheet prepared
     in  accordance  with  Canadian  GAAP.

     SUPPLEMENTAL INFORMATION FOR U.S. GAAP PURPOSES ON STOCK-BASED COMPENSATION

     Pro forma information regarding net loss and net loss per share is required
     by  SFAS  No.  123,  Accounting  for  Stock-Based Compensation and has been
     determined  as if the Company had accounted for its employees stock options
     under the fair value method. The fair value for these options was estimated
     at  the  date  of grant using a Black-Scholes option pricing model with the
     following  weighted  average  assumptions  for  2003  and  2002:  risk-free
     interest  rate of 3.52%, dividend yield of 0%, volatility factor of 52% and
     a  weighted  average  expected  life  of  the  options of 2 to 5 years. The
     weighted  average  fair  value per share of options granted during 2003 and
     2002  was  $2.01 and $1.92, respectively, and the expense is amortized over
     the  vesting  period.


--------------------------------------------------------------------------------

                                       25
<PAGE>
APOLLO GOLD CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
THREE AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 2003
(IN THOUSANDS OF CANADIAN DOLLARS, EXCEPT FOR PER SHARE AMOUNTS)
(UNAUDITED)
--------------------------------------------------------------------------------


9.   DIFFERENCES  BETWEEN  CANADIAN  AND  UNITED  STATES  GENERALLY  ACCEPTED
     ACCOUNTING  PRINCIPLES  ("GAAP")  (CONTINUED)

     The  following  table  presents  the net loss and net loss per share, under
     U.S.  GAAP,  as if the Company had recorded compensation expense under SFAS
     No.  123  with  the  estimated fair value of the options being amortized to
     expense  over  the  options'  vesting  period.

<TABLE>
<CAPTION>
                                                        2003       2002
                                                      ---------  ---------
<S>                                                   <C>        <C>
     Net loss for the three month period ended
       September 30, 2003, as reported                $ (6,226)  $ (2,496)
     Stock option expense as reported                       63          -
     Pro forma stock option expense                       (826)         -
     ---------------------------------------------------------------------
     Net loss - pro forma                             $ (6,989)  $ (2,496)
     =====================================================================

     Net loss per share, basic - for the three month
       period ended September 30, 2003                $  (0.12)  $  (0.08)
     Stock option expense as reported                        -          -
     Pro forma stock option expense                      (0.02)         -
     ---------------------------------------------------------------------
     Net loss per share, basic - pro forma            $  (0.14)  $  (0.08)
     =====================================================================

                                                         2003       2002
                                                      ---------  ---------
     Net loss for the nine month period ended
       September 30, 2003, as reported                $ (9,443)  $(35,580)
     Stock option expense as reported                    1,186          -
     Pro forma stock option expense                     (3,407)         -
     ---------------------------------------------------------------------
     Net loss - pro forma                             $(11,664)  $(35,580)
     =====================================================================

     Net loss per share, basic - for the nine month
       period ended September 30, 2003                $  (0.19)  $  (2.88)
     Stock option expense as reported                     0.02          -
     Pro forma stock option expense                      (0.07)         -
     ---------------------------------------------------------------------
     Net loss per share, basic - pro forma            $  (0.24)  $  (2.88)
     =====================================================================
</TABLE>


--------------------------------------------------------------------------------

                                       26
<PAGE>
ITEM 2:  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF  OPERATIONS

THIS  REPORT  CONTAINS  FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF SECTION
21E  OF  THE  SECURITIES  EXCHANGE  ACT  OF 1934, INCLUDING, WITHOUT LIMITATION,
STATEMENTS  REGARDING OUR EXPECTATIONS, BELIEFS, INTENTIONS OR FUTURE STRATEGIES
THAT ARE SIGNIFIED BY THE WORDS "EXPECTS", "ANTICIPATES", "INTENDS", "BELIEVES",
OR  SIMILAR  LANGUAGE.   THESE   FORWARD-LOOKING   STATEMENTS   INVOLVE   RISKS,
UNCERTAINTIES AND OTHER FACTORS. ALL FORWARD-LOOKING STATEMENTS INCLUDED IN THIS
DOCUMENT  ARE  BASED ON INFORMATION AVAILABLE TO US ON THE DATE HEREOF AND SPEAK
ONLY AS OF THE DATE HEREOF. THE FACTORS DISCUSSED BELOW UNDER "RISK FACTORS" AND
ELSEWHERE IN THIS QUARTERLY REPORT ON FORM 10-Q ARE AMONG THOSE FACTORS THAT, IN
SOME  CASES,  HAVE  AFFECTED  OUR  RESULTS AND COULD CAUSE THE ACTUAL RESULTS TO
DIFFER  MATERIALLY  FROM  THOSE  PROJECTED  IN  THE  FORWARD-LOOKING STATEMENTS.

Overview

     The  following presents a discussion of the financial condition and results
of  operations  of the Company for the three and nine months ended September 30,
2003  and  2002.  Prior to June 24, 2002, the Company's operations were those of
International  Pursuit  Corporation  ("Pursuit"),  a  public  company previously
trading  on  the  Toronto  Stock Exchange under the ticker symbol "IPJ." In June
2002,  Pursuit  entered  into a Plan of Arrangement ("Plan of Arrangement") that
resulted  in  the  merger  of  Pursuit and Nevoro Gold Corporation ("Nevoro"), a
privately  held  corporation  and  the  parent  of Apollo Gold, Inc., a Delaware
corporation  ("AGI").

     This  Form  10-Q  should  be  read  in  conjunction  with  our consolidated
financial  statements  and  related  notes included in this quarterly report, as
well  as  our annual financial statements for the fiscal year ended December 31,
2002  included  in  our  Form  10  Registration  Statement   (the  "Registration
Statement")  filed  with the SEC.  Certain classifications have been made to the
prior  period  financial   statements   to  conform   with  the  current  period
presentation.  Unless  stated  otherwise,  all  dollar  amounts  are reported as
Canadian  dollars.

     In  this document unless the context otherwise requires, "we", "our", "us",
the  "Company"  or  "Apollo"  mean Apollo Gold Corporation and its subsidiaries.

BACKGROUND AND RECENT DEVELOPMENTS

     We  are  principally  engaged in the exploration, development and mining of
gold.  We  have  focused  our  efforts  to date on two principal properties: our
Montana  Tunnels  Mine,  owned  by  one  of  our  subsidiaries,  Montana Tunnels
Mining,  Inc.  ("Montana, Inc.") and our Florida  Canyon  Mine, owned by another
one  of  our  subsidiaries,  Florida Canyon Mining, Inc. ("Florida, Inc.").  Our
exploration  activities  involve  our Pirate Gold, Nugget Field and Diamond Hill
properties  as  well  as  our  Black  Fox  Property, acquired in September 2002.

     We  are  the  result  of  the  Plan  of  Arrangement  that  resulted in the
merger  of  Pursuit  and  Nevoro.  Pursuant   to   the  terms  of  the  Plan  of
Arrangement,  Pursuit  acquired  Nevoro  and  continued   operations  under  the
name  of  Apollo  Gold  Corporation.  Through  our  wholly-owned subsidiary, AGI
acquired by Nevoro in March 2002, we own the majority of our assets and  operate
our  business.  We  continued  trading  on the Toronto Stock Exchange under  our
new  name,  Apollo  Gold  Corporation,  and with a new ticker symbol, APG.U,  on
July  3,  2002.  On  August  2,  2002  our  ticker  symbol  changed  to  APG.


                                       27
<PAGE>
     In  February  2003,  we  filed a Registration Statement on Form 10 with the
SEC.  The  Registration  Statement was declared effective on August 13, 2003. On
August  26,  2003  the  Company began trading on the American Exchange under the
ticker  symbol  AGT.

     We  own  and  operate  the Florida Canyon Mine, a low grade heap leach gold
mine located approximately 42 miles southwest of Winnemucca, Nevada. The Florida
Canyon  Mine  employs  approximately  168  full-time non-unionized employees and
produces  approximately  110,000  ounces of  gold  annually.  In addition to the
mining  activities being conducted at the Florida Canyon Mine, we are continuing
a drilling program which is directed at confirmation and expansion of additional
mineralization,  and  we are conducting a study to determine if areas in some of
the  mine  walls  may  be  used  for  additional  mining.

     Operating  highlights  at  the  Florida  Canyon  Mine  include moving 4.882
million  tons  during  the  quarter.  While less than forecasted,  we anticipate
increasing  our  mine  tonnage  at the Florida Canyon Mine in the fourth quarter
with  the  addition  of  two  additional  haul  trucks.

     We  also own and operate the Montana Tunnels Mine, an open pit located near
Helena,  Montana.  When  in  full  production,  the  Montana  Tunnels  Mine  has
historically  produced approximately 70,000 ounces of gold, 26,000 tons of zinc,
6,676  tons of lead and 1,200,000 ounces of silver annually. The Montana Tunnels
Mine  produces  approximately  15%  of its annual gold production in the form of
dore,  an unrefined material consisting of approximately 90% gold, which is then
further  refined.  The  remainder  of  the  mine's  production is in the form of
concentrates,  one a zinc-gold concentrate and the other a lead-gold concentrate
which  are  shipped  to  a  smelter.  We  are paid for the metal content, net of
smelter charges. The Montana Tunnels Mine was idle for approximately four months
in  2002,  while  we made preparations to begin the removal of waste rock at the
Mine.  Limited  production  resumed  in October 2002, and full production on the
K-Pit  resumed  in  April  2003.  Since  that time, the Montana Tunnels Mine has
experienced  pit  wall problems that have resulted in significant changes to the
mine plan, including an accelerated stripping schedule to remove 10 million tons
of  material  that  slid  off  the  southwest  pit wall. Additional stripping is
currently  underway  and  adequate funding is in place. The Montana Tunnels Mine
employs  approximately  162  full-time  non-unionized  employees.

     Operating  highlights  for  the quarter at the Montana Tunnels Mine include
the  completion of the primary crusher. While the crusher ran for about one half
of  the quarter, the mill processed 1,267,973 tons, or an average of 13,934 tons
per  day.  Stripping  on  the  west  wall  began towards the end of the quarter.
Noticeable  progress  was  made  as  4.35  million  waste  tons  were  moved.

     We  have several exploration assets including Pirate Gold and Nugget Field,
each  located  in  Nevada  and owned by our wholly-owned subsidiary, Apollo Gold
Exploration,  Inc.,  a  Delaware  corporation.  In addition, we also own Diamond
Hill,  which  is  located  in  Montana  and  Standard  Mine  which is located in
Nevada.

     In  the  third quarter of 2003, we received three operating permits for the
Standard  Mine  from the State of Nevada, and we have begun drafting preliminary
operating  and production plans for mine production set to begin in 2005. At the
Standard  Mine,  drilling  began  in  October  2003,  and  we expect to drill at
numerous  targets


                                       28
<PAGE>
through  several  phases of drilling.  All but two of our drilling sites require
additional  permitting,  and we have submitted an exploration drill planning map
to  the  State  of  Nevada  for these additional permits. At Pirate Gold we have
solicited drilling bids and we expect to drill approximately 14 holes in 2004 to
explore  the  mineralization  of  this  property.

     In  September 2002, we completed the acquisition of certain assets known as
our Black Fox Property from two unrelated third parties, Exall Resources Limited
and  Glimmer  Resources, Inc. The Black Fox Property is located east of Timmins,
Ontario.  We  currently anticipate that the development and commercialization of
our  Black  Fox Property will require three phases. The first phase commenced in
early  2003,  and  involved  core drilling of approximately 215 core holes. As a
result  of the core drilling, we have identified proven and probable reserves at
the  Black  Fox  Property. We are conducting a study to confirm the reserves and
the  study  should be complete by December 2003. We believe that the first phase
will  cost  approximately  US  $3.5  million.

     Upon  completion of the first phase, we will then begin the second phase of
our  Black  Fox  project.  The  second phase will provide for the development of
underground  access for further exploratory drilling with an anticipated cost of
US  $11.7  million  for the period from January, 2004 through December, 2004. We
plan  to  develop  an  underground  ramp  from existing structures. We currently
anticipate commencing the second phase underground drilling in January, 2004. We
also  plan  to begin the permitting process for the third phase of the Black Fox
project,  and  anticipate  that this process will require approximately 2 years,
based  on  a  plan  for  combined  open  pit  and underground mine, with on-site
milling,  at a capacity of 1500 metric tons of ore per day. The third phase will
include the development of these capabilities, at an aggregate estimated cost of
approximately  US  $45.0  million.

APOLLO GOLD CORPORATION

     The  results  of  operations  of  the  Company  for  the  nine months ended
September  30,  2002  includes the results of operations of Pursuit for the nine
months  ended  September 30, 2002, and  Nevoro for the period from June 25, 2002
through  September  30,  2002.

RESULTS OF OPERATIONS:
----------------------

NINE MONTHS ENDED SEPTEMBER 30, 2003 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30,
2002

     Our  revenues  for  the  nine  months  ended  September  30,  2003  were
approximately $65.0 million derived primarily from the sale of 107,604 ounces of
gold. This compares to approximately $17.0 million derived primarily of the sale
of 34,147 ounces of gold for the same period in 2002. The average price received
for  gold for the first nine months of 2003 and 2002 was $489.48 and $493.53 per
ounce,  respectively.  Our revenues for silver, zinc and lead for the nine moths
ended  September 30, 2003 were $11.2 million compared to $0.2 million during the
same  period  2002. The growth in revenue in 2003 was due in part to an increase
in  mining  activity in that year. For the first six months of 2002, Pursuit was
primarily  engaged in seeking joint venture partners for its existing operations
and  in  negotiating the terms of its acquisition of Nevoro. In addition, during
the  three months ended September 30, 2002, the mill at the Montana Tunnels Mine
was  placed  on  a  care and maintenance basis; therefore, the only revenues for
this  period  came  from  the  Florida  Canyon  Mine.


                                       29
<PAGE>
     Sales  of  minerals  from  our Florida Canyon Mine accounted for 60% of our
revenues for the nine months ended September 30, 2003, with the remaining 40% of
revenues  derived  from sales of minerals from our Montana Tunnels Mine.  In the
nine  months  ended  September  30  2003,  we  received approximately 82% of our
revenue  from sales of gold and 18% from sales of silver, zinc and lead compared
to 99% from the sales of gold and 1% from the sales of silver, zinc and lead for
the  same  period  in  2002.

     Our  revenues  for  the  first  six  months  of 2003 were impacted by mixed
performances  from our mine operations. Our primary goal of bringing the Montana
Tunnels  Mine  back  into  production  was completed during the first quarter of
2003;  however,  wall  slippage  at  the  mine  and  problems  with  our crusher
installation limited our gold production to 13,118 ounces at the Montana Tunnels
Mine  for the first six months of 2003 which was 10,000 ounces below our initial
production  expectations.  Production began to accelerate during June 2003, when
5,377  ounces  of  gold  were produced. We completed the installation of our new
crusher  in  August  2003,  at  a  cost  of  US  $1.5  million.

     These improvements led to the increased production at Montana Tunnels Mine.
We  produced  16,538  ounces  of  gold at the Montana Tunnels Mine for the three
months  ended  September 30, 2003, an increase over the first six months of 2003
when we produced 13,118 ounces of gold. We expect to be in the center of the ore
body  by  August  2004.  The  east  side walls have stabilized and the stripping
program  has begun on the west side of the pit with 4.5 million waste tons moved
in the most recent quarter. Once the stripping process is complete, we expect to
produce  between  65,000  to  72,000  ounces  of gold per year together with the
associated  silver,  lead,  and  zinc  by-products.

     At  Florida  Canyon,  we produced 77,948 ounces of gold for the nine months
ended  September  30,  2003  as  compared  to 34,147 ounces of gold for the same
period  in  2002.  At  September 30, 2003, production was 8,000 ounces less than
anticipated  for  gold  due to lower than expected ore grades.  Our operation at
Florida Canyon is expected to accelerate during the last quarter to an estimated
total production of 110,000 ounces for 2003.

     We  anticipate  commencing operations at the Standard Mine in 2005. We will
operate  this  mine  as  a  satellite  of  the Florida Canyon Mine. We currently
project production rates of 100,000 to 130,000 ounces of gold on an annual basis
for  the  combined  operation  of  the  Florida  Canyon  Mine and Standard Mine.

     Assuming  a  gold  price  range  of  approximately US$375.00 ounce, we look
forward  to  the  Montana Tunnels Mine, the Florida Canyon Mine and the Standard
Mine,  collectively,  producing  approximately 180,000 ounces of gold next year,
with  output potentially increasing to approximately 185,000 to 190,000 ounces a
year thereafter.

     Our  direct  operating  costs equaled approximately $52.0 million and $12.3
million  for  the  nine months ended  September 30, 2003 and 2002, respectively.
These  amounts  include  mining  and  processing  costs. As explained above, the
lower  direct operating costs in 2002 reflect the operating cost of AGI from and
after  June 25, 2002.  We have focused on reducing our direct operating costs in
2003  focusing  on  cost reductions at our mines.  As of September 30, 2003, our
scheduled commitments include only our  operating  leases,  with  minimum  lease
payments  of  $27,000 in 2003 and $111,000 in  2004.  We  incurred  depreciation
and  amortization   expenses   of   approximately  $6.0  million  for  the  nine
months  ended September 30, 2003 as compared to $2.8 million for the same period
2002.  The  difference is the result that Pursuit had limited operations in 2002
and  was  focused  upon the Nevoro acquisition for the first six months of 2002.


                                       30
<PAGE>
     We incurred approximately $4.8 million and $1.8 million for the nine months
ended  September  30, 2003 and 2002, respectively, in general and administrative
expenses.  General  and  administrative  expenses  for  the  nine  months  ended
September  30,  2003  consisted  of  increased  legal  and  accounting  expenses
incurred  in  the preparation of our Registration Statement for the registration
of  our  common  stock  in  the  United States, and increased investor relations
costs,  including  exchange  listing  fees.  In 2002, general and administrative
expenses  consisted  primarily of salaries and legal and accounting expenses for
maintaining  Pursuit  as  a  publicly traded company in Canada for the first six
months  of the year (approximately $417,000).  Subsequent to that time the costs
included organization costs and maintenance of a Denver corporate office. In the
nine  months ended September 30, 2003, we also incurred share-based compensation
of  approximately  $534,000,  resulting  from  the  issuance of stock in lieu of
certain  cash  compensation.  We  do  not  currently  intend  to continue to use
share-based  compensation  for  the  foreseeable future, except for the possible
issuance of shares pursuant to the balance of the arrangement options granted to
certain  of  our officers and directors in 2002. These shares would be issued in
February 2004, based on fiscal 2003 performance, if earned pursuant to the terms
of  those  options.

     In  the nine months ended September 30, 2003 and 2002, we accrued accretion
expense  of  approximately  $1,373,000  and  $609,000  respectively, relating to
accrued site closure costs at our Florida Canyon Mine and Montana Tunnels Mines.
This  expense represents our estimation of the fair value of the increase in our
site closure and reclamation costs. We incurred $981,000 in royalty expenses for
the nine months ended September 30, 2003 as compared to $425,000 during the same
period  2002. These amounts are attributable to royalties on production from our
Florida Canyon Mine. Our expenses for exploration and development, consisting of
drilling  and   related   expenses   at  our   exploration  properties,  totaled
approximately  $3.0 million and $1.1 million for the nine months ended September
30,  2003 and 2002, respectively. Given that Pursuit was focused upon the Nevoro
acquisition  in  the  first  six months of 2002, it did not incur exploration or
development  costs  during  that  period,  and in the third quarter of 2002, our
exploration  and  development  expenses  were primarily focused on the Black Fox
project.

     As  a  result  of  these expense components, our operating expenses totaled
approximately  $68.7  million  for  the  nine  months  ended  September 2003, as
compared  to  approximately  $19.1  million  for  the  same period in 2002.  The
difference  is  the  result  that Pursuit had limited operations in 2002 and was
focused  upon  the  Nevoro  acquisition  for  the  first  six  months  of  2002.

     We realized interest income of approximately $73,000 during the nine months
ended September 30, 2003. We incurred interest expense of approximately $629,000
in  the nine months ended September 30, 2003, primarily for equipment leases and
bridge  loans.  We  did  not  realize  interest income but incurred net interest
expense  of  approximately  $842,000  during  the  comparable  period  in  2002.

     We  realized  foreign exchange gains of  approximately  $765,000 during the
nine  months  ended  September  30,  2003, from cash balances not held in United
States  dollars.  Although  we  report  currency in Canadian dollars, we utilize
United  States  dollars  as  our  functional  currency.  We  did not realize any
foreign  exchange  gains  during  the  nine  months  ended  September  30, 2002.


                                       31
<PAGE>
     Based on these factors, we incurred a loss of approximately $3.5 million or
$0.07  per  share for the nine months ended September 30, 2003, as compared to a
loss of approximately $2.9 million or $0.24 per share, for the nine months ended
September  30,  2002.

Differences  Between  Canadian  and  US  GAAP

     In  accordance with Canadian GAAP, we have not recorded any expense for the
nine  months  ended  September  30,  2003  with respect to stock options granted
to  employees.  Under  US  GAAP,  we  have  elected  to  continue to measure our
employee  stock-based  awards  using  the  intrinsic  value method prescribed by
Accounting Principles  Board  Opinion  No.  25,  "Accounting for Stock Issued to
Employees" ("APB  No.  25").  For  the  nine  months  ended  September 30, 2003,
an  expense  of approximately  $1.2 million  has  been recorded under APB No. 25
with  respect to the intrinsic  value  of  stock  options  granted  during  that
period.

     Under  US GAAP, SFAS 133 requires that for hedge accounting to be achieved,
a  company  must  provide detailed documentation and must specifically designate
the  effectiveness  of  a  hedge.  Furthermore, US GAAP also requires fair value
accounting  to  be  used  for all types of derivatives. As we have chosen not to
meet  these  requirements  for  US  GAAP  purposes  for  the  nine  months ended
September  30, 2003, an additional loss of approximately $1.9 million  has  been
recorded  in  that  period  to  reflect  the  fair  value  loss on the contracts
outstanding  between  December  31, 2002 and September 30, 2003.  The cumulative
gold  hedge  loss  on outstanding hedge contracts amounted to approximately $5.8
million  at  September  30,  2003.

     Under  US GAAP, the convertible debenture issued in June 2002 requires that
the beneficial conversion feature and debenture issuance costs be amortized over
the  term  of  the  debenture.  Accordingly,  an expense of  approximately $32.7
million  was  recorded  in  the  nine  month  period  ended  September 30,  2002
representing  the  amortization  of  these  costs.

     In  accordance  with  Canadian GAAP, we have determined the amortization of
deferred  stripping  costs  using  a  ratio calculated using proven and probable
reserves  and mineral resources expected to be converted into reserves. Under US
GAAP  the ratio would be calculated using only proven and probable reserves. For
the nine months ended September 30, 2003, an additional amortization of deferred
stripping  costs  of  approximately  $1.1  million  is recognized under US GAAP.

     Under  Canadian  GAAP,  we  capitalize  costs associated with the Black Fox
project as we have identified proven and probable reserves.  Under US GAAP these
costs are expensed.  For the nine months ended September 30, 2003, approximately
$1.9  million  has  been  expensed  under  US  GAAP in relation to the Black Fox
project.

     Under  US  GAAP,  the foreign currency component of shareholders' equity is
required to be recognized as a component of comprehensive income and reported in
the  financial  statements.  Canadian  GAAP  does  not  recognize the concept of
comprehensive  income. The only components of our comprehensive loss are the net
loss  for  the  period  and  the   foreign  currency  translation  component  of
shareholders'  equity  as reported in our consolidated balance sheet prepared in
accordance  with  Canadian  GAAP.

     The  net  loss  per  share for the nine months ended September 30, 2003 was
$0.07  and  $0.19  under  Canadian GAAP and US GAAP, respectively, and $0.24 and
$2.88,  respectively  for  the  nine  months  ended  September  30,  2002.


                                       32
<PAGE>
THREE  MONTHS  ENDED SEPTEMBER 30, 2003 COMPARED TO THREE MONTHS ENDED SEPTEMBER
30,  2002

     Our  revenues   for  the   three  months  ended  September  30,  2003  were
approximately  $27.7 million derived primarily from the sale of 42,695 ounces of
gold.  This  compares  to approximately $17.0 million derived primarily from the
sale  of  34,147  ounces  of gold for the same period in 2002. The average price
received  for  gold  during  the  same period was $504.29 and $493.53 per ounce,
respectively.  Our  revenues for silver, zinc and lead were $6.5 million for the
nine  months  ended  September  30, 2003, as compared to $0.2 million during the
same  period  in  2002.  The  growth  in  revenue  in 2003 was due in part to an
increase  in  mining  activity  for  that  year.  During  the three months ended
September  30,  2002,  the mill at the Montana Tunnels Mine was placed on a care
and maintenance basis; therefore the only revenues for this period came from the
Florida  Canyon  operation.  For  the  three  months ended September 30, 2003 we
produced  16,538 ounces of gold at the Montana Tunnels Mine and 26,157 ounces of
gold at the Florida Canyon Mine. We received approximately 76% of our revenue in
the  three months ended September 30, 2003 from sales of gold and 24% from sales
of  silver, zinc and lead compared to 99% from the sales of gold and 1% from the
sales  of  silver,  zinc  and  lead  for  the  same  period  in  2002.

     Our  direct  operating  costs equaled approximately $22.5 million and $12.3
million  for  the  three months ended September 30, 2003 and 2002, respectively.
These  amounts  include  mining  and processing costs. The primary difference is
during  the  three months ended September 30, 2002, the Montana Tunnels Mine was
on  a  care  and  maintenance  basis.  We  have  focused  on reducing our direct
operating  costs in 2003, focusing on cost reductions at our mines. However, our
direct  operating  costs  increased significantly from the first quarter of 2003
due  to  increasing  production at the Montana Tunnels Mine. As of September 30,
2003,  our scheduled commitments include only our operating leases, with minimum
lease payments of $27,000 in 2003 and $111,000 in 2004. We incurred depreciation
and  amortization  expenses  of  approximately $2.0 million for the three months
ended  September  30, 2003 as compared to $2.8 million for the same period 2002.

     We  incurred  approximately  $1.5  million  and  $1.4 million for the three
months  ended  September  30,  2003  and  2002,  respectively,  in  general  and
administrative  expenses.  General  and  administrative  expenses  for the three
months  ended  September  30,  2003  consisted of increased legal and accounting
expenses  incurred  in  the  preparation  of  our Registration Statement for the
registration  of  our  common stock in the United States, and increased investor
relations  costs,  including  exchange  listing  fees.  In 2002, the general and
administrative  expenses  were primarily organization costs and maintenance of a
Denver  corporate  office. In the three months ended September 30, 2003, we also
incurred  share-based  compensation of approximately $27,000, resulting from the
issuance  of  stock  in  lieu  of certain cash compensation. We do not currently
intend  to  continue to use share-based compensation for the foreseeable future,
except  for  the  possible  issuance  of  shares  pursuant to the balance of the
arrangement  options  granted  to certain of our officers and directors in 2002.
These shares would be issued in February 2004, based on fiscal 2003 performance,
if  earned  pursuant  to  the  terms  of  those  options.

     In the three months ended September 30, 2003 and 2002, we accrued accretion
expense of approximately $442,000 and $609,000 respectively, relating to accrued
site  closure  costs  at  our Florida Canyon Mine and Montana Tunnels Mine. This
expense  represents our estimation of the fair value of the increase in our site
closure  and reclamation costs for the third quarter of the respective years. We
incurred  $327,000  in royalty expenses for the quarter ended September 30, 2003
as  compared  to  $425,000  during  the  same  period  2002.


                                       33
<PAGE>
     These  amounts are attributable to royalties on production from our Florida
Canyon  Mine.  Our  expenses  for  exploration  and  development,  consisting of
drilling  and  related expenses at our exploration properties were approximately
$0.1  million and $1.1 million for the three months ended September 30, 2003 and
2002,  respectively,  largely  the  result  of  the  Black  Fox project which we
transitioned  from  an  exploration  (expensed)  to  a development (capitalized)
category. The expenses during 2002 were focused mainly on the Black Fox project.

     As  a  result  of  these expense components, our operating expenses totaled
approximately $26.9 million for the quarter ended September 2003, as compared to
approximately  $18.7  million  for  the  same  period  in  2002.

     We  realized  interest  income  of  approximately  $14,000 during the three
months ended September 30, 2003.  We incurred interest expense  of approximately
$175,000  in  the three months ended September 30, 2003, primarily for equipment
leases  and  bridge  loans.  We did not realize interest income but incurred net
interest  expense  of approximately $842,000 during  the  comparable  period  in
2002.

     We  realized foreign exchange losses of  approximately  $191,000 during the
quarter  ended  September 30, 2003, from cash balances not held in United States
dollars.   Although  we  report  currency in Canadian dollars, we utilize United
States  dollars  as  our  functional  currency.  We  did not realize any foreign
exchange  gains  during  the  three  months  ended  September  30,  2002.

     Based on these factors, we realized income of approximately $0.5 million or
$0.01  per share for the three months ended September 30, 2003, as compared to a
loss  of  approximately  $2.5  million  or $0.08 per share, for the three months
ended  September  30,  2002.

Differences  Between  Canadian  and  US  GAAP

     In  accordance with Canadian GAAP, we have not recorded any expense for the
three  months  ended September 30, 2003 with respect to stock options granted to
employees.  Under  US  GAAP, we have elected to continue to measure our employee
stock-based  awards  using  the  intrinsic value method prescribed by Accounting
Principles  Board  Opinion  No.  25,  "Accounting for Stock Issued to Employees"
("APB  No.  25").  For  the three months ended September 30, 2003, an expense of
approximately  $63,000  has  been  recorded under APB No. 25 with respect to the
intrinsic  value  of  stock  options  granted  during  that  period.

     Under  US GAAP, SFAS 133 requires that for hedge accounting to be achieved,
a  company  must  provide detailed documentation and must specifically designate
the  effectiveness  of  a  hedge.  Furthermore, US GAAP also requires fair value
accounting  to  be  used  for all types of derivatives. As we have chosen not to
meet  these  requirements  for  US  GAAP  purposes  for  the  three months ended
September  30, 2003, an additional loss of approximately $3.9 million  has  been
recorded  in  that  period  to  reflect  the  fair  value  loss on the contracts
outstanding  between  June  30, 2003 and September 30, 2003. The cumulative gold
hedge loss on outstanding hedge contracts amounted to approximately $5.8 million
at  September  30,  2003.

     In  accordance  with  Canadian GAAP, we have determined the amortization of
deferred  stripping  costs  using  a  ratio calculated using proven and probable
reserves  and  resources. Under US GAAP the ratio would be calculated using only
proven  and probable reserves. For the three months ended September 30, 2003, an
additional  amortization  of  deferred  stripping  costs  of  approximately $1.1
million  is  recognized  under  US  GAAP.


                                       34
<PAGE>
     Under  Canadian  GAAP,  we  capitalize  costs associated with the Black Fox
project.  Under  US  GAAP  these  costs are expensed. For the three months ended
September  30,  2003, approximately $1.9 million has been expensed under US GAAP
in  relation  to  the  Black  Fox  project.

     Under  US  GAAP,  the foreign currency component of shareholders' equity is
required to be recognized as a component of comprehensive income and reported in
the  financial  statements.  Canadian  GAAP  does  not  recognize the concept of
comprehensive  income. The only components of our comprehensive loss are the net
loss  for  the   period  and  the  foreign  currency  translation  component  of
shareholders'  equity  as reported in our consolidated balance sheet prepared in
accordance  with  Canadian  GAAP.

     The  net  income  (loss) per share for the three months ended September 30,
2003  was  $0.01  and $(0.12) under Canadian GAAP and US GAAP, respectively, and
$(0.08)  and  $(0.08), respectively for the three  months  ended  September  30,
2002.

FINANCIAL  CONDITION  AND  LIQUIDITY:
-------------------------------------

     At  September  30, 2003 we had cash balances of approximately $44.3 million
compared  to  cash  of  approximately  $13.3  million  at December 31, 2002. The
increased  cash resulted from our recent equity offering. On September 26, 2003,
we  completed  an  equity  offering  of  22,300,000 shares for gross proceeds of
approximately   $50.2  million.  We   incurred   commissions   and  expenses  of
approximately  $3.0  million  and  $0.7  million, respectively, for net proceeds
received  of  $46.45  million. 669,000 Agent's Options were also granted at this
time  with  an  expiration  date  of September 26, 2005 and an exercise price of
$2.25  per  share.

     Subsequent to September 30, 2003, the Agents exercised their over allotment
option  and  we  issued  an  additional  2,132,300  shares  for  net proceeds of
approximately  $4.5  million.  An  additional  63,969  Agent's Options were also
granted at this time with an expiration date of October 27, 2005 and an exercise
price  of  $2.25  per  share.

     The proceeds from this offering are to be used for the following:

  -  Standard  Mine - The Standard Mine is currently in the permitting stage. We
     are  receiving  permits  currently  and expect to be permitted in 2004 with
     enough time to build a leach pad and start production in 2005. We expect to
     spend  approximately  $7  million  on  the  project.

  -  Black  Fox Property - The development team is preparing an RFP (Request for
     Proposal)  for  the  development  plan  at Black Fox, and the drilling will
     continue  there  as  well.  The  team  is  working  toward  an  audited ore
     reserve/resource which should be complete at year end, bringing the project
     to  the  feasibility  stage.  We  expect  to  spend US $17.3 million on the
     project.

  -  Montana  Tunnels - The west wall stripping project has commenced at Montana
     Tunnels,  six  additional trucks have been added to the fleet. We expect to
     be  mining  the  west  side ores by August 2004. However, we also expect to
     keep  the  mill  operating during this development time frame. We expect to
     spend  approximately US $11 million, net of revenues from development ores,
     on  the  project.


                                       35
<PAGE>
     Pursuant to the terms and conditions of a $4.5 million private placement of
flow-through  common  shares (as defined in sub-section 66(15) of the Income Tax
Act  (Canada) conducted in November of 2002, the funds have been expended at the
Black  Fox  project.  Some  of  the  expenses  will not qualify for flow through
treatment  therefore  the  Company  has  added $700,000 to the fund to bring the
total  expected  expenditures  at  year  end  to  $5.2  million.

     In  June  2003  we  entered  into  a  Revolving Loan, Guaranty and Security
Agreement  with  Standard Bank London Limited ("Standard Bank").  Although there
is  a commitment of US $5 million, we must satisfy certain requirements in order
for  Standard  Bank  to  advance  the  maximum  amount  of  the loan.  Until the
commitment  under  the line of credit expires or has been terminated, we have to
meet  certain covenants. As of September 30, 2003 we do not owe any amount under
this  arrangement  and  all  covenants  have  been  met.

     We  believe  our  cash requirements for future development of the Black Fox
Mine,  Standard Mine and for operating our other mines, will be funded through a
combination  of  future cash flows from operations, and/or future debt or equity
security  issuances.  Our  ability to raise capital is highly dependent upon the
commercial  viability of our projects and the associated prices of the metals we
produce. Because of the impact that significant changes in the prices of silver,
gold,  lead  and  zinc have on our financial condition, declines in these metals
prices  may  negatively  impact  our  ability  to  raise  additional funding for
long-term  projects.  There  can  be  no assurance that we will be successful in
generating adequate funding for anticipated capital expenditures related to this
property.

Operating  Activities

     Operating activities provided approximately $9.9 million of cash during the
nine  months  ended  September 30, 2003. Substantially all of the operating cash
flow  consisted of noncash elements; principal noncash elements included charges
for  depreciation,  depletion  and  amortization  of approximately $6.0 million,
amortization  of  deferred  stripping  costs  of  $6.8  million,  share-based
compensation  of  approximately  $0.5  million, an increase in the provision for
accrued  site  closure  costs  of approximately $1.4 million, offset by the use,
through  the  change  in  non-cash  operating  assets  and  liabilities,  of
approximately  $1.2  million. Operating activities used approximately $16,000 of
cash  during  the  nine  months  ended  September  30,  2002.

Investing  Activities

     Investing  activities  utilized  approximately $27.3 million of cash during
the  nine  months  ended  September  30,  2003.  The major uses of cash were for
additions  to  deferred stripping costs (approximately $13.9 million), property,
plant  and  equipment (approximately $12.0 million) including but not limited to
development at the Standard Mine and the Black Fox project, the completion of an
additional  crusher at Montana Tunnels and purchase of additional haul trucks at
Montana  Tunnels,  and for the investment in a restricted certificate of deposit
(approximately  $1.6  million).  Investing  activities  used approximately $40.9
million  of  cash  during  the nine months ended September 30, 2002, including a
loan  to  Nevoro  to acquire Apollo Gold Inc. and subsequent property, plant and
equipment  additions  following  this  acquisition.


                                       36
<PAGE>
Financing  Activities

     During  the  nine  months  ended  September  30, 2003, financing activities
provided  approximately  $50.0  million  in cash, primarily from proceeds of the
equity  issuance  on  September  26, 2003 discussed above and approximately $5.1
million  from the exercise of warrants and options net of the repayment of notes
payable  of  approximately  $1.5  million.  Financing  activities  provided
approximately  $46.3  million in cash during the nine months ended September 30,
2002,  from  the  issuance and sale of convertible debentures and an issuance of
special  warrants  (approximately  $42.7 million) and form refinancing of leases
(approximately  $4.8  million proceeds from notes payable and approximately $1.1
million  of  capital  lease  repayments).

ENVIRONMENTAL

     All  of our operations are subject to reclamation and closure requirements.
We  monitor  these  costs  on  a  regular  basis,  and together with third party
engineers  we  prepare  internal estimates to evaluate our bonding requirements.
These  estimates  are  then  reconciled  with  requirements of state and federal
authorities.  As  of September 30, 2003, we have accrued US$21.3 million related
to  reclamation,  severance  and  other  closure requirements. This liability is
covered by a combination of surety bonds, totaling US$31,959,316, and cash bonds
totaling US$6,397,280, for a total reclamation surety, at September 30, 2003, of
over  US  $38  million. Our reclamation liability coverage exceeds our estimated
requirements  since the federal and state authorities estimate reclamation based
upon  wages  in  excess  of  what  we  would  have  to  pay if we to conduct the
reclamation  and  closure  requirements  and  the  federal and state authorities
assume  we  will not have the capability to complete the reclamation and closure
requirements.  Therefore,  liability  coverage  is  increased to account for the
increased overhead and other costs necessary for mobilization and demobilization
of workers, time delays and numerous other contingencies if the state or federal
authorities were forced to conduct the reclamation project. We have accrued what
management  believes  is the present value of our best estimate of the liability
as of September 30, 2003; however, it is possible that our obligation may change
in  the  near  or  long  term  depending  on  a  number  of  factors,  including
finalization  of  settlement terms, ruling from the courts and other factors. In
addition, any adverse ruling against us regarding any environmental matter could
have  a  material  adverse  effect  on  us.

     Each of our mines operate under a permit granted by the state in which each
mine  is  located.  Mining  operations  are usually governed by applicable state
environmental  policies which are usually regulated by statute. For instance, in
Montana,  the  Montana  Department  of  Environmental  Quality  administers  the
majority  of  permits  under  which  our  mine  operates.

     We  strive  to  conduct  our  operations  in an environmentally responsible
manner  by,  among  other  things,  implementing  sound work methods, completing
concurrent  reclamation  (where  practicable),  handling materials carefully and
monitoring  wildlife.

     All  aspects  of  our mining operations are regulated by operating permits.
Applications  are  submitted  to  appropriate  regulating agencies to obtain new
authorizations,  make  changes  to  the  existing plan of operations or to renew
permits on a periodic schedule. Applications submitted for operating permits are
reviewed  by  the  appropriate  regulatory  agencies with occasional third party
review  of  complex  issues. Regulatory agencies can, and do, request additional
explanations  or information in the review process before granting a permit. All
permits   contain  compliance  measures  and  require  periodic  monitoring  and
reporting  to  regulating  agencies  and  routine  inspections  are conducted by
permitting  agencies.


                                       37
<PAGE>
     Geochemical breakdown of ores or waste rock, water quality and stability of
constructed  structures  are  the  areas  that  receive  the  most attention for
environmental  concern  at mines. The characteristics of our mine ores and waste
rock  show  good  chemical stability. We have conducted tests at our mines which
support  our  belief  that  adverse  chemical breakdown should not occur and the
potential  for acid rock drainage is low. Consequently, water quality issues are
minimized as a result of the favorable characteristics of the mine rock. Several
studies,  models  and  reports  have been provided to the permitting agencies to
assess  our  environmental  risks  at  our  mines.

     Our  mines  use minimal amounts of regulated toxic substances in the mining
and  milling  operations.  Most  of  the  chemicals  which we use to collect the
minerals are not regulated as toxic substances. Standard fuels and oils are used
in  our  mining  operations and used oils and coolants are marketed or recycled.
There  are  no  regulated  cleaning  solvents  used  at  our  mines. The milling
operations use a small amount of sodium cyanide as an inhibitor in the flotation
recovery  process.  We  also use a cyanide compound which becomes complexed with
metals  or  is degraded by bacteria and sunlight in the tailings water rendering
any  residual  cyanide harmless. Our milling operations recover and reuse all of
the process water from the tailings impoundment recovery system with fresh water
makeup  added  as necessary. There is no water discharge to the environment from
the  mining  or  milling  operations.  All  storm water at our mines is captured
either  in the open pit  mine  or  in the tailings impoundment or in fresh water
makeup  ponds  and  is  subsequently  used  for  makeup  water  in  the  milling
process.

     Reclaiming  areas  that  have  been disturbed by mining activity to produce
original or  natural conditions is the focus of our operating permits. Our mines
maintain  a  closure plan with associated costs to complete final reclamation at
the  property following the cessation of mining operations. Waste rock dumps and
some  other  disturbance  areas  are  reclaimed  concurrent  with  active mining
operations.  The  tailings impoundment open pit mine and mine facilities will be
reclaimed  after  mining  and  milling  operations  have  been  completed.

     Following  mining  and  milling  operations,  our  mines will be closed and
reclaimed  to  former  or  new  beneficial use criteria in accordance with their
respective  mine operating permit and reclamation plan. Each mine's closure plan
details  the  tasks and schedules that will be required to reclaim the different
areas  of  the  mines.  We intend that all mine closure plans will be consistent
with  requirements  in  our  operating  permits.

     In  the  past  several years, there have been corporate level environmental
audits  and  third party audits. The audits are comprehensive and include review
of  the  environmental aspects of the mining operations. Individual areas of the
operation  have  also  been  reviewed  by  third party consultants. Geotechnical
requirements  such  as  construction of the tailings embankment and stability or
hydrogeology  analyses at the mine are conducted by qualified consultants who do
extensive studies, designs, construction oversight and reports on these projects
for  us  and  the  applicable  regulatory  agencies.

     We  try to conduct our operations in an environmentally responsible manner.
Since  our  merger  no  notices  of  violation  have  been  received  from  any
environmental  regulatory  agency.

     Generally,  our  mines  are  a  significant  part  of  the  tax base of the
community  and  our  mines  are  usually  strongly  supported by the community's
residents  and  schools. There have been no community protests against our mines
during  their  period  of  operations.


                                       38
<PAGE>
NEW ACCOUNTING PRONOUNCEMENTS

     We  report under Canadian GAAP and reconcile the financial statements to US
GAAP.

NEW CANADIAN GAAP ACCOUNTING PRONOUNCEMENTS

     The  CICA  has  also  issued  Accounting  Guideline  13,  AcG-13,  "Hedging
Relationships",  which  requires  that  in  order to apply hedge accounting, all
hedging  relationships must be identified, designated, documented and effective.
Where  hedging  relationships  cannot  meet these requirements, hedge accounting
must  be  discontinued.  AcG-13  is  applicable for fiscal years beginning on or
after  July  1,  2003.  Management  is  currently  evaluating  the effect of the
adoption  of  the  new  guideline  on  its  financial  statements.

     The  CICA  has  issued  a  revised  Handbook  Section  3475,  "Disposal  of
Long-Lived Assets and Discontinued Operations". The revised standard establishes
criteria  for  the  classification  of  long-lived assets as "held for sale" and
requires  that  long-lived assets that are to be disposed of by sale be measured
at  the  lower  of carrying value or fair value less cost to sell. It eliminates
the  previous  recommendation  that  enterprises  include  under  ''discontinued
operations''  in the financial statements amounts for operating losses that have
not  yet  occurred.  Additionally,  the  revised  standard  expands the scope of
discontinued  operations  to  include  all  components  of  an  enterprise  with
operations  that  (1)  can  be distinguished from the rest of the entity and (2)
will  be  eliminated  from  the  ongoing  operations of the entity in a disposal
transaction. The new Section 3475 is effective for disposal activities initiated
by  the  enterprise's  commitment  to a plan on or after May 1, 2003. Management
does  not  expect  the adoption of the new standard to have a material impact on
its  financial  statements.

     In  2002,  the  CICA  Handbook  Sections  3063  - "Impairment of Long Lived
Assets"  and  3475 - "Disposal of Long Lived Assets and Discontinued Operations"
were  amended  to  harmonize  with  SFAS  144.  The  standards  will  require an
impairment  loss  to be recognized when the carrying amount of an asset held for
use exceeds the sum of the undiscounted cash flows. The impairment loss would be
measured  as  the  amount by which the carrying amount exceeds the fair value of
the  asset.  An  asset  held for sale is to be measured at the lower of carrying
cost  or  fair  value less cost to sell. In addition, this guidance broadens the
concept  of  a  discontinued  operation  and  eliminates  the  ability to accrue
operating  losses  expected  between the measurement date and the disposal date.
Section  3063  is effective for fiscal years beginning on or after April 1, 2003
and  Section  3475  applies  to disposal activities initiated by an enterprise's
commitment  to  a  plan  on  or  after May 1, 2003. The sections will be applied
prospectively with early adoption encouraged. Management is currently evaluating
the  effect  of  the  adoption  of the new standard on its financial statements.

NEW US GAAP ACCOUNTING PRONOUNCEMENTS

     In  January  2003,  the  FASB  issued  FIN  46 - "Consolidation of Variable
Interest  Entities"  ("FIN  46"). FIN 46 clarifies the application of Accounting
Research  Bulletin  No. 51 - Consolidated Financial Statements to those entities
defined  as  "Variable  Interest Entities" (more commonly referred to as special
purpose  entities)  in which equity investors do not have the characteristics of
"controlling  financial  interest"  or do not have sufficient equity at risk for
the  entity  to finance its activities without additional subordinated financial
support  from other parties. FIN 46 applies immediately to all Variable Interest
Entities  created  after  January  31,  2003  and  by the beginning of the first
interim  or  annual reporting period commencing after June 15, 2003 for Variable
Interest  Entities  created  prior  to  February  1,  2003. The Company does not
conduct  any  transactions through special purposes entities and does not expect
FIN  46  to  have  an  impact  on  its  financial  statements.

     In  April 2003, the FASB issued SFAS No. 149, "Amendment of SFAS No. 133 on
Derivative Instruments  and  Hedging  Activities"  ("SFAS  149").  The Statement
amends  and  clarifies  accounting for derivative instruments, including certain
derivative  instruments  embedded in other contracts, and for hedging activities
under  SFAS  133.  In  particular,  it  (1) clarifies under what circumstances a
contract with an initial net investment meets the characteristic of a derivative
as  discussed  in SFAS 133, (2) clarifies when a derivative contains a financing
component,  (3)  amends  the  definition  of  an underlying to conform it to the
language used in FASB Interpretation No. 45, Guarantor Accounting and Disclosure
Requirements  for  Guarantees,  Including Indirect Guarantees of Indebtedness of
Others  and  (4)  amends  certain  other  existing  pronouncements.  SFAS 149 is
effective  for contracts entered into or modified after June 30, 2003, except as
stated  below  and for hedging relationships designated after June 30, 2003. The
provisions  of  SFAS 149 that relate to SFAS 133 Implementation Issues that have
been  effective  for  fiscal  quarters that began prior to June 15, 2003, should
continue  to  be applied in accordance with their respective effective dates. In
addition,  certain  provisions  relating  to  forward  purchases  or  sales  of
when-issued  securities  or  other  securities  that do not yet exist, should be
applied  to  existing contracts as well as new contracts entered into after June
30,  2003.  SFAS 149 should be applied prospectively. SFAS 149 is required to be
adopted  by  the Company on July 1, 2003. The Company has not yet determined the
impact  of  SFAS  149  on  its  financial  statements


                                       39
<PAGE>
     In  May  2003,  the  FASB  issued  SFAS  No.  150,  "Accounting for Certain
Financial  Instruments  with  Characteristics  of  both  Liabilities and Equity"
("SFAS 150"). SFAS 150 modifies the accounting for certain financial instruments
that,  under  previous  guidance,  issuers  could  account  for  as  equity. The
Statement  requires  that  those  instruments  be  classified  as liabilities in
statements  of  financial  position.

     SFAS  150  affects  an  issuer's accounting for three types of freestanding
financial  instruments,  namely:
-    mandatory  redeemable shares, which the issuing company is obligated to buy
     back  in  exchange  for  cash  or  other  assets.
-    Instruments,  other  than  outstanding  shares,  that do or may require the
     issuer to buy back some of its shares in exchange for cash or other assets.
     These  instruments  include  put  options  and  forward purchase contracts.
-    obligations that can be settled with shares, the monetary value of which is
     fixed,  tied  solely or predominantly to a variable such as a market index,
     or  varies  inversely  with  the  value  of  the  issuers'  shares.

     SFAS  150  is  effective for financial instruments entered into or modified
after  May  31,  2003,  and otherwise is effective at the beginning of the first
interim  period  beginning  after  June  15,  2003.  It  is to be implemented by
reporting  the  cumulative  effect  of  a  change in an accounting principle for
financial  instruments  created  before  the  issuance date of the Statement and
still  existing  at the beginning of the interim period of adoption. Restatement
is  not permitted. The Company is currently evaluating the impact of SFAS 150 on
its  results  of  operations  and  financial  position.

CRITICAL ACCOUNTING POLICIES

     The  preparation  of  financial  statements  in  conformity  with generally
accepted  accounting  principles  requires  management  to  make  a  variety  of
estimates  and  assumptions  that  affect (i) the reported amounts of assets and
liabilities  and  disclosure of contingent assets and liabilities as of the date
of  the  financial  statements  and  (ii)  the  reported amounts of revenues and
expenses  during  the  reporting  periods  covered  by the financial statements.


                                       40
<PAGE>
     Our  management routinely makes judgments and estimates about the effect of
matters  that  are  inherently   uncertain.  As  the  number  of  variables  and
assumptions affecting the future resolution of the uncertainties increase, these
judgments  become  even  more subjective and complex. We have identified certain
accounting  policies  that  are  most  important to the portrayal of our current
financial  condition  and  results  of  operations.  Our  significant accounting
policies  are  disclosed  in  Note  4  to  the Consolidated Financial Statements
included  in  our  S-1  Registration  Statement  filed  with  the  SEC.

REVENUE RECOGNITION

     Sales  of metals products sold directly to smelters are recorded when title
and  risk of loss transfer to the smelter at current spot metals prices. We must
estimate  the  price  at  which  our  metals  will  be  sold  in  reporting  our
profitability  and  cash  flow. Recorded values are adjusted monthly until final
settlement at month-end metals prices. Sales of metal in products tolled, rather
than  sold  to smelters, are recorded at contractual amounts when title and risk
of  loss  transfer  to  the  buyer.

MINING COSTS

     In general, mining costs are charged to cost of sales as incurred. However,
certain  mining costs associated with open-pit deposits that have diverse grades
and waste-to-ore ton ratios over the mine life are deferred and amortized. These
mining costs are incurred on mining activities that are normally associated with
the removal of waste rock at open-pit mines and which is commonly referred to as
"deferred  stripping."  Amortization of amounts deferred is based on a stripping
ratio,  calculated as estimated total mining costs divided by the current proven
and  probable  reserves  and  mineral  resources  expected  to be converted into
mineral  reserves. This ratio is used to calculate the current period production
cost  charged  against  earnings  by  multiplying  the stripping ratio times the
reserves mined during the period. The application of the accounting for deferred
stripping  costs  and  the  resulting  differences  in  timing  between  costs
capitalized  and amortization generally results in an asset on the balance sheet
(capitalized mining costs), although it is possible that a liability could arise
if  amortization  exceeds  costs  capitalized.

     The  amortization  of  these  capitalized  costs is reflected in the income
statement  in  a  pro-rata  manner  over the remaining life of the open-pit mine
operations  so  that  no  unamortized  balance remains at mine closure. Deferred
stripping  costs  are included with related mining property, plant and equipment
for  impairment  testing  purposes.

DEPRECIATION AND DEPLETION

     Depreciation  is  based  on the estimated useful lives of the assets and is
computed  using  straight-line  and  unit-of-production  methods.  Depletion  is
computed  using the unit-of-production method. The units-of-production method is
based  on proven and probable ore reserves. As discussed above, our estimates of
proven  and  probable  ore  reserves  may  change,  possibly  in  the near term,
resulting  in  changes  to depreciation, depletion, amortization and reclamation
accrual  rates  in  future  reporting  periods.

IMPAIRMENT OF LONG-LIVED ASSETS

     We  review  the  net  carrying  value  of  all  facilities,  including idle
facilities,  on  a  periodic basis. We estimate the net realizable value of each
property  based  on  the  estimated  undiscounted future cash flows that will be
generated  from  operations at each property, the estimated salvage value of the
surface  plant  and  equipment and the value associated with property interests.
These  estimates  of  undiscounted  future  cash


                                       41
<PAGE>
flows  are dependent upon the estimates of metal to be recovered from proven and
probable  ore  reserves (see discussion above), future production cost estimates
and  future  metals  price  estimates over the estimated remaining mine life. If
undiscounted  cash  flows  are  less  than  the carrying value of a property, an
impairment  loss  is  recognized  based  upon the estimated expected future cash
flows  from  the  property  discounted at an interest rate commensurate with the
risk  involved.

ENVIRONMENTAL MATTERS

     When  it  is  probable  that  such  costs  will  be  incurred  and they are
reasonably  estimable, we accrue costs associated with environmental remediation
obligations  at  the  most  likely  estimate. Accruals for estimated losses from
environmental  remediation  obligations  generally  are recognized no later than
completion  of  the remedial feasibility study for such facility and are charged
to  provision  for  closed operations and environmental matters. We periodically
review  our  accrued  liabilities for such remediation costs as evidence becomes
available  indicating  that  our  remediation liability has potentially changed.
Costs of future expenditures for environmental remediation are not discounted to
their  present  value  unless subject to a contractually obligated fixed payment
schedule.  Such  costs  are  based  on  our current estimate of amounts that are
expected  to  be  incurred when the remediation work is performed within current
laws  and  regulations. Recoveries of environmental remediation costs from other
parties  are  recorded  as  assets  when  their  receipt  is  deemed  probable.

BROKEN ORE ON LEACH PAD

     Mining,  engineering  and  crushing related costs are charged to the broken
ore  on  leach pad account and matched to the ounces added and removed. The gold
ounces are shipped to the refinery and revenues are recorded, in accordance with
our  revenue  recognition  policy, and matched in the current period against the
costs.

     When  the  ore  is delivered to the leach pad it is sprinkled with a dilute
solution  containing  cyanide  and  lime.  This solution seeps through the leach
pile until it reaches the plastic liner at the bottom.  This process is aided by
drainage  systems (pipes and trenches) throughout the leach pad.  From the liner
the  gold bearing solution is captured in a pond and pumped to a series of tanks
containing  granular  activated  carbon,  where  the  gold  is absorbed onto the
carbon's  porous  surfaces.  Removal  of  carbon  from the tanks facilitates the
stripping  or removal of gold from the carbon surfaces. The solution used in the
stripping process is then passed through an electrical plating (electro-winning)
circuit  where the gold is deposited on electrodes.  The electro-winning process
is  a  method  of  using positive and negative electricity to extract the metals
from the solutions.  This process creates a sludge material that is then refined
into  a  dore  product  at  the mine site.  Dore is a metal bar that consists of
50-65%  gold, 10-20% silver and various levels of other metals that may occur in
the  ore.  An  additional  refining  process  occurs offsite in which the bar is
converted  into  marketable  or  .9999  fine  gold  and  .9000  fine  silver.

     Our  drawdown  calculations  for  current  and  long  term  asset valuation
determination  suggest  that it will take approximately 18 months to deplete the
leach  pad  inventory.  For  production purposes, because we continually add new
production  ounces, we use a five month period in which we determine that 20% of
any  given  production  will  be  taken  off  of  the  pad  in  a  months  time.

     The  leach  pad  valuation process is based on management's best estimates.
When  the leach pad is finally closed and all gold and silver ounces removed are
counted  we  will  be  able  to  determine the actual quantity of metal that was
contained in the leach pad.  Estimates begin at the start of the process as tons
and  metal content are estimated.  Tonnage is estimated using ground surveys and
truck  counts.  Metal  content is calculated using fire assaying techniques that
involve  averaging the mining areas and comparing to the daily blast hole assays
which  are  done  using  the  Atomic  Absorption  Hot  Cyanide  Leach  assaying


                                       42
<PAGE>
techniques.  The  gold  recovery curve is then estimated using the design of the
leach  pad,  the  composition of run of mine and crushed ores, the estimated ore
grades  and the drawdown timing.  All calculations are based on mining rules and
processes,  however,  only  the  total amounts of metals removed from the pad is
truly known at any given time.  The ounces removed from the pad are measured and
used  as  a check and balance to the integrity of the calculation to ensure that
we  are  reasonably  assured  that  our  estimates  are  close.  The  leach  pad
inventories  at Florida Canyon are built and processed in stages and accordingly
at  the  close  of  any  given portion or stage of the process it is possible to
assess  the  effectiveness of all assumptions by comparing them to what actually
occurred.  The mine has been in production since 1986 and all historical records
are  used  for  comparative  purposes.

     Based  on  this historical information, it is expected that we will recover
approximately  73%  of  all  gold  ounces crushed and delivered to the pad.  Our
expected  recovery  for  run of mine or uncrushed ounces delivered to the pad is
58%  for  the  life  of  the  leach  pad.  However  these are estimates based on
historical  data and the ultimate recovery rate will only be known at the end of
the  leach  pad  life  cycle.

     With  the  current  mine  plan at the Florida Canyon operation, the current
leach  pad  operation  is  expected  to  deliver  ounces  through  2006.

     Changes  in  our  assumptions will or could have the effect of changing the
value  of  the  broken  ore  on  the  leach pad.  Circumstances that may lead to
changes  in our assumptions include but are not limited to the following: as the
ore  grades  fluctuate  the  recovery assumptions may change, the higher the ore
grade  the  higher  the  recovery is on those ounces, the weather may affect the
leaching  of  the  ores  on  the  pads  such  as  a  strong freeze may slow down
recoveries  and  a  very  wet  spring  may  speed  up  the  recovery  of ounces.

     The most critical area that could affect the leach pad process would be the
make  up  of  the  actual   ore  bearing  material.  For  example,  sulphide  or
carbonaceous  bearing  ores  are  harder  to  leach  than pure oxide ores. Other
minerals  or  chemical compounds may also affect the leachability of the ores on
the  pad.

     Currently, there is an estimated 63,402 ounces of gold in the broken ore on
leach  pad with a carrying value of $15,785,000 or $249 per ounce of gold.  Each
1% change in the estimated recovery rate is 634 ounces of gold.  If the recovery
is  estimated  to be lower than expected this is a permanent loss of gold ounces
and  if  the  recovery  is  estimated to be higher the reverse is true.  Each 1%
change  in  this  estimate  will change the broken ore on leach pad by $157,850.

HEDGING  ACTIVITIES

     In  the past, we have not used hedging techniques to reduce our exposure to
price  volatility;  however,  we  have  entered  into hedging contracts with the
Standard  Bank London Limited ("Standard Bank") for gold in the aggregate amount
of  100,000  ounces  involving  the  use  of  put  and  call options and forward
contracts.  The  hedging  contracts  were  a  requirement of our working capital
commitment  facility. Beginning in April 2003, we are obligated to deliver 4,000
ounces  of  gold  per  month,  for 25 months, under the following conditions: We
purchased  put  options  to  cover  the  floor price of gold at US$295 per ounce
whereby  if  the  price  of  gold  decreases  to a level below US$295 per ounce,
Standard Bank is obligated to purchase the 4,000 ounces for US$295 per ounce. We
also  sold  call options to Standard Bank whereby if the price of gold increases
to  over  US$345  per  ounce,  then  we must sell 4,000 ounces to Standard Bank,
thereby  leaving any excess of the US$345 ceiling for Standard Bank. We have the
ability  to  roll  forward  the  call  options  into forward sales contracts. At
September  30,  2003, we have put and call options for 76,000 ounces of gold and
forward  sales  contracts  for 16,400 ounces of gold. We have engaged in hedging
activities  to minimize the effect of declines in metals prices on our operating
results.  As  a  result, we may be prevented from realizing possible revenues in
the event that the market price of a metal exceeds the price stated in a forward
sale  or  call  option  contract.


                                       43
<PAGE>
     Our  senior  management, with approval of our board of directors, makes all
decisions  regarding  our  hedging  techniques,  and we have no formal corporate
policy  concerning  such  techniques.  We  have  no current plans to use hedging
techniques  in  the  future.

RISK FACTORS

     Any  of the following risks could materially adversely affect our business,
financial  condition, or operating results and could negatively impact the value
of  our  common  shares.  These risks have been separated into two groups: risks
relating  to  our  operations  and  risks  related to the metals mining industry
generally.

RISKS RELATING TO OUR OPERATIONS

WE  ARE  THE PRODUCT OF A RECENT MERGER, AND HAVE A LIMITED OPERATING HISTORY ON
WHICH  TO  EVALUATE  OUR  POTENTIAL  FOR  FUTURE  SUCCESS.

     We  were  formed as a result of an merger of two separate companies, Nevoro
and  Pursuit,  in  June  2002,  and  to  date  have only five fiscal quarters of
combined  operations.  While both Nevoro's wholly-owned subsidiary, Apollo Gold,
Inc.,  and  Pursuit  had  a  prior  operating  history,  we  have only a limited
operating  history  as  a  combined  company-,  upon  which you can evaluate our
business  and  prospects,  and  we  have  yet  to  develop sufficient experience
regarding  actual revenues to be received from our combined operations.  Pursuit
had  net  losses  of $703,238, $623,498, and $2,281,142 for the respective years
ended  December  31,  2001,  2000 and 1999.  The operations of Apollo Gold, Inc.
were  profitable in 2001, prior to the Plan of Arrangement.  For the nine months
ended  September  30,,2003 we had a loss of approximately $3,535,000 and for the
year  ended  December  31,  2002,  we  had  a loss of approximately $4,780,000 .

     You  must  consider  the  risks and uncertainties frequently encountered by
companies  in  situations such as ours, including but not limited to the ability
to  integrate  our  operations  and  eliminate  duplicative  costs.  If  we  are
unsuccessful  in addressing these risks and uncertainties, our business, results
of operations and financial condition will be materially and adversely affected.

WE  ARE  CURRENTLY INVOLVED IN ONGOING LITIGATION WHICH MAY ADVERSELY AFFECT US.

     We  are  engaged  in  litigation  from  time  to  time.  On May 29, 2003 we
successfully  defended  Safeco  Insurance Company of America ("Safeco's") appeal
involving  a  mining  reclamation  bond in the amount of US$16,936,130 issued by
Safeco.  The  purpose  of  the  bond  is  to provide financial guarantees to the
United  States  Government  to  ensure  that our Florida Canyon Mine in Pershing
County,  Nevada, will be reclaimed in the event we fail to do so.  The provision
of such financial guarantee is a condition of our operating permit.  Loss of the
litigation  would  have  required  us  to find replacement bonding in a material
amount.  If  any  claims  results  in  a  judgment  against us or are settled on
unfavorable  terms,  our  results  of operations, financial  condition  and cash
flows  could  be  materially  adversely  affected.  See  "Legal  Proceedings."


                                       44
<PAGE>
WE ARE DEPENDENT ON CERTAIN KEY PERSONNEL.

     We  are  currently  dependent  upon  the ability and experience of R. David
Russell,  our  President  and Chief Executive Officer; R. Llee Chapman, our Vice
President,  Chief Financial Officer, Treasurer and Controller; Richard F. Nanna,
our  Vice  President  of  Exploration;  David  K.  Young,  our Vice President of
Business  Development;  Donald  W. Vagstad, our Vice President, Legal, Secretary
and  General  Counsel; and Wade Bristol, Vice President, U.S. Operations.  There
can  be  no  assurance  that  we  will  be  able  to  retain  any or all of such
officers.  We  currently  do  not  carry  key  person  insurance on any of these
individuals,  and  the loss of one or more of them could have a material adverse
effect on our operations.  We have  entered into employment agreements with each
of  Messrs.  Russell,  Chapman, Nanna, Young, Vagstad and Bristol, which provide
for certain payments  upon termination or resignation resulting from a change of
control  (as defined in such  agreements).  We compete with other companies both
within  and  outside  the  mining industry in connection with the recruiting and
retention  of  qualified  employees  knowledgeable  in  mining  operations.

RISKS  RELATING  TO  THE  METALS  MINING  INDUSTRY

OUR  EARNINGS  MAY  BE  AFFECTED  BY  METALS  PRICE VOLATILITY, SPECIFICALLY THE
VOLATILITY  OF  GOLD  AND  ZINC  PRICES.

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

     -    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.

     -    Gold  prices  are  also  affected by macroeconomic factors, including:

     -    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.


                                       45
<PAGE>
     The  current demand for, and supply of, gold also affects gold prices.  The
supply  of  gold consists of a  combination of new production from mining and of
existing  stocks of bullion held by government central banks, public and private
financial  institutions,  industrial  organizations and private individuals.  As
the  amounts  produced  by  all  producers in any single year constitute a small
portion  of  the  total  potential  supply of gold, normal variations in current
production  do not usually have a significant impact on the supply of gold or on
its  price.  Mobilization  of  gold stocks held by central banks through lending
and  official sales may have a significant adverse impact on the gold price.  If
revenue  from  gold  sales  declines  for a substantial period below the cost of
production  at  any or all of our operations, we could be required to reduce our
reserves  and  make  a  determination  that  it  is not economically feasible to
continue  either  the  commercial  production  at  any  or  all  of  our current
operations  or  the  exploration  at  some  or  all  of  our  current  projects.

     Price  volatility  also  appears  in the silver, zinc and lead markets.  In
particular,  our Montana Tunnels Mine has historically produced approximately 45
million  pounds  of metal annually, and therefore we are subject to factors such
as  world  economic  forces  and  supply  and  demand.

     All  of  the above factors are beyond our control and are impossible for us
to  predict.  If  the  market  prices  for  these metals fall below our costs to
produce  them  for  a  sustained  period  of time, we will experience additional
losses  and  may have to discontinue exploration and/or mining at one or more of
our  properties.

     The  following  table  sets  forth  the average daily closing prices of the
following  metals  for  1980,  1985,  1990,  1995, 1997 and each year thereafter
through  December  31,  2002.

<TABLE>
<CAPTION>
                1980       1985       1990       1995       1997       1998       1999       2000       2001       2002
              ---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------  --------
<S>           <C>        <C>        <C>        <C>        <C>        <C>        <C>        <C>        <C>        <C>
Gold (1)      US$612.56  US$317.26  US$383.46  US$384.16  US$331.10  US$294.16  US$278.77  US$279.03  US$271.00  US309.73
(per ounces)

Silver (2)    US$20.63   US$6.14    US$4.82    US$5.19    US$4.90    US$5.53    US$5.25    US$5.00    US$4.39    US$4.60
(per ounces)

Lead (3)      US$0.41    US$0.18    US$0.37    US$0.29    US$0.28    US$0.24    US$0.23    US$0.21    US$0.22    US$0.21
(per lb.)

Zinc (4)      US$0.34    US$0.36    US$0.69    US$0.47    US$0.60    US$0.46    US$0.49    US$0.51    US$0.40    US$0.37
(per lb.)
<FN>
--------------------------
(1)  London Final
(2)  Handy & Harman
(3)  London Metals Exchange -- Cash
(4)  London Metals Exchange -- Special High Grade - Cash
</TABLE>

     On November 3, 2003, the closing price for gold, silver, zinc and lead were
US$383.25  per  ounce,  US$5.00per  ounce, US$929.00 per tonne and US$620.00 per
tonne,  respectively.

THE  VOLATILITY  OF  METALS  PRICES  MAY  ALSO  ADVERSELY AFFECT OUR EXPLORATION
EFFORTS.

     Our  ability  to  produce  gold,  silver,  zinc  and  lead in the future is
dependent  upon  our  exploration  efforts,  and  our ability to develop new ore
reserves.  If  prices  for  these  metals  decline,  it  may not be economically
feasible  for  us  to  continue  our  exploration  of  a  project or to continue
commercial  production  at  some  or  all  of  our  properties.


                                       46
<PAGE>
OUR  ORE  RESERVE  ESTIMATES  MAY  NOT  BE  REALIZED.

     We  estimate  our reserves on our properties as either "proven reserves" or
"probable  reserves".  Our ore reserve figures and costs are primarily estimates
and  are  not  guarantees that we will recover the indicated quantities of these
metals.  We  estimate  proven  reserve quantities through extensive sampling and
testing  of  sites  containing  the  applicable  ore  that  allow  us to have an
established estimate as to the amount of such ore that we expect to extract from
a  site.  Such  sampling  and  tests  are  conducted by us and by an independent
company  hired by us. Probable reserves are computed with information similar to
that  used  for proven resources, but the sites for sampling are less extensive,
and  the  degree  of certainty as to the content of a site is less. Reserves are
estimates made by our technical personnel and no assurance can be given that the
estimate  of  the  amount  of  metal or the indicated level of recovery of these
metals  will  be  realized.  Reserve estimation is an interpretive process based
upon  available  data. Further, reserves are based on estimates of current costs
and  prices.  Our reserve estimates for properties that have not yet started may
change based on actual production experience. In addition, the economic value of
ore  reserves  may  be  adversely  affected  by:

     -    declines in the market price of the various metals we mine;

     -    increased production or capital costs; or

     -    reduced recovery rates.

     Reserve  estimates  will  change  as existing reserves are depleted through
production,  as  well as changes in estimates caused by changing production cost
and/or  metals  prices.  Changes in reserves may also reflect that grades of ore
fed  to process may be different from stated reserve grades because of variation
in  grades  in  areas  mined,  mining  dilution,  recoveries  and other factors.
Reserves  estimated  for  properties  that have not yet commenced production may
require  revision  based  on  actual  production  experience.

     Declines  in the market price of metals, as well as increased production or
capital  costs  reduced  recovery  rates,  may render ore reserves uneconomic to
exploit  unless  the  utilization  of  forward  sales contracts or other hedging
techniques  is sufficient to offset such effects.  If our realized price for the
metals  we  produce,  including  hedging benefits, were to decline substantially
below  the  levels set for calculation of reserves for an extended period, there
could  be  material  delays  in  the  exploration of new projects, increased net
losses,  reduced  cash  flow,  restatements  or reductions in reserves and asset
write-downs  in  the  applicable  accounting  periods.  Reserves  should  not be
interpreted  as  assurances  of  mine life or of the profitability of current or
future operations.  No assurance can be given that the estimate of the amount of
metal  or  the  indicated  level  of  recovery of these metals will be realized.

WE  MAY  NOT  ACHIEVE  OUR  PRODUCTION  ESTIMATES.

     We  prepare  estimates  of future production for our operations. We develop
our  plans  based  on, among other things, mining experience, reserve estimates,
assumptions  regarding  ground  conditions  and physical characteristics of ores
(such  as   hardness   and   presence   or   absence  of  certain  metallurgical
characteristics)  and  estimated  rates  and costs of mining and processing. Our
actual  production  may vary from estimates for a variety of reasons, including:

     -    risks  and  hazards  of  the  types  discussed  in  this  section;

     -    actual  ore  mined  varying from estimates of grade, tonnage, dilution
          and  metallurgical  and  other  characteristics;

     -    short-term operating factors relating to the ore reserves, such as the
          need  for  sequential  development of ore bodies and the processing of
          new  or  different  ore  grades;

     -    mine  failures,  pit  wall  cave-ins  or  equipment  failures;


                                       47
<PAGE>
     -    natural  phenomena  such  as  inclement weather conditions, floods and
          earthquakes;

     -    unexpected  labor  shortages  or  strikes;

     -    restrictions  or  regulations  imposed  by  government  agencies;  and

     -    litigation  pursued  by governmental agencies or environmental groups.

     Each  of  these  factors also applies to sites not yet in production and to
operations  that are to be expanded.  In these cases, we do not have the benefit
of  actual  experience  in our estimates, and there is a greater likelihood that
the  actual  results  will  vary  from  the  estimates.

THE SUCCESS OF OUR EXPLORATION PROJECTS IS UNCERTAIN.

     From time to time we will engage in the exploration of new ore bodies.  Our
ability  to  sustain or increase our present level of production is dependent in
part  on  the  successful exploration of such new ore bodies and/or expansion of
existing  mining  operations.  The  economic  feasibility  of  such  exploration
projects  is  based  upon  many  factors,  including:

     -    estimates  of  reserves;

     -    metallurgical  recoveries;

     -    capital  and  operating  costs  of  such  projects;  and

     -    future  gold/metal  prices.

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

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

     -    anticipated  tonnage  and  grades  of  ore  to be mined and processed;

     -    the  configuration  of  the  ore  body;

     -    ground  and  mining  conditions;

     -    expected  recovery  rates  of  the  gold  from  the  ore;  and

     -    anticipated  environmental  and  regulatory  compliance  costs.

     It is possible that actual costs and economic returns may differ materially
from  our  best  estimates.  It  is  not  unusual in the mining industry for new
mining operations  to  experience  unexpected problems during the start-up phase
and  to  require  more  capital  than  anticipated.

ORE EXPLORATION IN GENERAL, AND GOLD EXPLORATION IN PARTICULAR, ARE SPECULATIVE.


                                       48
<PAGE>
     Exploration  for  ore  is  speculative,  and  gold  exploration  is  highly
speculative  in  nature.  Exploration projects involve many risks and frequently
are unsuccessful.  There can be no assurance that our future exploration efforts
for gold or other metals will be successful.  Success in increasing our reserves
will  be  the  result  of  a  number  of  factors,  including  the  following:

     -    quality  of  management;

     -    geological  and  technical  expertise;

     -    quality  of  land  available  for  exploration;  and

     -    capital  available  for  exploration.

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

WE ARE DEPENDENT UPON OUR MINING PROPERTIES.

     All  of  our  revenues  are  currently  derived from our mining and milling
operations  at  the Montana Tunnels and Florida Canyon Mines which are low grade
mines.  If  operations  at  either  of  these  mines or at any of our processing
facilities are reduced, interrupted or curtailed, our ability to generate future
revenues  and  profits  could  be  materially  adversely  affected.

HEDGING ACTIVITIES COULD EXPOSE US TO LOSSES.

     We recently entered into hedging contracts for gold in the aggregate amount
of  100,000 ounces involving the use of put and call options. The contracts give
the  holder the right to buy and us the right to sell stipulated amounts of gold
at  the  upper  and  lower exercise prices, respectively. The contracts continue
through  April  25, 2005 with a put option of US$295 per ounce and a call option
of  US$345 per ounce. As at October 31, 2003, 89,800 ounces remained outstanding
on  these  contracts.  In  the  future,  we  may  enter  into additional hedging
contracts  which  may  involve  outright  forward sales contracts, spot-deferred
sales  contracts,  the use of options which may involve the sale of call options
and  the  purchase  of  all  these  hedging  instruments.

WE FACE SUBSTANTIAL GOVERNMENTAL REGULATION.

     Safety. Our U.S. mining operations are subject to inspection and regulation
by  the Mine Safety and Health Administration of the United States Department of
Labor  ("MSHA")  under the provisions of the Mine Safety and Health Act of 1977.
The Occupational Safety and Health Administration ("OSHA") also has jurisdiction
over  safety  and health standards not covered by MSHA.  Our policy is to comply
with  applicable  directives  and  regulations  of  MSHA  and  OSHA.


                                       49
<PAGE>
     Current  Environmental   Laws   and   Regulations.  We   must  comply  with
environmental  standards,  laws  and  regulations  that may result in greater or
lesser  costs  and  delays depending on the nature of the regulated activity and
how stringently the regulations are implemented by the regulatory authority. The
costs and delays associated with compliance with such laws and regulations could
stop  us  from  proceeding with the exploration of a project or the operation or
future  exploration of a mine. Laws and regulations involving the protection and
remediation  of the environment and the governmental policies for implementation
of  such laws and regulations are constantly changing and are generally becoming
more  restrictive.  We  have made, and expect to make in the future, significant
expenditures  to  comply  with  such  laws  and  regulations. These requirements
include  regulations  under  many  state  and U.S. federal laws and regulations,
including:

     -    the  Comprehensive  Environmental Response, Compensation and Liability
          Act  of 1980 ("CERCLA" or "Superfund") which regulates and establishes
          liability  for  the  release  of  hazardous  substances;

     -    the  U.S.  Endangered  Species  Act;

     -    the  Clean  Water  Act;

     -    the  Clean  Air  Act;

     -    the  U.S.  Resource  Conservative  and  Recovery  Act  ("RCRA");

     -    the  Migratory  Bird  Treaty  Act;

     -    the  Safe  Drinking  Water  Act;

     -    the  Emergency  Planning  and  Community  Right-to-Know  Act;

     -    the  Federal  Land  Policy  and  Management  Act;

     -    the  National  Environmental  Policy  Act;  and

     -    the  National  Historic  Preservation  Act.

     The United States Environmental Protection Agency continues the development
of  a solid waste regulatory program specific to mining operations such as ours,
where  the  mineral  extraction  and  beneficiation  wastes are not regulated as
hazardous  wastes  under  RCRA.

     Some  of  our  partially  owned  properties  are located in historic mining
districts  with  past  production and abandoned mines. The major historical mine
workings  and  processing facilities owned (wholly or partially) by us are being
targeted  by the Montana Department of Environmental Quality for publicly-funded
cleanup, which reduces our exposure to financial liability. We are participating
with  the  Montana  Department  of Environmental Quality under Voluntary Cleanup
Plans  on  those  sites.  Our  cleanup  responsibilities have been substantially
completed at the Corbin Flats CERCLA Facility and at the Gregory Mine site, both
located  in  Jefferson  County,  Montana,  under  programs involving cooperative
efforts  with  the Montana Department of Environmental Quality. The Corbin Flats
CERCLA Facility was the Montana Department of Environmental Quality's number one
priority  site  in  Jefferson  County.  The  Montana Department of Environmental
Quality  has reimbursed us for more than half of our cleanup costs at the Corbin
Flats  CERCLA  Facility  under  two  Montana  State public environmental cleanup
funding  programs.  However,  there can be no assurance that we will continue to
resolve disputed liability for historical mine and ore processing facility waste
sites  on such favorable terms in the future. We remain exposed to liability, or
assertions  of  liability that would require expenditure of legal defense costs,
under  joint  and  several  liability statutes for cleanups of historical wastes
that  have  not  yet  been  completed.


                                       50
<PAGE>
     Environmental  laws and regulations may also have an indirect impact on us,
such  as  increased  costs  for  electricity  due to acid rain provisions of the
United  States Clean Air Act Amendments of 1990. Charges by refiners to which we
sell  our  metallic  concentrates and products have substantially increased over
the  past  several  years  because  of  requirements  that refiners meet revised
environmental  quality  standards.  We  have   no  control  over  the  refiners'
operations or their compliance with environmental laws and regulations.

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

WE ARE SUBJECT TO ENVIRONMENTAL RISKS.

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

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

WE  FACE  STRONG  COMPETITION FROM OTHER MINING COMPANIES FOR THE ACQUISITION OF
NEW  PROPERTIES.

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


                                       51
<PAGE>
THE TITLES TO SOME OF OUR UNITED STATES PROPERTIES MAY BE DEFECTIVE.

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

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

     While  we have no reason to believe that the existence and extent of any of
our properties are in doubt, title to mining properties are subject to potential
claims  by  third  parties  claiming an interest in them.  The failure to comply
with all  applicable laws and regulations, including failure to pay taxes, carry
out and file assessment work, may invalidate title to portions of the properties
where  the  mineral  rights  are  not  owned  by  us.

OUR  OPERATIONS  MAY  BE ADVERSELY AFFECTED BY RISKS AND HAZARDS ASSOCIATED WITH
THE  MINING  INDUSTRY.

     Our  business  is  subject  to  a  number  of  risks and hazards including:

     -    environmental  hazards;

     -    political  and  country  risks;

     -    industrial  accidents;

     -    labor  disputes;

     -    unusual  or  unexpected  geologic  formations;

     -    cave-ins;

     -    slope  failures;  and

     -    flooding  and  periodic  interruptions  due  to inclement or hazardous
          weather  conditions.

     Such  risks  could  result  in:

     -    damage  to  or  destruction  of  mineral  properties  or  producing
          facilities;

     -    personal  injury  or  death;

     -    environmental  damage;

     -    delays  in  mining;


                                       52
<PAGE>
     -    monetary  losses;  and

     -    legal  liability.

     For  some  of  these  risks, we maintain insurance to protect against these
losses  at  levels  consistent  with  our  historical  experience  and  industry
practice.  However,  we may not be able to maintain this insurance, particularly
if  there  is  a significant increase in the cost of premiums. Insurance against
environmental risks is generally too expensive for us and other companies in our
industry,  and,  therefore, we do not maintain environmental insurance. Recently
we  have  experienced  several  slides  at  our  Montana  Tunnels Mine which has
affected  our milling operations causing us to lose valuable production time and
consequently  reducing  our  revenues.  To   the   extent   we  are  subject  to
environmental liabilities, we would have to pay for these liabilities. Moreover,
in  the  event  that  we  are  unable  to fully pay for the cost of remedying an
environmental  problem, we might be required to suspend operations or enter into
other  interim  compliance  measures.

OUR  PRIOR  INTERNATIONAL  OPERATIONS  ARE  SUBJECT  TO  RISK

     Prior  to the Plan of Arrangement, we conducted a portion of our operations
outside  of  the United States. Pursuit had interests in two mineral exploration
properties  located  in the Republic of Indonesia. However, due to the political
uncertainty and the economic climate of Indonesia, Pursuit placed its Indonesian
properties  on  a care and maintenance basis in 1999. Pursuit subsequently wrote
off  the  value  of such properties and no exploration is currently planned with
respect  thereto.  Efforts to joint venture such properties were also terminated
due  to  the  general  lack  of  exploration  interest  in  Indonesia.

     In addition, Pursuit had interests in a project in the Philippines known as
the  Hinoba-an  property.  Since  1999,  we  had been actively seeking a sale or
joint  venture  of  our  Philippines  property.  The  ultimate recovery from the
Hinoba-an  property  was  dependent on the price of copper which has been at low
levels.  In  December  of  2001,  we  executed an agreement with Hinoba Holdings
Limited  ("HL") whereby we granted HL the option to acquire all of our rights to
the  Hinoba-an  copper project.  Under the terms of the agreement, Apollo was to
receive 7.5% of HL's treasury shares as consideration for the option, and HL was
to  assume  all operating expenses relating to the Hinoba-an project in addition
to  receiving  full  operating  control  of  the  project.  In the event that HL
exercised  the  option  to acquire all of our interest in the project, HL was to
pay  us  additional  consideration  of  US$5,000,000  within 18 months of having
achieved  commercial  production.  In  2002, HL defaulted on this agreement.  In
November  2003,  we  reached an agreement whereby we received $100,000 to settle
all  claims and liabilites that have been asserted or that may at any time arise
or  exist  among  the  parties  with  respect  to  the  Hinoba-an  Project.

     Except  as described above, we have discontinued pursuing our interests, if
any,  in  Indonesia,  and  we  are  no  longer  financing  our subsidiaries that
own  the  underlying  title  to  the  properties.

     We  may  conduct mining operations internationally in the United States and
in  Canada  and we currently have exploration projects in Canada.  We anticipate
that  we  will  conduct significant international operations in other nations in
the  future.  Because  we  conduct operations internationally, we are subject to
political,  economic  and  other  risks  such  as:

     -    legislative or other governmental requirements concerning the mining
          industry;

     -    the effects of local political and economic developments;


                                       53
<PAGE>
     -    exchange controls;

     -    currency fluctuations; and

     -    taxation and laws or policies of foreign countries and the United
          States affecting trade, investment and taxation.

     Consequently,  our  exploration,   development  and  production  activities
outside of the United States may be substantially affected by factors beyond our
control,  any  of which could materially adversely affect our financial position
or  results  of  operations.

SPECIAL  NOTE  ON  FORWARD-LOOKING  STATEMENTS

     This  periodic  report includes forward-looking statements that reflect our
current  expectations  and  projections  about  our future results, performance,
prospects,  and  opportunities.  We have tried to identify these forward-looking
statements  by  using  words  such  as "may," "expect," "anticipate," "believe,"
"intend,"  "plan,"  "estimate,"  and similar expressions.  These forward-looking
statements are based on information currently available to us and are subject to
a  number of risks, uncertainties, and other factors that could cause our actual
results,  performance,  prospects,  or  opportunities  to differ materially from
those  expressed  in,  or  implied  by, these forward-looking statements.  These
risks,  uncertainties,  and  other  factors  include,  but  are  not limited to:

     -    metal  prices  and  price  volatility;

     -    amount  of  metal  production;

     -    costs  of  production;

     -    remediation,  reclamation,  and  environmental  costs;

     -    regulatory  matters;

     -    the  results  or  settlement  of  pending  litigation;

     -    cash  flow;

     -    revenue  calculations;

     -    the  nature  and  availability  of  financing;  and

     -    project  risks.

     See  "Risk  Factors"  for  a  description of these factors.  Other matters,
including  unanticipated events and conditions, also may cause our actual future
results  to  differ materially from these forward-looking statements.  We cannot
assure  you  that  our  expectations will prove to be correct.  In addition, all
subsequent  written  and  oral  forward-looking statements attributable to us or
persons  acting  on  our behalf are expressly qualified in their entirety by the
cautionary  statements  mentioned above.  You should not place undue reliance on
these  forward-looking  statements.  All of these forward-looking statements are
based  on  our  expectations  as  of the date of this periodic filing. Except as
required  by  federal  securities laws, we do not intend to update or revise any
forward-looking  statements,  whether  as  a  result  of new information, future
events,  or  otherwise.


                                       54
<PAGE>
ITEM 3.  QUANTITATIVE  AND  QUALITATIVE  DISCLOSURES  ABOUT  MARKET  RISK

     In  the past, we have not used hedging techniques to reduce our exposure to
price  volatility;  however,  we  have  entered  into  edging contracts with the
Standard Bank London Limited ("Standard Bank") for gold in the aggregate  amount
of  100,000  ounces  involving  the  use  of  put  and  call options and forward
contracts.  Beginning  in  April  2003, we are obligated to deliver 4,000 ounces
of gold per month,  for  25 months, under the following conditions: We purchased
put  options to cover the floor price of gold at US$295 per ounce whereby if the
price  of  gold  decreases  to  a level below US$295 per ounce, Standard Bank is
obligated  to  purchase  the  4,000  ounces  for  US$295 per ounce. We also sold
call  options to Standard  Bank whereby if  the  price of gold increases to over
US$345  per ounce,  then  we  must  sell  4,000 ounces to Standard Bank, thereby
leaving  any  excess  of  the  US$345  ceiling  for  Standard  Bank. We have the
ability  to  roll  forward  the  call options into forward sales contracts.   At
September  30,  2003, we have put and call options for 76,000 ounces of gold and
forward  sales  contracts for 16,400 ounces of gold.  We have engaged in hedging
activities  to minimize the effect of declines in metals prices on our operating
results.  As  a  result, we may be prevented from realizing possible revenues in
the event that the market price of a metal exceeds the price stated in a forward
sale  or  call  option  contract.

     Our  senior  management, with approval of our board of directors, makes all
decisions  regarding  our  hedging  techniques,  and we have no formal corporate
policy  concerning  such  techniques.  We  have  no current plans to use hedging
techniques  in  the  future.

Market Price of Gold
--------------------

     The  Company's earnings and cash flow are significantly impacted by changes
in  the  market price of gold. Gold prices can fluctuate widely and are affected
by  numerous  factors,  such  as demand, production levels, economic policies of
central banks, producer hedging, and the strength of the U.S. dollar relative to
other  currencies.  During  the  five  year  period ended December 31, 2002, the
average  annual  market price has fluctuated between $271 per ounce and $331 per
ounce.  During  the  third quarter of 2003, the spot price for gold improved and
experienced  highs  in  excess  of  US$390.

     There  are  certain  market  risks  associated  with  the hedging contracts
utilized  by  the  Company.  If the Company's counterparties fail to honor their
contractual  obligation  to purchase gold at agreed-upon prices, the Company may
be  exposed  to  market  price risk by having to sell gold in the open market at
prevailing  prices.  Similarly,  if  the  Company  fails  to  produce sufficient
quantities  of  gold  to meet its forward commitments, the Company would have to
purchase the shortfall in the open market at prevailing prices. At September 30,
2003, the fair value of the contracts is a loss of $5,918,000 (December 31, 2002
-  $3,573,000).

Interest  Rate  Risk
--------------------

     During  the  three  months  ended  September  30,  2003, we borrowed US$1.0
million under our line of credit with Standard Bank. Each loan under the line of
credit  bears  interest  during each interest period for such loan at a rate per
annum equal to the LIBOR Rate for such Interest Period plus 2.75%.  We repaid in
full  the  outstanding  balance  upon receipt of net proceeds from the September
2003  issuance  of  common  shares.

Foreign  Currency
-----------------

     While  the Company does currently conduct exploration activities in Canada,
the  price  of  gold  is  denominated  in  U.S.  dollars, and the Company's gold
production  operations  are  in  the  United States.  Therefore, the Company has
minimal,  if  any  foreign  currency  exposure.


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ITEM 4.  CONTROLS AND PROCEDURES

     Within  90  days  prior  to  the  date  of  this  report, we carried out an
evaluation,  under  the  supervision and with the participation of our principal
executive  officer  and principal financial officer, of the effectiveness of the
design  and  operation  of our disclosure controls and procedures. Based on this
evaluation,  our  principal  executive  officer  and principal financial officer
concluded  that  our  disclosure controls and procedures are effective in timely
alerting  them  to  material information required to be included in our periodic
reports  filed with the SEC. It should be noted that the design of any system of
controls  is  based  in  part  upon  certain assumptions about the likelihood of
certain  events,  and  there can be no assurance that any design will succeed in
achieving  its  stated  goals  under  all  future  conditions, regardless of how
remote.  In  addition, we reviewed our internal controls, and there have been no
significant  changes  in  our  internal  controls or in other factors that could
significantly  affect  those  controls  subsequent  to  the  date  of their last
evaluation.

PART II -- OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS.

     Not applicable.

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS.

     In  September  of  2003, in connection with a public offering of 14,988,025
common  shares  of  the  Company  in Canada and other foreign jurisdictions by a
syndicate  of  agents,  we  completed a brokered private placement in the United
States  of  7,311,975 common shares at an issue price of $2.25 per common share.
We  intend to use the proceeds (i) for advanced exploration and feasibility work
on the Black Fox project, (ii) to advance our other mineral properties including
the  Montana  Tunnels Mine and the Florida Canyon Mine in such amounts as may be
determined  by  management  of  the  Company,  and  (iii)  for general corporate
purposes.  The  syndicate  of agents were also granted non-transferable warrants
to acquire such number of common shares as is equal to 3% of the total number of
commons  shares  purchased  in total in the offering in Canada and certain other
foreign  jurisdictions  and in the private placement in the United States at the
offering  price.  These  warrants are exercisable at any time prior to September
26,  2005.  The  offering in Canada and certain other foreign jurisdictions were
made  by  way  of  an  offering  prospectus  filed  in Canada in the province of
Ontario.  The  U.S.  private placement was made in the U.S. in reliance upon the
exemption  from  registration  provided  in  Section  4(2)  of the United States
Securities  Act of 1933, as amended, and/or Rule 506 of Regulation D promulgated
thereunder.  The  private  placement  was  made  without general solicitation or
advertising.  The  purchasers  were  sophisticated  institutional investors with
access to all relevant information necessary to evaluate the investment, and who
represented  to  us  that  the  shares  were  being  acquired  for  investment.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES.

     Not applicable.

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

     Not applicable.

ITEM 5.  OTHER INFORMATION.

     Not applicable.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

Exhibit No.                          Title of Exhibit

(a)  Exhibits:

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 pursuant to Section 906 of the
         Sarbanes-Oxley  Act
32.2  -  Certification of Chief Financial Officer pursuant to Section 906 of the
         Sarbanes-Oxley  Act

(b)  Reports  filed  on  Form  8-K  during the quarter ended September 30, 2003:

     On  August  22,  2003,  we  filed  a  Form  8-K  to announce our results of
operations  for  the  second  quarter  ended  June  30,  2003, and to announce a
conference  call  with  for Monday, August 25, 2003 to discuss such results with
senior  management  of  the  Company.


SIGNATURES

     In  accordance  with  the  requirements of the Exchange Act, the registrant
caused  this report to be signed on its behalf by the undersigned thereunto duly
authorized.


APOLLO  GOLD  CORPORATION

Date:  November 14, 2003                /s/ R. David Russell
                                        -----------------------
                                        R. David Russell, President and
                                        Chief Executive Officer

Date:  November 14, 2003                /s/ R. Llee Chapman
                                        ----------------------
                                        R. Llee Chapman,
                                        Chief Financial Officer


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