Apogee Silver Ltd.

Apogee Silver Ltd.

December 08, 2011 08:00 ET

Apogee Provides Update on Trial Mining and Production Plans at its Pulacayo Deposit

- Underground mining development commenced in October 2011, first ore extracted during trial mining operations in November 2011, one month ahead of schedule

- Initial sampling in trial mining zone returns higher than expected grades

- Pilot concentrator design on schedule for completion in December 2011

- Long lead items ordered

- Pilot concentrator commissioning remains on schedule in Q4 2012

- Exploration drilling remains ongoing

TORONTO, ONTARIO--(Marketwire - Dec. 8, 2011) - Apogee Silver Ltd. ("Apogee" or the "Company") (TSX VENTURE:APE) announced it has successfully commenced trial mining operations in October 2011 and struck ore one month ahead of schedule (See Press Release dated May 25, 2011) at its 100% controlled Pulacayo project situated in southern Bolivia (Figure 1).

During the months of October and November 2011, trial mining operations resulted in the extraction of approximately 500 tonnes of ore and additionally advanced the three development drifts being mined a total of 32 meters. The ore mined has been delivered to two surface stockpiles to be treated in the pilot concentrator, which will be commissioned by the Company in late 2012. Initial sampling results from the low grade stockpile, consisting of approximately 250 tonnes of ore, indicates a silver grade of approximately 3 ounces per tonne. Sampling results from the high grade stockpile, also consisting of approximately 250 tonnes of ore, indicated a silver grade of approximately 10 ounces per tonne. Approximately 400 tonnes of ore originated from historical underground workings that were cleaned out as part of the rehabilitation of the mine. The Company may elect to transport some of the ore for toll milling at nearby concentrators in the event financially beneficial toll milling terms are negotiated.

Production rates are expected to increase as the new mining teams complete their on-the-job training. Currently, the trial mining method employed by the Company is conventional, using hand-held jackleg drills (Figure 2), rail bound locomotives (Figure 3) and hydraulic shovels for cleaning. In order to further develop the pilot plant, the Company intends to acquire two larger, eight tonne locomotives and 16 mine cars with capacity of five tonnes, which are on order from Peru. Delivery of this equipment to Pulacayo is expected by March, 2012. A reconditioned trackless mining fleet consisting of two scoop LHD's, a twin jumbo drill rig and a 20 tonne dump truck has also been sourced from Sudbury in Canada. The equipment is currently being refurbished in Canada and is scheduled for shipping to site in January 2012. The mining plan currently includes drifts that target three separate silver bearing veins in close proximity to the San Leon tunnel (Figure 4). Unverified underground sampling results from these veins are showing significantly higher grades than the average resource grades previously reported (See Press Release dated October 18, 2011).

In response to these positive developments, Chief Executive Officer Neil Ringdahl stated, "The resource at Pulacayo continues to exceed our expectations as we develop the mine. Apart from finding previously un-mined veins underground that were not picked up in earlier drilling campaigns, we also remain cautiously optimistic that first stopes we are targeting could contain higher silver grades than the average grade of the previously reported resource estimate. If our team is able to extract this ore with minimum dilution, the Company may see a potential significant near-term upside when the ore is treated in its pilot plant which we plan to bring into production in the fourth quarter of 2012."

New employees for the trial mining project have been recruited predominantly from Pulacayo and the communities surrounding the property. Currently the Company employs approximately 84 Bolivian employees, of which 42 are employed directly from the local communities.

Pilot Concentrator & Permitting

Current 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. Apogee plans to construct and commission a 400 tonne per day capacity pilot base and precious metals concentrator at Pulacayo in 2012. The detailed engineering and design for the concentrator (Figure 5) is nearing completion with final signoff expected by the end of this year. The Engineering, Procurement & Construction Management contract was awarded in June 2011 to TWP Sudamerica S.A., an international engineering firm with worldwide experience (refer to further information below).

Upon receipt of the necessary environmental permits, the Company anticipates that construction with respect to the development of the project will begin, as planned, by June 2012. Orders have been placed for the long lead items including the ball mill and crusher. The Company is currently in negotiation with several Bolivian based companies for the steelwork and civil construction contracts.

The Company is also pleased to announce that the environmental permitting process for the concentrator is progressing on schedule. In the first part of this application, Apogee received a lower-risk environmental categorization or "ficha ambiental Level 2" from the authorities. In anticipation of speeding up the process, the Company already prepared its Environment Impact Study (EIS) in such a way that environmental mitigations to be used will exceed the required standards. The independent Bolivian environmental auditing company Fundación Medmin has been hired by Apogee to facilitate the process and make recommendations to both the Company and the authorities in respect of the environmental permit. Apogee expects to receive the environmental permit for the pilot concentrator on schedule in May 2012 (See Press Release dated May 25, 2011).

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 channels at the face are submitted to M.J. BECKET Servicios Analíticos de Minerales y Metales of Oruro, Bolivia for analyses. This lab is not accredited. These drill core samples are 35mm in diameter, which prohibits sawing, and the entire sample is sent for analysis. The quality control protocol on these samples includes the submission of certified geological standards and field blanks at a frequency of 1 every 20 samples. The analytical pulps are retrieved for future cross-check analysis and validation at an accredited laboratory should they be required for inclusion in resource estimates.

The Quality Control and all aspects of the exploration program are supervised by Apogee Silver Limited'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.

About TWP Sudamerica S.A.

TWP Sudamerica S.A. is a wholly owned subsidiary of TWP Projects and the Basil Read Group, which is a capable international resource and infrastructure focused engineering project house with over 30 years of experience. It provides a full range of engineering, architectural, finance and project management solutions. The TWP group employs in excess of 1,200 multi-disciplinary professionals and administrative personnel around the world. The company has a project portfolio with a capital value of more than US$10-billion and has offices in South Africa, Australia and Peru. TWP's office in Peru employs more than 110 professionals and is completing work in Chile, Colombia, Bolivia and Peru.

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 mineral resource estimates, mineral prices, exploration and development timetables and budgets, receipt from the regulatory authorities of all required environmental permitting, receipt and proper delivery of all required material and equipment, timing with respect to the development of the pilot plant and pilot concentrator at the Pulacayo property, initial sample results with respect to the ore currently mined, along with additional permitting requirements 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, please visit the following link: http://media3.marketwire.com/docs/ape1208_f1.pdf

To view Figure 2, please visit the following link: http://media3.marketwire.com/docs/ape1208_f2.pdf

To view Figure 3, please visit the following link: http://media3.marketwire.com/docs/ape1208_f3.pdf

To view Figure 4, please visit the following link: http://media3.marketwire.com/docs/ape1208_f4.pdf

To view Figure 5, please visit the following link: http://media3.marketwire.com/docs/ape1208_f5.pdf


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