Apogee Silver Ltd.
TSX VENTURE : APE

Apogee Silver Ltd.

March 06, 2012 08:00 ET

Apogee Provides Update on Mine Development at Pulacayo Project and Changes to the Board of Directors

- Over 1,600 meters of historical underground workings rehabilitated

- Trial mining operations underway and 3,800 tonnes ore & waste mined to date

- 189 meters of new underground development, including 130 meters in ore completed to date

- Sampling ahead of first trial stope includes undiluted, weighted average grades of

- 742.5g/t silver 11.01% lead and 5.65% zinc over a strike length of 37 meters and average vein width of 0.80 meters. This mineralization occurs outside of the published resource

- Concentrator plant design completed

- Initial mine production being stockpiled while custom milling contracts completed

TORONTO, ONTARIO--(Marketwire - March 6, 2012) - Apogee Silver Ltd. ("Apogee" or the "Company") (TSX VENTURE:APE) is pleased to provide an update to its mining and development initiatives at its 100% owned Pulacayo project situated in southwest Bolivia (Figure 1).

Mining

Between October 2011 and mid-February 2012, trial mining operations resulted in the rehabilitation of over 1,600 meters of historical mine galleries and tunnels. Over 3,800 tonnes of ore and waste were mined in this period and 189 meters of new development was completed including 130 meters in ore, on the 4,275 meter level of the mine. A key focus for this period was staff training in support of steadily ramping up production. This represents Apogee's intention to develop and employ a local workforce in support of the Pulacayo operation. This will result initially in a slower ramp up but longer-term, a local skilled work force will be an important benefit to the operation.

High grade vein structures which are not part of the existing mineral resource estimate have been encountered in the underground development. As a result raises are now being developed into a "ramal" or hanging wall vein structure adjacent to the main "Veta Tajo" structure. The Tajo Vein contains most of the resources at Pulacayo as described in the NI 43-101 technical report dated October 19, 2011 and filed on SEDAR. Fifty-seven meters of development have been completed in this area, where two high grade veins have been delineated over strike lengths of 37 and 12 meters, respectively. Sampling of the veins during development has returned undiluted weighted average grades of 742.5 g/t Ag, 11.01% Pb and 5.65% Zn over an average width of 0.80 meters in Veta 1, and 470.1 g/t Ag, 4.78 %Pb, and 3.96% Zn over an average width of 0.86 meters in Veta 1b. Results of the sampling of these veins are summarized in Table 1 below. The first stope is planned above the 37 meters of strike length along Veta 1 and this high grade material will be stockpiled in advance of milling.

Table 1 Underground Sampling Results in Zone #5
Vein Round Advance
(m)
Sample
Number

Lab
Sample
Width*

Ag g/t

Pb %

Zn %
Veta 1 28-29 4.81 Min 479 Conde 0.35 1280.0 15.58 6.59
Veta 1 26-27 4.69 Min 458 Conde 0.14 670.0 8.39 4.40
Veta 1 25 1.70 Min 310 Conde 0.70 249.0 3.32 1.48
Veta 1 24 2.05 Min 272 Conde 0.70 970.0 12.72 6.38
Veta 1 23 1.75 Min 265 Conde 0.99 108.0 1.44 1.57
Veta 1 22 1.89 Min 260 Conde 1.20 196.0 2.78 2.96
Veta 1 21 1.80 Min 238 Conde 1.05 1330.0 19.96 3.98
Veta 1 20 1.92 Min 231 ALS 0.70 982.0 17.35 4.49
Veta 1 9-12 7.05 Min 121 ALS 1.00 333.0 9.37 10.85
Veta 1 8 1.75 Min 105 ALS 1.00 143.0 2.57 5.01
Veta 1 7 2.00 Min 103 ALS 1.00 295.0 3.76 2.16
Average Sample Width and weighted average grade 0.80 742.5 11.01 5.65
Veta 2 19 1.91 Min 201 ALS 0.70 869.0 8.17 3.06
Veta 2 18 1.73 Min 177 ALS 0.70 127.0 1.99 3.00
Veta 2 17 1.80 Min 174 ALS 0.65 960.0 4.35 5.66
Veta 2 16 2.00 Min 164 ALS 1.00 531.0 13.0 5.4
Veta 2 15 2.00 Min 152 ALS 1.00 178.0 1.02 1.42
Veta 2 14 1.99 Min 140 ALS 1.00 194.0 3.68 4.91
Veta 2 13 2.08 Min130 ALS 1.00 620.0 1.26 4.31
Average Sample Width and weighted average grade 0.86 470.1 4.78 3.96
* Channel samples are continuous across the face and oriented at right angles to the apparent dip of the mineralized structures and/or veins in the development end. Sample widths are not always the same as the width of the mineralized structure and/or vein.

Apogee's Chief Executive Officer, Neil T. Ringdahl stated, "Apart from these exciting results, we are delighted by the progress that our teams new to mining have made underground. We are on track to gradually increase underground production in the coming months with a strong emphasis on safe operating practices. As reported in October 2011, the resource estimate with respect to the Pulacayo project was dramatically increased and we remain confident that there is excellent potential for continued resource growth as new underground exploration and development results flow in. Ore mined is being stockpiled for treatment and Apogee plans to commence custom toll-milling earlier than contemplated with a view to reach a sustained target of 200 tonnes per day of ore produced later in the year."

Currently the Company employs approximately 84 Bolivian employees, of which, 42 are employed directly from the local communities. Mining activities are taking place under the current exploration environmental permit, which allows for extraction rates of up to 200 tonnes of ore per day.

Concentrator Plant

The detailed design for a 400 tonne per day pilot plant was completed on schedule December 2011. Given present silver prices and access to high grade mineralization, the Company intends to evaluate custom toll milling as a lower cost and quicker alternative to processing ore and acquiring metallurgical data. The Company will continue with necessary technical and feasibility studies for a larger, commercial scale plant at site and will provide updates on the progress in the future. Management believes the possibility for eliminating a pilot plant step by using mills in the area exists, and may provide potential to generate cash flow at an earlier date.

Permitting

Currently the Company is operating under a 200 tonne per day environmental permit which includes the mining, transport and custom milling of ore within the province of Potosi, Bolivia.

Apogee successfully completed the first phase of the permitting process for a 400 tonne per day mining and processing operation in August 2011. The second phase of the permitting process is pending completion of the design of the tailings disposal facility, and approval is expected in May/June of 2012 following public consultation. Upon receipt of approval from the federal environmental authority, the Company plans to amend its previously submitted permit application to acquire a permit for a higher production rate in line with the planned commercial production as determined by feasibility and technical studies. The Company has retained Medio Ambiente Mineria y Industria S.A. (MEDMIN), a well-respected and independent Bolivian environmental consulting firm, for all of its environmental auditing and permitting submissions and requirements.

Resource Development

There are two diamond drills currently active on the property, both of which are working from newly developed underground drill cut-outs in support of the mining activity which is ongoing at Pulacayo.

Apogee completed over 29,000 meters of diamond drilling at Pulacayo during 2011, which was focused on two key initiatives bringing the total drilling conducted specifically at Pulacayo to 69,737 meters. A sulfide resource expansion program in excess of 23,000 meters successfully culminated with the disclosure of an updated independent mineral resource estimate in October 2011 (See Press Release dated October 19th 2011). The new mineral resource estimate includes 29.5 million ounces of silver in the indicated category plus 26.1 million ounces of silver in the inferred category which represents an increase of silver in the indicated resource category of 134% or 16.9 million ounces and an increase of silver in the inferred resource category of 37% or 7.1 million ounces from the previous mineral resource estimate which was undertaken as a part of the Preliminary Assessment of the Pulacayo Project. (See Press Release dated June 24th, 2010). An oxide resource drill program totaling 6,250 meters in 45 drill holes was completed in late December 2011. Results from the first 21 holes of the program were released in late January, (See Press Release dated January 30th, 2012) were highlighted by intercepts of 30.0 meters grading 129.0 g/t silver in drill hole PUD221 and 26.0 meters grading 68.7 g/t silver in drill hole PUD230. Assay results from the final 24 drill holes of the program are currently being finalized and will be released once complete. Mercator Geological Services have been contracted to prepare an independent mineral resource estimate of the oxide mineralization at Pulacayo. This mineral resource estimate is expected to be completed by June 2012.

Changes to the Board

In addition, Apogee is pleased to announce the appointment of Mr. Chantal Lavoie to the Board of Directors of the Company. Mr. Chantal Lavoie brings significant technical and corporate experience to assist as the Company advances into production. Mr. Lavoie is a Professional Mining Engineer with extensive experience in mining operations and projects. Mr. Lavoie is currently the CEO of Crocodile Gold Limited and previously spent eight years at De Beers Canada Inc. and was COO and acting CEO of De Beers Canada. Mr. Lavoie has also worked for Barrick Gold Corporation at Goldstrike in Nevada and Aur Resources Inc. at the former Louvicourt mine. In connection with his appointment, Mr. Lavoie was granted 200,000 stock options of the Company at an exercise price of $0.18. The options shall vest immediately and will expire within five years from the date of the grant, in accordance with the Company's stock option plan, and shall remain subject to a statutory hold period. The options shall remain subject to the receipt of all necessary regulatory approvals, including the approval of the TSX Venture Exchange.

Following the appointment of Mr. Lavoie, the Company also announces the resignations of Mr. Stan Bharti, Ms. Marilia Bento and Mr. Maurice Colson, from the Board of Directors of the Company.

On behalf of the Board Chief Executive Officer Neil T. Ringdahl said "We wish to thank Mr. Bharti, Ms. Bento and Mr. Colson for their valued contribution as members of the Board of Directors. Mr. Bharti will remain a strategic advisor the Board. In addition, Ms. Bento will continue in her role as the VP Corporate Development of the Company and will remain an advisor to the Board."

Quality Control

Apogee Silver employs a QA/QC protocol on all aspects of its sampling programs and analytical procedures.

Analyses of all surface and underground diamond drill hole and surface channel samples taken for inclusion in mineral resource estimates are completed at the accredited facilities of ALS Chemex at Oruro, Bolivia and Lima, Peru. All HQ and/or NQ core samples are sawn with one half returned to the core box for future reference and the other half sent for analysis. The quality control protocol includes the insertion of certified geological standards and field blanks at a frequency of 1 every 20 samples. Field duplicates are taken at a frequency of 1 every 50 samples. Sample preparation duplicates are taken at the crushing and pulverizing stages at a frequency of 1 every 20 samples. Cross-check analysis is undertaken on 5% of all samples at the accredited facilities of SGS Mineral Services in Lima, Peru.

In order to achieve the analytical turnaround time required to facilitate geological control on underground development mining, samples from selected underground diamond drill holes and channel samples at the face are submitted to Laboratorio Quimico Conde Morales located in Oruro, Bolivia for analyses. This lab is not accredited. These drill core samples are 35 mm in diameter, which prohibits sawing, and the entire sample is sent for analysis. The quality control protocol on these drill and channel samples includes the submission of certified geological standards and field blanks at a frequency of 1 each per batch or 1 each in every 20 samples, should the batch exceed 20 samples. The analytical pulps are retrieved for cross-check analysis and validation at an accredited laboratory. Data from the accredited laboratory takes precedence over data from the unaccredited laboratory. Apogee is currently using ALS Chemex in Oruro, Bolivia and Lima Peru for cross check analysis on the pulps from the unaccredited labs. The Quality Control and all aspects of the exploration program are supervised by the Company's Exploration Manager, Mr. Hernan Uribe, who holds a Masters of Applied Science in Mineral Exploration from the Imperial College of Science and Technology, Royal School of Mines, London, England, under the supervision of Mr. Chris Collins, P.Geo., President of Apogee.

All scientific and technical information presented in this press release has been reviewed and approved by Chris Collins, P. Geo., President of Apogee Silver and a qualified person, as defined by NI 43-101.

For more detailed project information please refer to Apogee's web site at www.apogeesilver.com.

About Apogee Silver Ltd.

Apogee Silver Ltd. is a mineral exploration and development stage company listed on the TSX Venture Exchange under the symbol APE. Apogee targets advanced silver-zinc-lead projects in South America that demonstrate potential to be developed to production. Currently its projects are located in the historic silver producing regions of southwest Bolivia and northern Chile.

Its most advanced project is the 100% owned Pulacayo-Paca project in Bolivia, this project includes the property that covered the second-largest silver mine in the history of Bolivia with over 600 million ounces of past production.

Cautionary Note Regarding Forward-Looking Information. This press release contains "forward looking information" within the meaning of applicable Canadian securities legislation. Forward looking information includes, but is not limited to, statements with respect to anticipated timeline with respect to the development of the Pulacayo project, mineral resource estimates, mineral prices, exploration and development timetables and budgets, the ability to secure the necessary permitting and future production scenario's. Generally, forward looking information can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward- looking information, including but not limited to: financing not being available at desired prices; general business, economic, competitive, political and social uncertainties; the actual results of current exploration activities; timing and availability of external financing on acceptable terms; conclusions of economic evaluations; changes in project parameters as plans continue to be refined; future prices of mineral prices; failure of plant, equipment or processes to operate as anticipated; accidents, labour disputes and other risks of the mining industry; and, delays in obtaining governmental approvals or required financing or in the completion of activities. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward looking information. The Company does not undertake to update any forward-looking information, except in accordance with applicable securities laws.

On behalf of the Board,

Neil T. Ringdahl, Chief Executive Officer

To view "Figure 1: Pulacayo Project Location Map", please visit the following link: http://media3.marketwire.com/docs/appromap1.jpg

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