Balmoral to assign 22 % interest in an Kazakh oil property

Apolo Gold, announces it has signed a Letter of Intent with the Balmoral Companies of Dublin, Ohio, wherein Balmoral will assign its 22 % interest in an oil property to be drilled in Kazakhstan.
Balmoral previously entered into an Agreement dated September 14, 2004 with Profit Limited Company in Almaty, Kazakhstan, wherein Balmoral Companies are entitled to 22 % interest in the oil property. Balmoral Companies will now unconditionally assign its interest in the Agreement dated September 14, 2004 to Apolo Gold.

The oil property interest being assigned is known as "2D in Bozingen 28. Blok" near the town of Kizilorda, which the Profit Limited Company estimated to contain over 200 mm barrels of crude oil. Under the terms of the September 14, 2004 Agreement, Balmoral has the right to assign its interest in the oil deposit and has accordingly executed an Absolute Assignment of this Agreement to Apolo Gold. In return for this Absolute Assignment, Apolo will issue to Balmoral Companies a total of 1,500,000 restricted common shares which are subject to sale under rule 144.
As part of the assignment of the oil property, Balmoral has agreed to assist in funding for the development of the oil property by arranging for the sale of $ 20,000,000 of preferred and common shares of Apolo Gold. It is expected that the financing will occur in Asia.

After drilling and related title costs, it is expected that $ 4,500,000 will remain in Apolo for working capital purposes. Apolo will seek shareholder approval for the creation and issuance of up to 25,000,000 -- 6 % redeemable preferred shares. It is proposed that 5,000,000 redeemable preferred shares be issued at $ 3.90 per share and 5,000,000 restricted common shares at $ 0.10 per share for a total of $ 20,000,000. Financing is expected to be completed by April 30, 2005. The 6 % preferred shares will not be marketable nor will they be convertible.
Once Balmoral has successfully completed the financing of preferred and common shares for $ 20,000,000, Apolowill issue to Balmoral Companies an additional 8,000,000 in restricted common shares of its stock subject to sale under rule 144. Balmoral will also assist in obtaining a significant gold property with drill proven and probable minable reserves. Negotiations are currently underway regarding this aspect of the agreement with Balmoral and Profit Limited Company and this is expected to be completed later this year.

Balmoral is a consulting company in Dublin, Ohio, and incorporated in 1986 that focuses on oil and gas and natural resource opportunities throughout the world. They presently have 20 agents working in 11 different countries and have been successful in completing in excess of 100 transactions since incorporation.
Most of its activities occur in Eastern Europe, Asia and portions of North Africa. Once the proposed transactions are completed with Apolo, Balmoral Companies will nominate 2 directors to the board of directors of Apolo Gold. Work continues on the NUP property in Sumatra and the companyplans to update shareholders later on its work plan for 2005.