Apogee stock lifted as its Bolivia silver deposit more than doubles

“We are particularly pleased with the significant increase in silver ounces in the indicated category, upon which we are able to continue with the feasibility work for a mine that is now likely to be substantially larger than what has been previously projected,” Chief Executive Neil Ringdahl said in Monday’s statement.

Apogee said the Pulacayo-Paca mine would “now likely to be substantially larger than what has been previously projected in studies.” The project includes the property that covered the second-largest silver mine in the history of Bolivia with over 600 million ounces of past production. The company last month also purchased the remainder of a Chile project.

Press Release:

ORONTO, ONTARIO–(Marketwire – Oct. 19, 2011) – Apogee Silver Ltd. (“Apogee” or the “Company“) (TSX VENTURE:APE) is pleased to report the results of an independent resource estimate on the Pulacayo Deposit located in southwestern Bolivia (Figure 1), which includes 29.34 million ounces of silver in the Indicated category plus 26.24 million ounces of silver in the Inferred category. This represents an increase of silver in the Indicated resource category of 133% or 16.77 million ounces and an increase of silver in the Inferred resource category of 38% or 7.21 million ounces from the mineral resource estimate which was undertaken as a part of the Preliminary Assessment of the Pulacayo Project and supported in the NI 43-101 Technical Report dated June 25, 2010. The resource estimate also includes 268.05 million pounds of zinc in the Indicated category plus 247.35 million pounds of zinc in the Inferred category, and 119.57 million pounds of lead in the Indicated category plus 99.18 million pounds of lead in the Inferred category. Table 1 below summarizes the resource classification, tonnages and grades.

Neil Ringdahl, Chief Executive Officer, commented that “The new resource estimate strongly demonstrates the additional blue-sky potential of this polymetallic deposit, and to this end we plan to continue our aggressive exploration and development efforts. We are particularly pleased with the significant increase in silver ounces in the Indicated category, upon which we are able to continue with the feasibility work for a mine that is now likely to be substantially larger than what has been previously projected in studies.” He added that “The oxide drilling and trenching program has yielded encouraging results. These will be included in a resource update planned for the first half of 2012 that includes open pit resources as well. Together with the information obtained from our trial underground mining program and further results from ongoing drilling campaigns, we will be well positioned to conclude the feasibility study for a new multi-million ounce mine.”

Table 1: Summary of Mineral Resources, Pulacayo Deposits effective October 18, 2011
Pulacayo Underground Mineral Resources – Inverse Distance Squared Model
All blocks within $40 NSR Domain and ≥ $40 NSR cutoff
Class		Tonnes		Ag g/t		Pb %		Zn %		Ag Million oz.		Pb Million lbs.		Zn Million lbs.
Indicated		5,960,000		153.14		0.91		2.04		29.34		119.57		268.05
Inferred		5,420,000		150.61		0.83		2.07		26.24		99.18		247.35

NOTES
	(1)	Due to the polymetallic nature of the deposit the cut off is determined using a US$ Net Smelter Return (NSR) calculation which is normal industry practice; NSR calculation details appear below under a separate heading
	(2)	Tonnages have been rounded to the nearest 10,000
	(3)	Mineral resources that are not mineral reserves do not have demonstrated economic viability. The estimate of mineral resources may be materially affected by environmental, permitting, legal, title, taxation, sociopolitical, marketing, or other relevant issues.

The Pulacayo Deposit was the second largest silver mine in the history of Bolivia with over 600 million ounces past production of silver. The extent of the known mineralization at Pulacayo is based on the extent of the known workings that occur over a strike length of approximately 2.7 kilometers and to a vertical depth from surface of approximately 1 kilometer. To date the company has systematically drilled along approximately 1.3 kilometers of the known strike extent and to a vertical depth of approximately 550 meters from surface. (Figure 2). The Pulacayo Deposit remains open for further extension and Apogee is continuing to evaluate the deposit with two drill rigs working on surface and two rigs working from underground.

Resource Estimate Details:

This Mineral Resource Estimation was completed by Mercator Geological Services Limited (Mercator) of Dartmouth, Nova Scotia in accordance with Canadian Securities Administrators National Instrument (“NI 43-101”) and is based on CIM standards. The effective date of this mineral resource estimate is October 18, 2011.

The estimate is based on validated results of 59,352 meters of diamond drilling from 174 surface drill holes and 41 underground drill holes carried out by Apogee Silver through various drill programs between 2006 and 2011.

Modeling was performed using Gemcom Surpac^® 6.2.1 modeling software with silver, lead and zinc grades estimated by inverse distance squared (ID2) interpolation from 1.0 meter down hole assay composites. Block size was 5 meters (x) by 3 meters (y) by 3 meters (z) with no sub- blocking. Block model results were checked using ordinary Kriging and Nearest Neighbour interpolation methods.

The polymetallic nature of the mineralization was evaluated by a Net Smelter Return (NSR) value considering an underground mining scenario below the oxide surface within a minimum operating cost of $40NSR/t as identified in the Preliminary Assessment of the Pulacayo Deposit by Micon International Limited and supported in the NI 43-101 Technical Report dated June 25 2010 and filed under the company’s profile on SEDAR.

A peripheral constraining $40NSR solid model was created from 50 meter spaced interpreted sections of assay sample NSR values. NSR values were determined from a calculator developed by John Starkey, P. Eng., of Starkey & Associates Inc., Consulting Metallurgical Engineers. The modeling used a 24 month trailing average silver price and a 27 month forward seller contract price for both lead and zinc as of August 31 2011, which correspond to prices of $24.87USD/oz silver, $1.19USD/lb lead, and $1.09USD/lb zinc respectively. The $40NSR solid model has a 25 to 30 meter average thickness with a 1,100 meter strike length oriented at 280° and a 425 meter average sub-vertical dip extent. This reflects the orientation and geometry of the principal mineralized structure “Veta Tajo” and the associated secondary structures.

Grade interpolation was peripherally constrained by a $40NSR shell wireframe and carried out using multiple independent search ellipsoid passes for silver, lead and zinc. Contributing silver values were capped at 1,500 g/t and interpolated using an ellipsoid oriented at 280° with a 30° major axis plunge and 80° N dip, contributing lead values were capped at 13.5 % and interpolated using an ellipsoid oriented at 280° with a 45° major axis plunge and a 75° N dip, and contributing zinc values were capped at 13.5 % and interpolated using an ellipsoid oriented at 280° with a 45° major axis plunge and an 80° N dip. A 60 meter ellipsoid major axis, 30 meter semi-major axis and 5 meter minor axis were applied for all primary interpolation passes, with secondary and tertiary passes applied at 2 times and 3 times these ranges to completely fill the peripheral wireframe model.

A specific gravity model was interpolated by ID2 methodology from 1.0 meter down hole specific gravity composites using an ellipsoid oriented at 280° with a 45° major axis plunge, 80° N dip and the ranges specified above.

A solid model of historic underground mining and stoping was used to remove previously mined blocks and an interpolated 5 meter marginal envelope to historic workings was applied to assign intersecting resource blocks to the Inferred category. This reflects uncertainty in local accuracy of the underground solid model. Indicated resources occur outside this envelop and have an interpolated grade for each metal derived from primary interpolation ellipsoid passes and have at least 2 or more contributing drill holes within at least one of the passes. All other interpolated blocks have been categorized as Inferred resource blocks. (Figure 3)

A complete Technical Report on the Pulacayo Deposit describing in detail, among other things, the resource estimate, QA/QC, database validation and geologic model, will be filed on SEDAR within the required 45 day period.

Independent Qualified Persons:

Peter Webster P. Geo. and Michael Cullen M.Sc., P. Geo. of Mercator Geological Services Limited are the Qualified Persons, as defined in NI 43-101 who are responsible for the Mineral Resources Estimate.

John Starkey P. Eng., President of Starkey & Associates Inc., Consulting Metallurgical Engineers is acting as the Qualified Person responsible for the NSR calculations.

Net Smelter Return

Net Smelter Return is the calculated potential revenue that is returned from the smelter for the sale of concentrate products. The NSR method recognizes that more than one metal, (i.e. Ag, Pb, Zn, can contribute to a potential revenue stream. It proceeds to derive a potential revenue value that accounts for such items as recovery to concentrate, metal prices, payable fractions of the metals treatment, and refining charges, penalties, freight and handling. By this means in situ grades can be converted to potential revenues, with the cut-off grade being the estimated cost of all activities related to mining, mineral processing and general administration.

Quality Control

Apogee Silver employs a QA/QC protocol on all aspects of its drill core processing and analytical procedures. Core samples are sawn and one half of the NQ and/or HQ core is returned to the core box for future reference with the other half sent for analysis. Sample preparation is completed at the ALS Chemex preparation laboratory in Oruro, Bolivia and analysis occurs at the ALS Chemex laboratory in Lima, Peru.

The Company’s quality control protocol includes the insertion of certified geological standards that have been purchased from Canadian Resource Laboratories of Langley, British Columbia. Standards are inserted at a frequency of 1 in every 20 samples. The Company also inserts geological blanks that are blind to the laboratory at a frequency of 1 in every 20 samples. Duplicates are taken at every sub-sampling stage in the preparation process. Field duplicates are taken at a frequency of 1 every 50 samples. Sample preparation duplicates are taken at the crushing and pulverizing stages at a frequency of 1 in every 20 samples. Cross-check analysis on the master pulps is undertaken at a second laboratory for 5% of all samples. The Company uses SGS Mineral Services in Lima, Peru for the second lab cross check analysis.

The Quality Control and all aspects of the exploration program are supervised by Apogee Silver Limited’s Exploration Manager Mr. Hernan Uribe, who holds a Masters of Applied Science in Mineral Exploration from the Imperial College of Science And Technology, Royal School of Mines, London, England under the supervision of Mr. Chris Collins, P.Geo. and President of Apogee.

The scientific and technical information presented in this press release has been reviewed and approved by Chris Collins, P. Geo., who is the President of Apogee Silver and a qualified person as defined by NI 43-101.

For more detailed project information please refer to Apogee’s web site at www.apogeesilver.com.

About Apogee Silver Ltd.

Apogee Silver Ltd. is a mineral exploration and development stage company listed on the TSX Venture Exchange under the symbol APE. Apogee targets advanced silver-zinc-lead projects in South America that demonstrate potential to be developed to production. Currently its projects are located in the historic silver producing regions of southwest Bolivia and northern Chile.

Its most advanced project is the 100% owned Pulacayo-Paca project in Bolivia. This project includes the property that covered the second-largest silver mine in the history of Bolivia with over 600 million ounces of past production.