All Dollar amounts are expressed in United States Dollars

The following discussion and analysis should be read in conjunction with the accompanying condensed consolidated financial statements and related notes. The financial statements have been prepared in accordance with generally accepted accounting principles in Canada (Canadian GAAP). For a reconciliation to GAAP in the United States (U.S. GAAP), see Note 17 to the attached condensed consolidated financial statements.

In this Form 10-Q, the terms "cash operating cost," "total cash cost" and "total production cost" are non-GAAP financial measures and are used on a per ounce of gold sold basis. Cash operating costs per ounce is equivalent to direct operating cost as found on the Condensed Consolidated Statements of Operations, less production royalty expenses and mining taxes but includes by-product credits for payable silver, lead, and zinc production. Total cash costs is equivalent to cash operating costs plus production royalties and mining taxes. The term "total production costs" is equivalent to total cash costs plus non-cash costs including depreciation and amortization. See "Reconciliation of Cash Operating and Total Production Costs Per Ounce" below.

BACKGROUND AND RECENT DEVELOPMENTS

We are principally engaged in gold mining including extraction, processing, refining and the production of other co-product metals, as well as related activities including exploration and development of mineral deposits principally in North America. We are the operator of the Montana Tunnels mine (the "Mine"), which is a 50% joint venture with Elkhorn Tunnels, LLC ("Elkhorn"). The Mine is an open pit mine and mill located near Helena, Montana, which produces gold doré and lead-gold and zinc-gold concentrates. On July 28, 2006, we entered into a joint venture agreement with Elkhorn in respect of the Mine, pursuant to which Elkhorn was granted a 50% interest in the Mine in exchange for financial contributions.

We own a development property, the Black Fox Project, which is located near the township of Matheson in the Province of Ontario, Canada. We also own Mexican subsidiaries which own concessions at the Huizopa exploration property located in the Sierra Madres in Chihuahua, Mexico.

Corporate

On July 1, 2008, we announced that Montana Tunnels Mining, Inc., our wholly owned subsidiary, had entered into a $5.15 million extension of an existing debt facility with RMB. The primary use of funds from this extended facility was the payment of Cdn$4.0 million to St Andrew Goldfields Ltd. ("St Andrew") as a partial payment of the purchase price for the Stock Mill Complex.

On July 24, 2008, we completed an offering ("Unit Offering") of equity units ("Units"). A total of 40,806,500 Units were subscribed for at a price of Cdn$0.50 per Unit (US$0.495 per Unit for purchasers residing in the United States), for total gross proceeds of Cdn$20.2 million and US$0.2 million. Each Unit is comprised of one common share and one-half of one common share purchase warrant (a "Warrant"), with each whole Warrant exercisable into one common share at a price of Cdn$0.65 per share for 36 months.

On August 21, 2008, we completed an offering of 17,000,000 flow-through common shares ("Flow-through Offering") for purposes of the Income Tax Act (Canada) at Cdn$0.50 per common share for net proceeds of $7.5 million (Cdn$7.8 million). In connection with this offering, 1,020,000 share purchase warrants were issued to the agent. Each share purchase warrant is immediately exercisable at Cdn$0.50 per common share of the Company and expires on August 21, 2010. We intend to use the gross proceeds of the private placement for the pre-strip of the Black Fox open pit mine and to incur Canadian Exploration Expenses (as defined under the Income Tax Act (Canada)) at our Black Fox Project.

In May 2008, we retained Macquarie Bank Ltd. and RMB Resources Inc. as joint arrangers (the "Banks") and underwriters for the Black Fox project finance facility. The Banks have conducted extensive due diligence and this process is nearing completion. Following completion of due diligence, Apollo and the Banks will be in a position to proceed with credit committee approvals and negotiation of definitive documents.

During the third quarter 2008, approximately 2,454,000 tons were mined, of which 1,824,000 tons were ore. The mill processed 1,221,000 tons of ore at an average throughput of 13,300 tons per day for the quarter. As at September 30, 2008, the ore stockpile sitting alongside the mill was 1,982,000 tons. Payable production in the third quarter was 14,600 ounces of gold, 144,000 ounces of silver, 4,586,000 pounds of lead and 9,623,000 pounds of zinc. Apollo's share of this production is 50%.

Grade: Recoveries:
Gold ounces per ton 0.0154 Gold 81.20% Silver ounces per ton 0.1811 Silver 82.80% Lead % 0.2292 Lead 83.98% Zinc % 0.6261 Zinc 82.48%

Total cash costs for the third quarter 2008 on a by-product basis were $471 per ounce of gold and on a co-product basis they were $666 per ounce of gold, $9.40 per ounce of silver, $0.69 per lb of lead and $0.59 per lb of zinc. For the third quarter 2008, the higher cash costs per ounce of gold on a by-product basis compared to the third quarter 2007 are the result of (1) 37% higher direct costs related to higher cost of consumables such as diesel fuel and (2) a 19% reduction in by-product credits due to lower zinc and lead prices.

During the third quarter 2008, the joint venture spent $0.1 million on capital expenditures. Apollo's share of these capital expenditures is 50%. Also in the third quarter 2008, the joint venture distributed $3.0 million to its principals, 54% of which went to Apollo and 46% of which went to Elkhorn.

See Note 18 (Subsequent Events) for a discussion of the cessation of mining activities at Montana Tunnels in November 2008.

Black Fox

Reserves - On April 14, 2008, we filed a Canadian National Instrument, NI 43-101 Technical Report, which was prepared to a bankable standard ("bankable feasibility study"). A bankable feasibility study is a comprehensive analysis of a project's economics (+/- 15% precision) used by the banking industry for financing purposes. The table below summarizes the Black Fox Total Mineral Reserve. The mineral reserves shown in the table below were calculated based on a gold price of $650 per ounce.

Black Fox Probable Reserve Statement as of February 29, 2008

                        Cutoff Grade Tonnes Grade  Contained
Mining Method              Au g/t    (000)  Au g/t Au Ounces
Open Pit                    1.0      4,350   5.2    730,000
Underground                 3.0      2,110   8.8    600,000

Total Probable Reserves                            1,330,000

Purchase of the Stock Mill Complex - On July 28, 2008, the Company completed the acquisition of the Stock Mill Complex from St Andrew, a significant shareholder of the Company, for a purchase price of $19.6 million cash (Cdn$20.1 million). The Stock Mill Complex, which we now refer to as the Black Fox mill complex, includes a mill and related land, equipment, infrastructure, laboratory and tailings facilities, located near Timmins, Ontario. The Company intends to use the Black Fox mill complex to process ore mined at the Black Fox mine, which is approximately 30 kilometers from the Black Fox mill complex. In connection with the acquisition of the Black Fox mill complex, Apollo agreed to assume certain contractual liabilities of St Andrew and environmental liabilities relating to events after the closing of the acquisition and is required to refund St Andrew its bonding commitment at the Black Fox mill complex in the amount of approximately $1.1 million (Cdn$1.2 million) by July 28, 2009. As of July 28 and September 30, 2008, St Andrew held approximately 30.6 million and 29.5 million common shares of the Company, respectively (14.0% and 13.4% of the outstanding common shares, respectively).

On October 23, 2008, we commenced removal of the glacial till material which overlays the open pit. This removal is scheduled to be completed in May 2009. Apollo has placed orders for the long lead time mining equipment, and all items required to commence mining are scheduled to be on site in January and February 2009. We expect that, by the second quarter of 2009, the open pit will produce 1,500 tonnes of ore per day, which will be sufficient to feed the mill. Based on this assessment, we have decided to defer underground mining to periods after 2009.

Black Fox Mill Complex - We recently reviewed the costs associated with upgrading the Black Fox mill complex to process 1,500 tonnes of ore per day (1,650 tonnes at a 90% availability). It is estimated that the cost of the upgrade would be $17.0 million, for which we would need to obtain financing, and that the upgrade could be completed by April 2009.

Apollo is currently in the process of placing orders for the long lead time items required for mill upgrade, with the key item being a new 12ft x 18ft 1200 kw ball mill to enhance the grinding circuit, which is scheduled to arrive in March 2009.

Commitments - As of September 30, 2008, we had committed to lease $8.7 million of mining equipment and expend an additional $1.1 million for improvements to the Black Fox mill complex. As of November 10, 2008, we had (1) committed to lease an additional $4.8 million of mining equipment for use at Black Fox, (2) contracted the pre-strip of alluvial waste for $12.2 million, (3) contracted the construction of waste water ponds for $3.7 million and (4) made additional commitments to expend $1.4 million for improvements to the mill.

Huizopa Project

On August 14, 2008, we announced the results of the core drilling program on the Puma de Oro Exploration target. Twenty five NQ core holes were drilled on a north-trending zone targeted for drilling based on Apollo's geochemical sampling and geologic mapping. Anomalous gold and silver was found in twenty of the holes with six of the twenty holes having significant gold and silver values.

The next drill program is scheduled for 2009 and, in the meantime, we are working on completing a Canadian National Instrument 43-101 for the Huizopa property.

METAL SALES & METAL PRICE AVERAGES

The table below summarizes our share of metal sales of gold, silver, lead and
zinc of the Montana Tunnels mine, as well as average metal prices and other key
statistics, for each period indicated:

                                       37
--------------------------------------------------------------------------------

                                        Three months ended September 30,         Nine months ended September 30,
                                           2008                 2007                 2008                 2007
Metal sales:
Gold (ounces)                                    7,319                4,755               18,864              11,399
Silver (ounces)                                 72,202               79,048              181,797             189,504
Lead (pounds)                                2,293,152            1,685,385            5,661,713           4,081,191
Zinc (pounds)                                4,811,612            3,305,620           13,892,310           7,718,926
Total revenue ($millions)            $            12.8    $            11.9   $             38.7    $           27.6
Total cash and production costs on
a by-product basis:
Total cash costs per ounce of gold   $             471    $            (215 ) $              367    $           (231 )
Total production costs per ounce
of gold                              $             523    $            (141 ) $              424    $           (160 )
Total cash costs on a co-product
basis:
Total cash costs per ounce of gold   $             666    $             459   $              668    $            429
Total cash costs per ounce of
silver                               $            9.40    $            8.15   $            11.73    $           8.15
Total cash costs per pound of lead   $            0.69    $            1.12   $             0.79    $           0.86
Total cash costs per pound of zinc   $            0.59    $            0.78   $             0.67    $           0.92
Average metal prices:
Gold - London bullion mkt.
($/ounce)                            $             870    $             681   $              897    $            666
Silver - London bullion mkt.
($/ounce)                            $           15.03    $           12.70   $            16.63    $          13.12
Lead - London Metal Exchange
($/pound)                            $            0.87    $            1.43   $             1.08    $           1.07
Zinc - London Metal Exchange
($/pound)                            $            0.80    $            1.46   $             0.95    $           1.56

RECONCILIATION OF CASH OPERATING AND TOTAL PRODUCTION COSTS PER OUNCE

                                                                               Nine months
                                                                                  ended
                                          Three months ended Sept. 30,          Sept. 30,
($ in thousands, except per ounce
of gold data)                           2008           2007          2008        2007 (1)
Gold ounces sold                           7,319          4,755       18,864         11,399
Direct operating costs               $     9,977    $     7,283   $   28,503   $     17,031
Less: Mining taxes, royalty
expenses                                     377            327        1,165            763
By-product credits                         6,531          8,305       21,582         19,668
Cash operating cost                        3,069         (1,349 )      5,756         (3,400 )
Cash operating cost per ounce of
gold                                 $       419    $      (284 ) $      305   $       (298 )
Cash operating costs                       3,069         (1,349 )      5,756         (3,400 )
Add: Mining taxes, royalty
expenses                                     377            327        1,165            763
Total cash costs                           3,446         (1,022 )      6,921         (2,637 )
Total cash cost per ounce of gold    $       471    $      (215 ) $      367   $       (231 )
Total cash costs                           3,446         (1,022 )      6,921         (2,637 )
Add: Depreciation & amortization             381            351        1,086            817
Total production costs                     3,827           (671 )      8,007         (1,820 )
Total production cost per ounce of
gold                                 $       523    $      (141 ) $      424   $       (160 )

(1) Metal sales, revenue and costs for the first nine months of 2007 does not include January and February as milling was restarted on March 1, 2007 after being shut down since May 12, 2006.

MATERIAL CHANGES IN RESULTS OF OPERATIONS

Three Months Ended September 30, 2008 Compared to the Three Months Ended September 30, 2007

Revenue from the Sale of Minerals.

Revenue for the three months ended September 30, 2008 increased 8% to $12.8 million from $11.9 million for the same period in 2007. The increase in revenue is mainly due to the higher gold prices and a 54% increase in gold production for the quarter as compared to the same period last year. Increased gold revenues were partially offset by significantly lower prices for zinc and lead.

Direct Operating Costs. Direct operating costs, which include mining costs, processing costs and smelting and refining charges, for the three months ended September 30, 2008 increased 37% to $10.0 million from $7.3 million for the three months ended September 30, 2007. This increase is a result of 21% higher treatment charges and increased cost per ton of mining which increased 70% from $1.86 per ton up to $3.16 per ton as a direct result of increased costs of consumables such as diesel fuel.

Depreciation and Amortization. Depreciation and amortization expenses were $0.4 million and $0.4 million for the three months ended September 30, 2008 and 2007, respectively.

General and Administrative Expenses. General and administrative expenses were $0.8 million and $0.9 million for the three months ended September 30, 2008 and 2007, respectively.

Accretion Expense - Accrued Site Closure Costs. Accrued accretion expense was $0.2 million for the three months ended September 30, 2008 compared to $0.1 million for the same period in 2007.

Amortization of Deferred Gain. Amortization of the deferred gain, relating to the transfer of assets and liabilities to the Montana Tunnels joint venture, was $0.6 million for the three months ended September 30, 2008 compared to $0.3 million for the three months ended September 30, 2007.

Exploration and Business Development Expense. Expenses for exploration and development were $0.8 million and $0.3 million for the three months ended September 30, 2008 and 2007, respectively. The expenses for the third quarter of 2008 consisted of exploration related expenses at our Huizopa Project of $0.6 million and exploration expenses of $0.2 million, mainly drilling expenses, at an adjacent property to the Black Fox Project, known as Grey Fox. The increase in the costs for the third quarter 2008 was mainly a result of the drilling campaign undertaken at the Huizopa project.

Total Operating Expenses. As a result of these expense components, our total operating expenses increased 34% to $11.6 million for the three months ended September 30, 2008, from $8.6 million for the three months ended September 30, 2007.

Other Income (Expenses).

Interest Income and Interest Expense. We realized interest income of $0.1 million and incurred interest expense of $1.1 million during the three months ended September 30, 2008 compared to $0.1 million in interest income and $1.6 million in interest expense during the three months ended September 30, 2007. The decrease in interest expense is primarily the result of retiring the Series 2004-B convertible debentures in December 2007.

Net Income.

For the three months ended September 30, 2008, we recorded net income of $0.5 million, or $0.00 per share, as compared to net income of $2.1 million, or $0.01 per share, for the three months ended September 30, 2007.

Nine Months Ended September 30, 2008 Compared to the Nine Months Ended September 30, 2007

Revenue from the Sale of Minerals.

Revenue for the nine months ended September 30, 2008 increased 40% to $38.7 million from $27.6 million for the same period in 2007. The increase in revenue is due to higher gold prices in 2008 and a 65% increase in gold production. Some of the increase in production is attributable to the fact that for 2008 we have nine months of milling (less the three-week period during which the mill was shut down to repair the ball mill in the second quarter), compared to seven months of milling in 2007 (milling resumed at Montana Tunnels on March 1, 2007).

Direct Operating Costs. Direct operating costs, which includes mining costs, processing costs and smelting and refining charges, for the nine months ended September 30, 2008 increased 56% to $28.5 million from $18.3 million for the nine months ended September 30, 2007. This increase is a result of 62% higher treatment charges and increased cost per ton of mining which increased 64% from $1.93 per ton up to $3.17 per ton as a direct result of increased costs of consumables such as diesel fuel.

Depreciation and Amortization. Depreciation and amortization expenses were $1.2 million and $1.0 million for the nine months ended September 30, 2008 and 2007, respectively.

General and Administrative Expenses. General and administrative expenses were $2.9 million and $2.9 million for the nine months ended September 30, 2008 and 2007, respectively.

Accretion Expense - Accrued Site Closure Costs. Accrued accretion expense was $0.5 million for the nine months ended September 30, 2008 compared to $0.4 million for the same period in 2007.

Amortization of Deferred Gain. Amortization of the deferred gain, relating to the transfer of assets and liabilities to the Montana Tunnels joint venture, was $1.5 million for the nine months ended September 30, 2008 and $0.8 million for the nine months ended September 30, 2007.

Exploration and Business Development Expense. Expenses for exploration and development, consisting of exploration related expenses at our exploration properties, totaled $2.5 million and $2.0 million for the nine months ended September 30, 2008 and 2007, respectively. The increase is due primarily to increased exploration activity at the Huizopa property.

Total Operating Expenses. As a result of these expense components, our total operating expenses increased 43% to $34.1 million for the nine months ended September 30, 2008, compared to $23.8 million for the six months ended September 30, 2007.

Other Income (Expenses).

Interest Income and Interest Expense. We realized interest income of $0.3 million and incurred interest expense of $3.3 million during the nine months ended September 30, 2008 compared to $0.5 million in interest income and $4.2 million in interest expense during the nine months ended September 30, 2007. The decrease in interest expense is primarily the result of retiring the Series 2004-B convertible debentures in December 2007.

Financing Costs. There have been $0.1 million of financing costs during the nine months ended September 30, 2008. Financing costs of $0.5 million for the nine months ended September 30, 2007 were in connection with the convertible debentures issued in February 2007.

Net Income (Loss).

For the nine months ended September 30, 2008, we recorded net income of $2.9 million, or $0.02 per share, as compared to a net loss of $0.1 million, or $0.00 per share, for the nine months ended September 30, 2007.

MATERIAL CHANGES IN LIQUIDITY AND CAPITAL RESOURCES

To date, we have funded our operations primarily through issuances of debt and equity securities and cash generated by the Montana Tunnels joint venture. At September 30, 2008, we had cash of $7.6 million, compared to cash of $4.9 million at December 31, 2007. The increase in cash since December 31, 2007 is primarily the result of financing cash inflows of $26.3 million and operating cash inflows of $3.8 million, partially offset by investing cash out flows of $26.9 million and a $0.4 million reduction in cash due to the effect of exchange rate changes on cash.

During the nine months ended September 30, 2008, net cash used in investing activities totaled $26.9 million. Capital expenditures for property, plant and equipment of $26.5 million include $26.2 million for the further development of the Black Fox Project and $0.3 million spent at Montana Tunnels. Included in the Black Fox capital expenditures is $20.6 million for the purchase of the Black Fox mill complex. Other investing activities include cash outflows of $2.9 million for the funding of the Montana Tunnels reclamation liability and $1.0 million for additional bonding for the future reclamation at Black Fox. Additionally, there were cash inflows of $3.5 million from settlement of lead and zinc derivative contracts.

During the third quarter of 2008, Apollo spent $23.7 million on the development of the Black Fox Project including $20.6 million on the purchase of the Black Fox mill complex and $1.0 million on additional bonding. Current estimates are that an additional $50 million of capital, including $6.5 million in additional bonding, is required to complete the project. As of the end the third quarter of 2008 Apollo had capital commitments associated with Black Fox amounting to $9.8 million and, subsequent to September 30, 2008, we have made commitments for an addition $22.3 million in capital expenditures associated with the development of Black Fox. At Montana Tunnels, mining of the L Pit is scheduled to cease at the end of November 2008 and milling of stockpiled ore is scheduled to continue into the second quarter of 2009 and at current prices will produce a positive cash flow for the benefit of Apollo until the cessation of milling. There are no capital commitments at Montana Tunnels within the net twelve months unless Apollo and its JV partner, Elkhorn, decide to develop the M Pit project, a decision for which has not been made. If no decision on the M Pit has been made before we complete milling stockpiled ore in the second quarter 2009, then the mill will be placed on care and maintenance. The current estimate of the reclamation liability for the L Pit and the Montana Tunnels site is $18.5 million which as at the date this report was prepared is covered by $16.0 million in cash in a trust account plus collateralized land valued at $3.2 million (Apollo's share of the liability, cash in trust and collateralized land is 50% of these amounts). Therefore, in summary, no further capital expenditures at Montana Tunnels will be required unless the M Pit is developed.

Management has performed a limited review to assess whether there are facts and circumstances that indicate potential impairment of the Montana Tunnels joint venture. Management has considered the expected future gold, silver, lead and zinc prices and cost structures, and concluded that there was no indication of a potential impairment for the Montana Tunnels joint venture as of September 30, 2008. However, the ongoing challenging conditions in the financial markets, the commodity markets, and the related uncertainty about the future business environment make an assessment of the mid-to-long term performance by using estimates and assumptions extremely difficult. The Company's annual mineral property impairment test will be performed for the year ending December 31, 2008, as part of the review of the reserves, resources and status of the Montana Tunnels joint venture and financial plans to be determined. The continuation of the global liquidity crisis, the commodity market volatility and its wider . . .