Unassociated Document


    EXHIBIT
      10.1


     

     

    
      

    

    


     

    ASSET
      PURCHASE AGREEMENT

     

    Made
      as
      of June 6,
      2008

     

    Between

     

    APOLLO
      GOLD CORPORATION

     

    and

     

    ST
      ANDREW GOLDFIELDS LTD.

     

    and

     

     

    FOGLER,
      RUBINOFF LLP

     

     

    
      
 


     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      Table
        of
        Contents

    

     

    
      
        	 	
                 

              	 
	 	 	
                Page

              
	 	 
	
                Article
                  1 Interpretation

              	
                2

              
	 	 	 
	
                1.1

              	
                Defined
                  Terms

              	
                2

              
	
                1.2

              	
                Best
                  of Knowledge

              	
                6

              
	
                1.3

              	
                Schedules

              	
                6

              
	
                1.4

              	
                Currency

              	
                6

              
	
                1.5

              	
                Choice
                  of Law and Attornment

              	
                6

              
	
                1.6

              	
                Interpretation
                  Not Affected by Headings or Party Drafting

              	
                6

              
	
                1.7

              	
                Number
                  and Gender

              	
                6

              
	
                1.8

              	
                Time
                  of Essence

              	
                7

              
	 	 
	
                Article
                  2 Purchase and Sale

              	
                7

              
	 	 	 
	
                2.1

              	
                Purchased
                  Assets

              	
                7

              
	
                2.2

              	
                Unassignable
                  Contracts

              	
                8

              
	
                2.3

              	
                Assumed
                  Liabilities

              	
                8

              
	
                2.4

              	
                MNDM
                  Bonding

              	
                8

              
	
                2.5

              	
                Retained
                  Liabilities and Indemnity

              	
                9

              
	
                2.6

              	
                Purchase
                  Price

              	
                9

              
	
                2.7

              	
                Payment
                  of Purchase Price

              	
                9

              
	
                2.8

              	
                Allocation
                  of Purchase Price

              	
                11

              
	
                2.9

              	
                Section
                  167(1) ETA Joint Election

              	
                11

              
	
                2.10

              	
                Payment
                  of Taxes

              	
                11

              
	 	 
	
                Article
                  3 Trust Provisions

              	
                11

              
	 	 	 
	
                3.1

              	
                Transfer
                  of Title Documents in Trust

              	
                11

              
	
                3.2

              	
                Acknowledgment
                  of Receipt of Transfer Documents

              	
                11

              
	
                3.3

              	
                Declaration
                  of Trust

              	
                11

              
	
                3.4

              	
                Amendment
                  of Trust Conditions

              	
                12

              
	
                3.5

              	
                Satisfaction
                  of Trust Conditions

              	
                12

              
	
                3.6

              	
                Non
                  Satisfaction of Trust Conditions

              	
                12

              
	
                3.7

              	
                Release
                  of Transfer Documents by Trustee

              	
                12

              
	
                3.8

              	
                Fees
                  and Expenses of Trustee

              	
                13

              
	
                3.9

              	
                Indemnification

              	
                13

              
	
                3.10

              	
                Protection
                  of Trustee

              	
                13

              
	
                3.11

              	
                Retention
                  of Professional Advisors

              	
                13

              
	
                3.12

              	
                Disagreements

              	
                13

              
	
                3.13

              	
                Limitation
                  of Responsibilities

              	
                14

              
	
                3.14

              	
                Right
                  Not to Act

              	
                14

              
	
                3.15

              	
                Limitation
                  of Liability

              	
                14

              
	 	 
	
                Article
                  4 Representations and Warranties

              	
                14

              
	 	 	 
	
                4.1

              	
                Representations
                  and Warranties by the Vendor

              	
                14

              
	
                4.2

              	
                Representations
                  and Warranties by the Purchaser

              	
                18

              
	 	 
	
                Article
                  5 Survival and Limitations of Representations and
                  Warranties

              	
                20

              
	 	 	 
	
                5.1

              	
                Survival
                  of Warranties by the Vendor

              	
                20

              
	
                5.2

              	
                Survival
                  of Warranties by Purchaser

              	
                21

              


      

       

      
        
          
          

        

        
          -i-

          
            

          

        

        
          
          

        

      

      
      

       

      Table
        of Contents

       

      
        	 	
                 

              	 
	 	 	
                Page

              
	 	 	 
	
                5.3

              	
                Limitations
                  on Warranty Claims

              	
                21

              
	 	 
	
                Article
                  6 Covenants

              	
                22

              
	 	 	 
	
                6.1

              	
                Covenants
                  by the Vendor

              	
                22

              
	
                6.2

              	
                Covenants
                  by the Purchaser

              	
                24

              
	 	 
	
                Article
                  7 Standstill

              	
                26

              
	 	 	 
	
                7.1

              	
                Standstill

              	
                26

              
	 	 
	
                Article
                  8 Right of First Refusal And Grant of Option

              	
                28

              
	 	 	 
	
                8.1

              	
                Right
                  of First Refusal

              	
                28

              
	
                8.2

              	
                Grant
                  of Option

              	
                28

              
	
                8.3

              	
                Notice
                  of Exercise

              	
                28

              
	
                8.4

              	
                Transfer
                  of Title to Additional Properties

              	
                28

              
	
                8.5

              	
                No
                  Obligation to Purchase

              	
                28

              
	
                8.6

              	
                Termination
                  of Option

              	
                29

              
	 	 
	
                Article
                  9 Conditions

              	
                29

              
	 	 	 
	
                9.1

              	
                Conditions
                  to the Obligations of the Purchaser

              	
                29

              
	
                9.2

              	
                Waiver
                  or Termination by Purchaser

              	
                30

              
	
                9.3

              	
                Conditions
                  to the Obligations of the Vendor

              	
                30

              
	
                9.4

              	
                Waiver
                  or Termination by Vendor

              	
                31

              
	 	 
	
                Article
                  10 Trust Closing

              	
                31

              
	 	 	 
	
                10.1

              	
                Closing
                  Arrangements

              	
                31

              
	
                10.2

              	
                Documents
                  to be Delivered

              	
                32

              
	 	 
	
                Article
                  11 Indemnification and Set-off

              	
                32

              
	 	 	 
	
                11.1

              	
                Indemnity
                  by the Vendor

              	
                32

              
	
                11.2

              	
                Indemnity
                  by the Purchaser

              	
                33

              
	
                11.3

              	
                Provisions
                  Relating to Indemnity Claims

              	
                34

              
	
                11.4

              	
                Right
                  of Set-Off

              	
                36

              
	 	 
	
                Article
                  12 General Provisions

              	
                36

              
	 	 	 
	
                12.1

              	
                Further
                  Assurances

              	
                36

              
	
                12.2

              	
                Remedies
                  Cumulative

              	
                36

              
	
                12.3

              	
                Notices

              	
                36

              
	
                12.4

              	
                Counterparts

              	
                37

              
	
                12.5

              	
                Expenses
                  of Parties

              	
                38

              
	
                12.6

              	
                Brokerage
                  and Finder's Fees

              	
                38

              
	
                12.7

              	
                Announcements

              	
                38

              
	
                12.8

              	
                Assignment

              	
                38

              
	
                12.9

              	
                Successors
                  and Assigns

              	
                38

              
	
                12.10

              	
                Entire
                  Agreement

              	
                38

              
	
                12.11

              	
                Planning
                  Act

              	
                39

              
	
                12.12

              	
                Waiver

              	
                39

              
	
                12.13

              	
                Amendments

              	
                39

              


      

      


      
         

      

      
        
          
          

        

        
          -ii-

          
            

          

        

        
          
          

        

      

       

      
        Table
          of
          Contents

      

      
 

      
        	 	
                Page

              
	 	 
	
                Schedule
                  "A" Real Properties

              	
                A
                  -1

              
	
                Schedule
                  "B" Machinery, Equipment and Furniture

              	
                B
                  -1

              
	
                Schedule
                  "C" MNDM Orders and Closure Plans

              	
                C
                  -1

              
	
                Schedule
                  "D" Allocation of Purchase Price

              	
                D
                  -1

              
	
                Schedule
                  "E" Contractual and Regulatory Approvals

              	
                E -1

              
	
                Schedule
                  "F" Licenses

              	
                F
                  -1

              
	
                Schedule
                  "G" Additional Properties

              	
                G
                  -1

              
	
                Schedule
                  "H" Assigned Contracts

              	
                H
                  -1

              


      

      
 

      
        
          
          

        

        
          -iii-

          
            

          

        

        
          
          

        

      

    

    

      EXECUTION
        COPY

    

    
 

    ASSET
      PURCHASE AGREEMENT

     

    THIS
      AGREEMENT
      made as
      of the 6th day
      of
      June, 2008.

     

    
      BETWEEN:

    

     

    APOLLO
      GOLD CORPORATION,
      a
      corporation continued under the laws of the Yukon Territory 

     

    (hereinafter
      referred to as the "Purchaser")

     

    -
      and
      -

     

    ST
      ANDREW GOLDFIELDS LTD.,
      a
      corporation amalgamated under the laws of the Province of Ontario 

     

    (hereinafter
      referred to as the "Vendor")

     

    -
      and
      -

     

    FOGLER,
      RUBINOFF LLP

     

    (hereinafter
      referred to as the "Trustee")

     

    WHEREAS:

     

    
      
        	1.	 	
                The
                  Vendor owns certain property and assets relating to its Stock Mill
                  Complex
                  (as defined herein) located near Timmins,
                  Ontario;

              


      

       

    

    
      	
              2.

            	
               

            	
              The
                Vendor wishes to sell, and the Purchaser wishes to purchase, the
                assets
                relating to the Stock Mill Complex, upon the terms and subject to
                the
                conditions hereinafter contained;

            


    

     

    
      
        	3.	 	
                The
                  Trustee agrees to act as trustee pursuant to the terms and conditions
                  hereof;

              


      

    

     

    NOW
      THEREFORE THIS AGREEMENT WITNESSES
      that in
      consideration of the mutual covenants and agreements herein contained and the
      sum of $1.00 of lawful money of Canada and other good and valuable consideration
      paid by each of the parties hereto to each of the other parties hereto (the
      receipt and sufficiency of which are hereby acknowledged), it is agreed among
      the parties hereto as follows:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    ARTICLE 1

    INTERPRETATION

     

    1.1          
      Defined
      Terms

     

    In
      this
      Agreement and in the schedules hereto, unless there is something in the subject
      matter or context inconsistent therewith, the following terms and expressions
      will have the following meanings:

     

    
      	(a)  	
              "Additional
                Properties"
                means the real properties owned by the Vendor, which are described
                in
                Schedule
                "G"
                attached hereto;

            


    

     

    
      	(b)  	
              "Affiliate"
                has the meaning given to it in the Business
                Corporations Act
                (Ontario);

            


    

     

    
      	(c)  	
              "Apollo
                Shares"
                means up to the 28,675,000 common shares in the capital stock of
                the
                Purchaser owned by the Vendor;

            


    

     

    
      	(d)  	
              "Assigned
                Contracts"
                means (i) all Mining Leases entered into between the Vendor and third
                parties relating to the Stock Mill Complex which are included in
                the
                Purchased Assets and (ii) the contracts set out in Schedule
                "H"
                hereto; 

            


    

     

    
      	(e)  	
              "Assumed
                Liabilities"
                means collectively the liabilities of the Vendor which are to be
                assumed
                by the Purchaser pursuant to sections 2.3
                and 2.4
                hereof and the royalties set out under the heading "Royalty Interest"
                on
                Schedule
                "A"
                attached hereto; 

            


    

     

    
      	(f)  	
              "Business
                Day"
                means any day other than a day which is a Saturday, a Sunday or a
                statutory holiday in Toronto,
                Ontario;

            


    

     

    
      	(g)  	
              "Clavos
                Property"
                means a mineral property owned by the Vendor located near the Stock
                Mill
                Complex;

            


    

     

    
      	(h)  	
              "Completion
                Date"
                means June 30, 2008 or such other date (i) as set out in an Extension
                Notice, or (ii) as the Vendor and Purchaser may agree upon in
                writing;

            


    

     

    
      	(i)  	
              "Completion
                Notice" means
                a notice from the Purchaser and the Vendor to the Trustee confirming
                that
                (i) the Purchaser has the funds necessary to complete the transaction,
                and
                (ii) all other conditions to the completion of the transactions
                contemplated by this agreement have been satisfied or waived;
                

            


    

     

    
      	(j)  	
              "Completion
                Time"
                means 2:00 p.m. in Toronto on the Completion Date or such other time
                on
                the Completion Date as the parties hereto may agree
                upon;

            


    

     

    
      	(k)  	
              "Document
                Registration Agreement"
                means,
                where the transaction is to be completed by electronic registration
                as
                described in section 9.1(e) hereof, a document registration agreement
                in
                the form as is recommended from time to time by the Law Society of
                Upper
                Canada, amended to conform to the terms of this Agreement, or as
                otherwise
                agreed between the parties;

            


    

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

     

    
      	(l)  	
              "Encumbrances"
                means mortgages, charges, pledges, royalties, security interests,
                liens,
                encumbrances, actions, claims, demands and equities of any nature
                whatsoever or howsoever arising and any rights or privileges capable
                of
                becoming any of the foregoing; 

            


    

     

    
      	(m)  	
              "Environmental
                Laws"
                means applicable common law and any federal, provincial, municipal
                or
                local law, statute, by-law, ordinance, regulation, rule, order, decree,
                permit, agreement, judicial or administrative decision, injunction
                or
                legally binding requirement of any governmental entity which relates
                to or
                otherwise imposes liability or standards of conduct concerning discharges,
                spills, releases or threatened releases of noises, odours or any
                substances into, or the presence of noises, odours or any substances
                in,
                ambient air, ground or surface water or land, municipal or other
                works
                (including sewers and storm drains) or otherwise relating to the
                manufacture, processing, generation, distribution, use, treatment,
                storage, discharge, release, disposal, clean up, transport or handling
                of
                substances, as in effect on the date
                hereof;

            


    

     

    
      	(n)  	
              "ETA"
                means Part IX of the Excise
                Tax Act
                (Canada), as amended, together with the regulations to such Part,
                as
                amended;

            


    

     

    
      	(o)  	
              "Extension
                Notice"
                means a written notice of extension provided by the Purchaser to
                the
                Vendor and the Trustee at least 5 Business Days prior to June 30,
                2008
                indicating that it wishes to extend that Completion Date to a date
                beyond
                June 30, 2008, which date must be prior to August 29,
                2008;

            


    

     

    
      	(p)  	
              "First Deposit"
                has the meaning ascribed to that term in section 2.7
                hereof;

            


    

     

    
      	(q)  	
              "Material
                Adverse Effect"
                means any change, effect, event or occurrence that is, or could reasonably
                be expected to be, material and adverse to the business, properties,
                assets, liabilities, obligations, operations or financial condition
                of the
                Purchased Assets.

            


    

     

    
      	(r)  	
              "Mining
                Leases"
                means the leases and the agreements to lease between the Vendor and
                third
                parties in respect of those properties shown on Schedule
                "A"
                with the words "Mining Lease" under the heading
                "Type";

            


    

     

    
      	(s)  	
              "MNDM"
                means the Ontario Ministry of Northern Development and
                Mines;

            


    

     

    
      	(t)  	
              "Pavlica
                Agreement" means
                an agreement made the 21st
                day of May, 1996 between the Vendor and Mary
                Pavlica;

            


    

     

    
      	(u)  	
              "Permitted
                Encumbrances"
                means;

            


    

     

    
      	(i)  	
              Encumbrances
                for taxes, assessments or governmental charges incurred in the ordinary
                course of business that are not yet due and payable (taking into
                account
                any relevant grace periods), in respect of which the Vendor has
                established on its books reserves to the extent required by generally
                accepted accounting principles considered by it and its auditors
                to be
                adequate therefore;

            


    

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

     

    
      	(ii)  	
              rights
                reserved to or vested in any governmental authority by the terms
                of any
                lease, licence, franchise, grant or permit, or by any statutory provision,
                to terminate the same, to take action which results in an expropriation,
                to designate a purchaser of any of the Purchased Assets or to require
                annual or other payments as a condition to the continuance
                thereof;

            


    

     

    
      	(iii)  	
              construction,
                contractors’, mechanics’, carriers’, warehousemen’s, suppliers’ and
                materialmen’s liens and Encumbrances in respect of vacation pay, workers’
                compensation, unemployment insurance or similar statutory obligations,
                provided the obligations secured by such Encumbrances are not yet
                due and
                payable and, in the case of construction liens, which have not yet
                been
                filed or for which the Vendor has not received written notice of
                a
                Encumbrance;

            


    

     

    
      	(iv)  	
              zoning
                restrictions, easements, rights of way, leases or other similar
                encumbrances or privileges in respect of real property which in the
                aggregate do not materially impair the use of such property by the
                Vendor
                in the operation of its business;

            


    

     

    
      	(v)  	
              security
                given by the Vendor to a public utility or any governmental authority,
                when required by such utility or governmental authority in connection
                with
                the operations of the Vendor in the ordinary course of its business,
                which
                singly or in the aggregate do not materially detract from the value
                of the
                Purchased Assets or materially impair their use, including, without
                limitation, Encumbrances given in connection with reclamation bonds,
                environmental bonds or operating
                permits;

            


    

     

    
      	(vi)  	
              the
                reservation in any original grants from the Crown of any land or
                interest
                therein and statutory exceptions to
                title;

            


    

     

    
      	(vii)  	
              title
                defects or irregularities which are of a minor nature and which do
                not
                materially detract from the value of the assets of the Vendor encumbered
                thereby;

            


    

     

    
      	(viii)  	
              the
                royalties existing in respect of the Purchased Assets as set out
                under the
                column headed "Royalty Owner" on Schedule
                "A"
                hereto; and

            


    

     

    
      	(ix)  	
              the
                extension, renewal or refinancing of any of the
                above;

            


    

     

    
      	(v)  	
              "person"
                means and includes any individual, corporation, partnership, firm,
                joint
                venture, syndicate, association, trust, government, governmental
                agency or
                board or commission or authority, and any other form of entity or
                organization;

            


    

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

     

    
      	(w)  	
              "Purchase
                Price"
                means the sum of $20,000,000, less applicable adjustments as provided
                for
                herein;

            


    

     

    
      	(x)  	
              "Purchased
                Assets"
                has the meaning set out in section 2.1
                hereof;

            


    

     

    
      	(y)  	
              "Real
                Properties"
                means the real properties owned by the Vendor and shown on Schedule
                "A"
                with the word "Patent" under the heading "Type";
                

            


    

     

    
      	(z)  	
              "Registration
                Statement"
                means the registration statement on Form S-3 which was declared effective
                on May 7, 2008 by the SEC to register the Apollo Shares for resale
                pursuant to section 6.2(b)
                hereof;

            


    

     

    
      	(aa)  	
              "Rights"
                has the meaning given in section 2.2
                hereof;

            


    

     

    
      	(bb)  	
              "SEC"
                means the United States Securities and Exchange
                Commission;

            


    

     

    
      	(cc)  	
              "Second
                Deposit"
                has the meaning given in section 2.7
                hereof;

            


    

     

    
      	(dd)  	
              "Stock
                Mill Complex" means
                the assets of the Vendor located in Timmins, Ontario and known as
                the
                Vendor's "Stock Mill" complex; 

            


    

     

    
      	(ee)  	
              "Transfer
                Documents"
                means:

            


    

     

    
      	(i)  	
              all
                conveyance documents required to transfer title to the Purchased
                Assets,
                duly executed by the Vendor;

            


    

     

    
      	(ii)  	
              all
                documents necessary to discharge any Encumbrance registered against
                any of
                the Purchased Assets; and

            


    

     

    
      	(iii)  	
              all
                other documents required or contemplated to be delivered to the Trustee
                to
                transfer title to the Purchased Assets hereunder;
                

            


    

     

    
      	(ff)  	
              "Transfer
                Date"
                means the date of this Agreement;

            


    

     

    
      	(gg)  	
              "Trust
                Closing"
                has the meaning given in section 10.2;

            


    

     

    
      	(hh)  	
              "Trust
                Conditions"
                has the meaning given in section
                3.5;

            


    

     

    
      	(ii)  	
              "Trust
                Period"
                means the period from and including the Transfer Date to and including
                the
                Completion Date;

            


    

     

    
      	(jj)  	
              "Ultimate
                Owner"
                means:

            


    

     

    
      	(i)  	
              if
                the Trust Condition is fulfilled, the Purchaser;
                or

            


    

     

    
      	(ii)  	
              if
                the Trust Condition is not fulfilled, the Vendor;
                

            


    

     

    
      	(kk)  	
              "Unpatented Mineral
                Claims"
                means the mineral claims recorded in the name of the Vendor listed
                in
                Schedule
                “A”
                attached hereto; and

            


    

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    
      	(ll)  	
              "Warranty
                Claim"
                means a claim made by either the Purchaser or the Vendor based on
                or with
                respect to the inaccuracy or non-performance or non-fulfillment or
                breach
                of any representation or warranty made by the other party contained
                in
                this Agreement or contained in any document or certificate given
                in order
                to carry out the transactions contemplated
                hereby.

            


    

     

    1.2          
      Best
      of Knowledge

     

    Any
      reference herein to "the best of the knowledge" of the Vendor will mean the
      actual knowledge of the President and the Chief Financial Officer of the Vendor
      and the knowledge which either of them would have if they had conducted a
      reasonably diligent inquiry into the relevant subject matter.

     

    1.3          
      Schedules

     

    The
      schedules which are attached to this Agreement are incorporated into this
      Agreement by reference and are deemed to be part hereof.

     

    1.4          
      Currency

     

    Unless
      otherwise indicated, all dollar amounts referred to in this Agreement are in
      lawful money of Canada.

     

    1.5          
      Choice
      of Law and Attornment

     

    This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      Province of Ontario and the laws of Canada applicable therein.

     

    1.6          
      Interpretation
      Not Affected by Headings or Party Drafting

     

    The
      division of this Agreement into articles, sections, paragraphs, subparagraphs
      and clauses and the insertion of headings are for convenience of reference
      only
      and shall not affect the construction or interpretation of this Agreement.
      The
      terms "this Agreement", "hereof", "herein", "hereunder" and similar expressions
      refer to this Agreement and the schedules hereto and not to any particular
      article, section, paragraph, subparagraph, clause or other portion hereof and
      include any agreement or instrument supplementary or ancillary hereto. Each
      party hereto acknowledges that it and its legal counsel have reviewed and
      participated in settling the terms of this Agreement, and the parties hereby
      agree that any rule of construction to the effect that any ambiguity is to
      be
      resolved against the drafting party shall not be applicable in the
      interpretation of this Agreement.

     

    1.7          
      Number
      and Gender

     

    In
      this
      Agreement, unless there is something in the subject matter or context
      inconsistent therewith:

     

    
      	(a)  	
              words
                in the singular number include the plural and such words shall be
                construed as if the plural had been
                used;

            


    

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

     

    
      	(b)  	
              words
                in the plural include the singular and such words shall be construed
                as if
                the singular had been used, and

            


    

     

    
      	(c)  	
              words
                importing the use of any gender shall include all genders where the
                context or party referred to so requires, and the rest of the sentence
                shall be construed as if the necessary grammatical and terminological
                changes had been made.

            


    

     

    1.8          
      Time
      of Essence

     

    Time
      shall be of the essence hereof.

     

    ARTICLE 2

    PURCHASE
      AND SALE

     

    2.1          
      Purchased
      Assets

     

    On
      the
      terms and subject to the fulfillment of the conditions hereof, the Vendor hereby
      agrees to sell, transfer and assign to the Purchaser, and the Purchaser hereby
      agrees to purchase and accept from the Vendor, the following properties, assets,
      rights and interests of the Vendor related to the Stock Mill Complex (the
      "Purchased
      Assets"):

     

    
      	(a)  	
              Real
                Properties: all right, title and interest of the Vendor in the Real
                Properties, including the buildings and fixtures situated
                thereon;

            


    

     

    
      	(b)  	
              Mining
                Leases: all right, title and interest of the Vendor in the Mining
                Leases;

            


    

     

    
      	(c)  	
              Unpatented
                Mineral Claims: all right, title and interest of the Vendor in the
                Unpatented Mineral Claims;

            


    

     

    
      	(d)  	
              Machinery,
                Equipment and Furniture: all machinery, equipment, tools, furniture,
                furnishings and other miscellaneous items used in or relating to
                the Stock
                Mill Complex listed in Schedule
                "B"
                attached hereto;

            


    

     

    
      	(e)  	
              Core
                Samples and Data: all books, records, files and documents relating
                to the
                Real Properties, the Mining Leases and the Unpatented Mineral Claims,
                including without limitation, geological mapping studies, geological
                modelling studies, assay results, core samples, proposed drilling
                programs, geological reports, scoping studies, metallurgical studies,
                reports and studies prepared by third parties with respect to the
                Stock
                Mill Complex, reports and studies prepared by the Vendor with respect
                to
                the Stock Mill Complex and any other documents and information, in
                any
                format or media whatsoever, relating thereto;


            


    

     

    
      	(f)  	
              Regulatory
                Licences: all licences, permits, registrations and qualifications
                relating
                to the Stock Mill Complex required by any governmental or regulatory
                authority, to the extent transferable;
                and

            


    

     

    
      	(g)  	
              Assigned
                Contracts: all right, title and interest of the Vendor in the Assigned
                Contracts, to the extent
                assignable.

            


    

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    Notwithstanding
      anything contained herein, in the event that the Pavlica Agreement is determined
      to be unenforceable, it will not be included as part of the Purchased
      Assets.

     

    2.2          
      Unassignable
      Contracts

     

    If
      any
      rights, benefits or remedies (hereinafter, in this section, collectively called
      the "Rights")
      under
      any Assigned Contracts are not assignable by the Vendor to the Purchaser without
      the consent of the other party thereto and such consent is not obtained, then,
      unless the Purchaser exercises its rights under section 9.2
      hereof:

     

    
      	(a)  	
              the
                Vendor will hold the Rights for the benefit of the Purchaser;
                and

            


    

     

    
      	(b)  	
              the
                Vendor will, at the request and expense and under the direction of
                the
                Purchaser, in the name of the Vendor or otherwise as the Purchaser
                shall
                specify, take all such actions and do all such things as shall, in
                the
                opinion of the Purchaser, be necessary or desirable in order that
                the
                obligations of the Vendor under such Assigned Contracts may be performed
                in a manner such that the value of the Rights shall be preserved
                and shall
                enure to the benefit of the
                Purchaser.

            


    

     

    2.3          
      Assumed
      Liabilities.

     

    The
      Purchaser agrees to assume, pay, satisfy, discharge, perform and fulfill, from
      and after the Completion Date: (i) the Assumed Liabilities, (ii) the obligations
      arising out of or relating solely to an event, act or occurrence that takes
      place after the Completion Date under the Assigned Contracts; and (iii) all
      liabilities relating to the Purchased Assets under Environmental Laws provided
      that such liabilities do not arise out of or relate to an event, act or
      occurrence that takes place prior to the Completion Date.
      

     

    2.4          
      MNDM
      Bonding

     

    From
      and
      after the Transfer Date, the Purchaser will assume and thereafter pay, perform,
      discharge and satisfy the bonding requirements imposed by the MNDM in respect
      of
      the Stock Mill Complex as follows:

     

    
      	(a)  	
              the
                Purchaser shall assume the obligations of the Vendor under various
                orders
                and closure plans relating to the Stock Mill Complex issued by the
                MNDM,
                as listed in Schedule
                "C"
                hereto;

            


    

     

    
      	(b)  	
              the
                Purchaser shall provide its own bonding and cash security, in such
                amount
                as the MNDM may require, in each case as soon as reasonably possible
                after
                the Completion Time and in any event within 12 months from the date
                of
                this Agreement; and

            


    

     

    
      	(c)  	
              in
                the event that the MNDM has not repaid to the Vendor the sum of
                $1,211,245.11, representing the amount paid by the Vendor in respect
                of
                bonding requirements for the Stock Mill Complex within 12 months
                of the
                date of this Agreement, the Purchaser shall, within 7 days following
                the
                1st
                anniversary date of this Agreement, pay such amount to the Vendor.
                

            


    

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    2.5         
      Retained
      Liabilities and Indemnity

     

    Except
      with respect to the Assumed Liabilities, the Purchaser will not assume and
      will
      not be liable for, and the Vendor will indemnify the Purchaser from and against,
      all obligations, commitments and liabilities of and claims against the Vendor
      (whether absolute, accrued or contingent) relating to the Stock Mill Complex.
      Without limiting the generality of the foregoing, it is agreed that the
      Purchaser will have no liability for any of the following obligations or
      liabilities:

     

    
      	(a)  	
              all
                liabilities in respect of all indebtedness of the Vendor to all persons
                (other than the MNDM bonding obligations referred to in paragraph
                2.4(a)
                hereof);

            


    

     

    
      	(b)  	
              all
                liabilities for all taxes, duties, levies, assessments and other
                such
                charges, including any penalties, interests and fines with respect
                thereto, payable by the Vendor to any federal, provincial, municipal
                or
                other government or governmental agency, authority, board, bureau
                or
                commission, domestic or foreign, including, without limitation, any
                taxes
                in respect of or measured by the sale, consumption or performance
                by the
                Vendor of any product or service prior to the Completion Date and
                any tax
                pursuant to the Employer
                Health Tax Act
                (Ontario) or any similar legislation in respect of all remuneration
                payable to all persons employed in the Stock Mill Complex prior to
                the
                Completion Date;

            


    

     

    
      	(c)  	
              all
                liabilities for salary, bonus, vacation pay, severance payments,
                damages
                for wrongful dismissal and other compensation and all liabilities
                under
                employee benefit plans of the Vendor relating to employment of all
                persons
                in the Stock Mill Complex prior to the Completion Date;
                and

            


    

     

    
      	(d)  	
              subject
                to section 6.1(a),
                all liabilities for claims for injury, disability, death or workers'
                compensation arising from or related to employment in the Stock Mill
                Complex prior to the Completion
                Date.

            


    

     

    2.6          
      Purchase
      Price

     

    The
      price
      payable by the Purchaser to the Vendor for the Purchased Assets will be the
      sum
      of $20,000,000, subject to adjustments as described in section 2.5 and section
      4.1(k) herein.

     

    2.7          
      Payment
      of Purchase Price

     

    The
      Purchase Price will be paid and satisfied as follows:

     

    
      	(a)  	
              Concurrently
                with the execution of this Agreement, the Purchaser will pay to the
                Vendor
                by certified cheque or bank draft, the sum of $1,500,000 (hereinafter,
                in
                this section, called the "First
                Deposit")
                as a deposit. The First Deposit will be dealt with in accordance
                with the
                following provisions:

            


    

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    
      	(i)  	
              if
                the purchase and sale of the Purchased Assets is completed at the
                Completion Time, the First Deposit will be applied toward satisfaction
                of
                the Purchase Price;

            


    

     

    
      	(ii)  	
              if
                the purchase and sale of the Purchased Assets is not completed for
                any
                reason other than the failure of the Purchaser to satisfy any of
                the
                conditions set out in section 9.3
                hereof, the First Deposit shall be returned to the Purchaser without
                interest; and

            


    

     

    
      	(iii)  	
              if
                the purchase and sale of the Purchased Assets is not completed due
                to the
                failure of the Purchaser to satisfy any of the conditions set out
                in
                section 9.3
                hereof, then the First Deposit shall be forfeited and retained by
                the
                Vendor in full satisfaction of all damages, losses, costs and expenses
                incurred by the Vendor, and the Vendor acknowledges that it will
                not have
                any other remedy or claim against the Purchaser as a result of the
                sale of
                the Purchased Assets not being
                completed.

            


    

     

    
      	(b)  	
              Subject
                to section 2.7(c), at the Completion Time, the Purchaser will pay
                to the
                Vendor, by certified cheque or bank draft, the balance of the Purchase
                Price, being $18,500,000, less applicable adjustments as described
                in
                section 2.5 and section 4.1(k)
                herein.

            


    

     

    
      	(c)  	
              If
                the Purchaser provides the Extension Notice to the Vendor and the
                Trustee,
                the Purchaser shall:

            


    

     

    
      	(i)  	
              pay
                to the Vendor at the time of delivery of the Extension Notice the
                sum of
                $10,000,000 representing a further deposit (the "Second
                Deposit")
                to be applied against the Purchase Price;


            


    

     

    
      	(ii)  	
              if
                the purchase and sale of the Purchased Assets is not completed for
                any
                reason other than the failure of the Purchaser to satisfy any of
                the
                conditions set out in section 9.3
                hereof, the First Deposit and the Second Deposit (collectively the
                "Deposits")
                shall be returned to the Purchaser without interest;
                

            


    

     

    
      	(iii)  	
              if
                the purchase and sale of the Purchased Assets is not completed due
                to the
                failure of the Purchaser to satisfy any of the conditions set out
                in
                section 9.3
                hereof, then the Deposits shall be forfeited and retained by the
                Vendor in
                full satisfaction of all damages, losses, costs and expenses incurred
                by
                the Vendor, and the Vendor acknowledges that it will not have any
                other
                remedy or claim against the Purchaser as a result of the sale of
                the
                Purchased Assets not being completed;
                and

            


    

     

    
      	(iv)  	
              pay
                interest on the unpaid portion of the Purchase Price from June 30,
                2008 to
                the Completion Date at the rate of 12% per annum, calculated daily
                and
                payable on the Completion Date.

            


    

     

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    2.8          
      Allocation
      of Purchase Price

     

    The
      Purchase Price shall be allocated among the Purchased Assets in the manner
      provided by Schedule
      "D"
      attached
      hereto. The Vendor and the Purchaser shall file their respective tax returns
      prepared in accordance with such allocation.

     

    2.9          
      Section
      167(1) ETA Joint Election

     

    The
      parties hereto agree that they shall elect jointly under subsection 167(1)
      of
      the ETA and under any similar provision of any applicable provincial
      legislation, in the form prescribed for the purposes of that provision, in
      respect of the sale and transfer of the Purchased Assets hereunder which would
      have the effect of exempting the purchase and sale of the Purchased Assets
      from
      the Goods and Services Tax.

     

    2.10        
      Payment of Taxes

       

    

    The
      Purchaser shall be liable for and shall pay all applicable federal and
      provincial sales taxes, land transfer taxes, goods and services taxes, excise
      taxes and all other taxes (other than income taxes of the Vendor), duties and
      other like charges properly payable upon and in connection with the conveyance
      and transfer of the Purchased Assets to the Purchaser. The Vendor will do and
      cause to be done such things as are reasonably requested to enable the Purchaser
      to comply with such obligation in an efficient manner. 

     

    ARTICLE 3

    TRUST
      PROVISIONS

     

    3.1          
      Transfer
      of Title
      Documents in
      Trust

     

    The
      Vendor and the Purchaser hereby appoint the Trustee to act as trustee with
      respect to the Transfer Documents. The Trustee accepts its duties and
      responsibilities as set forth under this Agreement, and the Transfer Documents
      deposited, as a trustee.

     

    3.2          
      Acknowledgment
      of Receipt of Transfer Documents

     

    The
      Trustee acknowledges receipt of the Transfer Documents.

     

    3.3          
      Declaration
      of Trust

     

    
      	(a)  	
              The
                Trustee hereby declares and agrees to act as trustee of the Trust
                Documents and to hold and administer the Transfer Documents in trust
                for
                the use and benefit of the Ultimate Owner, its successors and permitted
                assigns, subject to the terms and conditions of this Agreement, such
                trust
                to constitute the trust (the “Trust”)
                hereunder. The appointment of the Trustee hereunder shall be conditional
                upon the delivery of the Transfer Documents to the Trustee on the
                Transfer
                Date.

            


    

     

    
      	(b)  	
              The
                Trustee hereby acknowledges and agrees that during
                the Trust Period:

            


    

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

     

    
      	(i)  	
              it
                will hold the legal title to the Transfer Documents as Trustee for
                the
                sole benefit of the Ultimate Owner as beneficial owner, and the equitable
                and beneficial interest in the Transfer Documents will
                be vested solely and exclusively in the Ultimate Owner;
                and

            


    

     

    
      	(ii)  	
              any
                benefit, interest, profit or advantage arising out of or accruing
                from the
                Transfer Documents or from the Purchased Assets during the Trust
                Period is
                and will continue to be a benefit, interest, profit or advantage
                of the
                Ultimate Owner and if received by the Trustee will be received and
                held by
                the Trustee for the sole use, benefit and advantage of the Ultimate
                Owner,
                and the Trustee will account to the Ultimate Owner for any money
                or other
                consideration paid to or to the order of the Trustee in connection
                with
                the Transfer Documents.

            


    

     

    
      	(c)  	
              The
                Trust and the Vendor and the Purchaser are not, shall not be deemed
                to be
                and shall not be treated as, a general partnership, limited partnership,
                society, syndicate, association or joint venture, nor shall the Trustee
                or
                the Vendor and the Purchaser or any of them or any person be, or
                be deemed
                to be, treated in any way whatsoever as liable or responsible hereunder
                as
                partners or joint venturers. The Trustee is not and shall not be,
                or be
                deemed to be, an agent of the Vendor and the Purchaser except as
                expressly
                set out herein. 

            


    

     

    3.4          
      Amendment
      of Trust Conditions

     

    The
      Trust
      Conditions may be amended by mutual written agreement of the Trustee, the Vendor
      and the Purchaser. 

     

    3.5          
      Satisfaction
      of Trust Conditions

     

    Upon
      delivery of a Completion Notice and the contemporaneous delivery by the
      Purchaser to the Trustee of the balance of the Purchase Price owing hereunder
      by
      certified cheque or wire transfer in immediately available funds (the
"Trust
      Conditions"),
      the
      Transfer Documents shall be dealt with as contemplated in section 9.1(e), with
      respect to the documents referred to therein, or released to the Purchaser,
      as
      the case may be, and once the registrations referred to in section 9.1(e) have
      been affected, the funds being held by the Trustee shall be paid over to the
      Vendor by certified cheque or wire transfer in immediately available funds,
      as
      more particularly set out in the Document Registration Agreement.

     

    3.6          
      Non
      Satisfaction of Trust Conditions

     

    In
      the
      event that the Trustee does not receive a Completion Notice on or before August
      29, 2008 then the Trustee shall forthwith deliver the Transfer Documents to
      the
      Vendor and the Trust shall be at an end.

     

    3.7          
      Release
      of Transfer Documents by Trustee

     

    The
      Trustee will have no responsibility for the Transfer Documents that it has
      released to the Purchaser or the Vendor in accordance with the terms of this
      Agreement.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    3.8          
      Fees
      and Expenses of Trustee

     

    The
      Purchaser shall be responsible for paying all fees and expenses charged by
      the
      Trustee in connection with the services performed by the Trustee pursuant to
      this Agreement.

     

    3.9          
      Indemnification

     

    The
      Purchaser and the Vendor hereby jointly and severally agree to indemnify and
      hold harmless the Trustee, and its current and former partners, associates,
      employees and agents from and against any and all claims, demands, losses,
      penalties, costs, expenses, fees and liabilities, directly or indirectly arising
      out of, in connection with, or in respect of, this Agreement, except where
      same
      result directly and principally from gross negligence, wilful misconduct or
      bad
      faith on the part of the Trustee. This indemnity survives the release of the
      Transfer Documents, the resignation or termination of the Trustee and the
      termination of this Agreement.

     

    3.10        
      Protection
      of Trustee

     

    The
      Trustee will be protected in acting and relying reasonably upon any notice,
      direction, instruction, order, certificate, confirmation, request, waiver,
      consent, receipt, statutory declaration or other paper or document (collectively
      referred to as "Documents")
      furnished to it and purportedly signed by any officer or person required to
      or
      entitled to execute and deliver to the Trustee any such Document in connection
      with this Agreement, not only as to its due execution and the validity and
      effectiveness of its provisions, but also as to the truth or accuracy of any
      information therein contained, which it in good faith believes to be genuine.
      The Trustee will have no responsibility for seeking, obtaining, compiling,
      preparing or determining the accuracy of any information or Document, including
      the representative capacity in which a party purports to act, that the Trustee
      receives as a condition to a release from Trust of the Transfer Documents under
      this Agreement.

     

    3.11       
      Retention
      of Professional Advisors

     

    The
      Trustee may consult with or retain such advisors as it may reasonably require
      for the purpose of discharging its duties or determining its rights under this
      Agreement and may rely and act upon the advice of such advisors. The Trustee
      will give written notice to the parties as soon as practicable that it has
      retained an advisor. The Purchaser will pay or reimburse the Trustee for any
      reasonable fees, expenses and disbursements of such advisors.

     

    3.12        
      Disagreements

     

    In
      the
      event of any disagreement arising under the terms of this Agreement between
      the
      Purchaser and the Vendor, the Trustee will be entitled, at its option, to refuse
      to comply with any and all demands whatsoever until the dispute is settled
      either by a written agreement between the Purchaser and the Vendor or by a
      court
      of competent jurisdiction.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    3.13        
      Limitation
      of Responsibilities

     

    The
      Trustee will have no duties or responsibilities except as expressly provided
      in
      this Agreement and will have no duty or responsibilities under any other
      agreement, including any agreement referred to in this Agreement, to which
      the
      Trustee is not a party.

     

    3.14        
      Right
      Not to Act

     

    The
      Trustee will have the right not to act and will not be liable for refusing
      to
      act unless it has received clear and reasonable documentation that complies
      with
      the terms of this Agreement. Such documentation must not require the exercise
      of
      any discretion or independent judgment.

     

    3.15        
      Limitation
      of Liability

     

    The
      Trustee will not be liable to any of the parties hereunder for any action taken
      or omitted to be taken by it under or in connection with this Agreement, except
      for losses directly, principally and immediately caused by its bad faith, wilful
      misconduct or gross negligence. Under no circumstances will the Trustee be
      liable for any special, indirect, incidental, consequential, exemplary,
      aggravated or punitive losses or damages hereunder, including any loss of
      profits, whether foreseeable or unforeseeable.

     

    ARTICLE 4

    REPRESENTATIONS
      AND WARRANTIES

     

    4.1          
      Representations
      and Warranties by the Vendor

     

    The
      Vendor hereby represents and warrants to the Purchaser as follows, and confirms
      that the Purchaser is relying upon the accuracy of each of such representations
      and warranties in connection with the purchase of the Purchased Assets and
      the
      completion of the other transactions hereunder:

     

    
      	(a)  	
              Corporate
                Authority and Binding Obligation.
                The Vendor has good right, full corporate power and absolute authority
                to
                enter into this Agreement and to sell, assign and transfer the Purchased
                Assets to the Purchaser in the manner contemplated herein and to
                perform
                all of the Vendor’s obligations under this Agreement. The Vendor has taken
                all necessary actions, steps and corporate and other proceedings
                to
                approve or authorize, validly and effectively, the entering into,
                and the
                execution, delivery and performance of, this Agreement and the sale
                and
                transfer of the Purchased Assets by the Vendor to the Purchaser.
                This
                Agreement is a legal, valid and binding obligation of the Vendor,
                enforceable against it in accordance with its terms subject to (i)
                bankruptcy, insolvency, moratorium, reorganization and other laws
                relating
                to or affecting the enforcement of creditors' rights generally, and
                (ii)
                the fact that equitable remedies, including the remedies of specific
                performance and injunction, may only be granted in the discretion
                of a
                court.

            


    

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

     

    
      	(b)  	
              No
                Other Purchase Agreements.
                Except for Permitted Encumbrances and the Encumbrances contemplated
                to be
                discharged by Section 1.1(ee)(ii),
                no person has any agreement, option, understanding or commitment,
                or any
                right or privilege (whether by law, pre-emptive or contractual) capable
                of
                becoming an agreement, option or commitment, for the purchase or
                other
                acquisition from the Vendor of any of the Purchased Assets, or any
                rights
                or interest therein.

            


    

     

    
      	(c)  	
              Contractual
                and Regulatory Approvals.
                Except as specified in Schedule
                "E"
                attached hereto, the Vendor is not under any obligation, contractual
                or
                otherwise, to request or obtain the consent of any person, and no
                permits,
                licences, certifications, authorizations or approvals of, or notifications
                to, any federal, provincial, municipal or local government or governmental
                agency, board, commission or authority are required to be obtained
                by the
                Vendor in connection with the execution, delivery or performance
                by the
                Vendor of this Agreement or the completion of any of the transactions
                contemplated herein. 

            


    

     

    Complete
      and correct copies of any agreements under which the Vendor is obligated to
      request or obtain any such consent have been provided to the
      Purchaser.

     

    
      	(d)  	
              Registration
                under ETA.
                The Vendor is duly and validly registered under the ETA and holds
                Registration No. 86793
                6841 RT0001.

            


    

     

    
      	(e)  	
              Status
                and Governmental Licences.

            


    

     

    
      	(i)  	
              The
                Vendor is a corporation duly incorporated and validly subsisting
                in all
                respects under the laws of its jurisdiction of incorporation. The
                Vendor
                has all necessary corporate power to own its properties and to carry
                on
                its business as it is now being
                conducted.

            


    

     

    
      	(ii)  	
              Schedule "F"
                sets out a complete and accurate list of all licences, registrations
                and
                authorizations (whether governmental, regulatory or otherwise) (the
                "Licences")
                held by or granted to the Vendor in connection with the Stock Mill
                Complex
                which are necessary in order to operate the business associated thereto.
                Each Licence is valid, subsisting and in good standing and the Vendor
                is
                not in default or breach in any material respect of any
                Licence.

            


    

     

    
      	(f)  	
              Compliance
                with Constating Documents, Agreements and Laws.
                The execution, delivery and performance of this Agreement and each
                of the
                other agreements contemplated or referred to herein by the Vendor,
                and the
                completion of the transactions contemplated hereby, will not constitute
                or
                result in a violation, breach or default, or cause the acceleration
                of any
                obligations which are included in the Assumed Liabilities,
                under:

            


    

     

    
      	(i)  	
              any
                term or provision of any of the articles, by-laws or other constating
                documents of the Vendor;

            


    

     

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    
      	(ii)  	
              subject
                to obtaining the contractual consents referred to in Schedule
                "E"
                hereof, the terms of any indenture, agreement (written or oral),
                instrument or understanding or other obligation or restriction to
                which
                the Vendor is a party or by which it is bound including, without
                limitation, any of the Assigned Contracts,
                or

            


    

     

    
      	(iii)  	
              subject
                to obtaining the regulatory consents referred to in Schedule
                "E"
                hereof, any term or provision of any of the Mining Leases or any
                order of
                any court, governmental authority or regulatory body or any law or
                regulation.

            


    

     

    
      	(g)  	
              Liabilities.
                There are no liabilities (contingent or otherwise) of the Vendor
                of any
                kind whatsoever in respect of which the Purchaser may become liable
                on or
                after the consummation of the transactions contemplated by this Agreement,
                except the Assumed Liabilities.

            


    

     

    
      	(h)  	
              Tax
                Matters.

            


    

     

    
      	(i)  	
              For
                purposes of this Agreement, the term "Governmental
                Charges"
                means and includes all taxes, customs duties, rates, levies, assessments,
                reassessments and other charges, together with all penalties, interest
                and
                fines with respect thereto, payable to any federal, provincial, municipal,
                local or other government or governmental agency, authority, board,
                bureau
                or commission, domestic or foreign, in each case, relating to the
                Stock
                Mill Complex.

            


    

     

    
      	(ii)  	
              The
                Vendor has paid, or by the Completion Date will have paid, all
                Governmental Charges which are due and payable by it on or before
                the date
                hereof. There are no actions, suits, proceedings, investigations,
                enquiries or claims now pending or made or, to the best of the knowledge
                of the Vendor threatened against the Vendor in respect of Governmental
                Charges. 

            


    

     

    
      	(i)  	
              Litigation.
                There are no actions, suits or proceedings, judicial or administrative
                (whether or not purportedly on behalf of the Vendor) pending or,
                to the
                best of the knowledge of the Vendor, threatened in writing, by or
                against
                or affecting the Vendor which relate to the Stock Mill Complex or
                the
                Purchased Assets, at law or in equity, or before or by any court
                or any
                federal, provincial, municipal or other governmental department,
                commission, board, bureau, agency or instrumentality, domestic or
                foreign
                which, in any case, could reasonably be expected to have a Material
                Adverse Effect on the Stock Mill Complex or the Purchased
                Assets.

            


    

     

    
      	(j)  	
              Title
                to Assets.
                The Vendor is the recorded and beneficial owner of and has good and
                marketable title to all of the Purchased Assets, free and clear of
                any
                Encumbrances, except for Permitted Encumbrances or as disclosed
                herein.

            


    

     

    
      	(k)  	
              Insurance.
                The Vendor does not maintain insurance coverage in respect of the
                Purchased Assets. The Vendor agrees that the Purchaser shall add
                the
                Purchased Assets to its existing insurance policy and be named as
                loss
                payee in respect of the Purchased Assets and further agrees that
                the cost
                of such insurance coverage will be deducted from the Purchase Price.
                If
                the Purchaser shall receive any insurance proceeds arising from a
                claim in
                respect of the Purchased Assets which occurs prior to the Completion
                Date
                and the Purchaser does not complete the transactions contemplated
                herein,
                the Purchaser shall promptly forward such insurance proceeds to the
                Vendor. 

            


    

     

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

     

    
      	(l)  	
              Real
                Properties and Mining Leases.

            


    

     

    
      	(i)  	
              Schedule
                "A"
                attached hereto lists all real properties included in the Purchased
                Assets
                and sets forth the property identification number (PIN) thereof.
                Except
                for Permitted Encumbrances and the Encumbrances contemplated to be
                discharged at the Completion Date by Section 1.1(ee)(ii),
                there are no agreements, options, contracts or commitments to sell,
                transfer or otherwise dispose of the Real Properties and Mining Leases
                or
                which would restrict the ability of the Vendor to transfer the Real
                Properties and Mining Leases. There are no leases, tenancies, licences
                or
                other rights of occupancy or use for any portion of the Real Properties,
                and no person other than the Vendor occupies or uses any portion
                of the
                Real Properties and Mining Leases.

            


    

     

    
      	(ii)  	
              The
                Vendor is the absolute beneficial owner of, and has good and marketable
                title in fee simple to, the Real Properties and is the absolute beneficial
                owner of, and has good and marketable title to the leasehold interest
                in
                the Mining Leases, free and clear of any and all Encumbrances, except
                for:

            


    

     

    
      	(A)  	
              Permitted
                Encumbrances; and

            


    

     

    
      	(B)  	
              the
                Encumbrances contemplated to be discharged by Section
                1.1.

            


    

     

    
      	(m)  	
              Unpatented
                Mineral Claims.
                The Unpatented Mineral Claims have been properly tagged, staked and
                recorded in accordance with the laws of the Province of Ontario.
                All
                assessment work has been performed, filed and recorded to maintain
                the
                Unpatented Mineral Claims in good standing in accordance with the
                laws of
                the Province of Ontario. 

            


    

     

    
      	(n)  	
              Affiliates.
                No part of the Stock Mill Complex and none of the Purchased Assets
                are
                owned or operated by any Affiliate of the
                Vendor.

            


    

     

    
      	(o)  	
              Partnerships
                or Joint Ventures.
                The Vendor is not, in relation to any part of the Stock Mill Complex,
                a
                partner or participant in any partnership, joint venture, profit-sharing
                arrangement or other association of any kind and is not party to
                any
                agreement under which the Vendor agrees to carry on any part of the
                Stock
                Mill Complex in such manner or by which the Vendor agrees to share
                any
                revenue or profit of the Stock Mill Complex with any other person,
                except
                pursuant to the royalties set out in Schedule
                "A".

            


    

     

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

     

    
      	(p)  	
              Outstanding
                Agreements.
                The Vendor is not a party to or bound by any outstanding or executory
                agreement, contract or commitment, whether written or oral, relating
                to
                the Stock Mill Complex, except for any contract, lease or agreement
                described or referred to in this Agreement or in the schedules hereto,
                complete and correct copies of each of the contracts, leases and
                agreement
                described herein have been provided to the
                Purchaser.

            


    

     

    
      	(q)  	
              Good
                Standing of Mining Leases.
                The Vendor is not in default or breach in any material respect of
                any of
                its obligations under any of the Mining Leases and there exists no
                state
                of facts which, after notice or lapse of time or both, would constitute
                such a default or breach. All Mining Leases are now in good standing
                and
                in full force and effect without amendment thereto, the Vendor is
                entitled
                to all benefits thereunder and, to the best of the knowledge of the
                Vendor, the other parties to such Mining Leases are not in default
                or
                breach of any of their obligations thereunder. The Vendor shall have
                obtained all necessary consents, including consent of MNDM and the
                Ontario
                Ministry of Natural Resources, for the transfer of the Mining Leases
                to
                the Purchaser on or at the Completion Date. There are no contracts,
                agreements, commitments, indentures or other instruments relating
                to the
                Stock Mill Complex under which the Vendor's rights or the performance
                of
                its obligations are dependent upon or supported by the guarantee
                of or any
                security provided by any other
                person.

            


    

     

    
      	(r)  	
              Employees.
                The Vendor has, or at the Completion Date will have, no employees
                employed
                at the Stock Mill Complex. 

            


    

     

    
      	(s)  	
              Compliance
                with Laws.
                In relation to the Stock Mill Complex, the Vendor is not in violation
                in
                any material respect of any federal, provincial or other law, regulation
                or order of any government or governmental or regulatory authority,
                domestic or foreign, including, without limitation, Environmental
                Laws and
                any law, regulation or order relating to mineral exploration and
                development.

            


    

     

    
      	(t)  	
              Complete
                Conveyance.
                The assets included in the Purchased Assets constitute all of the
                assets
                of the Vendor used in carrying on the Stock Mill Complex. The Purchased
                Assets include all rights, properties, interests, assets (both tangible
                and intangible) and agreements necessary to enable the Purchaser
                to carry
                on the Stock Mill Complex in the same manner and to the same extent
                as it
                has been carried on by the Vendor prior to the date
                hereof.

            


    

     

    
      	(u)  	
              Vendor's
                Residency.
                The Vendor is not a non-resident of Canada within the meaning of
                the
                Income
                Tax Act
                (Canada).

            


    

     

    
      	(v)  	
              Copies
                of Documents.
                Complete and correct copies (including all amendments) of all Assigned
                Contracts have been delivered to the
                Purchaser.

            


    

     

    4.2          
      Representations
      and Warranties by the Purchaser

     

    The
      Purchaser hereby represents and warrants to the Vendor as follows, and confirms
      that the Vendor is relying upon the accuracy of each of such representations
      and
      warranties in connection with the sale of the Purchased Assets and the
      completion of the other transactions hereunder:

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

    
      	(a)  	
              Corporate
                Authority and Binding Obligation.
                The Purchaser is a corporation duly incorporated and validly subsisting
                in
                all respects under the laws of its jurisdiction of incorporation.
                The
                Purchaser has good right, full corporate power and absolute authority
                to
                enter into this Agreement and to purchase the Purchased Assets from
                the
                Vendor in the manner contemplated herein and to perform all of the
                Purchaser's obligations under this Agreement. The Purchaser has taken
                all
                necessary or desirable actions, steps and corporate and other proceedings
                to approve or authorize, validly and effectively, the entering into
                of,
                and the execution, delivery and performance of, this Agreement and
                the
                purchase of the Purchased Assets by the Purchaser from the Vendor.
                This
                Agreement is a legal, valid and binding obligation of the Purchaser,
                enforceable against it in accordance with its terms subject to bankruptcy,
                insolvency, moratorium, reorganization and other laws relating to
                or
                affecting the enforcement of creditors' rights generally and the
                fact that
                equitable remedies, including the remedies of specific performance
                and
                injunction, may only be granted in the discretion of a
                court.

            


    

     

    
      	(b)  	
              Contractual
                and Regulatory Approvals.
                The Purchaser is not under any obligation, contractual or otherwise
                to
                request or obtain the consent of any person, and no permits, licences,
                certifications, authorizations or approvals of, or notifications
                to, any
                federal, provincial, municipal or local government or governmental
                agency,
                board, commission or authority are required to be obtained by the
                Purchaser in connection with the execution, delivery or performance
                by the
                Purchaser of this Agreement or the completion of any of the transactions
                contemplated herein. Complete and correct copies of any agreements
                under
                which the Purchaser is obligated to request or obtain any such consent
                have been provided to the Vendor.

            


    

     

    
      	(c)  	
              Compliance
                with Constating Documents, Agreements and Laws.
                The execution, delivery and performance of this Agreement and each
                of the
                other agreements contemplated or referred to herein by the Purchaser,
                and
                the completion of the transactions contemplated hereby, will not
                constitute or result in a violation or breach of or default
                under:

            


    

     

    
      	(i)  	
              any
                term or provision of any of the articles, by-laws or other constating
                documents of the Purchaser;

            


    

     

    
      	(ii)  	
              the
                terms of any indenture, agreement (written or oral), instrument or
                understanding or other obligation or restriction to which the Purchaser
                is
                a party or by which it is bound, or

            


    

     

    
      	(iii)  	
              any
                term or provision of any licences, registrations or qualification
                of the
                Purchaser or any order of any court, governmental authority or regulatory
                body or any applicable law or regulation of any
                jurisdiction.

            


    

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    
      	(d)  	
              Registration
                under ETA. The
                Purchaser is duly and validly registered under the ETA and holds
                Registration No.
                10251 3785 RT0002.

            


    

     

    
      	(e)  	
              Investment
                Canada Act.
                The Purchaser is not a "non-Canadian" for purposes of and within
                the
                meaning of the Investment
                Canada Act
                (Canada).

            


    

     

    ARTICLE 5

    SURVIVAL
      AND LIMITATIONS OF REPRESENTATIONS AND WARRANTIES

     

    5.1          
      Survival
      of Warranties by the Vendor

     

    The
      representations and warranties made by the Vendor and contained in this
      Agreement, or contained in any document or certificate given in order to carry
      out the transactions contemplated hereby, will survive the Closing of the
      purchase of the Purchased Assets provided for herein and, notwithstanding such
      closing or any investigation made by or on behalf of the Purchaser or any other
      person or any knowledge of the Purchaser or any other person, shall continue
      in
      full force and effect for the benefit of the Purchaser, subject to the following
      provisions of this section.

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

    
      	(a)  	
              Except
                as provided in paragraph (b)
                of
                this section, no Warranty Claim may be made or brought by the Purchaser
                after the date which is eighteen months following the Completion
                Date.

            


    

     

    
      	(b)  	
              Any
                Warranty Claim which is based upon or relates to the title to the
                Purchased Assets or which is based upon intentional misrepresentation
                or
                fraud by the Vendor may be made or brought by the Purchaser at any
                time.

            


    

     

    After
      the
      expiration of the period of time referred to in paragraph (a)
      of this
      section, the Vendor will be released from all obligations and liabilities in
      respect of the representations and warranties made by the Vendor and contained
      in this Agreement or in any document or certificate given in order to carry
      out
      the transactions contemplated hereby except with respect to any claims made
      by
      the Purchaser in writing prior to the expiration of such period and subject
      to
      the rights of the Purchaser to make any claim permitted by paragraph
(b)
      of this
      section.

     

    5.2          
      Survival
      of Warranties by Purchaser

     

    The
      representations and warranties made by the Purchaser and contained in this
      Agreement or contained in any document or certificate given in order to carry
      out the transactions contemplated hereby will survive the Closing of the
      purchase and sale of the Purchased Assets provided for herein and,
      notwithstanding such closing or any investigation made by or on behalf of the
      Vendor or any other person or any knowledge of the Vendor or any other person,
      shall continue in full force and effect for the benefit of the Vendor provided
      that no Warranty Claim may be made or brought by the Vendor after the date
      which
      is eighteen months following the Completion Date.

     

    5.3          
      Limitations
      on Warranty Claims

     

    
      	(a)  	
              Neither
                the Purchaser nor the Vendor shall be entitled to make a Warranty
                Claim if
                the Purchaser or the Vendor, as applicable, has been advised in writing
                or
                otherwise has actual knowledge prior to the Completion Time of the
                inaccuracy, non-performance, non-fulfillment or breach which is the
                basis
                for such Warranty Claim and the Purchaser or the Vendor, as applicable,
                completes the transactions hereunder notwithstanding such inaccuracy,
                non-performance, non-fulfillment or
                breach.

            


    

     

    
      	(b)  	
              The
                amount of any damages which may be claimed by the Purchaser or the
                Vendor,
                as applicable, pursuant to a Warranty Claim shall be calculated to
                be the
                cost or loss to the Purchaser or the Vendor, as applicable, after
                giving
                effect to:

            


    

     

    
      	(i)  	
              any
                insurance proceeds available to the Purchaser or the Vendor, as
                applicable, in relation to the matter which is the subject of the
                Warranty
                Claim, and

            


    

     

    
      	(ii)  	
              the
                value of any related, determinable tax benefits realized, or to be
                realized within a two year period following the date of incurring
                such
                cost or loss, by the Purchaser or the Vendor, as applicable, in relation
                to the matter which is the subject of the Warranty
                Claim.

            


    

     

    
      	(c)  	
              The
                Purchaser or the Vendor, as applicable, shall not be entitled to
                make any
                Warranty Claim until the aggregate amount of all damages, losses,
                liabilities and expenses incurred by the Purchaser or the Vendor,
                as
                applicable, as a result of all misrepresentations and breaches of
                warranties contained in this Agreement or contained in any document
                or
                certificate given in order to carry out the transactions contemplated
                hereby, after taking into account paragraph (b)
                of
                this section, is equal to $100,000. After the aggregate amount of
                such
                damages, losses, liabilities and expenses incurred by the Purchaser
                or the
                Vendor, as applicable, exceeds $100,000, the Purchaser or the Vendor,
                as
                applicable, shall only be entitled to make Warranty Claims to the
                extent
                that such aggregate amount, after taking into account the provisions
                of
                paragraph (b)
                of
                this section, exceeds $100,000.

            


    

     

    
      	(d)  	
              Notwithstanding
                any other provisions of this Agreement or of any agreement, certificate
                or
                other document made in order to carry out the transactions contemplated
                hereby, except the provisions of section 2.7(c), which shall not
                be so
                limited, the maximum aggregate liability of the Vendor or the Purchaser,
                as applicable, together in respect of all Warranty Claims by the
                Purchaser
                or the Vendor, as applicable, will be limited to $1,500,000.
                

            


    

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

    ARTICLE 6

    COVENANTS

     

    6.1          
      Covenants
      by the Vendor

     

    The
      Vendor covenants to the Purchaser that it will do or cause to be done the
      following:

     

    
      	(a)  	
              Investigation
                of Purchased Assets.
                During the Trust Period, the Vendor will provide access to and will
                permit
                the Purchaser, through its representatives, to make such investigation
                of
                the operations, properties, assets and records of the Stock Mill
                Complex
                and of its legal condition as the Purchaser deems necessary or advisable
                to familiarize itself with such operations, properties, assets, records
                and other matters. Without limiting the generality of the foregoing,
                during the Trust Period the Vendor will permit the Purchaser and
                its
                representatives to have access to the premises used in connection
                with the
                Stock Mill Complex, and will produce for inspection and provide copies
                to
                the Purchaser of:

            


    

     

    
      	(i)  	
              all
                agreements and other documents referred to in section 4.1
                hereof or in any of the schedules attached hereto and all other contracts,
                leases, licences, title documents, title opinions, documents relating
                to
                legal or administrative proceedings and all other documents of or
                in the
                possession of the Vendor relating to the Stock Mill Complex;
                and

            


    

     

    
      	(ii)  	
              all
                other information which, in the reasonable opinion of the Purchaser's
                representatives, is required in order to make an examination of the
                Stock
                Mill Complex;

            


    

     

    provided,
      however, that such investigations and inspections shall not mitigate or affect
      the representations and warranties of the Vendor hereunder, which shall continue
      in full force and effect. The Purchaser agrees to indemnify and hold the Vendor
      harmless for any damage to personal or real property and any damages for
      personal injury or death and any other liabilities of the Vendor resulting
      from
      the exercise of those rights granted by this section to the
      Purchaser.

     

    
      	(b)  	
              Removal
                of Assets.
                During the Trust Period, the Purchaser shall not remove any assets
                relating to the Stock Mill Complex or conduct any business activity
                thereon, except as permitted pursuant to this Agreement or upon the
                prior
                written consent of the Vendor.

            


    

     

    
      	(c)  	
              Environmental
                Remediation Work.
                During the Trust Period, the Purchaser and its authorized representatives
                shall be authorized to perform certain remediation work on the tailings
                dam of the Stock Mill Complex as required by the MNDM to satisfy
                work
                orders set out in Schedule
                "C"
                attached hereto, provided that the Purchaser acknowledges and agrees
                that
                it shall not be entitled to be indemnified by the Vendor for any
                costs it
                incurs pursuant to this section 6.1(c).

            


    

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

     

    
      	(d)  	
              Conduct
                During Trust Period.
                Except as contemplated by this Agreement or with the prior written
                consent
                of the Purchaser, during the Trust Period the Vendor will:
                

            


    

     

    
      	(i)  	
              maintain
                the security on the Stock Mill Complex as exists on the Transfer
                Date;

            


    

     

    
      	(ii)  	
              take
                all actions within its control to ensure that the representations
                and
                warranties in section 4.1
                hereof remain true and correct at the Completion Time, with the same
                force
                and effect as if such representations and warranties were made at
                and as
                of the Completion Time, and to satisfy or cause to be satisfied the
                conditions in section 9.1
                hereof;

            


    

     

    
      	(iii)  	
              promptly
                advise the Purchaser of any facts that come to its attention which
                would
                cause any of the Vendor's representations and warranties herein contained
                to be untrue in any material
                respect;

            


    

     

    
      	(iv)  	
              take
                all action to preserve the Purchased Assets and the Stock Mill Complex
                and
                to maintain in full force and effect all agreements, including the
                Mining
                Leases, relating to the Stock Mill Complex to which the Vendor is
                a party,
                and take all other action reasonably requested by the Purchaser in
                order
                that the condition of the Stock Mill Complex will not be impaired
                during
                the Trust Period;

            


    

     

    
      	(v)  	
              promptly
                advise the Purchaser in writing of any material adverse change in
                the
                condition of the Stock Mill Complex during the Trust
                Period;

            


    

     

    
      	(vi)  	
              not
                create, incur or assume any Encumbrance upon any of the Purchased
                Assets;

            


    

     

    
      	(vii)  	
              not
                dispose of any of Purchased Assets;
                and

            


    

     

    
      	(viii)  	
              take
                all actions within their control to ensure that the Vendor performs
                all of
                its obligations falling due during the Trust Period under all agreements
                relating to the Stock Mill Complex to which the Vendor is a party
                or by
                which it is bound.

            


    

     

    
      	(e)  	
              Transfer
                of Purchased Assets.
                At or before the Transfer Date, the Vendor will cause all necessary
                steps
                and corporate proceedings to be taken in order to permit the transfer
                of
                the Purchased Assets following completion of the Trust
                Condition.

            


    

     

    
      	(f)  	
              General
                Conveyance.
                At the Transfer Date, the Vendor will deliver in trust to the Trustee,
                for
                the benefit of the Purchaser subject to fulfillment of the Trust
                Conditions, the Transfer Documents.


            


    

     

    
      	(g)  	
              Retail
                Sales Tax.
                At or before the Completion Time, the Vendor will deliver to the
                Purchaser
                a duplicate copy of a certificate issued pursuant to section 6 of
                the
                Retail
                Sales Tax Act (Ontario).

            


    

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

    
      	(h)  	
              Transfer
                of Assigned Contracts.
                Vendor will deliver to the Trustee:

            


    

     

    
      	(i)  	
              on
                the Transfer Date, an executed original of each of the Assigned
                Contracts;

            


    

     

    
      	(ii)  	
              on
                the Transfer Date, one or more forms of assignment of the Assigned
                Contracts in form acceptable to the Purchaser,
                and

            


    

     

    
      	(iii)  	
              on
                the Completion Date, consents to the assignment of all of the Assigned
                Contracts under which consent is required executed by all persons
                whose
                consent is required in form acceptable to the Purchaser.
                

            


    

     

    
      	(i)  	
              Abandonment
                of Mineral Claim.
                On the Transfer Date, the Vendor will deliver to the Purchaser a
                notice of
                abandonment in respect of mineral claim #L3003826 in the Township
                of
                Hislop and shall execute and deliver to the Purchaser a mutual release
                in
                respect thereof.

            


    

     

    
      	(j)  	
              Clavos
                Property.
                The parties acknowledge that the Clavos Property is currently not
                using
                electricity provided by the power lines which are located on the
                Stock
                Mill Complex, however; within 10 years following the Completion Date,
                the
                Vendor shall have the right to give a written notice to the Purchaser
                stating that the Vendor (i) intends to use such power lines, (ii)
                shall
                pay for the costs of installing a separate electricity meter for
                the
                purpose of measuring electricity consumption at the Clavos Property,
                and
                (iii) shall reimburse the Purchaser for all electricity costs incurred
                by
                the Vendor in respect of the Clavos Property, such reimbursement
                to be
                paid within 30 days from the Purchaser delivering to the Vendor of
                a
                statement of the amount owing and evidence satisfactory to the Vendor,
                acting reasonably, with respect to the calculation thereof.
                

            


    

     

    6.2          
      Covenants
      by the Purchaser

     

    The
      Purchaser covenants to the Vendor that it will do or cause to be done the
      following:

     

    
      	(a)  	
              Confidentiality.
                Prior to the Completion Time and, if the transaction contemplated
                hereby
                is not completed, at all times after the Completion Time, the Purchaser
                will keep confidential all information obtained by it relating to
                the
                Stock Mill Complex, except such information
                which:

            


    

     

    
      	(i)  	
              prior
                to the date hereof was already in the possession of the Purchaser,
                as
                demonstrated by written records;

            


    

     

    
      	(ii)  	
              is
                generally available to the public, other than as a result of a disclosure
                by the Purchaser, or

            


    

     

    
      	(iii)  	
              is
                made available to the Purchaser on a non-confidential basis from
                a source
                other than the Vendor or its
                representatives.

            


    

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

     

    The
      Purchaser further agrees that such information will be disclosed only to those
      of its employees and representatives of its advisors who need to know such
      information for the purposes of evaluating and implementing the transaction
      contemplated hereby.

     

    Notwithstanding
      the foregoing provisions of this paragraph, the obligation to maintain the
      confidentiality of such information will not apply to the extent that disclosure
      of such information is required in connection with governmental or other
      applicable filings relating to the transactions hereunder, provided that, in
      such case, unless the Vendor otherwise agrees, the Purchaser will, if possible,
      request confidentiality in respect of such governmental or other filings. If
      the
      transactions contemplated hereby are not consummated for any reason, the
      Purchaser will return forthwith, without retaining any copies thereof, all
      information and documents obtained from the Vendor.

     

    
      	(b)  	
              Access
                to Core Samples.
                The Vendor shall be provided access during normal business hours
                following
                the Completion Date to any of its core samples unrelated to the Purchased
                Assets ("Unrelated
                Core Samples")
                and remaining at the Stock Mill Complex, provided, however, that
                the
                Vendor must remove such Unrelated Core Samples from the Stock Mill
                Complex
                within 12 months of the Completion Date, failing which it will have
                no
                further right of access to the Unrelated Core
                Samples.

            


    

     

    
      	(c)  	
              Clavos
                Property.
                Upon receipt of the notice referred to in section 6.1(j), the Purchaser
                agrees to install at the Vendor's expense an internal electricity
                meter to
                measure electrical power consumed by the Vendor at the Clavos Property,
                which electricity will be charged to the Vendor on a monthly basis
                and
                paid as contemplated in section
                6.1(j).

            


    

     

    
      	(d)  	
              Work
                Performed by Purchaser During Trust Period.
                The Purchaser agrees that any work that it performs during the Trust
                Period for the benefit of the Purchased Assets will be for its own
                account
                and shall not be for the account of or on behalf of the
                Vendor.

            


    

     

    
      	(e)  	
              Mutual
                Release in Respect of Mineral Claim.
                On the Transfer Date, the Purchaser shall execute and deliver to
                the
                Vendor a mutual release in respect of Apollo claim
                #L1048333.

            


    

     

    
      	(f)  	
              Registration
                Statement. The
                Purchaser confirms that it has registered for resale the Apollo Shares
                pursuant to the Registration Statement, provided
                that:

            


    

     

    
      	(i)  	
              in
                the event that the transactions contemplated herein are not completed
                for
                any reason, the Purchaser may withdraw such Registration
                Statement;

            


    

     

    
      	(ii)  	
              it
                is understood and agreed that the Purchaser’s obligation to maintain the
                effectiveness of the foregoing registration shall terminate on the
                date on
                which Vendor can sell all of the Apollo Shares in a single transaction
                in
                compliance with Rule 144 under the United States Securities Act of
                1933,
                as amended (or any similar rule then in
                force);

            


    

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

     

    
      	(iii)  	
              at
                any time upon written notice to the Vendor and for a period not to
                exceed
                120 days thereafter (the “Suspension
                Period”),
                the Purchaser may suspend the use or effectiveness of the Registration
                Statement (and the Vendor hereby agrees not to offer or sell any
                registrable securities pursuant to such registration statement during
                the
                Suspension Period) if the Purchaser reasonably believes that the
                Purchaser
                may, in the absence of such suspension hereunder, be required under
                state
                or federal securities laws to disclose any corporate development
                the
                disclosure of which could reasonably be expected to have a material
                adverse effect upon the Purchaser, its stockholders, a potentially
                significant transaction or event involving the Purchaser, or any
                negotiations, discussions, or proposals directly relating thereto;
                and

            


    

     

    
      	(iv)  	
              if
                at any time the SEC deems resales by the Vendor to be a primary offering
                of the Purchaser and at such time the Purchaser is ineligible to
                use Form
                S-3 for primary offerings, then the Purchaser shall be under no obligation
                to register for resale, or maintain the effectiveness of then existing
                Registration Statement in respect of, any the Apollo Shares during
                any
                such period; provided, however, that, if the Purchaser later becomes
                eligible to use Form S-3, then it shall register the Apollo Shares
                in
                accordance with the terms hereof.

            


    

     

    ARTICLE 7

    STANDSTILL

     

    7.1          
      Standstill

     

    Each
      of
      the Vendor and the Purchaser acknowledges and agrees that for a period of two
      years from the date hereof, it shall not, directly or indirectly, except with
      the prior written consent of the other party, which consent shall not be
      unreasonably withheld:

     

    
      	(a)  	
              solicit
                the employment of any officer or employees of the other or such other's
                Affiliates;

            


    

     

    
      	(b)  	
              acquire
                or agree to acquire, or make any proposal to acquire, in any manner,
                either directly or indirectly, any securities or property of the
                other
                party or its Affiliates;

            


    

     

    
      	(c)  	
              commence
                an offer of any nature or kind whatsoever for any securities of the
                other
                party or its Affiliates, including a takeover bid, tender or exchange
                offer; 

            


    

     

    
      	(d)  	
              in
                respect of any shareholder meeting of the other party, solicit proxies
                from one or more holders of securities of the other party or its
                Affiliates or form, join or in any way participate in a proxy contest
                with
                respect to the securities of the other party or its
                Affiliates;

            


    

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

     

    
      	(e)  	
              subject
                to the provisions contained in section 7.1(f) below, sell, transfer
                or
                dispose, in any manner either directly or indirectly, any securities
                of
                the other party or its Affiliates, provided that the Vendor shall
                be
                entitled to sell that number of the Apollo Shares during the time
                periods
                as set out below:

            


    

     

    
      	(i)  	
              up
                to 3,000,000 Apollo Shares may be sold by the Vendor commencing as
                of the
                date hereof and terminating on June 30,
                2008;

            


    

     

    
      	(ii)  	
              up
                to 4,000,000 Apollo Shares may be sold by the Vendor commencing July
                1,
                2008 and terminating on September 31,
                2008;

            


    

     

    
      	(iii)  	
              up
                to 5,000,000 Apollo Shares may be sold by the Vendor commencing October
                1,
                2008 and terminating on December 31,
                2008;

            


    

     

    
      	(iv)  	
              subsequent
                to December 31, 2008 there will be no restrictions on the ability
                of the
                Vendor to sell any Apollo Shares;

            


    

     

    
      	(f)  	
              the
                resale restrictions contained in section 7.1(e) above shall not apply
                in
                the following circumstances:

            


    

     

    
      	(i)  	
              subject
                to the prior written approval of the Purchaser, which approval shall
                not
                be unreasonably withheld, the Vendor shall be entitled to sell any
                number
                of Apollo Shares in a private transaction to a third party purchaser
                at
                any time during the time periods set forth above on the condition
                that
                such third party purchaser agrees to abide by the resale restrictions
                contained in this section 7.1(e);
                and

            


    

     

    
      	(ii)  	
              the
                Vendor shall be entitled to sell Apollo Shares through the facilities
                of
                the Toronto Stock Exchange (the "TSX")
                or the American Stock Exchange (the "AMEX")
                provided that the sale price for Apollo Shares is equal to or greater
                than
                the 5 day weighted average selling price of Apollo shares on the
                TSX or
                the AMEX for the 5 trading days immediately preceding the proposed
                date of
                any such sale;

            


    

     

    
      	(g)  	
              conclude
                any understandings or enter into any agreement, or otherwise act
                in
                concert with any third party to propose or effect any business combination
                or other similar transaction of any nature or kind with respect to
                the
                other party or its Affiliates, provided that the aforesaid shall
                not
                prevent the board of directors of a party making a recommendation
                to its
                shareholders regarding any unsolicited proposal by a third party
                relating
                to a business combination or other similar transaction with such
                party
                itself; or 

            


    

     

    
      	(h)  	
              advise,
                assist or encourage any person or party or join with or in any way
                participate in a group which is acting jointly or in concert in connection
                with any of the foregoing;

            


    

     

    provided,
      however, that the provisions of this section shall not be effective in the
      event
      that the transactions contemplated in this Agreement are not completed for
      any
      reason.

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

     

    ARTICLE 8

    RIGHT
      OF FIRST REFUSAL AND GRANT OF OPTION

     

    8.1          
      Right
      of First Refusal

     

     

    The
      Vendor hereby agrees, for a period of 24 months commencing on the Completion
      Date, to grant the Purchaser a right of first refusal to match a bona fide
      offer
      (a "Third
      Party Offer")
      from a
      third party dealing at arm’s length with the Vendor (the "Third
      Party Purchaser")
      to
      purchase all or any of the Additional Properties. Upon receipt of an Offer,
      the
      Vendor will give written notice (the “Selling
      Notice”)
      to the
      Purchaser of its intention to sell such Additional Properties. The Selling
      Notice will offer to sell to the Purchaser the Additional Properties as
      specified in the Third Party Offer on the terms contained in the Third Party
      Offer and will include a true copy of the Third Party Offer and the name of
      the
      Third Party Purchaser and any person controlling the Third Party Purchaser,
      directly or indirectly. The Purchaser will have 30 days from its receipt of
      the
      Third Party Offer to accept it by notice in writing to the Vendor. If the
      Purchaser fails to respond in writing within such 30 day period, it will be
      deemed to have declined the Offer.

    


     

    8.2          
      Grant
      of Option

     

    The
      Vendor hereby grants to the Purchaser, subject to the terms and conditions
      set
      out in this Article 8, an irrevocable option (the "Option")
      to
      purchase from the Vendor, all but not less than all of the Additional Properties
      free and clear of all Encumbrances, at any time and commencing on the
      2nd
      anniversary of the Completion Date to and including the 10th
      anniversary of the Completion Date (the "Option
      Period"),
      at an
      exercise price of $500,000 (the "Exercise
      Price").

     

    8.3          
      Notice
      of Exercise

     

    The
      Option shall be exercisable by the Purchaser delivering an irrevocable written
      notice to the Vendor (an "Exercise
      Notice")
      at its
      address hereinafter provided during the Option Period, stating that it will
      exercise the Option, together with a certified cheque or bank draft payable
      to
      or to the order of the Vendor for the Exercise Price on the date specified
      in
      the Exercise Notice (the "Option
      Closing Date")
      which
      shall be at lest 30 days, or no more than 60 days, from the date of the Exercise
      Notice. 

     

    8.4          
      Transfer
      of Title to Additional Properties

     

    On
      the
      Option Closing Date, the Vendor shall deliver to the Purchaser all title
      documents necessary to transfer title to the Additional Properties free and
      clear of all Encumbrances.

     

    8.5          
      No
      Obligation to Purchase

     

    Unless
      the Purchaser shall have delivered the Exercise Notice, nothing herein contained
      shall obligate the Purchaser to purchase and/or pay for the Additional
      Properties.

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

     

    8.6          
      Termination
      of Option

     

    The
      Option shall expire and all rights to purchase the Additional Properties
      hereunder shall cease and become null and void as at the expiration of the
      Option Period.

     

    ARTICLE 9

    CONDITIONS

     

    9.1          
      Conditions
      to the Obligations of the Purchaser

     

    Notwithstanding
      anything herein contained, the obligation of the Purchaser to complete the
      transactions provided for herein will be subject to the fulfillment of the
      following conditions at or prior to the Completion Time, and the Vendor
      covenants to use its best efforts to ensure that such conditions are
      fulfilled.

     

    
      	(a)  	
              Accuracy
                of Representations and Warranties and Performance of
                Covenants.
                The representations and warranties of the Vendor contained in section
                4.1
                of this Agreement shall be true and accurate on the date hereof and
                at the
                Completion Time with the same force and effect as though such
                representations and warranties had been made as of the Completion
                Time
                (regardless of the date as of which the information in this Agreement
                or
                in any schedule or other document made pursuant hereto is given).
                In
                addition, the Vendor shall have complied with all covenants and agreements
                herein agreed to be performed or caused to be performed by it at
                or prior
                to the Completion Time. In addition, the Vendor shall have delivered
                to
                the Purchaser a certificate confirming that the facts with respect
                to each
                of the above-noted representations and warranties of the Vendor are
                as set
                out herein at the Completion Time and that the Vendor has performed
                all
                covenants required to be performed by it
                hereunder.

            


    

     

    
      	(b)  	
              Material
                Adverse Changes.
                During the Trust Period there will have been no change in the condition
                in
                the Purchased Assets, howsoever arising, except changes which have
                occurred in the ordinary course of business and which, individually
                or in
                the aggregate, have not affected and may not affect the Purchased
                Assets
                in any material adverse respect. Without limiting the generality
                of the
                foregoing, during the Trust Period, no damage to or destruction of
                any
                material part of the Purchased Assets shall have occurred, whether
                or not
                covered by insurance. 

            


    

     

    
      	(c)  	
              No
                Restraining Proceedings.
                No order, decision or ruling of any court, tribunal or regulatory
                authority having jurisdiction shall have been made, and no action
                or
                proceeding shall be pending or threatened which, in the opinion of
                counsel
                to the Purchaser, is likely to result in an order, decision or
                ruling:

            


    

     

    
      	(i)  	
              to
                disallow, enjoin, prohibit or impose any limitations or conditions
                on the
                purchase and sale of the Purchased Assets contemplated hereby or
                the right
                of the Purchaser to own the Purchased Assets,
                or

            


    

     

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

     

    
      	(ii)  	
              to
                impose any limitations or conditions which may have a material adverse
                effect on the Purchased Assets.

            


    

     

    
      	(d)  	
              Consents.
                All consents required to be obtained in order to carry out the
                transactions contemplated hereby in compliance with all laws and
                agreements binding upon the parties hereto shall have been obtained,
                including the consents referred to in Schedule
                "E"
                attached hereto.

            


    

     

    
      	(e)  	
              Effective
                Registration of Transfers.
                Where
                the transaction will be completed by electronic registration pursuant
                to
                Part III of the Land Registration Reform Act, R.S.O. 1990, Chapter
                L4 and
                the Electronic Registration Act, S.O. 1991, Chapter 44, and any amendments
                thereto, the Vendor and Purchaser acknowledge and agree that the
                deliveries set out in this Agreement will: (a) not occur at the same
                time
                as the registration of the transfer of Real Properties and Mining
                Leases
                (and any other documents intended to be registered in connection
                with the
                completion of this transaction) and (b) be held in escrow and not
                released
                except in accordance with the terms of the Document Registration
                Agreement.

            


    

     

    
      	(f)  	
              Opinion
                of Vendor's Counsel.
                At the Transfer Date, the Purchaser shall have received an opinion
                of
                legal counsel for the Vendor in the form satisfactory to the Purchaser
                which opinion may rely on certificates of one or more senior officers
                of
                the Vendor as to factual matters. 

            


    

     

    9.2          
      Waiver
      or Termination by Purchaser

     

    The
      conditions contained in section 9.1
      hereof
      are inserted for the exclusive benefit of the Purchaser and may be waived in
      whole or in part by the Purchaser at any time. The Vendor acknowledges that
      the
      waiver by the Purchaser of any condition or any part of any condition shall
      constitute a waiver only of such condition or such part of such condition,
      as
      the case may be, and shall not constitute a waiver of any covenant, agreement,
      representation or warranty made by the Vendor herein that corresponds or is
      related to such condition or such part of such condition, as the case may be.
      If
      any of the conditions contained in section 9.1
      hereof
      are not fulfilled or complied with as herein provided, the Purchaser may, at
      or
      prior to the Completion Time at its option, rescind this Agreement by notice
      in
      writing to the Vendor and in such event the Purchaser shall be released from
      all
      obligations hereunder and, unless the condition or conditions which have not
      been fulfilled are reasonably capable of being fulfilled or caused to be
      fulfilled by the Vendor, then the Vendor shall also be released from all
      obligations hereunder.

     

    9.3          
      Conditions
      to the Obligations of the Vendor

     

    Notwithstanding
      anything herein contained, the obligations of the Vendor to complete the
      transactions provided for herein will be subject to the fulfillment of the
      following conditions at or prior to the Completion Time, and the Purchaser
      will
      use its best efforts to ensure that such conditions are fulfilled.

     

    
      	(a)  	
              Accuracy
                of Representations and Warranties and Performance of
                Covenants.
                The representations and warranties of the Purchaser contained in
                this
                Agreement or in any documents delivered in order to carry out the
                transactions contemplated hereby will be true and accurate on the
                date
                hereof and at the Completion Time with the same force and effect
                as though
                such representations and warranties had been made as of the Completion
                Time (regardless of the date as of which the information in this
                Agreement
                or any such schedule or other document made pursuant hereto is given).
                In
                addition, the Purchaser shall have complied with all covenants and
                agreements herein agreed to be performed or caused to be performed
                by it
                at or prior to the Completion Time. In addition, the Purchaser shall
                have
                delivered to the Vendor a certificate confirming that the facts with
                respect to each of the representations and warranties of the Purchaser
                are
                as set out herein at the Completion Time and that the Purchaser has
                performed each of the covenants required to be performed by it hereunder.
                

            


    

     

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

     

    
      	(b)  	
              No
                Restraining Proceedings.
                No order, decision or ruling of any court, tribunal or regulatory
                authority having jurisdiction shall have been made, and no action
                or
                proceeding shall be pending or threatened which, in the opinion of
                counsel
                to the Vendor, is likely to result in an order, decision or ruling,
                to
                disallow, enjoin or prohibit the purchase and sale of the Purchased
                Assets
                contemplated hereby.

            


    

     

    
      	(c)  	
              Opinion
                of Purchaser's Counsel.
                At the Transfer Date, the Vendor shall have received an opinion of
                the
                Purchaser's counsel in the form satisfactory to the Vendor which
                opinion
                may rely on certificates of senior officers of the Purchaser as to
                factual
                matters. 

            


    

     

    9.4          
      Waiver
      or Termination by Vendor

     

    The
      conditions contained in section 9.3
      hereof
      are inserted for the exclusive benefit of the Vendor and may be waived in whole
      or in part by the Vendor at any time. The Purchaser acknowledges that the waiver
      by the Vendor of any condition or any part of any condition shall constitute
      a
      waiver only of such condition or such part of such condition, as the case may
      be, and shall not constitute a waiver of any covenant, agreement, representation
      or warranty made by the Purchaser herein that corresponds or is related to
      such
      condition or such part of such condition, as the case may be. If any of the
      conditions contained in section 9.3
      hereof
      are not fulfilled or complied with as herein provided, the Vendor may, at or
      prior to the Closing Time at its option, rescind this Agreement by notice in
      writing to the Purchaser and in such event the Vendor shall be released from
      all
      obligations hereunder and, unless the condition or conditions which have not
      been fulfilled are reasonably capable of being fulfilled or caused to be
      fulfilled by the Purchaser, then the Purchaser shall also be released from
      all
      obligations hereunder.

     

    ARTICLE 10

    TRUST
      CLOSING

     

    10.1       
       Closing
      Arrangements

     

    Subject
      to the terms and conditions hereof, the Trust Closing shall take place at 10:00
      a.m. (Toronto time) on the Transfer Date at the offices of Lang Michener LLP
      at
      Brookfield Place, Suite 2500, 181 Bay Street, Toronto, Ontario M5J 2T7 or at
      such other place or places as may be mutually agreed upon by the Vendor and
      the
      Purchaser. 

     

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

     

    10.2        
      Documents
      to be Delivered

     

    On
      or
      before the Transfer Date, the Vendor shall execute, or cause to be executed,
      and
      shall deliver, or cause to be delivered, to the Trustee as contemplated in
      section 3.1
      hereof,
      all documents, instruments and things which are to be delivered by the Vendor
      pursuant to the provisions of this Agreement, and the Purchaser shall execute,
      or cause to be executed, and shall deliver, or cause to be delivered, to the
      Vendor all cheques or bank drafts and all documents, instruments and things
      which the Purchaser is to deliver or to cause to be delivered at the Transfer
      Date pursuant to the provisions of this Agreement (the "Trust
      Closing").
      

     

    ARTICLE 11

    INDEMNIFICATION
      AND SET-OFF

     

    11.1        
      Indemnity
      by the Vendor

     

    
      	(a)  	
              The
                Vendor hereby agrees to indemnify and save the Purchaser harmless
                from and
                against any claims, demands, actions, causes of action, damage, loss,
                deficiency, cost, liability and expense which may be made or brought
                against the Purchaser or which the Purchaser may suffer or incur
                as a
                result of, in respect of or arising out
                of:

            


    

     

    
      	(i)  	
              any
                non-performance or non-fulfillment of any covenant or agreement on
                the
                part of the Vendor contained in this Agreement or in any document
                given in
                order to carry out the transactions contemplated
                hereby;

            


    

     

    
      	(ii)  	
              any
                misrepresentation, inaccuracy, incorrectness or breach of any
                representation or warranty made by the Vendor contained in this Agreement
                or contained in any document or certificate given in order to carry
                out
                the transactions contemplated
                hereby;

            


    

     

    
      	(iii)  	
              any
                liabilities of the Vendor other than the Assumed Liabilities;
                

            


    

     

    
      	(iv)  	
              the
                operations of the Stock Mill Complex prior to the Transfer Date;
                and

            


    

     

    
      	(v)  	
              all
                costs and expenses including, without limitation, legal fees on a
                solicitor and client basis, incidental to or in respect of the
                foregoing.

            


    

     

    
      	(b)  	
              The
                obligations of indemnification by the Vendor pursuant to paragraph
                (a)
                of
                this section will be:

            


    

     

    
      	(i)  	
              subject
                to the limitations referred to in section 5.1
                hereof with respect to the survival of the representations and warranties
                by the Vendor;

            


    

     

    
      	(ii)  	
              subject
                to the limitations referred to in section 5.3
                hereof; 

            


    

     

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

    

     

    
      	(iii)  	
              subject
                the provisions of section 11.3
                hereof; and

            


    

     

    
      	(iv)  	
              shall
                not apply in respect of any work performed by the Purchaser at the
                Stock
                Mill Complex during the Trust
                Period.

            


    

     

    
      	(c)  	
              The
                Vendor and the Purchaser hereby waive compliance with the provisions
                of
                the Bulk
                Sales Act
                (Ontario) in relation to the transaction provided for in this Agreement
                and the Vendor hereby agrees that, if the Bulk
                Sales Act
                (Ontario) applies to the transaction provided for in this Agreement,
                the
                Vendor shall indemnify and save harmless the Purchaser from and against
                all loss, liability, cost and expense which it may incur due to such
                waiver of the provisions of the Bulk
                Sales Act
                (Ontario) in relation to the completion of the transaction provided
                for in
                this Agreement. 

            


    

     

    11.2       
       Indemnity
      by the Purchaser

     

    
      	(a)  	
              The
                Purchaser hereby agrees to indemnify and save the Vendor harmless
                from and
                against any claims, demands, actions, causes of action, damage, loss,
                deficiency, cost, liability and expense which may be made or brought
                against the Vendor or which the Vendor may suffer or incur as a result
                of,
                in respect of or arising out of:

            


    

     

    
      	(i)  	
              any
                non-performance or non-fulfillment of any covenant or agreement on
                the
                part of the Purchaser contained in this Agreement or in any document
                given
                in order to carry out the transactions contemplated
                hereby;

            


    

     

    
      	(ii)  	
              any
                misrepresentation, inaccuracy, incorrectness or breach of any
                representation or warranty made by the Purchaser contained in this
                Agreement or contained in any document or certificate given in order
                to
                carry out the transactions contemplated
                hereby;

            


    

     

    
      	(iii)  	
              any
                failure by the Purchaser to pay, satisfy, discharge, perform or fulfill
                any of the Assumed Liabilities;

            


    

     

    
      	(iv)  	
              the
                operations of the Stock Mill Complex from and after the Transfer
                Date;
                and

            


    

     

    
      	(v)  	
              all
                costs and expenses including, without limitation, legal fees on a
                solicitor and client basis, incidental to or in respect of the
                foregoing.

            


    

     

    
      	(b)  	
              The
                obligations of indemnification by the Purchaser pursuant to paragraph
                (a)
                of
                this section will be:

            


    

     

    
      	(i)  	
              subject
                to the limitations referred to in section 5.2
                hereof with respect to the survival of the representations and warranties
                by the Purchaser;

            


    

     

    
      	(ii)  	
              subject
                to the limitations referred to in section 5.3
                hereof, and

            


    

     

    
      	(iii)  	
              subject
                to the provisions of section 11.3
                hereof.

            


    

     

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

    

     

    11.3        
      Provisions
      Relating to Indemnity Claims

     

    The
      following provisions will apply to any claim by the either the Vendor or the
      Indemnified Party (the "Indemnified
      Party")
      for
      indemnification by the other (the "Indemnifying
      Party")
      pursuant to section 11.1
      or
11.2
      hereof,
      as the case may be (hereinafter, in this section, called an "Indemnity
      Claim").

     

    
      	(a)  	
              Promptly
                after becoming aware of any matter that may give rise to an Indemnity
                Claim, the Indemnified Party will provide to the Indemnifying Party
                written notice of the Indemnity Claim specifying (to the extent that
                information is available) the factual basis for the Indemnity Claim
                and
                the amount of the Indemnity Claim or, if an amount is not then
                determinable, an estimate of the amount of the Indemnity Claim, if
                an
                estimate is feasible in the
                circumstances.

            


    

     

    
      	(b)  	
              If
                an Indemnity Claim relates to an alleged liability to any other person
                (hereinafter, in this section, called a "Third
                Party Liability"),
                including without limitation any governmental or regulatory body
                or any
                taxing authority, which is of a nature such that the Indemnified
                Party is
                required by applicable law to make a payment to a third party before
                the
                relevant procedure for challenging the existence or quantum of the
                alleged
                liability can be implemented or completed, then the Indemnified Party
                may,
                notwithstanding the provisions of paragraphs (c)
                and (d)
                of
                this section, make such payment and forthwith demand reimbursement
                for
                such payment from the Indemnifying Party in accordance with this
                Agreement; provided that, if the alleged liability to the third party
                as
                finally determined upon completion of settlement negotiations or
                related
                legal proceedings is less than the amount which is paid by the
                Indemnifying Party in respect of the related Indemnity Claim, then
                the
                Indemnified Party shall forthwith following the final determination
                pay to
                the Indemnifying Party the amount by which the amount of the liability
                as
                finally determined is less than the amount which is so paid by the
                Indemnifying Party.

            


    

     

    
      	(c)  	
              The
                Indemnified Party shall not negotiate, settle, compromise or pay
                (except
                in the case of payment of a judgment) any Third Party Liability as
                to
                which it proposes to assert an Indemnity Claim, except with the prior
                consent of the Indemnifying Party (which consent shall not be unreasonably
                withheld or delayed), unless there is a reasonable possibility that
                such
                Third Party Liability may materially and adversely affect the condition
                of
                the Purchased Assets or the Indemnified Party, in which case the
                Indemnified Party shall have the right, after notifying the Indemnifying
                Party, to negotiate, settle, compromise or pay such Third Party Liability
                without prejudice to its rights of indemnification
                hereunder.

            


    

     

    
      	(d)  	
              With
                respect to any Third Party Liability, provided the Indemnifying Party
                first admits the Indemnified Party's right to indemnification for
                the
                amount of such Third Party Liability which may at any time be determined
                or settled, then in any legal, administrative or other proceedings
                in
                connection with the matters forming the basis of the Third Party
                Liability, the following procedures will
                apply:

            


    

     

    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

    

     

    
      	(i)  	
              except
                as contemplated by subparagraph (iii)
                below, the Indemnifying Party will have the right to assume carriage
                of
                the compromise or settlement of the Third Party Liability and the
                conduct
                of any related legal, administrative or other proceedings, but the
                Indemnified Party shall have the right and shall be given the opportunity
                to participate in the defence of the Third Party Liability, to consult
                with the Indemnifying Party in the settlement of the Third Party
                Liability
                and the conduct of related legal, administrative and other proceedings
                (including consultation with counsel) and to disagree on reasonable
                grounds with the selection and retention of counsel, in which case
                counsel
                satisfactory to the Indemnifying Party and the Indemnified Party
                shall be
                retained by the Indemnifying Party;

            


    

     

    
      	(ii)  	
              the
                Indemnifying Party will co-operate with the Indemnified Party in
                relation
                to the Third Party Liability, will keep it fully advised with respect
                thereto, will provide it with copies of all relevant documentation
                as it
                becomes available, will provide it with access to all records and
                files
                relating to the defence of the Third Party Liability and will meet
                with
                representatives of the Indemnified Party at all reasonable times
                to
                discuss the Third Party Liability,
                and

            


    

     

    
      	(iii)  	
              notwithstanding
                subparagraphs (i)
                and (ii),
                the Indemnifying Party will not settle the Third Party Liability
                or
                conduct any legal, administrative or other proceedings in any manner
                which
                could, in the reasonable opinion of the Indemnified Party, have a
                material
                adverse affect on the condition of the Purchased Assets or the Indemnified
                Party, except with the prior written consent of the Indemnified
                Party.

            


    

     

    
      	(e)  	
              If,
                with respect to any Third Party Liability, the Indemnifying Party
                does not
                admit the Indemnified Party's right to indemnification or decline
                to
                assume carriage of the settlement or of any legal, administrative
                or other
                proceedings relating to the Third Party Liability, then the following
                provisions will apply:

            


    

     

    
      	(i)  	
              the
                Indemnified Party, at its discretion, may assume carriage of the
                settlement or of any legal, administrative or other proceedings relating
                to the Third Party Liability and may defend or settle the Third Party
                Liability on such terms as the Indemnified Party, acting in good
                faith,
                considers advisable, and

            


    

     

    
      	(ii)  	
              any
                cost, lost, damage or expense incurred or suffered by the Indemnified
                Party in the settlement of such Third Party Liability or the conduct
                of
                any legal, administrative or other proceedings shall be added to
                the
                amount of the Indemnity Claim.

            


    

     

    
      
        
        

      

      
        35

        
          

        

      

      
        
        

      

    

     

     

    11.4        
      Right
      of Set-Off

     

    The
      Purchaser shall have the right to satisfy any amount from time to time owing
      by
      it to the Vendor by way of set-off against any amount from time to time owing
      by
      the Vendor to the Purchaser, including any amount owing to the Purchaser
      pursuant to the Vendor's indemnification pursuant to section 11.1
      hereof.

     

    ARTICLE 12

    GENERAL
      PROVISIONS

     

    12.1       
       Further
      Assurances

     

    Each
      of
      the Vendor and the Purchaser hereby covenants and agrees that at any time and
      from time to time after the Completion Date it will, upon the request of the
      others, do, execute, acknowledge and deliver or cause to be done, executed,
      acknowledged and delivered all such further acts, deeds, assignments, transfers,
      conveyances and assurances as may be required for the better carrying out and
      performance of all the terms of this Agreement.

     

    12.2       
       Remedies
      Cumulative

     

    The
      rights and remedies of the parties under this Agreement are cumulative and
      in
      addition to and not in substitution for any rights or remedies provided by
      law.
      Any single or partial exercise by any party hereto of any right or remedy for
      default or breach of any term, covenant or condition of this Agreement does
      not
      waive, alter, affect or prejudice any other right or remedy to which such party
      may be lawfully entitled for the same default or breach.

     

    12.3       
       Notices

     

    
      	(a)  	
              Any
                notice, designation, communication, request, demand or other document,
                required or permitted to be given or sent or delivered hereunder
                to any
                party hereto shall be in writing and shall be sufficiently given
                or sent
                or delivered if it is:

            


    

     

    
      	(i)  	
              delivered
                personally to an officer or director of such
                party;

            


    

     

    
      	(ii)  	
              sent
                to the party entitled to receive it by registered mail, postage prepaid,
                mailed in Canada, or

            


    

     

    
      	(iii)  	
              sent
                by telecopy machine.

            


    

     

    
      	(b)  	
              Notices
                shall be sent to the following addresses or telecopy
                numbers:

            


    

     

    
      	(i)  	
              in
                the case of the Vendor;

            


      	 	 


      	 	
              St Andrew Goldfields Ltd.

              1540 Cornwall Road

              Suite 212

              Oakville, Ontario

              L6J 7W5

              Attention: Mr.
                Jacques Perron

            


      	 	
               

            


    

     

    
      
        
        

      

      
        36

        
          

        

      

      
        
        

      

    

     

    
      	(ii)  	
              in
                the case of the Purchaser:

            


      	 	 


      	 	
              Apollo Gold Corporation

              5655 South Yosemite Street

              Suite 200

              Greenwood Village, Colorado

              80111-3220

              Attention: Mr.
                R. David Russell

            


      	 	
            


    

    or
      to
      such other address or telecopier number as the party entitled to or receiving
      such notice, designation, communication, request, demand or other document
      shall, by a notice given in accordance with this section, have communicated
      to
      the party giving or sending or delivering such notice, designation,
      communication, request, demand or other document.

     

    Any
      notice, designation, communication, request, demand or other document given
      or
      sent or delivered as aforesaid shall

     

    
      	(iii)  	
              if
                delivered as aforesaid, be deemed to have been given, sent, delivered
                and
                received on the date of delivery;

            


    

     

    
      	(iv)  	
              if
                sent by mail as aforesaid, be deemed to have been given, sent, delivered
                and received (but not actually received) on the fourth Business Day
                following the date of mailing, unless at any time between the date
                of
                mailing and the fourth Business Day thereafter there is a discontinuance
                or interruption of regular postal service, whether due to strike
                or
                lockout or work slowdown, affecting postal service at the point of
                dispatch or delivery or any intermediate point, in which case the
                same
                shall be deemed to have been given, sent, delivered and received
                in the
                ordinary course of the mails, allowing for such discontinuance or
                interruption of regular postal service,
                and

            


    

     

    
      	(c)  	
              if
                sent by telecopy machine, be deemed to have been given, sent, delivered
                and received on the date the sender receives the telecopy answer
                back
                confirming receipt by the
                recipient.

            


    

     

    12.4        
      Counterparts

     

    This
      Agreement may be executed in several counterparts, each of which so executed
      shall be deemed to be an original, and such counterparts together shall
      constitute but one and the same instrument.

     

    
      
        
        

      

      
        37

        
          

        

      

      
        
        

      

    

     

    12.5        
      Expenses
      of Parties

     

    Each
      of
      the parties hereto shall bear all expenses incurred by it in connection with
      this Agreement including, without limitation, the charges of their respective
      counsel, accountants, financial advisors and finders.

     

    12.6       
      Brokerage
      and Finder's Fees

     

    It
      is
      understood and agreed that no broker, agent or other intermediary acted for
      either the Vendor or the Purchaser in connection with the sale or purchase
      of
      the Purchased Assets, provided that (i) the Vendor agrees to indemnify the
      Purchaser and hold it harmless in respect of any claim for brokerage or other
      commissions relative to this Agreement or the transactions contemplated hereby
      which is caused by actions of the Vendor or any of its Affiliates, and (ii)
      the
      Purchaser will indemnify the Vendor and hold it harmless in respect of any
      claim
      for brokerage or other commissions relative to this Agreement or to the
      transactions contemplated hereby which is caused by actions of the Purchaser
      or
      any of its Affiliates.

     

    12.7        
      Announcements

     

    No
      announcement with respect to this Agreement will be made by any party hereto
      without the prior approval of the other parties. The foregoing will not apply
      to
      any announcement by any party required in order to comply with laws pertaining
      to timely disclosure, provided that such party consults with the other parties
      before making any such announcement.

     

    12.8       
      Assignment

     

    The
      rights of the Vendor hereunder shall not be assignable without the written
      consent of the Purchaser. The rights of the Purchaser hereunder shall not be
      assignable without the written consent of the Vendor.

     

    12.9       
      Successors
      and Assigns

     

    This
      Agreement shall be binding upon and enure to the benefit of the parties hereto
      and their respective successors and permitted assigns. Nothing herein, express
      or implied, is intended to confer upon any person, other than the parties hereto
      and their respective successors and assigns, any rights, remedies, obligations
      or liabilities under or by reason of this Agreement.

     

    12.10     
      Entire
      Agreement

     

    This
      Agreement and the schedules referred to herein constitute the entire agreement
      between the parties hereto and supersede all prior agreements, representations,
      warranties, statements, promises, information, arrangements and understandings,
      whether oral or written, express or implied, with respect to the subject matter
      hereof. None of the parties hereto shall be bound or charged with any oral
      or
      written agreements, representations, warranties, statements, promises,
      information, arrangements or understandings not specifically set forth in this
      Agreement or in the schedules, documents and instruments to be delivered on
      or
      before the Closing Date pursuant to this Agreement. The parties hereto further
      acknowledge and agree that, in entering into this Agreement and in delivering
      the schedules, documents and instruments to be delivered on or before the
      Closing Date, they have not in any way relied, and will not in any way rely,
      upon any oral or written agreements, representations, warranties, statements,
      promises, information, arrangements or understandings, express or implied,
      not
      specifically set forth in this Agreement or in such schedules, documents or
      instruments.

     

    
      
        
        

      

      
        38

        
          

        

      

      
        
        

      

    

     

    12.11     
      Planning
      Act

     

    This
      Agreement shall only be effective to create an interest in the Real Property
      if
      the subdivision control provisions of the Planning
      Act
      (Ontario) are complied with by the Vendor on or before the Transfer Date and
      the
      Vendor covenants to proceed diligently at its expense to obtain any necessary
      consent on or before Transfer Date. The Vendor has no knowledge that completion
      of the transactions provided for in this Agreement will require any consent
      under the Planning
      Act
      (Ontario) and if any consent is required the Vendor will obtain such consent
      prior to the Transfer Date, at its sole cost and expense. If requested by the
      Purchaser, the Vendor covenants that the transfer/deeds of land to be delivered
      on the Transfer Date shall contain statements contemplated by section 50(22)
      of
      the Planning Act (Ontario).

     

    12.12  Waiver

     

    Any
      party
      hereto which is entitled to the benefits of this Agreement may, and has the
      right to, waive any term or condition hereof at any time on or prior to the
      Closing Time; provided, however, that such waiver shall be evidenced by written
      instrument duly executed on behalf of such party.

     

    12.13  Amendments

     

    No
      modification or amendment to this Agreement may be made unless agreed to by
      the
      parties hereto in writing.

     

    IN
      WITNESS WHEREOF
      the
      parties hereto have duly executed this agreement under seal as of the day and
      year first written above.

     

     

    EXECUTION
      PAGE TO FOLLOW

     

    
      
        
        

      

      
        39

        
          

        

      

      
        
        

      

    

    


    
      	 	 	 
	 	
              APOLLO
                GOLD CORPORATION

            
	 
 	 
 	 
 
	 	By:  	
              /s/
                R. David Russell

            
	 	
              

              R.
                David Russell

              President
                and Chief Executive Officer

            
	 	 


    

    


    
      
        	 	 	 
	 	ST
                ANDREW
                GOLDFIELDS LTD.
	 
 	 
 	 
 
	 	By:  	
                /s/
                  Jacques Perron

              
	 	
                

                Jacques
                  Perron

                President
                  and Chief Executive Officer

              
	 	 


      


      
        	 	 	 
	 	
                FOGLER,
                  RUBINOFF LLP

              
	 
 	 
 	 
 
	 	By:  	
                
                  /s/
                    G. Michael Hobart

                

              
	 	
                

              
	 	 


      

    

     

     

    
      
        
        

      

      
        40