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Apollo Minerals – September 2018 Quarterly Report

Completed transaction to increase ownership of Couflens Project to 100% and commenced the re-installation of mine services

HIGHLIGHTS FROM THE SEPTEMBER 2018 QUARTER

• Completed the acquisition of the remaining 20% interest in the Couflens Project in France which includes the historical high grade Salau tungsten mine

• Commenced with a program to reinstall mine services at Salau. With the exception of ventilation, all work on the main level 1230 has now been completed

• Received firm bids from a shortlist of drilling contractors for the initial drilling campaign to test multiple high-grade tungsten and gold targets within the mine

• Commenced with geophysics programs to assist with the definition of exploration targets and to improve the Company’s understanding of regional geological structures

• Commenced baseline environmental impact assessment studies initially focused on water sampling • Strengthened local community relationships with a ceremony at site to commemorate the start of works, attended by former miners and senior local politicians

• Held introductory meetings with the newly appointed Prefect of Ariege

• The Couflens Project continues to deliver increasing economic and social benefits to the local region as the Company hired more local staff and contracted more local businesses for construction and study work

• Submitted plans in support of the final phase of health and safety risk assessments within the historical mine environment. The assessments will be conducted after the reinstallation of mine services and are subject to approvals

• Tungsten prices ended the quarter at US$284/mtu

LOOKING AHEAD

Salau Mine Area:

• Interpret geophysical data obtained from initial program and submit applications for further work • Review drilling proposals, select preferred bidder and submit drill program applications after the completion of health and safety risk assessments 2

• Complete the program to reinstall mine services after relevant approvals have been obtained • Continue with the final phase of health and safety risk assessments

• Advance applications for drilling at the Aurenere project in Spain as part of the ongoing Investigation Permit application CORPORATE:

• The Company held A$4.4 million in cash and no debt at the end of the quarter

For further information please contact:

Hugo Schumann Robert Behets

Tel: +44 207 478 3900

Tel: +61 8 9322 6322

Email: info@apollominerals.com

Apollo Minerals (AON) takes a significant step as it commences reinstallation of mine services at historical Salau mine

Highlights

  • Apollo Minerals has commenced a program to re-install mine services within the historical Salau tungsten mine at the Couflens Project in France
  • The work program includes the installation of modern ventilation systems, power and cabling in the proposed working levels of the mine for the exploration phase
  • The new mine services will support the exploration programs including sampling and drilling targeted at tungsten and gold, which are planned to commence after the final phase of health and safety risk assessments
  • The Company has procured its goods from local businesses where possible and is using local contractors to complete the installation works
  • A battery storage inverter and an electric vehicle have been purchased for mine access in order to reduce energy consumption as part of the Company’s commitment to responsible mining

Apollo Minerals Limited (“Apollo Minerals” or “Company”) is pleased to advise that it has commenced with the re-installation of mine services within the historical Salau tungsten mine following the receipt of approvals by the French authorities. The Salau tungsten mine, which was one of the world’s highest-grade tungsten mines before its closure in 1986, forms the central part of the Company’s 100% owned Couflens tungsten and gold project (“Couflens Project”).

The program of works includes the widening of the current mine portal to facilitate access into the mine by truck, the installation of ventilation and cabling, the construction of walls and gates within the mine, and the removal of piping, waste material and any hazards. Permission for the works was granted by way of a prefectural approval which followed an extensive initial phase of health and safety risk assessments including air quality monitoring and geotechnical stability.

The Company anticipates completing the installations within two months, using local contractors and having sourced goods and services locally as part of its commitment to bring
benefits to the local region.

Once the installations have been completed, a final phase of health and safety risk assessments will be conducted after which exploration inside the mine will formally commence.

The Company is currently reviewing final bids from a shortlist of drilling contractors for an initial drilling campaign to test numerous high grade tungsten and gold targets within the mine.

Hugo Schumann, Executive Director, commented:
“The re-installation of mine services at Salau represents a very significant moment for the Company and for the local population after more than 30 years of the mine’s closure. The program of installations, drawing on the goods and services of local service providers, will pave the way for major exploration campaigns to follow.”

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Apollo Minerals (ASX:AON) – June 2018 Quarterly Report

Received government approval for 100% ownership of the Couflens Project whilst finalising drill programs and strengthening management team

HIGHLIGHTS FROM THE JUNE 2018 QUARTER

  • Received approval from the French Ministry of Economy and Finance of the proposed acquisition of the remaining 20% interest in the Couflens Project
  • Completed the initial phase of health and safety risk assessments within the historical Salau tungsten mine, focused on geotechnical stability, air quality monitoring, ventilation tests and water quality
  • Tests confirmed excellent infrastructure servicing the historical mine and excellent ground conditions within competent granite or marble host rock
  • Submitted a proposed program of works to the French authorities for the restoration of mine services including ventilation
  • Ranked and prioritised numerous drill targets for gold and tungsten based on historical drilling data and 3D modelling completed by Company geologists
  • Submitted applications for an extensive airborne geophysics survey at the Couflens Project
  • Submitted applications for a drill program at the Aurerene Project in Spain as part of the application for an Investigation Permit
  • Strengthened management team with the appointment of Mr Hugo Schumann, an experienced European mining executive, as Executive Director
  • Co-founded the Club de Mécènes Mines du Salat to support the cultural and historical heritage of the Couserans province of France
  • Completion of A$6 million placement leading European Institutional Investors
  • Completed the listing of the Company’s former subsidiary Constellation Resources Limited, which holds Fraser Range nickel-copper and gold assets, via an Initial Public Offering (IPO) on the Australian Securities Exchange (ASX) in July 2018
  • Tungsten prices continued to strengthen, rising 6% during the quarter and ending at US$347 per mtu, the highest level since 2014

LOOKING AHEAD                             

Salau Mine Area:

  • Finalise and submit applications for drill programs for gold and tungsten within the Salau mine area
  • Final round of health and safety risk assessments to be completed in the coming months
  • Planning geotechnical stability tests and additional sampling programs at the tailings disposal areas outside the Salau mine where gold grades of up to 8.94 g/t were recorded and tungsten grades averaged 0.49% WO3

Within the broader ground holding including the Couflens Project (France) and the adjacent Aurenere Project (Spain):

  • Extensive airborne geophysical surveys to refine regional targets and enhance understanding of regional geological structures
  • Based on the results of the airborne surveys, complete drill program applications to assess the identified tungsten and gold prospects

CORPORATE:

  • Appointment of Mr Dylan Browne as Chief Financial Officer and Company Secretary
  • The Company held A$5.5 million in cash and no debt at the end of the quarter

Executive Director Hugo Schumann commented:

“Our geological team has successfully digitised the assay results of more than 650 historical drill holes at the Couflens Project and constructed 3D geological models focused on the historical Salau mine. Using this 3D modelling, we have now developed multiple drill targets for gold and tungsten and will be advancing planning and applications for drilling in the coming quarter.

The historical Salau mine has been closed for more than 30 years and we have been working closely with the authorities on health and safety risk assessments to ensure safe working conditions for our exploration campaigns. These assessments have so far confirmed excellent infrastructure and ground conditions within the mine, with wide development drives and competent host rock as well as shown numerous visible areas of mineralisation prospective for gold and tungsten.

As we look ahead we plan to finalise the risk assessments, re-establish mine services, and then commence an extensive exploration program including underground drilling and channel sampling. In the wider region across our large licence holding we have planned an airborne geophysics program which will assist with drill targeting across where high-grade gold and tungsten have been identified from field campaigns.”

 

For further information please contact:

Hugo Schumann                                                         Robert Behets

Tel: +44 207 478 3900                                              Tel: +61 8 9322 6322  

Email: info@apollominerals.com.au

Top Countries for Tungsten Production – France to feature again? – Apollo Minerals (ASX:AON)

Top Countries for Tungsten Production

(Tungsten Investing News article first published by Amanda Kay on April 24th, 2018)

What countries account for the most tungsten production? China took the top spot last year, and eight other countries also put out significant amounts.Tungsten, also known as wolfram, has many uses. It is commonly used to produce electrical wires, heating and electrical contacts.

But it is also used in welding, heavy metal alloys, heat sinks, turbine blades and as a substitute for lead in bullets.

According to the most recent US Geological Survey report on the metal, world tungsten production came in at 95,000 MT in 2017, up from 2016’s 88,100 MT.

This increase came despite reduced output from Mongolia, Rwanda and Spain. A large boost in production came from the UK, where production increased around 50 percent.

The price of tungsten started to rise at the beginning of 2017, and has been booming since then. The bump in prices has been attributed to supply constraints, especially in China.

Tungsten’s importance in industrial applications, from smartphones to car batteries, means that demand won’t disappear anytime soon. With that in mind, it’s worth being aware of which countries produce the most tungsten.

Given its unique and valuable properties, the European Union ranked tungsten as one of Europe’s most critical raw materials, with the highest supply risk of all materials on the list.

Before we look at them in more detail, it is worth noting that France could re-enter the list of top producing nations in the next few years.

The Couflens Project is located in the Pyrenees region in Southern France, and comprises a 42km2license area. Owned and operated by ASX listed Apollo Minerals (ASX: AON), the area includes Salau, previously one of the world’s highest-grade historical tungsten mines, which in the 1970s and 80s produced approximately 930,000 tonnes at 1.5% tungsten for around 11,500 tonnes of high grade tungsten concentrate during its 15 years of operation.

If Salau reopened and produced that level of tungsten today, it would not only immediately put France onto the table as a top tungsten producer, but it would propel the nation to the forefront as a producer of some of the world’s highest grade tungsten, offering end users security of supply from its location in the heart of the European Union

Here’s a brief overview of the nations that produced the most of the metal last year.

 

  1. China

Mine production: 79,000 MT

China produced more tungsten in 2017 than it did in 2016, and was still the world’s largest producer of the metal by an incredibly wide margin. In total, it put out 79,000 MT of tungsten last year, up from 72,000 MT the year before. China has limited the quantity of tungsten-mining and export licenses it awards, and has imposed quotas on concentrate production. The country has also recently increased environmental inspections. Nonetheless, the Asian nation still came out on top.

In addition to being the world’s largest tungsten producer, China is also the world’s top consumer of the metal. China was also the main source of tungsten imported into the US in 2017.

  1. Vietnam

Mine production: 7,200 MT

Unlike China, Vietnam experienced another jump in tungsten production in 2017. It put out 7,200 MT of the metal compared to 6,500 MT the previous year. Privately owned Masan Resources runs the Vietnam-based Nui Phao mine, which it says is the largest tungsten-producing mine outside China. It is also one of the lowest-cost producers of tungsten in the world.

  1. Russia

Mine production: 3,100 MT

Russia’s tungsten production was flat from 2016 to 2017, coming in at 3,100 MT both years. This plateau came in spite of President Vladimir Putin’s order that production resume at the Tyrnyauz tungsten-molybdenum field. Putin would like to see a large-scale mining and processing complex established.

Wolfram Company is the country’s largest producer of tungsten products, according to its website, and the company claims that each year it produces up to 1,000 tons of metal tungsten powder, plus up to 6,000 tons of tungsten oxide and up to 800 tons of tungsten carbide.

  1. Bolivia

Mine production: 1,100 MT

Bolivia tied with the UK for tungsten production in 2017. Despite moves to promote the tungsten industry in the country, Bolivia’s output remained flat at 1,100 MT.

Bolivia’s mining industry is heavily influenced by Comibol, the country’s state-owned mining umbrella company. The company reported a profit of $53.6 million for the 2017 fiscal year.

  1. United Kingdom

Mine production: 1,100 MT

The UK saw a huge leap in tungsten production in 2017, with output rising to 1,100 MT compared to 736 MT the year before. Wolf Minerals (ASX:WLF, LSE:WLFE) is likely largely responsible for the increase; in the fall of 2015, the company opened the Hemerdon tungsten mine in Devon. As per its 2017 annual report, the company mined 2,266,958 tons of ore and produced 112,270 MTU of tungsten in the year.

According to the BBC, Hemerdon was the first tungsten mine to open in Britain in over 40 years.

  1. Austria

Mine production: 950 MT

Austria produced 950 MT of tungsten in 2017 compared to 954 MT the previous year. Much of that production can be attributed to the Mittersill mine, which is located in Salzburg and hosts the largest tungsten deposit in Europe. The mine is owned by Sandvik (STO:SAND).

  1. Portugal

Mine production: 680 MT

Portugal is one of the few countries on this list that saw an increase in tungsten production in 2017. It put out 680 MT of the metal, up from 549 MT the previous year.

The Panasqueira mine is Portugal’s largest tungsten-producing mine. The past-producing Borralha mine, once the second-largest tungsten mine in Portugal, is currently owned by Blackheath Resources (TSXV:BHR). Avrupa Minerals (TSXV:AVU) is another smaller company with a tungsten project in Portugal.

  1. Rwanda

Mine production: 650 MT

Tungsten is one of the most common conflict minerals in the world, meaning that at least some of it is produced in conflict zones and sold to perpetuate fighting. While Rwanda has promoted itself as a source of conflict-free minerals, concerns remain about tungsten output from the country. Fairphone, a company that promotes “fairer electronics,” is supporting conflict-free tungsten production in Rwanda.

Rwanda produced just 650 MT of tungsten in 2017, down a fair bit from 820 MT in 2016.

  1. Spain

Mine production: 570 MT

Spain’s tungsten production dropped in 2017, coming in at 570 MT. That’s down from 650 MT the previous year.

There are a number of companies engaged in the exploration, development and mining of tungsten assets in Spain. Examples include Almonty Industries (TSXV:AII), Ormonde Mining (LSE:ORM), aforementioned Apollo Minerals (ASX:AON) and W Resources (LSE:WRES).

Link to the original article here

Apollo Minerals $AON Demonstrates Commitment to Local Communities

Apollo Minerals, focused on the development of a responsible, modern mine at the Couflens Project in France, has demonstrated its commitment to local communities through the creation of a significant cultural heritage initiative – the Club de Mécènes Mines du Salat (“CMMS”). The CMMS has been established by Apollo Minerals’ French subsidiary, Mines du Salat.

The CMMS has been established to ensure the cultural and historical heritage of the Couserans province in the Ariege region is upheld. The heritage of the province, which is known for its Roman art and architecture, attracts over 150,000 tourists a year and provides a major source of economic stimulus for the area.

The CMMS was formed as a consortium between Mines du Salat and a number of local businesses. Each founding partner will make annual contributions which will then be allocated to the various restoration projects in the Couserans province. The French government will contribute an additional 60% to the total amount of funds raised.

To date, the CMMS has provided funding for:

  • the restoration of three paintings in the Vic d’Oust church;
  • the renovation of the roof, electricity and paintings of the Romanesque church of Saint-Jacques d’Aubert in Moulis; and
  • a study of the statues at the chapel Notre-Dame du Pouech in Oust, classified as historical monuments.

The establishment of the CMMS further strengthens the Company’s commitment to the region and reinforces its desire to work collaboratively with local stakeholders.

Every restoration project that the CMMS commits to financing has the potential to create direct and indirect jobs.

The CMMS is part of the Fondation du Patrimoine, an independent organisation created to defend and enhance national heritage in France.

Hugo Schumann, Executive Director, commented: “We are developing the Couflens Project in a province steeped in cultural heritage. We are proud to have co-created this foundation whose sole aim is to protect, promote and enhance that heritage. Our goal is to develop a project that generates benefits for all our stakeholders and we have a duty to ensure that our social, economic and environmental impact is positive.”

For further information contact:

Hugo Schumann Robert Behets
Tel: +44 207 478 3900 Tel: +61 8 9322 6322
Email: info@apollominerals.com.au

Apollo Minerals #AON – Excellent Infrastructure and Ground Conditions Confirmed At Historical Salau Tungsten Mine

EXCELLENT INFRASTRUCTURE AND GROUND CONDITIONS CONFIRMED AT HISTORICAL SALAU TUNGSTEN MINE

Highlights
• Extensive first phase of health and safety assessments completed within the historical Salau tungsten mine
• Results confirm excellent ground conditions within competent granite host rock with limited deterioration of conditions evident since mine closure
• Wide mine development drives which extend for more than 24 kilometres underground
• Ventilation is good, supported by natural air flows between higher and lower mine levels
• Water access already confirmed from local sources
• Nearest power line approximately one kilometre from the mine portal
• Only minor works proposed for the re-establishment of mine services for exploration activities including the installation of one ventilation fan
• Proposed work program to secure working areas for exploration and drilling and to reestablish ventilation and other services submitted to authorities

Apollo Minerals Limited is pleased to advise that the Company has completed its initial phase of health and safety risk assessments within the historical Salau mine, confirming excellent infrastructure and ground conditions in the mine. The Salau mine is at the centre of the Company’s Couflens Project in the south of France and was one of the world’s highest-grade tungsten mines, operating between 1970 and 1986. The mine, which remains open at depth and with gold upside, closed when tungsten prices were significantly lower than today. Apollo Minerals is studying the potential reactivation of the Salau mine and exploring numerous gold and tungsten targets in the wider region. Prior to the commencement of exploration works within the Salau mine, the Company was required to complete a series of health and safety risk assessments aimed at ensuring safe conditions for workers during the exploration phase of the Project. An initial phase of risk assessments, focused on geotechnical stability, air quality monitoring, ventilation tests and water quality have been completed, and the results presented herein.

Executive Director Hugo Schumann commented: “The Salau tungsten mine is blessed with excellent infrastructure and ground conditions including wide development drives, good natural ventilation and ready access to water and power. The previous mine owners developed the majority of the mine within a hard and competent granite rock which remains in excellent condition today. These infrastructure advantages represent potential major time and cost savings and will greatly facilitate our planned work programs which include drilling to test multiple gold and tungsten targets.”

For further information contact:
Hugo Schumann Robert Behets
Tel: +44 207 478 3900 Tel: +61 8 9322 6322
Email: info@apollominerals.com.au

 

Background
Prior to the commencement of exploration works within the Salau mine, the Company was required to complete a series of health and safety risk assessments. The Salau mine has been closed for more than 30 years and the risk assessments were designed to ensure the working environment is safe for exploration activities to take place. The risk assessments focused predominantly on geotechnical stability, air quality monitoring, ventilation tests and water quality.

An initial phase of risk assessments was completed by SOGIMINES who has considerable experience in the establishment of mine services in France. The work culminated in the submission to the French authorities of a report outlining the results of the risk assessments and a proposed work program to re-establish services including ventilation, water and power. A summary of the risk assessments is presented below.

Ground Conditions
A review of ground conditions was conducted throughout the main access levels required for planned exploration programs within the historical mine. These include the main levels 1230, 1320 and 1430 and cover more than 4.5 kilometres of historical mine development. The development drives in these lower levels of the mine were designed with dimensions which facilitated the use of mobile mining equipment for ore and waste movement during the previous operations. The ground conditions were confirmed to be in excellent condition, with limited degradation having occurred in the 30 years since the mine’s closure. The excellent conditions are largely due to the nature and competence of the granodiorite or marble host rock into which historical mine developments were driven.

Figure 1: Mine access at level 1230 (Historical Photo)

Figure 2: Mine development drive at level 1230 (Modern Photo)

The mineralised areas of the main levels were also assessed to be in good condition which is expected to facilitate mapping, sampling and drilling during upcoming exploration programs.

Figure 3: Veronique fault showing in level 1230

Ventilation
A series of air monitoring tests were completed throughout the levels of the mine to be used for planned exploration work programs. Excellent in-mine ventilation is facilitated by the natural flow of air between the higher levels of the mine, where openings to the outside environment are present, and the lower level of the mine where the mine portal is located.

Minimal works are proposed for ventilation measures to support exploration activities, other than the installation of one fan at level 1430 and two ventilation doors.

Figure 3: Former location of a fan at the top of an air vent at level 1320

Water and Power
Water requirements for the exploration phase of work are expected to be modest. The Company has secured access to a local water supply sourced from a nearby spring which is considered sufficient for exploration activities. Power requirements for the exploration phase will be derived from a 100kVA on-site generator as well as using an electric vehicle to support early stage mapping and channel sampling activities. It is expected that 48kVA will be required for main ventilation at level 1430 and 36kVA for secondary ventilation.

A regional power line is located approximately one kilometre from the mine portal. Studies will be completed in due course to assess potential access links and costs for the exploitation phase.

Next Steps
Having completed the first phase of health and safety risk assessments, the Company has submitted a program of works to the French authorities regarding proposed installations to restore mine services including ventilation.

The proposed safety works are required to facilitate the safe access of staff and independent experts for the final phase of health and safety risk assessments, and ultimately for exploration activities to occur.

About Apollo Minerals
Apollo Minerals Limited is developing the Couflens Project and the Aurenere Project which, when combined, cover a 97km2 area in a highly prospective region of the Pyrenees. The Couflens Project in located in the Pyrenees region of southern France and comprises a 42km2 license area, within which lies the high grade historical Salau tungsten mine.

The mine was one of the world’s highest-grade tungsten mines, producing approximately 930,000 tonnes at 1.5% WO3 for around 13,950 tonnes of WO3 in concentrate, prior to its closure in 1986 when tungsten prices were significantly lower than today.

Apollo Minerals is focussed on two parallel work programs at the Couflens Project:

  1. Brownfields activities within, and immediately adjacent to, the historical Salau tungsten mine.
    The deposit remains open at depth with previous drilling below the base of the existing
    underground development confirming continuation of the mineralised system. Both the
    underground development and infrastructure will be examined to determine the most efficient
    method to progress mine exploration, development activities and potential mine reactivation;
  2. Continuation of an aggressive regional exploration program, focused initially on gold. Recent
    field campaigns have returned grades of up to 24.5 g/t gold from rock chip samples. Exploration
    will be focused on the multiple fault structures recognised within the major granodiorite intrusion
    at Salau and the discovery of shear hosted gold mineralisation associated with large fault
    structures extending along a 5km corridor to the west of the Salau mine area.

Progress made with both work programs enhanced the Company’s understanding of the geology and regional scale exploration potential of the area. As a result, the Company signed an agreement to acquire the remaining 20% of the Couflens Project, which will increase its ownership to 100%, and acquired a 75% interest in the Aurenere tungsten-gold project in the Lleida province in northern Spain.

The Aurenere Project comprises an Investigation Permit under application which covers an area of 55km2, along strike from and adjacent to, the Company’s Couflens Project. The Aurenere Project hosts an extension of the highly prospective corridor for tungsten and gold which strikes east west through the Couflens Project and into the Aurenere Project area.

Apollo Minerals is developing its Projects in accordance with the highest standards of environmental, social, health and safety, and economic management. All work programs are carried out with a strong commitment to both sustainable development and proactive stakeholder engagement as the Company seeks to maintain and develop positive relationships with its host communities and stakeholders.

Competent Persons Statement
The information in this announcement that relates to Exploration Results is extracted from announcements on 29 November 2017 and 5 February 2018. These announcements are available to view on www.apollominerals.com. The information in the original announcements that related to Exploration Results were based on, and fairly represents information compiled by Mr Robert Behets, a Competent Person who is a Fellow of The Australasian Institute of Mining and Metallurgy and a Member of the Australian Institute of Geoscientists. Mr Behets is a holder of shares and options in, and is a director of, Apollo Minerals Limited. Mr Behets has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. The Company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcements. The Company confirms that the form and context in which the Competent Person’s findings are presented have not been materially modified from the original market announcement.

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Proactive Investors – Outlook for tungsten developers ‘promising’ amid tightening supply – Apollo Minerals $AON

Mark Seddon, tungsten market expert and senior manager consulting services at Argus Media is joined in the Proactive studio by Apollo Minerals‘ (ASX:AON) Hugo Schumann and Andrew Scott.

Seddon talks through the main uses for the metal as well as the outlook for European developers and producers.”The supply side is dominated by China accounting for around 85% of supply so there are issues around security of supply”.

Meanwhile Schumann updates on developments with their Couflens project following the announcement they’ve received approval from the French government to acquire the remaining 20% interest in the asset.

 

Apollo Minerals ASX: #AON – French Govt approves transaction to increase Couflens project ownership to 100%

ASX RELEASE | 25 JUNE 2018 | ASX:AON 

JUNE 25TH – FRENCH GOVERNMENT APPROVES TRANSACTION TO INCREASE OWNERSHIP OF COUFLENS TO 100% 

Highlights 

  • Apollo Minerals has received approval from the French Ministry of Economy and Finance of its agreement to acquire the remaining 20% interest in the Couflens Project in France 
  • The Couflens Project includes the historical Salau mine which was one of the world’s highest-grade tungsten mines and remains open at depth and with gold upside
  • Approval of the acquisition ensures Apollo Minerals will have full upside to the Couflens Project as the Company ramps up its major exploration campaigns and study programs
  • The majority of the consideration for the remaining 20% is deferred to the future and payable upon the successful achievement of project milestones including production from the mine, thereby limiting the upfront cash outlay
  • The simplified ownership structure of the Couflens Project will enable the Company to accelerate development of the project with streamlined decision making and greater optionality for future funding

Apollo Minerals Limited is pleased to advise that it has received approval from the French Ministry of Economy and Finance of the proposed acquisition of the remaining 20% interest in the Couflens tungsten-copper-gold project in the Pyrenees region of southern France, thereby increasing its ownership to 100%. 

The approval, which was a Condition Precedent to Completion of the transaction, required the Ministry of Economy and Finance to confirm compatibility of the proposed transaction with decree 2006-648 of 2 June 2006 relating to mining titles. 

Apollo Minerals initially acquired an 80% interest in the Couflens Project in 2017. Following positive exploration activities on site, which confirmed the presence of widespread tungsten (up to 8.25% WO3) and high-grade gold (up to 24.5 g/t), the Company entered into an agreement to acquire the remaining 20% interest in the Couflens Project. 

In accordance with the terms of the Sale and Purchase Agreement, Apollo Minerals acquires the remaining 20% interest in the Couflens Project through the purchase of Variscan Mines SAS (“Variscan France”), a wholly owned subsidiary of Variscan Mines Limited (ASX: VAR). 

Hugo Schumann, Executive Director, commented: “We are pleased that the French government has confirmed its approval of our proposed transaction, which was a Condition Precedent to closing. Our desire to increase our ownership in the Couflens Project to 100% reflects our growing appreciation of the high quality of the project and its significant exploration upside. We are now well placed to carry out our exploration and study programs backed by a strong cash balance and quality institutional shareholders.” 

Apollo Minerals is funding the transaction using a combination of cash and future share payments based on the achievement of project milestones, as well as assuming the liabilities of Variscan France. The majority of the consideration is deferred and is weighted towards share based payments in the future, thereby limiting the upfront cash outlay. 

Apollo Minerals will continue to advance its exploration activities including an airborne geophysics program, the completion of in-mine safety assessments and initial drilling campaigns targeting both tungsten and gold targets. 

For further information contact: 

Hugo Schumann Robert Behets 

Tel: +44 207 478 3900 Tel: +61 8 9322 6322 

Email: info@apollominerals.com.au 3 

Apollo Minerals Limited | ASX code: AON | ABN: 96 125 222 924 | www.apollominerals.com.au PERTH Level 9, BGC Centre, 28 The Esplanade Perth, WA 6000 | +61 8 9322 6322 | +61 8 9322 6558 LONDON Unit 3C, Princes House, 38 Jermyn Street London, SW1Y 6DN | +44 203 903 1930 | +44 207 434 4450

COMMERCIAL TERMS 

Apollo Minerals will acquire the remaining 20% interest in the Couflens Project through the acquisition of 100% of the shares in Variscan France, a subsidiary of Variscan Mines Limited (“Variscan Australia”) (ASX: VAR), which holds a 20% interest in Mines du Salat SAS (“MdS”). 

The Share Sale Agreement (“Agreement”) to acquire Variscan France includes consideration as follows: 

  1. An upfront cash payment on signature of A$200,000 
  2. Subject to the final quantum of liabilities of Variscan France (see item 4 below), staged cash payments to Variscan Australia over an 8-month period: i. Up to A$300,000 on completion ii. Up to A$250,000 on the date that is 4 months from the date of completion iii. Up to A$250,000 on the date that is 8 months from the date of completion
  3. Subject to item 4 below and shareholder approval, issuing Variscan Australia new fully paid ordinary shares (“Shares”) in Apollo Minerals based on the achievement of certain milestones at the Couflens Project:  (a) First Milestone (Share Consideration): the earlier of (i) Tungsten Resource Milestone: A$250,000 of Shares in Apollo Minerals upon the announcement of a Mineral Resource Estimate of at least 25,000 tonne WO3 at an average grade of not less than 1% WO3 using a cut-off grade of not less than 0.3% WO3; or (ii) Mineral Resource Milestone: A$125,000 of Shares in Apollo Minerals upon the announcement of a Mineral Resource Estimate for tungsten for the Couflens Project at levels below those of the Tungsten Resource Milestone, or a Mineral Resource Estimate for gold; (b) Second Milestone (Share Consideration): A$500,000 of Shares in Apollo Minerals upon the announcement by the Company to ASX of a Scoping Study; (c) Third Milestone (Share Consideration): A$500,000 of Shares in Apollo Minerals upon the announcement by the Company to ASX of a Pre-Feasibility Study; (d) Fourth Milestone (Share Consideration): A$500,000 of Shares in Apollo Minerals upon the announcement by the Company to ASX of a Definitive-Feasibility Study; and (e) Fifth Milestone (Share Consideration): A$873,671 of Shares in Apollo Minerals upon the commencement of production at the Couflens Project. If shareholder approval has not been received by the date of the satisfaction of the relevant milestone, or if Apollo Minerals determines at its own discretion, it shall pay a cash equivalent for the relevant milestone consideration in lieu of the share consideration.
  4. Apollo Minerals has agreed to assume up to EUR400,000 of Variscan France liabilities. Any liabilities over EUR400,000 will be deducted from the staged future cash payments and share payments referred to in items 2 and 3 above.

The Agreement was dated 7 March 2018 and completion of the acquisition of Variscan France has to occur on or before 30 September 2018 and is subject to standard conditions precedent 4 

for acquisition of a company in France, including government agency approvals, extinguishment of intercompany debts, Variscan Australia not accepting a superior offer from employees in accordance with their rights under the French Commercial Code which provides employees a right to make an offer to acquire VM France and completion under the separate agreement of Variscan Australia to retain its interest in 6 other tenements in France (described below). 

Government agency approvals have now been received and Variscan employees have waived their rights to make an offer to acquire VM France. Completion of the Agreement is expected to occur within the next month after the satisfaction of final conditions precedent, which may be waived by Apollo Minerals. 

The Agreement also contains usual warranties provided by the parties associated with an acquisition of this nature. The Agreement can be terminated by the Company if the conditions precedent are not satisfied by 30 September 2018 or if there is a breach of the Agreement or warranties provided by Variscan Australia. Variscan Australia can only terminate the Agreement if the Company is in breach of the Agreement. 

As stated above, Apollo Minerals will acquire the remaining 20% interest in the Couflens Project through the acquisition of 100% of the shares in Variscan France, which holds an 20% interest in MdS. 

Under a separate agreement Variscan Australia retains a 100% interest in 6 other tenements in France (and associated liabilities) that were held by Variscan France. The effect of this separate agreement is that only the 20% interest in Couflens PER will remain in Variscan France upon acquisition by Apollo Minerals. The French authorities have stipulated that the remaining 6 licenses must be relinquished within four months of 22 June 2018. 

COMPETENT PERSONS STATEMENT 

The information in this announcement that relates to Exploration Results from the Couflens Project in France and Aurenere Project in Spain is extracted from announcements on 29 November 2017, 5 February 2018 and 27 March 2018. These announcements are available to view on www.apollominerals.com.au. The information in the original announcement that related to Exploration Results were based on, and fairly represents, information compiled by Mr Robert Behets, a Competent Person who is a Fellow of The Australasian Institute of Mining and Metallurgy and a Member of the Australian Institute of Geoscientists. Mr Behets is a holder of shares and options in, and is a director of, Apollo Minerals Limited. Mr Behets has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. The Company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcement. The Company confirms that the form and context in which the Competent Person’s findings are presented have not been materially modified from the original market announcement. 

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