EXHIBIT 10.1

CREDIT AGREEMENT

THIS AGREEMENT dated for reference March 30, 2009 is between:

 

IONIC CAPITAL CORP., a British Columbia company having an office at Suite 1028,
550 Burrard Street, Vancouver, British Columbia V6C 2B5

 

(the “Lender”)

AND:

ALLIED NEVADA GOLD CORP., a Delaware corporation, having its chief executive
office at 9600 Prototype Court, Reno, Nevada 89521

 

(“Allied Nevada”)

AND:

HYCROFT RESOURCES & DEVELOPMENT, INC., a Nevada corporation, having its chief
executive office at 9604 Prototype Court, Reno, Nevada 89521

 

(“Hycroft”)

(Allied Nevada and Hycroft are collectively referred to herein as the
“Borrowers”)

 

BACKGROUND

A.        The Lender has agreed to lend to the Borrowers and the Borrowers have
agreed to borrow from the Lender the aggregate principal amount of up to
CAD$8,000,000, on the terms and subject to the conditions of this Agreement.

AGREEMENTS

For good and valuable consideration, the receipt and sufficiency of which each
party acknowledges, the parties agree as follows:

1.

Definitions. In this Agreement:

 

(a)

“Advance” means the advance of the Facility hereunder;

 

(b)

“Allied Nevada” Allied Nevada Gold Corp., a Delaware corporation;

 

(c)

“Borrowers” means collectively, Allied Nevada and Hycroft and “Borrower” means
either one of them;

 

(d)

“Business Day” means a day which is not a Saturday, Sunday or a statutory
holiday in the Province of British Columbia or the State of Nevada;

 

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(e)

“Collateral” has the meaning set forth in subparagraph 7(a) below;

 

(f)

“control” has the meaning set forth in subparagraph 12(n) below;

 

(g)

“Equipment” means the equipment which has been acquired by Hycroft, as described
in Schedule “C” attached hereto;

 

(h)

“Event of Default” has the meaning set forth in paragraph 12 below;

 

(i)

“Exchange” means The Toronto Stock Exchange;

 

(j)

“Facility” means the $8,000,000 credit facility granted by the Lender to the
Borrowers pursuant to this Agreement;

 

(k)

“Final Approval” has the meaning set forth in subparagraph 9(j) below;

 

(l)

“Financial Statements” has the meaning set forth in subparagraph 9(g) below;

 

(m)

“Hycroft” means Hycroft Resources & Development, Inc., a Nevada corporation;

 

(n)

“Hycroft Mine” means the mining properties and related interests comprising the
Hycroft open pit mine located near Winnemucca, Nevada operated by Hycroft;

 

(o)

“Indebtedness” means:

 

(i)

all indebtedness for borrowed money and all obligations evidenced by notes,
bonds, debentures or other similar instruments;

 

(ii)

all obligations, contingent or otherwise, in respect of letters of credit
(whether or not drawn) or bankers acceptances or similar facilities;

 

(iii)

all obligations to pay the deferred purchase price of property or services
(other than current trade payables that are incurred in the ordinary course of
business and are not overdue for a period of more than 90 days;

 

(iv)

all indebtedness created or arising under any conditional sale or other title
retention agreement with respect to property acquired;

 

(v)

all obligations which would be required to be disclosed on the Borrower’s
balance sheet as a liability in accordance with US GAAP and which would be
payable more than 12 months from the date of creation thereof (other than
reserves for taxes and for contingent obligations); and

 

(vi)

all obligations of the kind referred to above in this subparagraph (o) secured
by (or for which the holder of such obligation has an existing right, contingent
or otherwise, to be secured by) any Lien on property (including accounts and
contract rights), whether or not either Borrower has become liable for the
payment of such obligation;

 

(p)

“Lender” means Ionic Capital Corp., a British Columbia company;

 

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(q)

“Liens” means any mortgage, charge, lien, hypothec or encumbrance, whether fixed
or floating on, or any security interest in, any property, whether real,
personal or mixed, tangible or intangible, any pledge or hypothecation of any
property, any royalty payment obligation, any deposit arrangement, priority,
conditional sale agreement, other title retention agreement or equipment trust,
capital lease or other security arrangement of any kind;

 

(r)

“Note” has the meaning set forth in paragraph 8(a)(i) below;

 

(s)

“Permitted Disposition” has the meaning set forth in paragraph 4(b)(i) below;

 

(t)

“Permitted Encumbrances” means the Liens described in Schedule “D” hereto;

 

(u)

“Public Record” has the meaning set forth in paragraph 9(i) below;

 

(v)

“Outstanding Balance” has the meaning set forth in paragraph 4(a) below;

 

(w)

“Retainer” has the meaning set forth in paragraph 14 below;

 

(x)

“Secondary Mining Properties” means any mining claims, patented or unpatented,
leases, permits, easements, licences, subleases, rights of way or other rights
to carry out or conduct mining exploration or operations now held by any of
Allied Nevada Gold Holdings LLC, Allied VNC Inc. or Victory Exploration Inc.,
which for greater certainty, does not include the Hycroft Mine;

 

(y)

“Structuring Fee” has the meaning set forth in paragraph 6 below;

 

(z)

“Subsidiaries” means, with respect to the Borrowers, any corporation of which at
least a majority of the outstanding shares to which there is attached voting
power under ordinary circumstances to elect a majority of the board of directors
of such corporation, shall at the relevant time be owned directly or indirectly
by the Borrowers, one or more Subsidiaries of the Borrowers, or any combination
thereof, and for greater certainty, shall include those corporations listed on
Schedule “B” hereto, and “Subsidiary” shall mean any one of them;

 

(aa)

“Term Sheet” means the Term Sheet for Credit Facility dated March 6, 2009,
between Allied Nevada and the Lender; and

 

(bb)

“US GAAP” has the meaning set forth in paragraph 9(g) below.

2.

Facility Advance. Subject to and upon the fulfilment of the conditions precedent
contained in paragraph 8 of this Agreement, as the case may be, the Lender will
advance the principal amount of the Facility to the Borrowers or as the
Borrowers may otherwise direct.

3.

Use of Proceeds. The Borrowers covenant and agree with the Lender that the
Facility proceeds will be used by Hycroft for its general working capital
purposes, and for no other purpose whatsoever without the express written
consent of the Lender.

 

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4.

Term and Prepayment.

 

(a)

Subject to the rights of the Lender under Section 13 to accelerate payment of
all monies owing hereunder, the principal amount of the Advance, together with
all accrued but unpaid interest, fees and other costs or charges payable
hereunder from time to time (collectively the “Outstanding Balance”), will be
immediately due and payable by the Borrowers to the Lender on September 30,
2010.

 

(b)

If after the Advance of the Facility, the Borrowers or any of their respective
Subsidiaries:

 

(i)

sell or otherwise dispose of any assets outside of the ordinary course of
business, except for the transfer by any of Allied Nevada Gold Holdings LLC,
Allied VNC Inc. or Victory Exploration Inc. of any interest in any Secondary
Mining Properties to an arms length third party for good and valuable
consideration at fair market value by way of joint venture, sale or option
(each, a “Permitted Disposition”); or

 

(ii)

close one or more equity or debt financings (which for greater certainty shall
not include the exercise of any options or warrants validly issued by either of
the Borrowers and outstanding as at the date of this Agreement),

the Borrowers will pay or cause to be paid to the Lender all proceeds from such
sale, disposition or financing, net of reasonable selling or financing costs, up
to the full amount of the Outstanding Balance, to be applied on account of the
Facility.

 

(c)

The Borrowers may prepay the Facility in whole at any time before maturity,
without penalty, provided that such prepayment occurs on the last Business Day
of any calendar month during the term of the Facility and further provided that
the Borrowers have delivered to the Lender written notice of its intention to
prepay the Facility not less than two (2) months prior to such prepayment.

5.

Interest. Interest will accrue on the Outstanding Balance from the date of
Advance at the rate of fifteen percent (15%) per annum, calculated daily and
compounded monthly (effective annual rate of 16.08%), and be payable by the
Borrowers to the Lender monthly on the last Business Day of every month, as well
as after maturity, default and judgment.

6.

Structuring Fee. In consideration for the Lender entering into this Agreement,
the Borrowers shall pay to the Lender a non-refundable $80,000 structuring fee
concurrently with the Advance (the “Structuring Fee”).

7.

Security. As security for the Facility the Borrowers will execute and deliver,
or cause to be executed and delivered, to the Lender:

 

(a)

security agreements from the Borrowers, under which the Borrowers will grant to
the Lender a first priority security interest over all of the Equipment listed
on Schedule “C” hereto, together with all spare parts, accessions and
accessories located with or installed on or affixed or attached to any of the
Equipment from time to time, all replacements, substitutions and all proceeds
thereof (collectively, the “Collateral”), subject only to Permitted
Encumbrances; and

 

(b)

such other security as the Lender may reasonably require;

 

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all in form and terms satisfactory to the Lender and its counsel (collectively,
the “Security”).

8.

Conditions Precedent to the Advance. As conditions precedent to the Advance
under the Facility by the Lender:

 

(a)

the Borrowers will have:

 

(i)

executed and delivered to the Lender a promissory note in the form attached
hereto as Schedule “B” (the “Note”) in the principal amount of the Advance;

 

(b)

the Borrowers will have:

 

(i)

executed and delivered or caused to be executed and delivered all of the
security documents referred to in paragraph 7 above and the documents,
securities and instruments referred therein and the Lender will have completed
all registrations and other filings that may be prudent or necessary to perfect
the Lender’s security therein;

 

(ii)

delivered certified copies of their directors’ resolutions authorizing the
borrowing or guaranteeing of the Facility, as the case may be, the grant of the
Security and the execution and delivery of this Agreement and all agreements,
documents and instruments referred to herein, together with officer’s
certificates, certifying certain factual matters; and

 

(iii)

caused to be executed and delivered legal opinions of the Borrowers’ United
States counsel, in form and terms satisfactory to the Lender and its counsel,
acting reasonably;

 

(c)

the representations and warranties of the Borrowers contained in paragraph 9
will be true and correct in all material respects and the Borrowers will have
complied with all covenants required to be complied with by them prior to the
Advance under the Facility by the Lender (including but not limited to the
payment of the Structuring Fee payable in connection with the Advance);

 

(d)

there shall have been no adverse material change in the business, operations,
assets or ownership of the Borrowers or any of their respective Subsidiaries,
taken as a whole, since the date of the Term Sheet;

 

(e)

the Lender will have completed and, in its sole and absolute discretion, be
satisfied with its due diligence review of the Borrowers and their respective
Subsidiaries, properties and assets, including but not limited to the Equipment
and all valuations in respect thereof;

 

(f)

the Lender will, in its sole and absolute discretion, be satisfied as to the
creditworthiness of the Borrowers and their respective Subsidiaries and the
adequacy of the collateral security contemplated herein;

 

(g)

the Lender shall have completed the syndication of the Facility; and

 

(h)

the Lender shall have received the approval of its board of directors;

 

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all in form and terms satisfactory to the Lender and its counsel. If any of the
foregoing conditions precedent are not satisfied or waived by the Lender in
writing on or before April 3, 2009, this Agreement will terminate, and the
Lender will be under no further obligation to the Borrowers in connection with
the transaction contemplated herein.

9.

Representations and Warranties. The Borrowers represent and warrant to the
Lender as follows:

 

(a)

each of the Borrowers exists as a company under the law of its jurisdiction of
incorporation, and has not discontinued or been dissolved under that Law and is
in good standing with respect to the filing of annual reports thereunder;

 

(b)

each of the Borrowers has the power and authority to (i) carry on its business
as now being conducted and is licensed or registered or otherwise qualified in
all jurisdictions where in the nature of its assets or the business transacted
makes such licensing, registration or qualification necessary, (ii) acquire,
own, hold, lease and mortgage or grant security in its assets including real
property and personal property and (iii) enter into and perform its obligations
under this Agreement and all other documents or instruments delivered hereunder;

 

(c)

this Agreement and all ancillary instruments or documents issued, executed and
delivered hereunder by each of the Borrowers, has been duly authorized by all
necessary action of each of the Borrowers and each constitutes or will
constitute a legal, valid and binding obligation of each, enforceable against
each of the Borrowers in accordance with their terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium and other similar laws
affecting the rights and remedies of creditors and to the general principles of
equity;

 

(d)

neither of the Borrowers nor any Subsidiary is in breach of or in default under
any agreement which if terminated or cancelled could reasonably be expected to
have a material adverse effect on the business, properties or assets of the
Borrowers, or any obligation in respect of borrowed money and the execution and
delivery of this Agreement and all ancillary instruments or documents issued and
delivered hereunder or thereunder, and the performance of the terms hereof and
thereof will not be, or result in, a violation or breach of, or default under
the Borrowers’ or any Subsidiary’s constating documents, any law, any judgment,
agreement or instrument to which they are a party or may be bound;

 

(e)

on closing, the Security will create a valid first registered charge, lien and
security over the Collateral, subject only to Permitted Encumbrances;

 

(f)

no litigation or administrative proceedings before any court or governmental
authority are presently ongoing, or have been threatened in writing, or to the
best of the Borrowers’ knowledge are pending, against either of the Borrowers or
any Subsidiary or any of their respective properties or assets or affecting any
of their properties or assets which could reasonably be expected to have a
material adverse effect on their business, properties or assets;

 

(g)

the audited annual consolidated financial statements for Allied Nevada for the
fiscal year ended December 31, 2008, including all notes and management’s
discussion and analysis publicly disclosed in connection therewith
(collectively, the “Financial Statements”),

 

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fairly present the financial affairs of Allied Nevada and its Subsidiaries as of
the date to which they are made, and have been prepared in accordance with
United States of America generally accepted accounting principles, consistently
applied (“US GAAP”);

 

(h)

Allied Nevada is in compliance, in all material respects, with its continuous
disclosure obligations under applicable securities laws and, without limiting
the generality of the foregoing, there has been no adverse material change
(actual, contemplated or threatened) in the property, assets, business or
operations of either of the Borrowers or any of their respective Subsidiaries,
taken as a whole, since the date of release of the Financial Statements, other
than as publicly disclosed in writing by Allied Nevada prior to the date of this
Agreement;

 

(i)

the information circulars, prospectuses, annual information forms, offering
memoranda, financial statements, material change reports and news releases filed
with the Exchange and the Securities Commissions in those jurisdictions in which
Allied Nevada is a reporting issuer on or during the twelve (12) months
preceding the date hereof (collectively, the “Public Record”), is complete and
accurate in all material respects and omits no facts, the omission of which
makes the Public Record, or any particulars therein, misleading,
misrepresentative or incorrect in any material respect;

 

(j)

the Borrowers and their respective Subsidiaries have conducted and are
conducting their respective businesses in compliance with all applicable laws,
bylaws, rules and regulations of each jurisdiction in which their businesses are
now carried on and hold all licenses, registrations, permits, consents or
qualifications (whether governmental, regulatory or otherwise) required in order
to enable their businesses to be carried on as now conducted and all such
licenses, registrations, permits, consents and qualifications are valid and
subsisting and in good standing and neither of the Borrowers nor any Subsidiary
has received any notice of proceedings relating to the revocation or
modification of any such licenses, registrations, permits, consents or
qualifications which could reasonably be expected to have any materially adverse
affect on, the condition of such businesses, operations, condition (financial or
otherwise) or income of the Borrowers or any Subsidiary;

 

(k)

no order ceasing or suspending trading in securities of either of the Borrowers
or prohibiting the sale of securities by either of the Borrowers has been issued
and no proceedings for this purpose have been instituted, are pending,
contemplated or threatened;

 

(l)

neither Canada Revenue Agency, the Internal Revenue Service, nor any other
taxation authority has asserted or, to the best of the Borrowers’ knowledge, has
threatened to assert any assessment, claim or liability for taxes due or to
become due in connection with any review or examination of the tax returns of
either of the Borrowers or any Subsidiary filed for any year which would have
material adverse effect on the assets, properties, business, results of
operations, prospects or condition (financial or otherwise) of the Borrowers or
any Subsidiary;

 

(m)

neither of the Borrowers nor any Subsidiary is a party to any material contract
other than as disclosed in the Public Record;

 

(n)

Allied Nevada is a reporting issuer under the Securities Acts of all Canadian
Provinces and the Yukon Territory and is in compliance with its material
obligations under those

 

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Acts and under the rules, regulations and policies of the Exchange, and will use
its best efforts to maintain such status, without default, from the date hereof
until repayment in full of the Facility to the Lender;

 

(o)

as at the date of this Agreement, except as disclosed in the Financial
Statements, in any filings within any governmental body or securities regulatory
authority or to the Lender in writing and as contemplated by this Agreement, no
holder of outstanding shares in the capital of the Borrowers will be entitled to
any pre-emptive or any similar rights to subscribe for any of the shares in the
capital of the Borrowers or other securities of the Borrowers, and no rights,
warrants or options to acquire, or instruments convertible into or exchangeable
for any shares in the capital of the Borrowers are outstanding;

 

(p)

except as disclosed on Schedule “B” hereto, the Borrowers have no direct or
indirect subsidiary corporations;

 

(q)

all factual information previously or contemporaneously furnished to the Lender
by or on behalf of the Borrowers for purposes of or in connection with this
Agreement or any transaction contemplated hereby, is true and accurate in every
material respect and such information is not incomplete by the omission of any
material fact necessary to make such information not misleading;

 

(r)

the Borrowers and their respective Subsidiaries are solvent and are generally
able to pay their debts as they come due and will be able to do so after giving
effect to the transactions contemplated in this Agreement; and

 

(s)

the chief executive, principal place of business and place where each of the
Borrowers and each Subsidiary keep their books and records is located at 9600
Prototype Court, Reno, Nevada 89521.

10.

Positive Covenants of the Borrowers. The Borrowers covenant and agree that so
long as any monies will be outstanding under this Agreement, they will:

 

(a)

at all times maintain their corporate existence and the corporate existence of
all of their Subsidiaries;

 

(b)

duly perform their obligations under this Agreement and all other agreements and
instruments executed and delivered hereunder or thereunder;

 

(c)

promptly pay when due all agency or finders’ fees payable in connection with the
Facility or this Agreement and indemnify and save harmless the Lender from all
claims in respect of any such fees;

 

(d)

carry on and conduct their business in a proper business-like manner in
accordance with good business practice and will keep or cause to be kept proper
books of account in accordance with US GAAP;

 

(e)

at all times comply with all applicable laws, except where such voluntary
non-compliance could not reasonably be expected to have a material adverse
effect on the business, properties or assets of either of the Borrowers or any
Subsidiary;

 

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(f)

pay and discharge promptly when due, all taxes, assessments and other
governmental charges or levies imposed upon it or upon its properties or assets
or upon any part thereof, as well as all claims of any kind (including claims
for labour, materials and supplies) which, if unpaid, would by law become a
lien, charge, trust or other claims upon any such properties or assets, provided
however that the Borrowers shall not be required to pay any such tax,
assessment, charge or levy or claim so long as it remains secured by a Permitted
Lien;

 

(g)

give to the Lender within three (3) Business Days of filing on SEDAR copies of
all documents or instruments publicly filed by Allied Nevada on SEDAR, together
with such other financial or other management reports, certificates, updated
financial statements, including monthly internal financial and operational
reports and documents and such other information with respect to the Borrowers
or the Subsidiaries as the Lender may reasonably request from time to time
during the term of this Agreement;

 

(h)

provide the Lender with written notice of any proposed financing made by or to
the Borrowers concurrently with, but not prior to, public disclosure of such
financing;

 

(i)

furnish and give to the Lender (if such is the case) notice that an Event of
Default has occurred and, if applicable, is continuing or notice in respect of
any event which would constitute an Event of Default hereunder and specifying
the nature of same; and

 

(j)

perform and do all such acts and things as are necessary to perfect and maintain
the Security provided to the Lender pursuant to this Agreement.

11.

Negative Covenants of the Borrowers. The Borrowers covenant and agree with the
Lender that the Borrowers will not without first obtaining the written consent
of the Lender:

 

(a)

except for the Security and Permitted Encumbrances, make, give, create or permit
or attempt to make, give or create any mortgage, charge, lien, security interest
or other encumbrance over any assets of the Borrowers or any Subsidiary;

 

(b)

change the name of either Borrower or any Subsidiary;

 

(c)

allot and issue any new shares of any Subsidiary, unless in the case of a
Subsidiary whose shares have been pledged or otherwise subject to a security
interest in favour of the Lender as part of the Security, the share certificates
representing all such new shares allotted and issued are delivered to the
Lender, together with powers of attorney and such other transfer documents as
the Lender or its counsel may require, to be held by the Lender pursuant to the
Security as additional security for the obligations of the Borrowers to the
Lender in respect of the Facility;

 

(d)

in the case of the Borrowers, declare or provide for any dividends or other
payments or distributions based on share capital;

 

(e)

in the case of the Borrowers, redeem or purchase any of its shares;

 

(f)

make any sale of or dispose of any substantial or material part of its business,
assets or undertaking, or that of any Subsidiary, including their interest in
the Hycroft Mine or the shares or assets of any Subsidiary outside of the
ordinary course of business, but

 

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excluding a Permitted Dispostion by any of Allied Nevada Gold Holdings LLC,
Allied VNC Inc. or Victory Exploration Inc.;

 

(g)

save and except for the Facility and purchase money security interests, chattel
mortgages and equipment leases entered into in the ordinary course of business,
incur any Indebtedness or cause any Subsidiary to incur any Indebtedness,
without first obtaining and delivering to the Lender a duly signed assignment
and postponement of claim by such person in favour of the Lender, in form and
terms satisfactory to the Lender;

 

(h)

in respect of itself or any Subsidiary, pay out any shareholders loans or other
indebtedness to non-arm’s length parties or enter into any transactions with any
non-arm’s length parties other than on commercially reasonable terms, unless
such payment or transaction is with one of the other Borrowers hereto and the
proceeds of such payment and all benefits of such transaction continue to be
subject to the Security after giving effect to such payment or transaction; or

 

(i)

in respect of itself or any Subsidiary, guarantee the obligations of any other
person, directly or indirectly, other than obligations permitted by this
Agreement.

12.

Events of Default. Each and every of the events set forth in this paragraph will
be an event of default (“Event of Default”):

 

(a)

if the Borrowers fail to make any payment of principal or interest when due
hereunder, and such failure continues for two (2) Business Days;

 

(b)

if either of the Borrowers defaults in observing or performing any material
term, covenant or condition of this Agreement or any Security or other document
delivered hereunder or in connection with the Facility, other than the payment
of monies as provided for in subparagraph (a) hereof, on their part to be
observed or performed and such failure continues for five (5) Business Days;

 

(c)

if either of the Borrowers commits an event of default under the Security;

 

(d)

if Allied Nevada is in default of any material prescribed filings with
applicable securities regulatory authorities, the stock exchange or market on
which its shares trade (collectively, the “Authorities”), or are subject to any
suspension in excess of two (2) trading days or cease trade order issued by any
such Authority;

 

(e)

if any of the Borrowers’ representations, warranties or other statements in this
Agreement or any other collateral document delivered hereunder or in connection
with the Facility were at the time given false or misleading in any material
respect;

 

(f)

if either of the Borrowers are in default under any agreement which if
terminated could reasonably be expected to result in a material adverse effect
on the operations, business or assets of either of the Borrowers and written
notice of such default has been given to the Borrowers by the other party
thereto;

 

(g)

if either of the Borrowers default in any material respect in observing or
performing any term, covenant or condition of any debt instrument or obligation
in respect of borrowed money by which they are bound in an aggregate amount of
not less than $100,000;

 

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(h)

if either of the Borrowers permit any sum which has been admitted as due, or is
not disputed to be due, and which forms or is capable of being made a charge
upon any of the assets or undertaking of either of the Borrowers to remain
unpaid or not challenged for 30 days after proceedings have been taken to
enforce the same;

 

(i)

if either of the Borrowers, directly or indirectly through any Subsidiary, cease
or threaten to cease to carry on business;

 

(j)

if any order is made or issued by a competent regulatory authority prohibiting
the trading in shares of Allied Nevada or if Allied Nevada’s common shares are
suspended or de-listed from trading on any stock exchange;

 

(k)

if, in the reasonable opinion of the Lender, an adverse material change occurs
in the financial condition of either of the Borrowers;

 

(l)

if the Lender in good faith and on commercially reasonable grounds believes that
the ability of the Borrowers, taken as a whole, to pay any of the Outstanding
Balance to the Lender or to perform any of the covenants contained in this
Agreement or any Security or other agreement or document delivered hereunder is
impaired or any security granted by the Borrowers or any Subsidiary to the
Lender is or is about to be impaired or in jeopardy in any material respect;

 

(m)

if either of the Borrowers or any Subsidiary petitions or applies to any
tribunal for the appointment of a trustee, receiver or liquidator or commences
any proceedings under any bankruptcy, insolvency, readjustment of debt or
liquidation law of any jurisdiction, whether now or hereafter in effect;

 

(n)

any change of control of either of the Borrowers (“control” being defined as
ownership of or control or direction over, directly or indirectly, 20% or more
of the outstanding voting securities of either such Borrowers); or

 

(o)

if any petition or application for appointment of a trustee, receiver or
liquidator is filed, or any proceedings under any bankruptcy, insolvency,
readjustment of debt or liquidation law are commenced, against either of the
Borrowers or any Subsidiary which is not opposed by such Borrowers or Subsidiary
in good faith, or an order, judgment or decree is entered appointing any such
trustee, receiver, or liquidator, or approving the petition in any such
proceeding.

13.

Effect of Event of Default. If any one or more of the Events of Default occur or
occurs and is or are continuing, the Lender may without limitation in respect of
any other rights it may have in law or pursuant to this Agreement or any other
document or instrument delivered hereunder, demand immediate payment of all
monies owing hereunder.

14.

Lender’s Expenses. The Borrowers will pay for the Lender’s reasonable legal fees
(on a solicitor and own client basis) and all other reasonable costs, charges
and expenses (including all due diligence expenses) of and incidental to the
preparation, execution and completion of this Agreement and the contemplated
security hereunder, all as may be reasonably required by the Lender, in its sole
and absolute discretion, to complete this transaction, as well as all legal fees
(on a solicitor and own client basis) and all other costs, charges and expenses
of and incidental to the collection or recovery of all amounts owing hereunder,
including but not limited to the enforcement of the Security granted hereunder
or otherwise, which secures repayment of the

 

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Facility. In connection therewith, the Borrowers have delivered to the Lender
CAD$30,000 as a retainer for such fees and expenses (the “Retainer”). All
amounts payable hereunder will be paid firstly from the Retainer. In connection
with the Advance, the Lender may deduct such additional retainer from the
proceeds of the Advance as it may require to cover all such fees and expenses
incurred up to and including the closing of the transactions contemplated
herein. All amounts payable under this paragraph 14 thereafter will be payable
by the Borrowers to the Lender within 30 days of presentment of an invoice. If
not paid within that time, such amount will be added to and form part of the
principal amount of the Facility and shall accrue interest from such date as if
it had been advanced by the Lender to the Borrowers hereunder.

15.

Indemnity. The Borrowers agree to indemnify and save harmless the Lender and
each of its directors, officers, employees and agents from and against all
liabilities, claims, losses, damages and reasonable costs and expenses in any
way caused by or arising directly or indirectly from or in consequence of the
occurrence of any Event of Default under this Agreement.

16.

Notices. In this Agreement:

 

(a)

any notice or communication required or permitted to be given under this
Agreement will be in writing and will be considered to have been given if
delivered by hand, transmitted by facsimile transmission or mailed by prepaid
registered post to the address or facsimile transmission number of each party
set out below:

 

(i)

if to the Lender:

Ionic Capital Corp..

Suite 1028, 550 Burrard Street

Vancouver, BC V6C 2B5

 

Attention:

A. Murray Sinclair

 

Fax No:

(604) 681-4692

 

(ii)

if to either of the Borrowers:

c/o Allied Nevada Gold Corp.

9600 Prototype Court

Reno, Nevada 89521

 

Attention:

Hal Kirby

 

Fax No:

(775) 358-4458

or to such other address or facsimile transmission number as any party may
designate in the manner set out above; and

 

(b)

notice or communication will be considered to have been received:

 

(i)

if delivered by hand during business hours on a Business Day, upon receipt by a
responsible representative of the receiver, and if not delivered during business
hours, upon the commencement of business on the next Business Day;

 

(ii)

if sent by facsimile transmission during business hours on a Business Day, upon
the sender receiving confirmation of the transmission, and if not transmitted

 

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- 13 -

 

during business hours, upon the commencement of business on the next Business
Day; and

 

(iii)

if mailed by prepaid registered post upon the fifth Business Day following
posting; except that, in the case of a disruption or an impending or threatened
disruption in postal services every notice or communication will be delivered by
hand or sent by facsimile transmission.

17.

Assignment. The Borrowers acknowledge and agree that the Lender may assign all
or part of the Facility, this Agreement and all collateral agreements, documents
or instruments delivered hereunder to one or more assignees, free from any right
of set-off or counterclaim or equity (other than such as arise under this
Agreement or the Security), subject only to the Lender’s notification of such
assignment or assignments being given in writing to the Borrowers.

18.

Agreement to Pay. Upon receipt of written notice and direction from the Lender,
the Borrowers covenant and agree to make all payments of interest, bonus,
standby, principal and structuring fees due under this Agreement to the Lender
and any assignee, pro rata in accordance with their respective proportionate
interests in the Facility as set out in such written notice and direction,
absent which all such payments may be made to the Lender.

19.

Enurement. This Agreement will enure to the benefit of and be binding upon the
parties hereto and their respective successors and permitted assigns.

20.

Waivers. No failure or delay on the Lender’s part in exercising any power or
right hereunder will operate as a waiver thereof.

21.

Joint Obligations. The agreements of, and all obligations and covenants to be
performed and observed by, the Borrowers hereunder will be the joint and several
agreements, obligations and covenants of each of the persons comprising the
Borrowers and any request or authorization given to the Lender by any of the
persons comprising the Borrowers will be considered to be the joint and several
requests or authorizations of each of the persons comprising the Borrowers.

22.

Remedies are Cumulative. The Lender’s rights and remedies hereunder are
cumulative and not exclusive of any rights or remedies at law or in equity.

23.

Time. Time is of the essence of this Agreement and all documents or instruments
delivered hereunder.

24.

Criminal Code Compliance. In this paragraph the terms “interest”, “criminal
rate” and “credit advanced” have the meanings ascribed to them in Section 347 of
the Criminal Code (Canada) as amended from time to time. The Borrowers and the
Lender agree that, notwithstanding any agreement to the contrary, no interest on
the Facility or the credit advanced by the Lender under this Agreement will be
payable in excess of that permitted under the laws of Canada. If the effective
rate of interest, calculated in accordance with generally accepted actuarial
practices and principles, would exceed the criminal rate on the credit advanced,
then:

 

(a)

the elements of return which fall within the term “interest” will be reduced to
the extent necessary to eliminate such excess;

 

(b)

any remaining excess that has been paid will be credited towards prepayment of
the Facility; and

 

--------------------------------------------------------------------------------

- 14 -

 

 

(c)

any overpayment that may remain after such crediting will be returned forthwith
to the Borrowers upon demand, and, in the event of dispute, a Fellow of the
Canadian Institute of Actuaries appointed by the Lender will perform the
relevant calculations and determine the reductions, modifications and credits
necessary to effect the foregoing and the same will be conclusive and binding on
the parties. This Agreement, the Note and all related agreements and documents
will automatically be modified to reflect such modifications without the
necessity of any further act or deed of the Borrowers and the Lender to give
effect to them.

25.

Invalidity. If at any time any one or more of the provisions hereof is or
becomes invalid, illegal or unenforceable in any respect under any law, the
validity, legality and enforceability of the remaining provisions hereof will
not in any way be affected or impaired thereby to the fullest extent possible by
law.

26.

Governing Laws. This Agreement will be governed by and interpreted in accordance
with the laws of the Province of British Columbia and the laws of Canada
applicable therein. The Borrowers submit to the non-exclusive jurisdiction of
the Courts of the Province of British Columbia and agree to be bound by any
suit, action or proceeding commenced in such Courts and by any order or judgment
resulting from such suit, action or proceeding, but the foregoing will in no way
limit the right of the Lender to commence suits, actions or proceedings based on
this Agreement in any jurisdiction it may deem appropriate.

27.

Amendment. This Agreement supersedes the Term Sheet and all prior agreements and
discussions between the parties with respect to the subject matter set forth
herein. This Agreement may be varied or amended only by or pursuant to an
agreement in writing signed by the parties hereto.

28.

Schedules. All Schedules attached hereto will be deemed fully a part of this
Agreement.

29.

Currency. All references herein to “dollars” or “$” are to Canadian dollars,
unless otherwise indicated.

30.

Counterparts. This Agreement may be signed in one or more counterparts,
originally or by facsimile, each such counterpart taken together will form one
and the same agreement.

 

[Signature page follows]

--------------------------------------------------------------------------------

TO EVIDENCE THEIR AGREEMENT each of the parties has executed this Agreement on
the date first above written.

 

IONIC CAPITAL CORP.

 

Per:                                                                  

 

Authorized Signatory

 

ALLIED NEVADA GOLD CORP.

 

Per:                                                                  

 

Authorized Signatory

 

HYCROFT RESOURCES & DEVELOPMENT, INC.

 

Per:                                                                  

 

Authorized Signatory

 

 

--------------------------------------------------------------------------------

SCHEDULE “A”

PROMISSORY NOTE

 

Principal Amount: CAD$8,000,000

For value received, ALLIED NEVADA GOLD CORP. and HYCROFT RESOURCES &
DEVELOPMENT, INC. (the “Borrowers”) hereby jointly and severally promise to pay
to or to the order of IONIC CAPITAL CORP. (the “Lender”) the principal amount of
EIGHT MILLION CANADIAN DOLLARS (CAD$8,000,000) (the “Principal Amount”) on
(subject to the rights of the Lender to accelerate payment under the Credit
Agreement dated for reference March 30, 2009 is between the Lender and the
Borrowers) September 30, 2010, together with interest accruing on the
outstanding Principal Amount from the date hereof at a rate of FIFTEEN PERCENT
(15%) per annum, compounded monthly (effective rate of 16.08% per annum), before
and after each of maturity, default and judgment, payable monthly on the last
Business Day of every month. All payments under this promissory note will be
made by certified cheque, bank draft or wire transfer (pursuant to wire transfer
instructions provided by the Lender from time to time) and delivered to the
Lender at Suite 1028, 550 Burrard Street, Vancouver, British Columbia V6C 2B5.

The undersigned are entitled to prepay this promissory note, in whole or in
part, without penalty, provided that such prepayment occurs on the last Business
Day of any calendar month during the term of the Facility (as defined in the
Credit Agreement) and further provided that the Borrowers have delivered to the
Lender written notice of its intention to prepay the Facility not less than two
(2) months prior to such prepayment. The undersigned waives demand and
presentment for payment, notice of non-payment, protest, notice of protest and
notice of dishonour. This promissory note will be governed by and construed in
accordance with the laws of the Province of British Columbia and the federal
laws of Canada applicable therein. In this promissory note, “Business Day” means
a day which is not a Saturday, Sunday or a statutory holiday in the Province of
British Columbia or the State of Nevada.

Dated: March 30, 2009.

 

ALLIED NEVADA GOLD CORP.

 

Per:                                                                  

 

Authorized Signatory

 

 

HYCROFT RESOURCES & DEVELOPMENT, INC.

 

Per:                                                                  

 

Authorized Signatory

 

--------------------------------------------------------------------------------

SCHEDULE “B”

SUBSIDIARIES

 

•

Allied Nevada Gold Holdings LLC, a Nevada limited liability company

•

Hycroft Resources & Development, Inc. , a Nevada corporation

•

Allied VGH Inc. , a Nevada corporation

•

Allied VNC Inc. , a Nevada corporation

•

Victory Gold Inc. , a Nevada corporation

•

Victory Exploration Inc. , a Nevada corporation

 

--------------------------------------------------------------------------------

SCHEDULE “C”

EQUIPMENT

 

 

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- 2 -

 

SCHEDULE “D”

PERMITTED ENCUMBRANCES

 

None.