APOLLO MINERALS LIMITED — Capital/Financing Update 2012

Jan 18, 2012

19 January 2012

ASX ANNOUNCEMENT

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DRILLING COMMENCES AT COMMONWEALTH HILL IRON PROJECT

Apollo Minerals Limited (“Apollo” or “Company”) is pleased to advise that drilling has commenced at the Company’s 100% owned Commonwealth Hill Iron Project in South Australia (Figure 1).

ASX Code: AON

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ABOUT APOLLO MINERALS

Apollo Minerals is an iron ore explorer and developer with two key projects in the Australian iron ore provinces of the Pilbara (Western Australia) and Gawler Craton (South Australia). Apollo’s South Australian tenements are also highly prospective for base and precious metals.

Figure 1: Drilling at the Sequoia prospect

Apollo’s projects are well situated close to existing infrastructure including railways, ports and power.

Capital Profile

Shares on issue 180.7m Options on issue 66.8m Market Cap $9m

Iron Ore Projects Mount Oscar Western Australia Commonwealth Hill South Australia

Base and Precious Metals Project

Titan South Australia

Apollo Minerals Limited ABN 96 125 222 924 50 Margaret Street Sydney NSW 2000 T: +61 2 9078 7670 F: +61 2 9078 7661 E: info@apollominerals.com.au

Contact

Dominic Tisdell Apollo Minerals Ltd T: +61 2 9078 7660

Tony Dawe Investor Relations T: +61 8 9388 0944 www.apollominerals.com.au

The Company is carrying out a programme of Reverse Circulation (“RC”) drilling totalling approximately 2,500m, designed to achieve two main goals:

1. Stage 1: A JORC compliant resource at the Sequoia prospect, and 2. Stage 2: Better understand the surrounding geology and the potential for near-surface, high grade Direct Shipping Ore (“DSO”) pods in the surrounding area.

The Stage 1 drilling programme will target extensions to the known mineralisation at the Sequoia Prospect, both at depth and along strike (figure 2).

The Sequoia Prospect is 1.2km long, up to 350m wide, laterally discontinuous and lies 24km from the existing bulk haulage railway line that connects the project to the port at Adelaide. Rock chip samples collected at Sequoia in the late 1990s have returned grades as high as 55% Fe and indicate surficial zones of haematite enrichment.

Recently completed ground gravity data analysis has identified potential for significant haematite / geothite alteration at depth along the southern limits of the prospect (Figure 3). This new target is being investigated.

Mr Dominic Tisdell, COO, said “We are delighted drilling has commenced at Commonwealth Hill where we have the potential to identify significant quantities of iron ore that could be transported on existing infrastructure to world markets. This marks the start of Apollo’s first drilling campaign in a new and emerging mining province in South Australia. In a period of less than four months since receiving approval to access the site for exploration from the Commonwealth, we have made significant progress in our goal of defining and developing an important iron project.”

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19 January 2012

ASX ANNOUNCEMENT

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Figure 2: Plan of gravity survey stations (red), historical drilling (yellow) and JORC programme at Sequoia (blue)

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Magnetic interpretations (blue)
Gravity interpretations (orange)
+1.6 T/m [3] Gravity inversion (red)
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Figure 3: Sequoia prospect historical and JORC drilling, gravity and magnetic interpretations

The results from this drilling programme will feed directly into a Scoping Study to evaluate the potential for rapid development of a start-up project based on the opportunity to access existing rail and port infrastructure.

Stage 2 of the drilling programme will focus on understanding the geology of the surrounding area, including the potential for near-surface DSO pods. The recently completed gravity survey has identified seven near-surface gravity highs previously unknown and untested by drilling (Figure 4).

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19 January 2012

ASX ANNOUNCEMENT

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St Andrews prospect
Sequoia prospect
Historic drilling
+0.6 T/m [3] Gravity inversions (red)
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Figure 4: Near-surface gravity high targets in and around Sequoia and St Andrews prospects

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Historical exploration in and around these gravity highs has been focused on following up surface calcrete anomalies in a search for gold, copper and nickel. Interestingly, many of these holes were anomalous in these metals with grades typically in the order of 100 – 200 ppb Au, 400 – 600 ppm Cu, and 0.05 – 0.13% Ni, above background levels. At the St Andrews prospect, 1 of 8 holes assayed for Fe returned 24m at 57% from 12m below surface.

Interestingly, the recently discovered gravity highs in the immediate area are semi-coincident or offset from the magnetic highs (Figure 5), indicating the potential for alteration including haematite and geothite.

Figure 5: Gravity and magnetic targets in and around Sequoia

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19 January 2012

ASX ANNOUNCEMENT

ABOUT APOLLO’S PROJECTS

Apollo Minerals Ltd (ASX Code: AON) is an iron ore and minerals explorer and developer with projects in South Australia and Western Australia. The Company’s key focus is to develop an iron ore project at each of Apollo’s project sites, namely the Pilbara, WA and the Gawler Craton, SA.

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The Commonwealth Hill site lies on the northwest margin of the Gawler Range Volcanics Domain, where the older basement rocks are interpreted as Archaean gneisses of the Mulgathing Complex, which are intruded by late syntectonic granitoids of Palaeoproterozoic age. In the southeast of the Project, Mesoproterozoic Gawler Range Volcanics overlie the older basement and coeval Hiltaba Suite granitoids intrude both the volcanics and the older basement. Major northwest and northeast trending fault structures are evident from aeromagnetic data.

Commonwealth Hill straddles the

Adelaide to Darwin Railway line, 120km south west of the opal mining centre of Coober Pedy, 30km east of Challenger Gold Mine, 70km south-west of Cairn Hill and 100km west of Prominent Hill IOCG mines and 100km west of the Peculiar Knob DSO iron ore mine. The railway connects Commonwealth Hill directly with several ports capable of shipping iron ore.

The Titan Base Metals and Precious Metals Project is also part of Apollo’s large Commonwealth Hill holding (including the namesake Commonwealth Hill Iron Project) that covers an area of approximately 750 km[2] across three tenements in the central Gawler Craton of South Australia.

Apollo is currently evaluating the potential to develop a medium sized iron mine on the property. Drilling has identified both coarse grained magnetite and Direct Shipping Ore (DSO) style mineralisation including 24m at 57% Fe inclusive of 4m at 70% Fe. Previous work has highlighted the possibilities of producing premium quality iron concentrates and sinter fines products.

The Mt Oscar Iron Project is located in north-western part of the Pilbara Craton in north-west Western Australia, and is approximately 30 km from the coast. The magnetite-bearing rocks at Apollo’s Mt Oscar Project outcrop over an oval shaped area measuring some 5km by 2km. The iron rich horizons are strike-continuous for up to 5.5km and are locally up to 160m thick with an average interpreted thickness in excess of 60m. Recent metallurgical work has demonstrated that the production of marketable products is possible i.e. >60% Fe, <8% (Al2O3 + SiO2).

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19 January 2012

ASX ANNOUNCEMENT

FOR FURTHER INFORMATION CONTACT:

Richard Shemesian Executive Director Apollo Minerals Ltd Tel: +61 2 9078 7660

Dominic Tisdell Chief Operating Officer Apollo Minerals Limited Tel: +61 2 9078 7660

Tony Dawe Professional Public Relations Tel: +61 08 9388 0944 Mob: 0405 989 743 Email: tony.dawe@ppr.com.au

Competent Person Declaration

The information in this Report that relates to Exploration Results is based on information compiled by John Bridson who is a member of the Australian Institute of Mining and Metallurgy. John Bridson 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 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. John Bridson consents to the inclusion in the report of the matters based on their information in the form and context in which it appears.

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