Apogee Minerals Ltd.

Apogee Minerals Ltd.

July 11, 2005 08:00 ET

Apogee Receives Regulatory Approval to Acquire La Solucion Silver-Zinc-Lead Producing Mine

TORONTO, ONTARIO--(CCNMatthews - July 11, 2005) -

La Solucion Mine Has Long History of Production

Apogee Minerals Ltd. (TSX VENTURE:APE) has received TSX Venture Exchange approval for the acquisition of the Silver-Zinc-Lead producing La Solucion Mine in Colquecahua, Bolivia. The mine is located approximately 17 km northeast of La Paz, the capital city of Bolivia.

The mine and 120 tonnes per day flotation mill, built in 1992 at a capital cost of US$1.6 million, have been producing at a rate of 100 tonnes per day for the past 13 years. The ore has graded an average of 7% Zinc, 3 - 4% Lead, and approximately 150 g/t Silver.

Apogee President and CEO John Carlesso stated: "With Exchange approval in hand, we will be moving rapidly to begin a drilling program to quantify resources at La Solucion".

La Solucion

The project area totals approximately 6000 ha and has been operated by a private partnership since 1989. The mine is located approximately 17 km from the city of La Paz via paved roads. A small village is located to the west of the mine, where a majority of the mine's workforce is located. Mine and mill employees are transported from the village and from La Paz on a daily basis. Elevations at the property range from 4100-5300m.

Geology at La Solucion

The La Solucion area, also known as Colquecahua, is located within the Cordillera Real of Bolivia, a thick sequence of folded Lower Paleozoic sedimentary rocks intruded by younger granitoids. The Colquecahua vein system is large and is comprised of several major sub-parallel veins trending 050-060 degrees, dipping 60-85 degrees to the SE and NW, which extend for several kilometers across the project area. These include the La Solucion Vein, the Principal Vein, the Hampaturi Vein, the Machuca Veins, the Santa Elena Vein, and the JC (Jacheha Caikho) Vein.

In general terms these veins strike perpendicular to the fold axis of the sediments and are locally potentially as thick as 10m but generally more likely to average 5-8m. The veins vary from massive quartz, barren of mineralization, to quartz-siderite veins with sphalerite, galena, chalcopyrite and lesser bornite, covellite, stibnite, and varying amounts to abundant pyrite. Locally multiple vein swarms have been reported where thicker mining widths have been achieved.

Historically explored by several exploration companies, geological work has consisted primarily of geological mapping and sampling on surface and underground, with no exploration drilling known to have been carried out on the property. The work of these companies is consistent in reporting multiple vein systems and strike lengths up to 10 km. There are no existing Resource or Reserve estimates that meet the criteria for reporting in any categories under National Instrument 43-101.

A Phase I exploration program, dominated by drilling, will begin shortly at La Solucion to begin the process of quantifying and expanding known mineral resources on the property. Apogee's exploration strategy at La Solucion will be focused on evaluating mineralization within known veins sub-parallel to veins being mined, particularly where the veins coalesce and intersect, and to evaluate the known vein systems along strike and above and below current mining levels.

Operations at La Solucion

The surface facilities at the La Solucion mine site are located at an elevation of approximately 4500m and consist of several small buildings. Access to the underground workings is via an adit and mined ore is hauled by truck to the mill located approximately 5km from the mine. Zinc and lead concentrates produced at the mill are trucked to the port of Arica in Chile and then sent on to smelters in Asia.

Mining has been carried out for the past 13 years on a small-scale basis, and all development is by air-powered jack-leg drills. Current mining activity is confined to the Hampaturi Vein. Approximately 60 people are employed in mining activities and the production rate of the mine is currently 100 tonnes per day, 20 tonnes per day less than the current mill capacity. No geological mapping or grade control is performed. Mining has been confined to elevations 4645m - 4925m, leaving unexplored potential from the valley floor at 4200m - 4900m.

The 120 tonnes per day flotation mill was built in 1992 at a capital cost of US$1.6 million, and has been producing lead and zinc concentrates for the past 13 years. Approximately 20 people are employed in milling activities. The ore grades an average of 7% Zinc, 3 - 4% Lead, and approximately 150 g/t Silver. The Zinc concentrate grades an average 54% Zinc and 140 g/t Silver and the Lead concentrate grades an average of 65% Lead and 40 oz/t Silver. Recoveries are approximately 90% for Zinc, 90% for Lead, and 80% for Silver. Assuming current production and recovery levels, and current prices for Silver, Zinc, and Lead, the La Solucion Mine would generate roughly US$400,000 in cash flow on an annual basis.

Key components of Apogee's strategy to optimize profitability in the mining operations will focus on examining the potential to: increase the economic width of mineralized veins through proper exploration and grade control techniques, improve mining and metallurgical recovery, increase productivity through improved mine planning and scheduling and the use of new and additional mining equipment.

Under the terms of the agreement Apogee can earn an initial 51% interest in the property through work expenditures totaling US$1.3 million over three years (US$300,000 in year one, $500,000 in year two, and $500,000 in year three), and share issuances totaling US$1 million over three years (US$250,000 in year one, $250,000 in year two, and $500,000 in year three). Once it has earned a 51% interest in the property, Apogee will have the option to acquire the remaining 49% interest by making a payment of US$1,000,000 in cash or shares to the owners of the property.

Mr. Robert Anderson Campbell, M.Sc., P.Geo., is the Qualified Person as defined under National Instrument 43-101 responsible for the scientific and technical work on the exploration program and is responsible for reviewing the technical disclosure in this press release.

Apogee acquired the option to earn an interest on the property from Forbes & Manhattan, Inc., who will receive a one time cash payment of CDN$200,000 and be issued 1,000,000 common shares of Apogee. The agreements referred to above, including the issuance of any common shares and cash payments, have received regulatory approval.

Apogee Minerals Ltd. is a Canadian exploration and development company listed on the TSX Venture Exchange under the symbol APE. The company has several advanced Silver-Zinc exploration properties in the historic Potosi Department of southwestern Bolivia.

This press release is available on the company's official on-line investor relations site for investor commentary, feedback and questions. Investors are asked to visit http://www.agoracom.com/ir/apogee . Alternatively, investors are asked to email all questions and correspondence to APE@agoracom.com where they can also request addition to the Apogee Minerals investor email list to receive all future press releases and updates directly.

Statements in this release that are not historical facts are "forward-looking statements" within the meaning of the U.S Private Securities Litigation Reform Act of 1995. Readers are cautioned that any such statements are not guarantees of future performance and that actual developments or results may vary materially from those in these "forward-looking statements".

Contact Information

  • Apogee Minerals Ltd.
    John Carlesso
    President and CEO
    (416) 861-5881