Exhibit 10.5

NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS CONVERTIBLE
HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON REGULATION S PROMULGATED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY.

Original Issue Date: August 3, 2006
Conversion Price $0.75

$2,000,000.00

10% SECURED CONVERTIBLE DEBENTURE
DUE August 3, 2008

This 10% Secured Convertible Debentures of Bullion River Gold Corp., a Nevada
corporation, having a principal place of business at 3500 Lakeside Court, Suite
200, Reno, NV 89509 (the “Company”), designated as its 10% Secured Convertible
Debenture, due August 3, 2008 (this debenture, the “Debenture” and collectively
with the other such series of debentures, the “Debentures”). This Debenture is
secured as provided for in the Securities Purchase Agreement and the Pledge
Agreement referred to therein.

FOR VALUE RECEIVED, the Company promises to pay to Elton Participation Corp. or
its registered assigns (each a “Holder”), the principal sum of $2,000,000.00 by
August 3, 2008, or such earlier date as this Debenture is required or permitted
to be repaid as provided hereunder (the “Maturity Date”), and to pay interest to
the Holder on the aggregate unconverted and then outstanding principal amount of
this Debenture in accordance with the provisions hereof. This Debenture is
subject to the following additional provisions:

Section 1. Definitions

For the purposes hereof, in addition to the terms defined elsewhere in this
Debenture: (a) capitalized terms not otherwise defined herein have the meanings
given to such terms in the Purchase Agreement, and (b) the following terms shall
have the following meanings:

“Alternate Consideration” shall have the meaning set forth in Section 6.3.

“Business Day” means any day except Saturday, Sunday and any day which shall be
a federal legal holiday in the United States or a day on which banking
institutions in the State of Nevada are authorized or required by law or other
government action to close.

“Common Stock” means the common stock, par value $0.001 per share, of the
Company and stock of any other class of securities into which such securities
may hereafter have been reclassified or changed into.

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“Conversion Date” shall have the meaning set forth in Section 4.1.

“Conversion Price” shall have the meaning set forth in Section 4.3.

“Conversion Shares” means the shares of Common Stock issuable upon conversion of
this Debenture or as payment of interest in accordance with the terms.

“Effectiveness Period” shall have the meaning given to such term in the
Registration Rights Agreement.

“Event of Default” shall have the meaning set forth in Section 8.

“Fundamental Transaction” shall have the meaning set forth in Section 6.3.

“Interest Conversion Rate” means $0.75 per share.

“Interest Payment Date” shall have the meaning set forth in Section 2.2.
 
“Maturity Date” means August 3 , 2008

“Nevada Courts” shall have the meaning set forth in Section 9.4.

“Notice of Conversion” shall have the meaning set forth in Section 4.1.

“Optional Prepayment” shall have the meaning set forth in Section 7.

“Optional Prepayment Amount” shall have the meaning set forth in Section 7

“Optional Prepayment Date” shall have the meaning set forth in Section 7.

“Optional Prepayment Notice” shall have the meaning set forth in Section 7.

“Original Issue Date” shall mean the date of the first issuance of the
Debentures regardless of the number of transfers of any Debenture and regardless
of the number of instruments which may be issued to evidence such Debenture.

“Person” means a corporation, an association, a partnership, organization, a
business, an individual, a government or political subdivision thereof or a
governmental agency.

“Purchase Agreement” means the Securities Purchase Agreement, dated as of August
3, 2006, to which the Company and the original Holder are parties, as amended,
modified or supplemented from time to time in accordance with its terms.
 
“Trading Day” means a day on which the Common Stock is traded on a Trading
Market.

“Trading Market” means the following markets or exchanges on which the Common
Stock is listed or quoted for trading on the date in question: The Over The
Counter Bulletin Board, the Nasdaq SmallCap Market, the American Stock Exchange,
the New York Stock Exchange or the Nasdaq National Market.
 
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Section 2. Interest

2.1 Accrual of Interest. Interest shall accrue on the principal balance of this
Debenture at the rate of ten percent (10%) per annum.

2.2 Payment of Interest in Cash or Kind. The Company shall pay interest to the
Holder on the aggregate unconverted and then outstanding principal amount of
this Debenture at the rate of 10% simple interest per annum, payable quarterly
on January 1, April 1, July 1 and October 1, beginning on October 1, 2006, and
on the Maturity Date (except that, if any such date is not a Business Day, then
such payment shall be due on the next succeeding Business Day) (each such date,
an “Interest Payment Date”). Interest may be paid in cash, or if by mutual
consent of the Company and the Holder, by shares of Common Stock at the
“Interest Conversion Rate” or a combination of shares and cash.
 
Section 3. Repayment of Principal

3.1 Repayment in U.S. Dollars. On or before the Maturity Date, the Company shall
repay the unpaid principal amount of this Debenture in U.S. Dollars.

3.2 The Company and the Holder may before or at the Maturity Date mutually agree
to extend the Maturity Date for one year period(s).

Section 4.Conversion Into Shares of Common Stock

4.1 Voluntary Conversion. At any time after the Original Issue date and until
this Debenture is no longer outstanding, this Debenture shall be convertible
into shares of Common Stock (“Conversion Shares”) at the option of the Holder,
in whole or in part, at any time and from time to time. The Holder shall effect
conversions by delivering to the Company the form of Notice of Conversion
attached hereto as Annex A (a “Notice of Conversion”), specifying therein the
principal amount of this Debenture, and accrued interest thereon, to be
converted and the date on which such conversion is to be effected (a “Conversion
Date”). If no Conversion Date is specified in a Notice of Conversion, the
Conversion Date shall be the date that such Notice of Conversion is provided
hereunder. To effect conversions hereunder, the Holder shall not be required to
physically surrender this Debenture to the Company unless the entire principal
amount of this Debenture plus all accrued and unpaid interest thereon has been
so converted. Conversions hereunder shall have the effect of lowering the
outstanding principal amount of this Debenture in an amount equal to the
applicable conversion. Any and all conversion hereunder shall be made in amounts
of not less than $10,000 (and in increments of $10,000) unless the balance of
the outstanding debenture amount is less than $10,000 and then in such event,
the entire amount of the debenture shall be converted into shares of Common
Stock if Holder elects to convert such balance.

4.2 Conversion Records. The Holder and the Company shall maintain records
showing the principal amount converted and the date of such conversions. The
Company shall deliver a copy of its records as to Holder in a reasonable time
following any conversion. If Holder disagrees with the Company’s records, Holder
shall provide notice of such objection to the Company within twenty days
following the Company’s mailing of such record to holder. In the event of any
dispute or discrepancy, the records of the Company shall be controlling and
determinative in the absence of manifest error. The Holder and any assignee, by
acceptance of this Debenture, acknowledge and agree that, by reason of the
provisions of this paragraph, following conversion of a portion of this
Debenture, the unpaid and unconverted principal amount of this Debenture may be
less than the amount stated on the face hereof. Notwithstanding anything herein
to the contrary, the Holders right to convert hereunder shall in no way excuse
the Company from having to meet its obligation to pay the outstanding principal
and interest on this Debenture nor shall it limit the Holder’s right to seek any
other remedy against the Company for failing to meet such obligations. The right
to convert this Debenture into Conversion Shares is in addition to any other
rights or remedies the Holder may have hereunder or under law.

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4.3 Conversion Price. The conversion price in effect on any Conversion Date
shall be $0.75 (subject to adjustment as provided herein)(the “Conversion
Price”).

4.4 Mechanics of Conversion

(a) Conversion Shares Issuable Upon Conversion of Principal Amount. The number
of shares of Common Stock issuable upon a conversion hereunder shall be
determined by the quotient obtained by dividing (x) the outstanding principal
amount of this Debenture to be converted by (y) the Conversion Price.

(b) Delivery of Certificate Upon Conversion. Not later than seven Trading Days
after any Conversion Date, the Company will deliver or cause to be delivered to
the Holder (A) a certificate or certificates representing the Conversion Shares
which shall be free of restrictive legends and trading restrictions (other than
those required by the Purchase Agreement) representing the number of shares of
Common Stock being acquired upon the conversion of this Debenture including
payment of interest in shares of Common Stock. The Company shall, if available
and if allowed under applicable securities laws, use its best efforts to deliver
any certificate or certificates required to be delivered by the Company under
this Section electronically through the Depository Trust Corporation or another
established clearing corporation performing similar functions.

(c) Failure to Deliver Certificates. If in the case of any Notice of Conversion
such certificate or certificates are not delivered to or as directed by the
applicable Holder by the third Trading Day after a Conversion Date, the Holder
shall be entitled by written notice to the Company at any time on or before its
receipt of such certificate or certificates thereafter, to rescind such
conversion, in which event the Company shall immediately return the certificates
representing the principal amount of this Debenture tendered for conversion.
 
(d) Reservation of Shares Issuable Upon Conversion. The Company covenants that
it will at all times reserve and keep available out of its authorized and
unissued shares of Common Stock solely for the purpose of issuance upon
conversion of this Debenture and payment of interest on this Debenture, each as
herein provided, free from preemptive rights or any other actual contingent
purchase rights of persons other than the Holder (and the other holders of the
Debentures), not less than such number of shares of the Common Stock as shall
(subject to the terms and conditions set forth in the Purchase Agreement) be
issuable (taking into account the adjustments and restrictions of Section 6)
upon the conversion of the outstanding principal amount of this Debenture and
payment of interest hereunder. The Company covenants that all shares of Common
Stock that shall be so issuable shall, upon issue, be duly and validly
authorized, issued and fully paid, and nonassessable.
 
(e) Fractional Shares. The Holder shall be entitled to receive, in lieu of
fractional shares, one whole share of Common Stock.

(g). Transfer Taxes. The issuance of certificates for shares of the Common Stock
on conversion of this Debenture shall be made without charge to the Holder
hereof for any documentary stamp or similar taxes that may be payable in respect
of the issue or delivery of such certificate, provided that the Company shall
not be required to pay any tax that may be payable in respect of any transfer
involved in the issuance and delivery of any such certificate upon conversion in
a name other than that of the Holder of this Debenture so converted and the
Company shall not be required to issue or deliver such certificates unless or
until the person or persons requesting the issuance thereof shall have paid to
the Company the amount of such tax or shall have established to the satisfaction
of the Company that such tax has been paid.

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Section 5. Registration of Transfers and Exchanges

5.1 Different Denominations. This Debenture is exchangeable for an equal
aggregate principal amount of Debentures of different authorized denominations,
as requested by the Holder surrendering the same. No service charge will be made
for such registration of transfer or exchange.

5.2 Investment Representations. This Debenture has been issued subject to
certain investment representations of the original Holder set forth in the
Purchase Agreement and may be transferred or exchanged only in compliance with
the Purchase Agreement and applicable federal and state securities laws and
regulations.

5.3 Reliance on Debenture Register. Prior to due presentment to the Company for
transfer of this Debenture, the Company and any agent of the Company may treat
the Person in whose name this Debenture is duly registered on the Debenture
Register as the owner hereof for the purpose of receiving payment as herein
provided and for all other purposes, whether or not this Debenture is overdue,
and neither the Company nor any such agent shall be affected by notice to the
contrary.

Section 6. Certain Adjustments

6.1 Stock Dividends and Stock Splits. If the Company, at any time while this
Debenture is outstanding: (A) pays a stock dividend or otherwise makes a
distribution or distributions on shares of its Common Stock or any other equity
or equity equivalent securities payable in shares of Common Stock (which, for
avoidance of doubt, shall not include any shares of Common Stock issued by the
Company pursuant to this Debenture, including as interest thereon), (B)
subdivides outstanding shares of Common Stock into a larger number of shares,
(C) combines (including by way of reverse stock split) outstanding shares of
Common Stock into a smaller number of shares, or (D) issues by reclassification
of shares of the Common Stock any shares of capital stock of the Company, then
the Conversion Price shall be multiplied by a fraction of which the numerator
shall be the number of shares of Common Stock (excluding treasury shares, if
any) outstanding immediately before such event and of which the denominator
shall be the number of shares of Common Stock outstanding immediately after such
event. Any adjustment made pursuant to this Section shall become effective
immediately after the record date for the determination of stockholders entitled
to receive such dividend or distribution and shall become effective immediately
after the effective date in the case of a subdivision, combination or
re-classification.
 
6.2 Subsequent Equity Issuances. If the Company or any subsidiary thereof, at
any time while any Debenture is outstanding, issues, sells or grants any option
to purchase or issues, sells or grants any right to reprice its securities, or
otherwise disposes of or issues (or announces any sale, grant or any option to
purchase or other disposition of) any Common Stock or Common Stock Equivalents
entitling any Person to acquire shares of Common Stock at an effective price per
share that is lower than the higher of (i) the then Conversion Price and (ii)
80% of the then VWAP (such lower effective price price per share, the “Base
Conversion Price” and such issuances collectively, a “Dilutive Issuance”) (if a
holder of the Common Stock or Common Stock Equivalents so issued shall at any
time, whether by operation of purchase price adjustments, reset provisions,
floating conversion, exercise or exchange prices or otherwise, or due to
warrants, options or rights per share which are issued in connection with such
issuance, be entitled to receive shares of Common Stock at an effective price
per share that is lower than the Conversion Price, such issuance shall be deemed
to have occurred for less than the higher of the then Conversion Price or 80% of
the then VWAP, as applicable, on such date of the Dilutive Issuance), then the
Conversion Price shall be reduced, and only reduced, by multiplying the
Conversion Price by a fraction, the numerator of which is the number of shares
of Common Stock issued and outstanding (on a fully-diluted basis) immediately
prior to the Dilutive Issuance plus the number of shares of Common Stock which
the actual cash offering price for such Dilutive Issuance would purchase at the
then Exercise Price, and the denominator of which shall be the sum of the number
of shares of Common Stock issued and outstanding (on a fully-diluted basis)
immediately prior to the Dilutive Issuance plus the number of shares of Common
Stock and Common Stock Equivalents so issued or issuable in connection with the
Dilutive Issuance, but in no event shall such adjustment reduce the Conversion
Price to less than $0.05.

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Notwithstanding the foregoing, no adjustment will be made under this Section 6.2
in respect of an Exempt Issuance. The Company shall notify each Holder in
writing, no later than the five (5) Business Days prior to the issuance of any
Common Stock or Common Stock Equivalents subject to this Section 6.2, indicating
therein the applicable issuance price, or applicable reset price, exchange
price, conversion price and other pricing terms (such notice, the “Dilutive
Issuance Notice”). For purposes of clarification, whether or not the Company
provides a Dilutive Issuance Notice pursuant to this Section 6.2, upon the
occurrence of any Dilutive Issuance, each Holder is entitled to receive a number
of Conversion Shares based upon the Base Conversion Price on or after the date
of such Dilutive Issuance, regardless of whether such Holder accurately refers
to the Base Conversion Price in the Notice of Conversion.

6.3 Fundamental Transaction. If, at any time while this Debenture is
outstanding, (A) the Company effects any merger or consolidation of the Company
with or into another Person, (B) the Company effects any sale of all or
substantially all of its assets in one or a series of related transactions, (C)
any tender offer or exchange offer (whether by the Company or another Person) is
completed pursuant to which holders of Common Stock are permitted to tender or
exchange their shares for other securities, cash or property, or (D) the Company
effects any reclassification of the Common Stock or any compulsory share
exchange pursuant to which the Common Stock is effectively converted into or
exchanged for other securities, cash or property (in any such case, a
“Fundamental Transaction”), then upon any subsequent conversion of this
Debenture, the Holder shall have the right to receive, for each Conversion Share
that would have been issuable upon such conversion immediately prior to the
occurrence of such Fundamental Transaction, the same kind and amount of
securities, cash or property as it would have been entitled to receive upon the
occurrence of such Fundamental Transaction if it had been, immediately prior to
such Fundamental Transaction, the holder of one share of Common Stock (the
“Alternate Consideration”). For purposes of any such conversion, the
determination of the Conversion Price shall be appropriately adjusted to apply
to such Alternate Consideration based on the amount of Alternate Consideration
issuable in respect of one share of Common Stock in such Fundamental
Transaction, and the Company shall apportion the Conversion Price among the
Alternate Consideration in a reasonable manner reflecting the relative value of
any different components of the Alternate Consideration.

If holders of Common Stock are given any choice as to the securities, cash or
property to be received in a Fundamental Transaction, then the Holder shall be
given the same choice as to the Alternate Consideration it receives upon any
conversion of this Debenture following such Fundamental Transaction. To the
extent necessary to effectuate the foregoing provisions, any successor to the
Company or surviving entity in such Fundamental Transaction shall issue to the
Holder a new debenture consistent with the foregoing provisions and evidencing
the Holder’s right to convert such debenture into Alternate Consideration. The
terms of any agreement pursuant to which a Fundamental Transaction is effected
shall include terms requiring any such successor or surviving entity to comply
with the provisions of this paragraph (d) and insuring that this Debenture (or
any such replacement security) will be similarly adjusted upon any subsequent
transaction analogous to a Fundamental Transaction.

6.4 Calculations. All calculations under this Section 6 shall be made to the
nearest cent or the nearest 1/100th of a share, as the case may be. For purposes
of this Section 6, the number of shares of Common Stock deemed to be issued and
outstanding as of a given date shall be the sum of the number of shares of
Common Stock (excluding treasury shares, if any) issued and outstanding.

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6.5 Notice to the Holder.

(a) Adjustment to Conversion Price. Whenever the Conversion Price is adjusted
pursuant to any of this Section 6, the Company shall promptly mail to each
Holder a notice setting forth the Conversion Price after such adjustment and
setting forth a brief statement of the facts requiring such adjustment. If the
Company issues a variable rate security, despite the prohibition thereon in the
Purchase Agreement, the Company shall be deemed to have issued Common Stock or
Common Stock Equivalents at the lowest possible conversion or exercise price at
which such securities may be converted or exercised in the case of a Variable
Rate Transaction (as defined in the Purchase Agreement).

(b) Notice to Allow Conversion by Holder. If (A) the Company shall declare a
dividend (or any other distribution) on the Common Stock; (B) the Company shall
declare a special nonrecurring cash dividend on or a redemption of the Common
Stock; (C) the Company shall authorize the granting to all holders of the Common
Stock rights or warrants to subscribe for or purchase any shares of capital
stock of any class or of any rights; (D) the approval of any stockholders of the
Company shall be required in connection with any reclassification of the Common
Stock, any consolidation or merger to which the Company is a party, any sale or
transfer of all or substantially all of the assets of the Company, of any
compulsory share exchange whereby the Common Stock is converted into other
securities, cash or property; (E) the Company shall authorize the voluntary or
involuntary dissolution, liquidation or winding up of the affairs of the Company
or (F) the Company shall authorize entering into any other type of Fundamental
Transaction; then, in each case, the Company shall cause to be filed at each
office or agency maintained for the purpose of conversion of this Debenture, and
shall cause to be mailed to the Holder at its last addresses as it shall appear
upon the stock books of the Company, at least 20 calendar days prior to the
applicable record or effective date hereinafter specified, a notice stating (x)
the date on which a record is to be taken for the purpose of such dividend,
distribution, redemption, rights or warrants, or if a record is not to be taken,
the date as of which the holders of the Common Stock of record to be entitled to
such dividend, distributions, redemption, rights or warrants are to be
determined or (y) the date on which such reclassification, consolidation,
merger, sale, transfer or share exchange, or other Fundamental Transaction, is
expected to become effective or close, and the date as of which it is expected
that holders of the Common Stock of record shall be entitled to exchange their
shares of the Common Stock for securities, cash or other property deliverable
upon such reclassification, consolidation, merger, sale, transfer or share
exchange, or other Fundamental Transaction; provided, that the failure to mail
such notice or any defect therein or in the mailing thereof shall not affect the
validity of the corporate action required to be specified in such notice. The
Holder is entitled to convert this Debenture during the 20-day period commencing
the date of such notice to the effective date of the event triggering such
notice.

Section 7. Optional Prepayment Right

Prior to the later of (i) August 3, 2007 and (ii) the date on which the
Conversion Shares are registered pursuant to a registration statement filed with
and declared effective by the Commission, the Company may only prepay the
Debenture with the approval of the holder thereof. Following August 3, 2007,
upon the Conversion Shares being registered pursuant to a registration statement
filed with and declared effective by the Commission, the Company may, upon five
(5) Business Days prior written notice to the Holder, prepay in part or in full
the Debenture in accordance with this Section 7. The prepayment amount must be
$300,000 or a greater amount. Notice of any proposed prepayment hereunder (an
“Optional Prepayment”) shall be delivered to the Holder of the Debentures and
shall state (1) that the Company wishes to prepay the Debentures issued on the
Original Issue Date and (2) the date of prepayment (the “Optional Prepayment
Notice”). Subject to receiving the written consent of the Holder, on the date
fixed for prepayment (the “Optional Prepayment Date”), the Company shall make
payment of the Optional Prepayment Amount (as defined below) to the Holder. If
the Company prepays a Debenture, the Company shall make payment to the Holder of
an amount in cash equal to the principal amount to be prepaid plus any amount of
interest owed hereunder to the Holder (“Optional Prepayment Amounts”). The
Holder shall at all times prior to the Optional Prepayment Date maintain the
right to convert all or any portion of the Debenture (and, thereafter, any
unconverted portion) and any portion of Debenture so converted after receipt of
an Optional Prepayment Notice and prior to the Optional Prepayment Date set
forth in such notice and payment of the aggregate Optional Prepayment Amount
shall be deducted from the principal amount of Debenture which is otherwise
subject to prepayment pursuant to such notice.

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Section 8.Events of Default.

8.1 “Event of Default”. Wherever used herein, an Event of Default means any one
of the following events (whatever the reason and whether it shall be voluntary
or involuntary or effected by operation of law or pursuant to any judgment,
decree or order of any court, or any order, rule or regulation of any
administrative or governmental body):

(a) any default in the payment of (A) the principal amount of any Debenture, or
(B) interest on any Debenture, as and when the same shall become due and payable
(whether on a Conversion Date or the Maturity Date or by acceleration or
otherwise) which default, solely in the case of an interest payment or other
default under clause (B) above, is not cured, within three (3) Trading Days;

(b) the Company shall fail to observe or perform any other material covenant or
material agreement contained in this Debenture or any other Debenture which
failure is not cured, if possible to cure, within the earlier to occur of five
(5) Trading Days after notice of such default sent by the Holder or by any other
Holder;

(c) a default or event of default (subject to any grace or cure period provided
for in the applicable agreement, document or instrument) shall occur under any
of the Transaction Documents,

(d) any representation or warranty or covenant made herein, in any other
Transaction Documents, in any written statement pursuant hereto or thereto, or
in any other report, financial statement or certificate made or delivered to the
Holder or any other holder of Debentures shall be untrue or incorrect in any
material respect as of the date when made or deemed made;

(e) (i) the Company or any of its Subsidiaries shall commence a case, as debtor,
under any applicable bankruptcy or insolvency laws as now or hereafter in effect
or any successor thereto, or the Company or any Subsidiary commences any other
proceeding under any reorganization, arrangement, adjustment of debt, relief of
debtors, dissolution, insolvency or liquidation or similar law of any
jurisdiction whether now or hereafter in effect relating to the Company or any
Subsidiary thereof or (ii) there is commenced a case against the Company or any
Subsidiary thereof, under any applicable bankruptcy or insolvency laws, as now
or hereafter in effect or any successor thereto which remains undismissed for a
period of 60 days; or (iii) the Company or any Subsidiary thereof is adjudicated
by a court of competent jurisdiction insolvent or bankrupt; or any order of
relief or other order approving any such case or proceeding is entered; or (iv)
the Company or any Subsidiary thereof suffers any appointment of any custodian
or the like for it or any substantial part of its property which continues
undischarged or unstayed for a period of 60 days; or (v) the Company or any
Subsidiary thereof makes a general assignment for the benefit of creditors; or
(vi) the Company shall fail to pay, or shall state that it is unable to pay, or
shall be unable to pay, any of its debts or its debts generally as they become
due; or (vii) the Company or any Subsidiary thereof shall call a meeting of its
creditors with a view to arranging a composition, adjustment or restructuring of
its debts; or (viii) the Company or any Subsidiary thereof shall by any act or
failure to act expressly indicate its consent to, approval of or acquiescence in
any of the foregoing; or (ix) any corporate or other action is taken by the
Company or any Subsidiary thereof for the purpose of effecting any of the
foregoing; or

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(f) the Company or any Subsidiary shall default in any of its obligations under
any mortgage, credit agreement or other facility, indenture agreement, factoring
agreement or other instrument under which there may be issued, or by which there
may be secured or evidenced, any indebtedness for borrowed money or money due
under any long term leasing or factoring arrangement of the Company in an amount
exceeding $1,000,000, whether such indebtedness now exists or shall hereafter,
be created, unless otherwise approved in writing by the Holder.
 
8.2 Remedies Upon Event of Default. If any Event of Default occurs, the Company
shall give Holder prompt notice thereof and the full principal amount of this
Debenture, together with interest and other amounts owing in respect thereof, to
the date of acceleration shall become, at the Holder’s election, immediately due
and payable in cash. Upon the payment in full of the principal and interest
under the Debenture under this Section 8.2, the Holder shall promptly surrender
this Debenture to or as directed by the Company. The Holder need not provide and
the Company hereby waives any presentment, demand, protest or other notice of
any kind, and the Holder may immediately and without expiration of any grace
period enforce any and all of its rights and remedies hereunder and all other
remedies available to it under applicable law. Such declaration may be rescinded
and annulled by Holder at any time prior to payment hereunder and the Holder
shall have all rights as a Debenture holder until such time, if any, as the full
payment under this Section shall have been received by it. No such rescission or
annulment shall affect any subsequent Event of Default or impair any right
consequent thereon.

Section 9. Miscellaneous

9.1 Notices. Any and all notices or other communications or deliveries to be
provided by the Holder hereunder, including, without limitation, any Notice of
Conversion, shall be in writing and delivered personally, by facsimile, sent by
a nationally recognized overnight courier service, addressed to the Company, at
the address set forth above, facsimile number (775) 324-7893, Attn: Peter Kuhn
or such other address or facsimile number as the Company may specify for such
purposes by notice to the Holder delivered in accordance with this Section. Any
and all notices or other communications or deliveries to be provided by the
Company hereunder shall be in writing and delivered personally, by facsimile,
sent by a nationally recognized overnight courier service addressed to each
Holder at the facsimile telephone number or address of such Holder appearing on
the books of the Company, or if no such facsimile telephone number or address
appears, at the principal place of business of the Holder. Any notice or other
communication or deliveries hereunder shall be deemed given and effective on the
earliest of (i) the date of transmission, if such notice or communication is
delivered via facsimile at the facsimile telephone number specified in this
Section prior to 5:30 p.m. (Nevada time), (ii) the date after the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile telephone number specified in this Section later than 5:30 p.m.
(Nevada time) on any date and earlier than 11:59 p.m. (Nevada time) on such
date, (iii) the second Business Day following the date of mailing, if sent by
nationally recognized overnight courier service, or (iv) upon actual receipt by
the party to whom such notice is required to be given.

9.2 Absolute Obligation. Except as expressly provided herein, no provision of
this Debenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of, interest and liquidated
damages (if any) on, this Debenture at the time, place, and rate, and in the
coin or currency, herein prescribed. This Debenture is a direct debt obligation
of the Company. This Debenture ranks pari passu with all other Debentures now or
hereafter issued under the terms set forth herein.

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9.3 Lost or Mutilated Debenture. If this Debenture shall be mutilated, lost,
stolen or destroyed, the Company shall execute and deliver, in exchange and
substitution for and upon cancellation of a mutilated Debenture, or in lieu of
or in substitution for a lost, stolen or destroyed Debenture, a new Debenture
for the principal amount of this Debenture so mutilated, lost, stolen or
destroyed but only upon receipt of evidence of such loss, theft or destruction
of such Debenture, and of the ownership hereof, and indemnity, if requested, all
reasonably satisfactory to the Company.

9.4 Governing Law. All questions concerning the construction, validity,
enforcement and interpretation of this Debenture shall be governed by and
construed and enforced in accordance with the internal laws of the State of
Nevada, without regard to the principles of conflicts of law thereof. Each party
agrees that all legal proceedings concerning the interpretations, enforcement
and defense of the transactions contemplated by any of the Transaction Documents
(whether brought against a party hereto or its respective affiliates, directors,
officers, shareholders, employees or agents) shall be commenced in the state and
federal courts sitting in the City of Reno, State of Nevada (the “Nevada
Courts”). Each party hereto hereby irrevocably submits to the exclusive
jurisdiction of the Nevada Courts for the adjudication of any dispute hereunder
or in connection herewith or with any transaction contemplated hereby or
discussed herein (including with respect to the enforcement of any of the
Transaction Documents), and hereby irrevocably waives, and agrees not to assert
in any suit, action or proceeding, any claim that it is not personally subject
to the jurisdiction of any such court, or such Nevada Courts are improper or
inconvenient venue for such proceeding.

Each party hereby irrevocably waives personal service of process and consents to
process being served in any such suit, action or proceeding by mailing a copy
thereof via registered or certified mail or overnight delivery (with evidence of
delivery) to such party at the address in effect for notices to it under this
Debenture and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law.
Each party hereto hereby irrevocably waives, to the fullest extent permitted by
applicable law, any and all right to trial by jury in any legal proceeding
arising out of or relating to this Debenture or the transactions contemplated
hereby. If either party shall commence an action or proceeding to enforce any
provisions of this Debenture, then the prevailing party in such action or
proceeding shall be reimbursed by the other party for its attorneys’ fees and
other costs and expenses incurred with the investigation, preparation and
prosecution of such action or proceeding.

9.5 Waiver. Any waiver by the Company or the Holder of a breach of any provision
of this Debenture shall not operate as or be construed to be a waiver of any
other breach of such provision or of any breach of any other provision of this
Debenture. The failure of the Company or the Holder to insist upon strict
adherence to any term of this Debenture on one or more occasions shall not be
considered a waiver or deprive that party of the right thereafter to insist upon
strict adherence to that term or any other term of this Debenture. Any waiver
must be in writing.

9.6 Severability. If any provision of this Debenture is invalid, illegal or
unenforceable, the balance of this Debenture shall remain in effect, and if any
provision is inapplicable to any person or circumstance, it shall nevertheless
remain applicable to all other persons and circumstances. If it shall be found
that any interest or other amount deemed interest due hereunder violates
applicable laws governing usury, the applicable rate of interest due hereunder
shall automatically be lowered to equal the maximum permitted rate of interest.
The Company covenants (to the extent that it may lawfully do so) that it shall
not at any time insist upon, plead, or in any manner whatsoever claim or take
the benefit or advantage of, any stay, extension or usury law or other law which
would prohibit or forgive the Company from paying all or any portion of the
principal of or interest on this Debenture as contemplated herein, wherever
enacted, now or at any time hereafter in force, or which may affect the
covenants or the performance of this indenture, and the Company (to the extent
it may lawfully do so) hereby expressly waives all benefits or advantage of any
such law, and covenants that it will not, by resort to any such law, hinder,
delay or impeded the execution of any power herein granted to the Holder, but
will suffer and permit the execution of every such as though no such law has
been enacted.

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9.7 Next Business Day. Whenever any payment or other obligation hereunder shall
be due on a day other than a Business Day or Trading Day, such payment or
obligation shall be made or performed on the next succeeding Business Day.

9.8 Headings. The headings contained herein are for convenience only, do not
constitute a part of this Debenture and shall not be deemed to limit or affect
any of the provisions hereof.

9.9 Assumption. Any successor to the Company or surviving entity in a
Fundamental Transaction shall (i) assume in writing all of the obligations of
the Company under this Debenture and the other Transaction Documents pursuant to
written agreements in form and substance satisfactory to the Holder (such
approval not to be unreasonably withheld or delayed) prior to such Fundamental
Transaction and (ii) to issue to the Holder a new debenture of such successor
entity evidenced by a written instrument substantially similar in form and
substance to this Debenture, including, without limitation, having a principal
amount and interest rate equal to the principal amounts and the interest rates
of the Debentures held by the Holder and having similar ranking to this
Debenture, and satisfactory to the Holder (any such approval not to be
unreasonably withheld or delayed). The provisions of this Section 9.9 shall
apply similarly and equally to successive Fundamental Transactions and shall be
applied without regard to any limitations of this Debenture.
 
IN WITNESS WHEREOF, the Company has caused this Debenture to be duly executed by
a duly authorized officer as of the date first above indicated.
 
BULLION RIVER GOLD CORP.

By:  /s/ Nancy B. Huber
Name: Nancy B. Huber
Title: Chief Financial Officer

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ANNEX A

NOTICE OF CONVERSION

The undersigned hereby elects to convert principal (and accrued interest
thereon) under the 10% Secured Convertible Debenture of Bullion River Gold
Corp., a Nevada corporation (the “Company”), due on August 3, 2008 into shares
of common stock, par value $0.001 per share (the “Common Stock”), of the Company
according to the conditions hereof, as of the date written below. If shares are
to be issued in the name of a person other than the undersigned, the undersigned
will pay all transfer taxes payable with respect thereto and is delivering
herewith such certificates and opinions as reasonably requested by the Company
in accordance therewith. No fee will be charged to the holder for any
conversion, except for such transfer taxes, if any.

By the delivery of this Notice of Conversion the undersigned represents and
warrants to the Company that its ownership of the Common Stock does not exceed
the amounts determined in accordance with Section 13(d) of the Exchange Act,
specified under Section 4 of this Debenture.

The undersigned agrees to comply with the prospectus delivery requirements under
the applicable securities laws in connection with any transfer of the aforesaid
shares of Common Stock.

Conversion calculations:

Date to Effect Conversion:___________________

Principal Amount of Debenture to be Converted: $________
Payment of Interest in Common Stock __ yes __ no

If yes, $_____ of Interest Accrued on Account of
Conversion at Issue.

Number of shares of Common Stock to be issued:
_______________________________________

Signature:________________________________

Name:___________________________________

Address: _________________________________

 
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