EXHIBIT 10.3
 
 
WARRANTS TO PURCHASE
COMMON SHARES OF APOLLO GOLD CORPORATION
 
Warrant Certificate Number: _____
Number of Warrants: _____  

 
THIS IS TO CERTIFY THAT for value received ●, [address] (the "Warrantholder")
has the right to purchase in respect of each whole warrant ("Warrants")
represented by this certificate or by a replacement certificate (in either case
this "Warrant Certificate"), at any time up to 5:00 p.m. Toronto time, on July
24, 2012 (the "Expiry Time") one fully paid and non-assessable common share
("Common Shares" and which term shall include any shares or other securities to
be issued in addition thereto or in substitution or replacement therefor as
provided herein) of Apollo Gold Corporation (the "Corporation"), a corporation
continued under the Business Corporations Act (Yukon), as constituted on the
date hereof at a purchase price (the purchase price in effect from time to time
being called the "Exercise Price") of CDN$0.78 per Common Share, subject to
adjustment as provided herein.
 
The Corporation agrees that the Common Shares purchased pursuant to the exercise
of the Warrants shall be and be deemed to be issued to the Warrantholder as of
the close of business on the date on which this Warrant Certificate shall have
been surrendered and payment made for such Common Shares as aforesaid.
 
Nothing contained herein shall confer any right upon the Warrantholder to
subscribe for or purchase any Common Shares at any time after the Expiry Time
and from and after the Expiry Time the Warrants and all rights under this
Warrant Certificate shall be void and of no value.
 
The above provisions are subject to the following:
 
1.
Exercise:

 
In the event that the Warrantholder desires to exercise the right to purchase
Common Shares conferred hereby, the Warrantholder shall (a) complete to the
extent possible in the manner indicated and execute a subscription form in the
form attached as schedule A to this Warrant Certificate, (b) surrender this
Warrant Certificate to the Corporation in accordance with section 9 hereof, and
(c) pay the amount payable on the exercise of such Warrants in respect of the
Common Shares subscribed for by certified cheque, bank draft or money order in
lawful money of Canada payable to the Corporation or by transmitting same day
funds in lawful money of Canada by wire to such account as the Corporation shall
direct the Warrantholder. Upon such surrender and payment as aforesaid, the
Warrantholder shall be deemed for all purposes to be the holder of record of the
number of Common Shares to be so issued and the Warrantholder shall be entitled
to delivery of a certificate or certificates representing such Common Shares and
the Corporation shall cause such certificate or certificates to be delivered to
the Warrantholder at the address specified in the subscription form within three
business days after such surrender and payment as aforesaid. No fractional
Common Shares will be issuable upon any exercise of the Warrants and the
Warrantholder will not be entitled to any cash payment or compensation in lieu
of a fractional Common Share.
 

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2.
Partial Exercise: The Warrantholder may from time to time subscribe for and
purchase any lesser number of Common Shares than the number of Common Shares
expressed in this Warrant Certificate. In the event that the Warrantholder
subscribes for and purchases any such lesser number of Common Shares prior to
the Expiry Time, the Warrantholder shall be entitled to receive a replacement
certificate representing the unexercised balance of the Warrants.

 
3.
Not a Shareholder: The holding of the Warrants shall not constitute the
Warrantholder a shareholder of the Corporation nor entitle the Warrantholder to
any right or interest in respect thereof except as expressly provided in this
Warrant Certificate.

 
4.
Covenants, Representations and Warranties: The Corporation hereby represents and
warrants that it is authorized to create and issue the Warrants and covenants
and agrees that it will cause the Common Shares from time to time subscribed for
and purchased in the manner provided in this Warrant Certificate and the
certificate or certificates representing such Common Shares to be issued and
that, at all times prior to the Expiry Time, it will reserve and there will
remain unissued a sufficient number of Common Shares to satisfy the right of
purchase provided for in this Warrant Certificate. The Corporation hereby
further covenants and agrees that it will at its expense expeditiously use its
best efforts to obtain the listing of such Common Shares (subject to issue or
notice of issue) on each stock exchange or over-the-counter market on which the
Common Shares may be listed from time to time. All Common Shares which are
issued upon the exercise of the right of purchase provided in this Warrant
Certificate, upon payment therefor of the amount at which such Common Shares may
be purchased pursuant to the provisions of this Warrant Certificate, shall be
and be deemed to be fully paid and non-assessable shares and free from all
taxes, liens and charges with respect to the issue thereof. The Corporation
hereby represents and warrants that this Warrant Certificate is a valid and
enforceable obligation of the Corporation, enforceable in accordance with the
provisions of this Warrant Certificate.

 
5.
Anti-Dilution Protection:

 

 
(1)
Definitions: For the purposes of this section 5, unless there is something in
the subject matter or context inconsistent therewith, the words and terms
defined below shall have the respective meanings specified therefor in this
subsection 5(1):

 

 
(a)
"Adjustment Period" means the period commencing on the date of issue of the
Warrants and ending at the Expiry Time;

 

 
(b)
"Current Market Price" of the Common Shares at any date means the price per
share equal to the volume weighted average trading price at which the Common
Shares have traded on the Toronto Stock Exchange or the American Stock
Exchange or, if the Common Shares are not then listed on the Toronto Stock
Exchange or the American Stock Exchange, on such other Canadian or U.S. stock
exchange as may be selected by the directors of the Company for such purpose or,
if the Common Shares are not then listed on any Canadian or U.S. stock exchange,
in the over-the-counter market, during the period of any 20 consecutive trading
days ending not more than five business days before such date; provided that the
weighted average trading price shall be determined by dividing the aggregate
sale price of all Common Shares sold on the said exchange or market, as the case
may be, during the said 20 consecutive trading days by the total number of
Common Shares so sold; and provided further that if the Common Shares are not
then listed on any Canadian or U.S. stock exchange or traded in the
over-the-counter market, then the Current Market Price shall be determined by a
firm of independent chartered accountants selected by the directors of the
Corporation.;

 
2.

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(c)
"director" means a director of the Corporation for the time being and, unless
otherwise specified herein, a reference to action "by the directors" means
action by the directors of the Corporation as a board or, whenever empowered,
action by any committee of the directors of the Corporation; and

 

 
(d)
"trading day" with respect to a stock exchange or over-the-counter market means
a day on which such stock exchange or market is open for business.

 

 
(2)
Adjustments: The Exercise Price and the number of Common Shares issuable to the
Warrantholder upon the exercise of the Warrants shall be subject to adjustment
from time to time in the events and in the manner provided as follows:

 

 
(a)
If at any time during the Adjustment Period the Corporation shall:

 

 
(i)
fix a record date for the issue of, or issue, Common Shares to the holders of
all or substantially all of the outstanding Common Shares by way of a stock
dividend;

 

 
(ii)
fix a record date for the distribution to, or make a distribution to, the
holders of all or substantially all of the outstanding Common Shares payable in
Common Shares or securities exchangeable for or convertible into Common Shares;

 

 
(iii)
subdivide the outstanding Common Shares into a greater number of Common Shares;
or

 

 
(iv)
consolidate the outstanding Common Shares into a lesser number of Common Shares,

 
(any of such events in subclauses 5(2)(a)(i), 5(2)(a)(ii), 5(2)(a)(iii) and
5(2)(a)(iv) above being herein called a "Common Share Reorganization"), the
Exercise Price shall be adjusted on the earlier of the record date on which
holders of Common Shares are determined for the purposes of the Common Share
Reorganization and the effective date of the Common Share Reorganization to the
amount determined by multiplying the Exercise Price in effect immediately prior
to such record date or effective date, as the case may be, by a fraction:
 

 
A.
the numerator of which shall be the number of Common Shares outstanding on such
record date or effective date, as the case may be, before giving effect to such
Common Share Reorganization; and

 

 
B.
the denominator of which shall be the number of Common Shares which will be
outstanding immediately after giving effect to such Common Share Reorganization
(including in the case of a distribution of securities exchangeable for or
convertible into Common Shares the number of Common Shares that would have been
outstanding had such securities been exchanged for or converted into Common
Shares on such date).

 
3.

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To the extent that any adjustment in the Exercise Price occurs pursuant to this
clause 5(2)(a) as a result of the fixing by the Corporation of a record date for
the distribution of securities exchangeable for or convertible into Common
Shares, the Exercise Price shall be readjusted immediately after the expiry of
any relevant exchange or conversion right to the Exercise Price which would then
be in effect based upon the number of Common Shares actually issued and
remaining issuable after such expiry and shall be further readjusted in such
manner upon the expiry of any further such right.
 

 
(b)
If at any time during the Adjustment Period the Corporation shall fix a record
date for the issue or distribution to the holders of all or substantially all of
the outstanding Common Shares of rights, options or warrants pursuant to which
such holders are entitled, during a period expiring not more than 45 days after
the record date for such issue (such period being the "Rights Period"), to
subscribe for or purchase Common Shares or securities exchangeable for or
convertible into Common Shares at a price per share to the holder (or in the
case of securities exchangeable for or convertible into Common Shares, at an
exchange or conversion price per share) at the date of issue of such securities
of less than 95% of the Current Market Price of the Common Shares on such record
date (any of such events being called a "Rights Offering"), the Exercise Price
shall be adjusted effective immediately after the record date for such Rights
Offering to the amount determined by multiplying the Exercise Price in effect on
such record date by a fraction:

 

 
(i)
the numerator of which shall be the aggregate of

 

 
A.
the number of Common Shares outstanding on the record date for the Rights
Offering, and

 

 
B.
the quotient determined by dividing

 

 
(1)
either (a) the product of the number of Common Shares offered during the Rights
Period pursuant to the Rights Offering and the price at which such Common Shares
are offered, or, (b) the product of the exchange or conversion price of the
securities so offered and the number of Common Shares for or into which the
securities offered pursuant to the Rights Offering may be exchanged or
converted, as the case may be, by

 

 
(2)
the Current Market Price of the Common Shares as of the record date for the
Rights Offering; and

 

 
(ii)
the denominator of which shall be the aggregate of the number of Common Shares
outstanding on such record date and the number of Common Shares offered pursuant
to the Rights Offering (including in the case of the issue or distribution of
securities exchangeable for or convertible into Common Shares the number of
Common Shares for or into which such securities may be exchanged or converted).

 
4.

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If by the terms of the rights, options, or warrants referred to in this clause
5(2)(b), there is more than one purchase, conversion or exchange price per
Common Share, the aggregate price of the total number of additional Common
Shares offered for subscription or purchase, or the aggregate conversion or
exchange price of the convertible or exchangeable securities so offered, shall
be calculated for purposes of the adjustment on the basis of the lowest
purchase, conversion or exchange price per Common Share, as the case may be. Any
Common Shares owned by or held for the account of the Corporation shall be
deemed not to be outstanding for the purpose of any such calculation. To the
extent that any adjustment in the Exercise Price occurs pursuant to this clause
5(2)(b) as a result of the fixing by the Corporation of a record date for the
issue or distribution of rights, options or warrants referred to in this clause
5(2)(b), the Exercise Price shall be readjusted immediately after the expiry of
any relevant exchange, conversion or exercise right to the Exercise Price which
would then be in effect based upon the number of Common Shares actually issued
and remaining issuable after such expiry and shall be further readjusted in such
manner upon the expiry of any further such right.
 

 
(c)
If at any time during the Adjustment Period the Corporation shall fix a record
date for the issue or distribution to the holders of all or substantially all of
the outstanding Common Shares of:

 

 
(i)
shares of the Corporation of any class other than Common Shares;

 

 
(ii)
rights, options or warrants to acquire Common Shares or securities exchangeable
for or convertible into Common Shares (other than rights, options or warrants
pursuant to which holders of Common Shares are entitled, during a period
expiring not more than 45 days after the record date for such issue, to
subscribe for or purchase Common Shares or securities exchangeable for or
convertible into Common Shares at a price per share (or in the case of
securities exchangeable for or convertible into Common Shares at an exchange or
conversion price per share) at the date of issue of such securities to the
holder of at least 95% of the Current Market Price of the Common Shares on such
record date);

 

 
(iii)
evidences of indebtedness of the Corporation; or

 

 
(iv)
any property or assets of the Corporation;

 
and if such issue or distribution does not constitute a Common Share
Reorganization or a Rights Offering (any of such non-excluded events being
herein called a "Special Distribution"), the Exercise Price shall be adjusted
effective immediately after the record date for the Special Distribution to the
amount determined by multiplying the Exercise Price in effect on the record date
for the Special Distribution by a fraction:
 

 
A.
the numerator of which shall be the difference between

 
5.

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(1)
the product of the number of Common Shares outstanding on such record date and
the Current Market Price of the Common Shares on such record date, and

 

 
(2)
the fair value, as determined by the directors of the Corporation, to the
holders of Common Shares of the shares, rights, options, warrants, evidences of
indebtedness or property or assets to be issued or distributed in the Special
Distribution, and

 

 
B.
the denominator of which shall be the product obtained by multiplying the number
of Common Shares outstanding on such record date by the Current Market Price of
the Common Shares on such record date.

 
Any Common Shares owned by or held for the account of the Corporation shall be
deemed not to be outstanding for the purpose of such calculation. To the extent
that any adjustment in the Exercise Price occurs pursuant to this clause 5(2)(c)
as a result of the fixing by the Corporation of a record date for the issue or
distribution of rights, options or warrants to acquire Common Shares or
securities exchangeable for or convertible into Common Shares referred to in
this clause 5(2)(c), the Exercise Price shall be readjusted immediately after
the expiry of any relevant exercise, exchange or conversion right to the amount
which would then be in effect based upon the number of Common Shares issued and
remaining issuable after such expiry and shall be further readjusted in such
manner upon the expiry of any further such right.
 

 
(d)
If at any time during the Adjustment Period there shall occur:

 

 
(i)
a reclassification or redesignation of the Common Shares, a change of the Common
Shares into other shares or securities or any other capital reorganization
involving the Common Shares other than a Common Share Reorganization;

 

 
(ii)
a consolidation, amalgamation or merger of the Corporation with or into another
body corporate which results in a reclassification or redesignation of the
Common Shares or a change of the Common Shares into other shares or securities;

 

 
(iii)
the transfer of the undertaking or assets of the Corporation as an entirety or
substantially as an entirety to another corporation or entity;

 
(any of such events being called a "Capital Reorganization"), after the
effective date of the Capital Reorganization the Warrantholder shall be entitled
to receive, and shall accept, for the same aggregate consideration, upon
exercise of the Warrants, in lieu of the number of Common Shares to which the
Warrantholder was theretofor entitled upon the exercise of the Warrants, the
kind and aggregate number of shares and other securities or property resulting
from the Capital Reorganization which the Warrantholder would have been entitled
to receive as a result of the Capital Reorganization if, on the effective date
thereof, the Warrantholder had been the registered holder of the number of
Common Shares which the Warrantholders was theretofore entitled to purchase or
receive upon the exercise of the Warrants. If necessary, as a result of any such
Capital Reorganization, appropriate adjustments shall be made in the application
of the provisions of this Warrant Certificate with respect to the rights and
interests thereafter of the Warrantholder to the end that the provisions shall
thereafter correspondingly be made applicable as nearly as may reasonably be
possible in relation to any shares or other securities or property thereafter
deliverable upon the exercise of the Warrants.
 
6.

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(e)
If at any time during the Adjustment Period any adjustment or readjustment in
the Exercise Price shall occur pursuant to the provisions of clause 5(2)(a),
5(2)(b) or 5(2)(c) of this Warrant Certificate, then the number of Common Shares
purchasable upon the subsequent exercise of the Warrants shall be simultaneously
adjusted or readjusted, as the case may be, by multiplying the number of Common
Shares purchasable upon the exercise of the Warrants immediately prior to such
adjustment or readjustment by a fraction which shall be the reciprocal of the
fraction used in the adjustment or readjustment of the Exercise Price.

 

 
(3)
Rules: The following rules and procedures shall be applicable to adjustments
made pursuant to subsection 5(2) hereof:

 

 
(a)
Subject to the following clauses of this subsection 5(3), any adjustment made
pursuant to subsection 5(2) hereof shall be made successively whenever an event
referred to therein shall occur.

 

 
(b)
No adjustment in the Exercise Price shall be required unless such adjustment
would result in a change of at least one per cent in the then Exercise Price and
no adjustment shall be made in the number of Common Shares purchasable or
issuable on the exercise of the Warrants unless it would result in a change of
at least one one-hundredth of a Common Share; provided, however, that any
adjustments which except for the provision of this clause 5(3)(b) would
otherwise have been required to be made shall be carried forward and taken into
account in any subsequent adjustment.

 

 
(c)
No adjustment in the Exercise Price or in the number or kind of securities
purchasable upon the exercise of the Warrants shall be made in respect of any
event described in section 5 hereof if the Warrantholder is entitled to
participate in such event on the same terms mutatis mutandis as if the
Warrantholder had exercised the Warrants prior to or on the record date or
effective date, as the case may be, of such event.

 

 
(d)
No adjustment in the Exercise Price or in the number of Common Shares
purchasable upon the exercise of the Warrants shall be made pursuant to
subsection 5(2) hereof in respect of the issue from time to time of Common
Shares pursuant to this Warrant Certificate or pursuant to any stock option,
stock purchase or stock bonus plan in effect from time to time for directors,
officers or employees of the Corporation and/or any subsidiary of the
Corporation and any such issue, and any grant of options in connection
therewith, shall be deemed not to be a Common Share Reorganization, a Rights
Offering nor any other event described in subsection 5(2) hereof.

 
7.

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(e)
If at any time during the Adjustment Period the Corporation shall take any
action affecting the Common Shares, other than an action described in subsection
5(2) hereof, which in the opinion of the directors would have a material adverse
effect upon the rights of Warrantholders, either or both the Exercise Price and
the number of Common Shares purchasable upon exercise of Warrants shall be
adjusted in such manner and at such time by action by the directors, in their
sole discretion, as may be equitable in the circumstances. Failure of the taking
of action by the directors so as to provide for an adjustment prior to the
effective date of any action by the Corporation affecting the Common Shares
shall be deemed to be conclusive evidence that the directors have determined
that it is equitable to make no adjustment in the circumstances.

 

 
(f)
If the Corporation shall set a record date to determine holders of Common Shares
for the purpose of entitling such holders to receive any dividend or
distribution or any subscription or purchase rights and shall, thereafter and
before the distribution to such holders of any such dividend, distribution or
subscription or purchase rights, legally abandon its plan to pay or deliver such
dividend, distribution or subscription or purchase rights, then no adjustment in
the Exercise Price or the number of Common Shares purchasable upon exercise of
the Warrant shall be required by reason of the setting of such record date.

 

 
(g)
In any case in which this Warrant Certificate shall require that an adjustment
shall become effective immediately after a record date for an event referred to
in subsection 5(2) hereof, the Corporation may defer, until the occurrence of
such event:

 

 
(i)
issuing to the Warrantholder, to the extent that the Warrants are exercised
after such record date and before the occurrence of such event, the additional
Common Shares or other securities issuable upon such exercise by reason of the
adjustment required by such event; and

 

 
(ii)
delivering to the Warrantholder any distribution declared with respect to such
additional Common Shares or other securities after such record date and before
such event;

 
provided, however, that the Corporation shall deliver to the Warrantholder an
appropriate instrument evidencing the right of the Warrantholder upon the
occurrence of the event requiring the adjustment, to an adjustment in the
Exercise Price or the number of Common Shares purchasable upon the exercise of
the Warrants and to such distribution declared with respect to any such
additional Common Shares issuable on the exercise of the Warrants.
 

 
(h)
In the absence of a resolution of the directors fixing a record date for a
Rights Offering, the Corporation shall be deemed to have fixed as the record
date therefor the date of the issue of the rights, options or warrants issued
pursuant to the Rights Offering.

 

 
(i)
If a dispute shall at any time arise with respect to adjustments of the Exercise
Price or the number of Common Shares purchasable upon the exercise of the
Warrants, such disputes shall be conclusively determined by the auditors of the
Corporation or if they are unable or unwilling to act, by such other firm of
independent chartered accountants as may be selected by the directors and any
such determination shall be conclusive evidence of the correctness of any
adjustment made pursuant to subsection 5(2) hereof and shall be binding upon the
Corporation and the Warrantholder.

 
8.

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(j)
As a condition precedent to the taking of any action which would require an
adjustment pursuant to subsection 5(2) hereof, including the Exercise Price and
the number or class of Common Shares or other securities which are to be
received upon the exercise thereof, the Corporation shall take any action which
may, in the opinion of counsel to the Corporation, be necessary in order that
the Corporation may validly and legally issue as fully paid and non-assessable
shares all of the Common Shares or other securities which the Warrantholder is
entitled to receive in accordance with the provisions of this Warrant
Certificate.

 

 
(4)
Notice: At least 21 days prior to the earlier of the record date or effective
date of any event which requires or might require an adjustment in any of the
rights of the Warrantholder under this Warrant Certificate, including the
Exercise Price or the number of Common Shares which may be purchased under this
Warrant Certificate, the Corporation shall deliver to the Warrantholder a
certificate of the Corporation specifying the particulars of such event and, if
determinable, the required adjustment and the calculation of such adjustment. In
case any adjustment for which a notice in this subsection 5(4) has been given is
not then determinable, the Corporation shall promptly after such adjustment is
determinable deliver to the Warrantholder a certificate providing the
calculation of such adjustment. The Corporation hereby covenants and agrees that
the register of transfers and share transfer books for the Common Shares will be
open, and that the Corporation will not take any action which might deprive the
Warrantholder of the opportunity of exercising the rights of subscription
contained in this Warrant Certificate, during such 21 day period.

 
6.
Further Assurances: The Corporation hereby covenants and agrees that it will do,
execute, acknowledge and deliver, or cause to be done, executed, acknowledged
and delivered, all and every such other act, deed and assurance as the
Warrantholder shall reasonably require for the better accomplishing and
effectuating of the intentions and provisions of this Warrant Certificate.

 
7.
Time of Essence: Time shall be of the essence of this Warrant Certificate.

 
8.
Governing Laws: This Warrant Certificate shall be construed in accordance with
the laws of the Province of Ontario and the federal laws of Canada applicable
therein.

 
9.
Notices: All notices or other communications to be given under this Warrant
Certificate shall be delivered by hand or by telecopier and, if delivered by
hand, shall be deemed to have been given on the delivery date and, if sent by
telecopier, on the date of transmission if sent before 5:00 p.m. on a business
day or, if such day is not a business day, on the first business day following
the date of transmission.

 
Notices to the Corporation shall be addressed to:
 
Apollo Gold Corporation
5655 South Yosemite Street, Suite 200
Greenwood Village, Colorado
80111-3220
 
9.

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Attention:     R. David Russell
Telecopier:    303-524-3280
 
Notices to the Warrantholder shall be addressed to the address of the
Warrantholder set out on the face page of this Warrant Certificate.
 
The Corporation and the Warrantholder may change its address for service by
notice in writing to the other of them specifying its new address for service
under this Warrant Certificate.
 
10.
Lost Certificate: If this Warrant Certificate or any replacement hereof becomes
stolen, lost, mutilated or destroyed, the Corporation shall, on such terms as it
may in its discretion impose, acting reasonably, issue and deliver a new
certificate, in form identical hereto but with appropriate changes, representing
any unexercised portion of the subscription rights represented hereby to replace
the certificate so stolen, lost, mutilated or destroyed.

 
11.
Successors: This Warrant Certificate shall enure to the benefit of the
Warrantholder and the successors thereof and shall be binding upon the
Corporation and the successors thereof.

 
 
10.

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IN WITNESS WHEREOF the Corporation has caused this Warrant Certificate to be
signed by an authorized officer as of the _____ day of ___________, 200<>.
 
APOLLO GOLD CORPORATION
 
By:
   
Name:
Title:

11.

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