– October 23, 2009

- Apollo Gold Corporation (“Apollo”) (TSX: APG)

(NYSE Amex: AGT) is pleased to announce that it has entered into a letter of intent with Elkhorn

Goldfields LLC (“Elkhorn”) pursuant to which Elkhorn has agreed to purchase all the

outstanding capital stock in Montana Tunnels Mining, Inc., an indirect wholly owned subsidiary

of Apollo (“Montana Tunnels”), which includes the 50% interest held by Montana Tunnels in the

joint venture agreement with Elkhorn Tunnels, LLC (an affiliate of Elkhorn), the Diamond Hill

mine and mill and any and all ancillary assets for a purchase price of US$9 million, payable as

described below. The Montana Tunnels mine has been on care and maintenance since April 30,

2009.

R. David Russell, President & CEO of Apollo, and Patrick Imeson, Chairman of Elkhorn

Tunnels, LLC, jointly state, “The working relationship as joint venture partners at Montana

Tunnels has been a great working relationship over the last 3.5 years and also financially positive

for both companies.” Mr. Imeson further states, “Elkhorn Tunnels has good synergies with other

owned mining assets located near Montana Tunnels, which will add to its ultimate financial plan.

Elkhorn Tunnels looks forward to reinitiating the Montana Tunnels mine in the near future.”

The terms of the letter of intent provide for staged cash payments in the aggregate amount of

US$5 million payable over a 7 month period, of which a non-refundable deposit of $250,000 was

paid on or about October 19, 2009. The payment schedule provides for two additional nonrefundable

payments of $250,000 each to be paid no later than November 25, 2009 and

December 25, 2009 (the “Non-Refundable Payments”), followed by three separate payments of

$250,000 payable on January 25, 2010, February 25, 2010, and March 25, 2010, a payment of

$1,500,000 payable on April 30, 2010 and a payment of $2,000,000 payable on May 31, 2010

(collectively, including the Non-Refundable Payments, the “Cash Purchase Price”). The letter of

intent provides that any missed scheduled payment will result in the termination of the letter of

intent (unless otherwise negotiated) and retention by Apollo of the Non-Refundable Payments.

The balance of the purchase price in the amount of US$4 million is payable through a 4% net

smelter royalty (“NSR”) with payments commencing coincident with the start of production and

to be paid from production until such time as a total of US$4 million is paid. Upon full payment

of the Cash Purchase Price, title to the capital stock of Montana Tunnels will be conveyed to

Elkhorn, subject to the NSR. In addition, Apollo and Elkhorn have agreed that they will review

other property owned by Montana Tunnels (outside of the current open pit operations and any

expansions of the open pit, including the “M-Pit”

) for future exploration possibilities and that,