EXHIBIT 10.13(c)

                     SECURITY AGREEMENT AND PROMISSORY NOTE

This Agreement made and entered into on 10/9/02 by and between:         K-223002

Debtor:   APOLLO GOLD, INC.         Company:   Caterpillar  Financial Services
          421 WEST RIVERSIDE AVE #820          Corporation
          SPOKANE, WA 99201-0415               2120  West  End  Avenue
                                               Nashville,  Tennessee  37203-0001


1.     Grant  of  Security  Interest.  Debtor  hereby  grants to Company a first
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priority,  continuing security interest in the property described below, and all
substitutions,  additions  and  accessions  thereto:  SEE  EXHIBIT  "A"  (herein
called  the  "Equipment"),  and  all  accounts, chattel paper, deposit accounts,
security  agreements, instruments, contract rights, policies and certificates of
insurance,  documents  and general intangibles (including all monies and credits
now  due or to become due to Debtor from, and all claims against, manufacturers,
purchasers  or  other  parties)  with  respect  to  thereto, and, whether or not
installed  thereon,  all  exchanges,  parts,  returns, and attachments therefor,
whether  any  of  the  foregoing  is  now  owned  or hereafter acquired, and all
proceeds  and  products  of  any of the foregoing including, but not limited to,
proceeds  in  the  form of chattel paper.  All of the above shall hereinafter be
called  the  "Collateral"  and  are  defined  pursuant  to the provisions of the
Uniform  Commercial  Code.

Debtor agrees not to remove any Equipment from Montana Tunnels Mine at Jefferson
County  Montana  without  the  prior  written  consent of Company.  Debtor shall
immediately  notify Company of any condition or event that may change the proper
location  for  the  filing of any financing statement or other public notices or
recordings  for the purposes of perfecting security interests in the Collateral,
including  any  change in Debtor's name or business organization or the location
of  Debtor's  place  of  business.

2.     Obligations.     The  security  interest  hereby granted is to secure the
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prompt  and  unconditional  payment  and  performance  when  due  of  all of the
following  (herein  called  the  "Indebtedness"):  (a)  any and all indebtedness
owing  by  Debtor to Company pursuant to a certain promissory note dated 10/9/02
in  the  amount  of  $2,000,000.00  and  any  and all amendments, modifications,
restructures,  restatements,  renewals, and extensions of said indebtedness (the
"Promissory Note") and (b) all duties, obligations, and liabilities of Debtor to
Company  hereunder  and  under  the  Promissory Note and all related agreements.
Debtor  agrees that the security interest herein granted to Company shall extend
to  all of the Collateral for so long as any portion of the indebtedness secured
hereby  remains  unpaid or undischarged, whether such property comprising a part
of  the  Collateral  is  acquired by Debtor prior to, contemporaneously with, or
subsequent  to  the  date  of  this  Agreement.

3.     (A)  Promise  to Pay.  For Value Received, Debtor (jointly and severally,
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if  more  than  one)  promises  to  pay  to the order of Company, in immediately
available  funds  at the address of the Company set forth above or at such other
place  as Company or the holder hereof shall designate in writing, the principal
amount  of  $2,000,000.00  with  interest  on the outstanding principal from and
including  the  date hereof at the per annum rate equal to that set forth below,
until  paid  in  full.


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     (B)     Payment  Schedule.  Monthly  payments  of principal and interest in
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arrears,  each  in an mount equal to $89,545.17 shall be made commencing 10/9/02
and  continuing  on  the like day of each month thereafter through and including
11/9/02  for  a  total  of 24 payments.  All payments received shall  be applied
first  to  accrued interest and other nonprincipal amounts then owing under this
Agreement  and then to the principal balance outstanding.  The acceptance of any
payment  which is less than payment in full of all amounts due and owing at such
time  shall  not constitute waiver of Company's or the holder's right to receive
payment  in  full  of  all  amounts  due  and owing at such time or any prior or
subsequent  time.

     (C)     Interest.  Interest  shall  be computed at the per annum rate equal
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to  7.00%.  All  interest  payable hereunder shall be calculated on the basis of
the  actual  number of days elapsed in a year of three hundred sixty (360) days.

     (D)     Time.  Time is of the essence hereof.  If any payment or portion of
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a  payment  or  other sum due hereunder is not paid within 10 days from the date
such  payment  is due, there shall be immediately due and payable from Debtor to
Company  a  late  fee  equal to the lesser of 5.00% of the amount of the overdue
payment  or  portion  of a payment or other sum or the highest amount allowed by
law.

     (E)     Prepayment.  Debtor  may  prepay  the  Indebtedness  evidenced  by
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Section 3 in full on any payment due date by giving Company at least thirty (30)
days advance written notice and paying the then unpaid principal balance of this
Agreement,  all  accrued  interest and all other amounts payable hereunder and a
prepayment  charge of $275.00.  If Debtor fails to make a prepayment as notified
to  Company,  Debtor  shall  pay a charge of $0.00 for failure to do so.  Debtor
agrees  that  the  above  prepayment  charge  shall  be  due and payable whether
prepayment  is  voluntary or the result of prepayment created by acceleration of
this  Agreement  by  Company  in  the  event  of  default  as  provided  herein.

     (F)     Savings.  If  at  any  time implementation of any provision of this
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Agreement  shall  raise  or  be  deemed  to  raise  the  interest rate per annum
contracted  for, charged in or collectible under this Agreement above the lawful
maximum  interest  rate  per annum in effect from time to time in the applicable
jurisdiction,  then such interest rate per annum shall be limited to such lawful
maximum  interest  rate;  provided, however, that if the applicable state law is
amended  or  the  law  of  the United States of America pre-empts the applicable
state  law,  so  that  it  becomes  lawful  for the Company to receive a greater
interest  rate  per  annum than is presently allowed, Debtor agrees that, on the
effective  date of such amendment or pre-emption, as the case may be, the lawful
maximum  hereunder  shall  be  increased  to the maximum interest rate per annum
allowed  by  the higher of the amended state law or the law of the United States
of America.  If from any circumstance, Company shall ever receive as interest or
otherwise  an  amount which will exceed the applicable lawful maximum rate, such
amount  which  would  be excessive shall be deemed a mistake and shall be either
refunded  or  applied  to  the  reduction  of  any  principal  owing  under this
Agreement,  as  Company  may  elect.

     (G)     Waivers.  Debtor  hereby waives presentment for payment, demand for
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payment,  protest,  notice of protest, notice of nonpayment, notice of dishonor,
notice  of  acceleration  and  notice of intent to accelerate hereunder, and all
other notices in connection with this Agreement,


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filing  of  suit and diligence in collecting any sums due hereunder or otherwise
under  the  Indebtedness  or  in  enforcing  this  Agreement.

4.     Representations  and  Warranties.  Debtor  represents  and  warrants  to
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Company  as  follows:  (a)  the  execution,  delivery  and  performance  of this
Agreement  and  of  the  Promissory  Note  and  other  agreements  and documents
evidencing  the  Indebtedness  secured hereby are duly authorized by Debtor, and
are  not in conflict with any provision of law, the articles of incorporation or
the by-laws of Debtor, or any other indenture, agreement or undertaking by which
Debtor is bound; (b) this Agreement, the Promissory Note and other agreements or
documents  evidencing  the  Indebtedness  secured  hereby  constitute  valid
obligations  of  Debtor,  legally  binding upon it and enforceable in accordance
with  their terms; (c) all property forming part of the Collateral is now or, at
the time it becomes part of the Collateral shall be, owned by Debtor by good and
marketable  title,  and  shall  at  all times be and remain free from all liens,
claims,  security  interests  and encumbrances, except for the security interest
granted  hereby  and  any  other  security  interest(s)  agreed to in writing by
Company,  and  Debtor shall defend the Collateral against all claims and demands
of  all  persons  claiming an interest therein; (d) all financial statements and
data  and  any  other  information  or  documentation related to the business or
financial  condition  of Debtor which have been or may hereafter be furnished to
Company  to  induce  it to advance funds or extend credit to Debtor shall fairly
represent  the  operations  and  financial  condition  of Debtor, as of the date
stated  therein, and shall be accurate and correct in all material respects; (e)
Debtor  is  and  shall  remain  a  Corporation  registered  in  the  state of WA
("Business  Location");  (f)  Debtor  will  not  change  its  form  of  business
organization  or  Business Location without prior written notice to Company; and
(g) no representation, warranty, or statement by Debtor contained herein, in the
Promissory  Note  or any other agreement or document evidencing the Indebtedness
secured  hereby,  or  any  certificate  or  other  document  furnished  or to be
furnished  by  Debtor  in  connection  with the transaction contemplated hereby,
contains  or  at  the  time  of  delivery  shall contain any untrue statement of
material  fact,  or  omits,  or  shall  omit at the time of delivery, to state a
material  fact  required  to   make  such  certificate  or  other  document  not
misleading.  The  representations and warranties specified above are in addition
to  and  not  in  lieu  of  any  representations and warranties set forth in the
Promissory  Note  or any other agreement or document evidencing the Indebtedness
secured  hereby.

5.     Financing  Statement,  etc.  Debtor  shall take any and all steps Company
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may  from  time  to  time  require  to  establish  and maintain Company's valid,
perfected  security  interest in the Collateral, including to execute  or obtain
the  execution of , in form and substance satisfactory to Company, such notices,
subordinations,  releases or waivers, UCC assignments, UCC financing statements,
and  other  documents  that  Company  may  deem necessary to perfect, extend, or
clarify  Company's  rights  in  the  Collateral  securing  or intended to secure
Debtor's  obligations  to Company hereunder.  Debtor hereby irrevocably appoints
Company  as  Debtor's  Attorney-in-Fact  for  the  signing  and  filing  of such
documents  and  authorizes  Company  to  delegate  these limited powers.  Debtor
agrees  to pay all costs, including attorney's fees, incurred in connection with
such  filings  and otherwise preserving and protecting Company's interest in the
Collateral.

6.     Use  and Disposition of Collateral; First and Prior Lien.  The Collateral
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shall  remain  in  Debtor's  control and possession at all times.  Debtor agrees
that it will not in any way misuse, conceal, pledge, mortgage, encumber or sell,
lease,  assign, transfer or otherwise dispose of the


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Collateral.  Debtor further agrees that it will keep the Collateral free of, and
shall  defend  the  Collateral  from  and  against,  all liens, claims, security
interests  and  encumbrances, except for the security interest granted hereunder
and  any  other security interest(s) agreed to in writing by Company. Debtor, at
its  sole  expense,  shall  maintain  the Equipment in good repair and operating
condition.  The  Equipment  is  and  shall remain personal property at all times
notwithstanding  the  manner  in  which it is attached or affixed to realty. All
proceeds  including,  but  not limited to, proceeds in the form of chattel paper
received  by  Debtor  forming  part of the Collateral shall be received under an
express  trust  for  the  benefit of Company, shall not be commingled with other
monies,  assets  or accounts of Debtor, and shall be immediately paid to Company
(unless  otherwise  permitted  in  writing  by  Company).

7.     Inspection  of  Collateral;  Taxes  and Charges.  Company may inspect the
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Collateral, and inspect and copy all records pertaining to same, at any time and
wherever  located, and Debtor shall fully cooperate with Company to identify and
provide  evidence  of  the  location,  possession,  and  condition  of,  and the
ownership  of,  and  any  other  interest  in,  the  Collateral, as requested by
Company.  Debtor shall also complete and return audit forms submitted by Company
from  time  to  time  within  five (5) days of receipt thereof.  Debtor shall be
solely  responsible  for  and  shall  promptly  pay when due all taxes and other
charges  of every nature which may be levied or assessed against the Collateral,
its use or operation, or which arise out of are connected with this Agreement or
the  Promissory  Note  or  any  other  agreement  or  document  evidencing  the
Indebtedness  secured  hereby,  by  any  governmental  agency.

8.     Insurance.  Debtor  shall bear the risk of loss, damage or destruction to
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the  Collateral.  Debtor shall, at its expense, insure the Equipment against all
risks  for  its  full  insurable  value.  All  such insurance shall be with such
insurance companies and under such policies and in such form as are satisfactory
to Company.  Such insurance shall be primary, without right of contribution from
any  insurance  carried by Company and shall provide that it may not be canceled
or  altered so as to affect the interest of Company without at least thirty (30)
days  prior written notice to Company.  All insurance covering loss or damage to
Equipment  shall  name  Company  (or  its  designee) as sole loss payee.  At the
request  of  Company, Debtor shall furnish Company with satisfactory evidence of
such  insurance.  Debtor  shall promptly notify Company of any loss or damage to
the  Equipment  and  of  any  claim  relating  thereto.  Debtor  shall  not make
adjustments  relating  to  the  Equipment  with insurers without Company's prior
written  consent.  Debtor  hereby  irrevocably  appoints  Company  Debtor's
attorney-in-fact  to endorse all drafts or checks payable to Debtor, and to file
claims  and  to take all other actions necessary to collect any proceeds of such
insurance.  Any  amounts  collected from insurance shall, if received by Debtor,
be  immediately  paid  to  Company  and  shall  be  applied  by  Company  to the
Indebtedness  secured  hereby.

9.     Substitute  Performance.  If  Debtor  shall fail to maintain the required
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insurance,  pay  taxes  or  other  charges,  properly  maintain  or  repair  the
Equipment,  or  perform any other duty or obligation required hereunder, Company
may  at any time thereafter (but shall not be required to) perform any such duty
or  obligation to the extent determined by Company and make expenditures for any
or  all  such  purposes  in  order  to maintain and preserve the Equipment.  The
amount  so  expended,  together  with interest thereon at the lessor of eighteen
percent  (18%)  per


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annum  or the highest lawful contract rate of interest, shall be immediately due
and  payable  by Debtor to Company and shall be secured by the security interest
herein  granted.

10.     Default.  Debtor  shall be in default hereunder and under the Promissory
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Note  and all other agreements and documents evidencing the Indebtedness secured
hereby  upon  the occurrence of any of the following events: (a) Debtor fails to
pay  any  sum when due under any of the Indebtedness secured hereby or to timely
when  required  perform  any  duty  or  obligation under any of the Indebtedness
secured  hereby  and  such  default   shall  continue  unremedied  for  10  days
thereafter; (b) Debtor fails to observe or perform any of the provisions of this
Agreement,  the  Promissory  Note or any other agreement or document relating to
all  or  any part of the Collateral or the Indebtedness; (c) any representation,
warranty,  financial  statement or other information made or furnished by Debtor
to  Company  is untrue in any material respect as of the date made or furnished;
(d) any default shall occur under any other agreement between Debtor and Company
or  Debtor  and  any  subsidiary  or affiliate of Company; (e) the making of any
levy,  seizure  or  attachment  upon  the  Collateral;  (f) should Debtor or any
guarantor  default  under  any  other  security agreement directly or indirectly
securing  repayment  of  the Indebtedness or under any material promissory note,
loan,  extension  of credit, security agreement, purchase or sales agreement, or
any  other  agreement,  in favor of any other creditor or person; (g) should any
guarantor,  surety, or other party liable on whatever basis for the Indebtedness
default  under  the agreement of guaranty, surety, or other agreement evidencing
the  liability,  as  the  case  may  be;  (h) the Collateral or any part thereof
becomes  lost, stolen or materially damaged (i) Debtor becomes unable, or admits
in writing its inability to pay its debts as they mature, or becomes the subject
of  proceedings  in  bankruptcy or insolvency, or makes a general assignment for
the  benefit  of  creditors,  or  enters  into  an  arrangement  with a group of
creditors,  or  enters  into any action for the purposes of accomplishing any of
the  preceding;  (j)  Debtor,  or  any  partner of Debtor, winds up, liquidates,
ceases  to  do  business, dissolves, reorganizes, merges, consolidates or sells,
assigns,  transfers, leases or otherwise disposes of all or substantially all of
its  assets,  or  becomes the subject of any proceeding for any of the foregoing
purposes,  if  Debtor  or the partner of Debtor is other than an individual; (k)
the death or judicial determination of incompetency of a Debtor who is a natural
person  or of any partner of Debtor which is a partnership; or (l) should Debtor
have  a  material  adverse  change with respect to its financial condition which
results,  in Company's opinion, in an impairment of the prospect of repayment of
any of the Indebtedness or of Debtor's performance of its obligations hereunder.

11.     Rights  and  Remedies.  Upon the occurrence of any default hereunder and
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at  any  time  thereafter, Company may, at its option, do any one or more of the
following:  (a) declare any or all of the Indebtedness accrued hereby (including
additional  interest  accrued  on  past due payments and any prepayment premium)
immediately due and payable without notice or demand; (b) recover any additional
damages  and  expenses sustained by Company by reason of breach of any provision
of  this  Agreement  by  Debtor;  (c)  enforce  the  security  interest  granted
hereunder; (d) accelerate the maturity and insist upon immediate payment in full
of  each  and  every  other  loan,  extension  of credit, debt, liability and/or
obligation  of  every  nature  and  kind  that  Debtor  may then owe to Company,
whether  direct  or  indirect  or  by way of assignment, and whether absolute or
contingent,  liquidated or unliquidated, voluntary or involuntary, determined or
undetermined,  secured  or  unsecured, whether Debtor is obligated alone or with
others  on  a  joint,  several  or  solitary  basis,  as  a principal obligor or
otherwise,  all  without  further


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notice,  demand or putting in default, unless Company shall otherwise elect; (e)
without  notice, liability or legal process enter upon the premises where any of
the  Collateral  may  be  and take possession thereof; and (f) require Debtor to
assemble  the  Collateral and make it available to Company at a place designated
by  Company  which is reasonably convenient to Company and Debtor. Company shall
have  all rights given to a secured party by law and all of Company's rights and
remedies  shall  be  cumulative  and  nonexclusive,  to  the extent permitted by
applicable  law.  Company  may, at its option, undertake commercially reasonable
efforts  to  sell  or  dispose  of  all  or  any part of the Collateral, and the
proceeds of any such sale and disposition shall be applied as follows: first, to
reimburse  Company  for  all reasonable expenses of retaking, holding, preparing
for  sale  or disposition, and selling or disposing of the Collateral, including
all  taxes  and  reasonable  attorney's  fees;  and,  second,  to the extent not
previously paid by Debtor, to pay all Indebtedness secured hereby. Company shall
have  the  right,  in  its  sole discretion, to determine the order in which its
rights  in or remedies against any Collateral or other property now or hereafter
securing  the Indebtedness are to be exercised, which part of Collateral or such
other  property  is  to  be  proceeded  against, and the order of application of
proceeds  of Collateral or such other property as against any particular portion
of  the  Indebtedness. Any surplus shall be paid to the person entitled thereto.
Debtor  shall  remain  liable  for  and  promptly pay any deficiency to Company.
Company  shall have the right to enter and remain upon the premises of Debtor or
any other place or places where any part of the Collateral may be kept, for such
time  as  Company  may  deem necessary, and (a) remove, maintain, sell, collect,
and/or  liquidate  the Collateral; (b) use the premises of Debtor, together with
materials  and  supplies  located  thereon,  to  maintain  the  condition of the
Collateral  and  to  prepare  the  Collateral  for  sale or liquidation, and (c)
require  Debtor  to  assemble the Collateral and make it available to Company or
the  agents  or designees of Company at Debtor's premises or such other place as
Company  may  reasonably  designate.

Debtor  hereby  acknowledges  that  sales for cash or on credit to a wholesaler,
retailer  or  user,  and  with  or without the Collateral being present, are all
commercially reasonable dispositions of the Collateral. Debtor agrees to pay all
reasonable  attorney's  fees  and  all costs and expenses incurred by Company in
enforcing  this  Agreement  or the Promissory Note or other Indebtedness secured
hereby  upon  the  occurrence  of  any  default  hereunder  or  thereunder or in
connection  with  any  bankruptcy or other insolvency proceeding commenced by or
against  Debtor.  Company  shall have the right, immediately and without further
action  by  it, to set off against to Indebtedness secured hereby all money owed
by Company or any affiliate or subsidiary of Company in any capacity (including,
without  limitation,  Caterpillar,  Inc.)  to  Debtor,  whether  or not due, and
Company  shall  be  deemed  to have exercised such right of setoff and to have a
charge  against  any  such  money  immediately  upon the occurrence of a default
hereunder  or  under  the Indebtedness secured hereby even though such charge is
made  or  entered  on  the  books  of  Company  or an affiliate or subsidiary of
Company,  as  the  case  may be, subsequent thereto.  To the extent permitted by
law,  Debtor  hereby  releases  any  claim it may have against Company which may
result  from or arise out of the possession or repossession of the Collateral by
Company, and further waives the benefit of all valuation and appraisal laws with
respect  to  the  Collateral.  If  Company  shall seek to take possession of, or
repossess,  the Collateral or any part thereof by judicial action, Debtor hereby
waives any requirement of notice or for Company to provide bond, surety or other
security  in  relation  thereto,  whether  required  by  statute,  court rule or
otherwise,  to  the  extent  permitted  by  law.  The remedies specified in this
Section  10  are in addition to and not


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in lieu of any remedies specified in the Promissory Note or any other agreements
or  documents  evidencing  Indebtedness  secured  hereby.

12.     Waiver and Indemnity. Debtor understands and agrees that its obligations
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hereunder and under the Indebtedness secured hereby shall not be affected by any
defect  in,  damage  to  or  loss of possession or use of any of the Collateral,
however  caused,  by  the  attachment  of  any lien or other claim to any of the
Collateral,  by  any interference with Debtor's use of any of the Collateral, or
for any other cause, whether similar or dissimilar to the foregoing, any present
or  future law to the contrary notwithstanding. DEBTOR HEREBY AGREES TO RELEASE,
DEFEND, INDEMNIFY AND HOLD HARMLESS COMPANY, ITS DIRECTORS, OFFICERS, EMPLOYEES,
AGENTS  AND  ASSIGNS  FROM  AND  AGAINST  ANY CLAIMS OF DEBTOR OR THIRD PARTIES,
INCLUDING  CLAIMS  BASED  UPON  BREACH OF CONTRACT, BREACH OF WARRANTY, PERSONAL
INJURY, PROPERTY DAMAGE, STRICT LIABILITY OR NEGLIGENCE, FOR ANY LOSS, DAMAGE OR
INJURY  CAUSED  BY  OR RELATING TO THE DESIGN, MANUFACTURE, SELECTION, DELIVERY,
CONDITION,  OPERATION,  USE, OWNERSHIP, MAINTENANCE OR REPAIR OF ANY COLLATERAL.
FURTHER,  DEBTOR  AGREES TO BE RESPONSIBLE FOR ALL COSTS AND EXPENSES, INCLUDING
REASONABLE  AITORNEY'S  FEES,  INCURRED  BY  COMPANY OR ITS DIRECTORS, OFFICERS,
EMPLOYEES,  AGENTS  AND  ASSIGNS  IN  DEFENDING SUCH CLAIMS OR IN ENFORCING THIS
PROVISION.  UNDER  NO  CONDITION  OR CAUSE OF ACTION SHALL COMPANY BE LIABLE FOR
ANY  LOSS  OF ACTUAL OR ANTICIPATED BUSINESS OR PROFITS OR ANY SPECIAL, INDIRECT
OR  CONSEQUENTIAL  DAMAGES.

13.     Integration; Amendment; Waiver.  This  Agreement  constitutes the entire
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agreement  between  the  parties  concerning  Company's security interest in the
Collateral  and  the portion of the Indebtedness evidenced hereby and may not be
altered  or  amended except by a writing signed by all parties hereto. Waiver of
any  default  hereunder  shall  not constitute waiver of any subsequent default.
Any  waiver  or consent by Company of or to any default by Debtor hereunder must
be  in writing specifically set forth.  In addition, any failure or delay on the
part  of  Company  to exercise any of the rights and remedies granted to Company
shall  not  have the effect of waiving any of Company's rights and remedies. Any
partial  exercise  of  any  rights  and/or  remedies  granted  to  Company shall
furthermore  not  be  construed as a waiver of any other rights and remedies, it
being  Debtor's intent and agreement that Company's rights and remedies shall be
cumulative  in  nature. To the extent permitted by law, Debtor waives all rights
to  plead  any  statute  of  limitations  as  a  defense  to  any action on this
Agreement.  DEBTOR  WAIVES  THE  RIGHT  TO  TRIAL  BY  JURY IN ANY ACTION, SUIT,
PROCEEDING  OR  COUNTERCLAIM  OF  ANY  KIND,  ARISING  OUT OF OR RELATED TO THIS
AGREEMENT,  AND  ACKNOWLEDGES THAT THE FOREGOING WAIVER IS A MATERIAL INDUCEMENT
TO  COMPANY  IN ENTERING INTO THIS AGREEMENT AND CREATING IN FAVOR OF DEBTOR THE
INDEBTEDNESS  SECURED  HEREBY  AND  THAT  COMPANY  IS RELYING UPON THE FOREGOING
WAIVER.  DEBTOR  WARRANTS  THAT IT HAS KNOWINGLY AND VOLUNTARILY WAIVED ITS JURY
TRIAL  RIGHTS.  IN  THE  EVENT  OF  LITIGATION, THIS AGREEMENT MAY BE FILED AS A
WRITTEN  CONSENT  TO  A  TRIAL  BY  THE  COURT.


<PAGE>
14.     Assignment. Any or all of the rights of Company under this Agreement and
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in the Collateral may be assigned by Company at any time.  No assignment of this
Agreement  or of any right or obligation hereunder may be made by Debtor without
the  prior  written consent of Company. This Agreement shall be binding upon the
heirs,  personal  representatives, successors and assigns of Debtor and inure to
the  benefit  of  Company,  its  successors  and  assigns.

15.     Construction;  Severability.     This  Agreement  shall  be construed no
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more  strictly  against  one  party  than  the  other, regardless of which party
drafted  the  Agreement.  Any provision found to be invalid under any applicable
law  shall  be  inapplicable  and  deemed  omitted, but the remaining provisions
hereof  shall  be  given  effect  in accordance with the manifest intent hereof.
Notwithstanding  any  termination  of  this  Agreement, all terms and conditions
hereof  shall  continue  to  apply after such termination until all Indebtedness
secured hereby has been finally performed and paid in full.  If the Agreement is
signed  by  more  than  one  Debtor,  the singular "Debtor" as used herein shall
include  the  plural and the obligations of all those signing as Debtor shall be
joint  and  several.

16.     Headings.  The  headings  appearing  in  each  section  hereof  are  for
        --------
convenience  or  reference  only  and are not to be considered or construed as a
substantive  part  of  this  Agreement.

17.     Counterparts.  This  Agreement  may be separately executed by Debtor and
        -------------
Company  in  any  number  of  counterparts,  each of which, when so executed and
delivered,  shall be deemed to be an original and all of which, when so executed
and  delivered,  shall  be  deemed  to  be  an  original and all of which, taken
together,  shall  constitute  but  one  and  the  same  instrument.

18.     Applicable Law.  This agreement shall be governed by and construed under
        --------------
the  laws  of  the  State  of  Tennessee,  without  giving  effect  to  the
conflict-of-laws  principles  thereof,  and  Debtor  hereby  consents  to  the
jurisdiction  of  any  state  or  federal  court  located  within  the  State of
Tennessee.

In  Witness  Whereof, Debtor and Company have duly executed this Agreement as of
the  day  and  year  first  above  written.

     ("Debtor")                            ("Company")
APOLLO GOLD, INC.                   CATERPILLAR FINANCIAL SERVICES CORPORATION


Signature:     /s/ RL Chapman       Signature:     /s/ Bill Schowalter

Name   (PRINT): RL Chapman          Name  (PRINT): Bill Schowalter

Title: Chief Financial Officer      Title: Documentation  Manager

Address:  4601 DTC Boulevard,
          Suite 750
          Denver, CO 80237


<PAGE>
EXHIBIT "A" FOR PROMISSORY NOTE AND SECURITY AGREEMENT


Between     APOLLO  GOLD,  INC.

And         Caterpillar  Financial  Services  Corporation

Dated       10/9/02

DESCRIPTION  OF  UNIT(S)          MODEL          SERIAL#

ONE CATERPILLAR 950B WHEEL LOADER S/N 31R00553
ONE CATERPILLAR D8N TRACK TYPE TRACTOR S/N 9TC04370
ONE CATERPILLAR D9N TRACK TYPE TRACTOR S/N 1JD02912
ONE CATERPILLAR D9N TRACK TYPE TRACTOR S/N 1JD02933
ONE CATERPILLAR 16G MOTOR GRADER S/N 93U03254
ONE CATERPILLAR 16G MOTOR GRADER S/N 93U03521
ONE CATERPILLAR 992C WHEEL LOADER S/N 49Z01809
ONE CATERPILLAR 992D WHEEL LOADER S/N 7MJ00166
ONE CATERPILLAR 992C WHEEL LOADER S/N 49Z01936
ONE CATERPILLAR 992C WHEEL LOADER S/N 49Z01935
ONE CATERPILLAR 325BL EXCAVATOR S/N 2JR02869
ONE CATERPILLAR 5230FS FRONT SHOVEL EXCAVATOR S/N 7LL00024
ONE CATERPILLAR 777C OFF HIGHWAY TRUCK S/N 4XOJ0233
ONE CATERPILLAR 777C OFF HIGHWAY TRUCK S/N 4XJ00234
ONE CATERPILLAR 777C OFF HIGHWAY TRUCK S/N 4XJ00236
ONE CATERPILLAR 777B OFF HIGHWAY TRUCK 4YC01710
ONE CATERPILLAR 777B OFF HIGHWAY TRUCK W/N 4YC01711
ONE CATERPILLAR 777B OFF HIGHWAY TRUCK S/N 4YC01642
ONE CATERPILLAR 777B OFF HIGHWAY TRUCK S/N 4YC01649
ONE CATERPILLAR 785 OFF HIGHWAY TRUCK S/N 8GB0366
ONE CATERPILLAR 785 OFF HIGHWAY TRUCK S/N 8GB00368
ONE CATERPILLAR 785B OFF HIGHWAY TRUCK S/N 6HK00348
ONE CATERPILLAR 785B OFF HIGHWAY TRUCK S/N 6HK00516
ONE CATERPILLAR 785B OFF HIGHWAY TRUCK S/N 6HK00334
ONE CATERPILLAR 785B OFF HIGHWAY TRUCK S/N 6HK00335
ONE CATERPILLAR 785B OFF HIGHWAY TRUCK S/N 6HK00347
ONE CATERPILLAR 5230FS FRONT SHOVEL EXCAVATOR S/N 7LL00055
ONE CATERPILLAR 5230FS FRONT SHOVEL EXCAVATOR S/N 7LL00061
ONE CATERPILLAR 785 OFF HIGHWAY TRUCK S/N 8GB00369
ONE CATERPILLAR 785B OFF HIGHWAY TRUCK S/N 6HK00517

APOLLO GOLD, INC.                   CATERPILLAR FINANCIAL SERVICES CORPORATION


Signature:     /s/                  Signature:     /s/
           ----------------------               --------------------

Print:  RL Chapman                  Print:  Bill Schowalter

Title:  Chief Financial Officer     Title:  Documentation Manager


<PAGE>
                              AMORTIZATION SCHEDULE
                                  VARIABLE RATE
                                (MULTIPLE ASSETS)


  Prepared Sept-19-2002 15:43 by . . . . . . . . . . . . . . Christy Fugate
  QIP number . . . . . . . . . . . . . . . . . . . . . . . . QIP-EFC-12227
  365 day calculations . . . . . . . . . . . . . . . . . . . 360 / 360

  Customer . . . . . . . . . . . . . . . . . . . . . . . . . Apollo Gold, Inc.
  Model. . . . . . . . . . . . . . . . . . . . . . . . . . . Multiple Assets

<TABLE>
<CAPTION>
            NUMBER
              OF
           PAYMENTS    STARTING                                 INTEREST    INTEREST                   ENDING
DATE         MADE      BALANCE         LOAN        PAYMENT      7.00001%      RATE     PRINCIPAL      BALANCE
<S>        <C>       <C>           <C>           <C>           <C>          <C>       <C>           <C>
Sep-19-02         0          0.00  2,000,000.00          0.00        0.00       7.00          0.00  2,000,000.00
Oct-19-02         1  2,000,000.00          0.00     89,545.17   11,666.68       7.00     77,878.49  1,922,121.51
Nov-19-02         2  1,922,121.51          0.00     89,545.17   11,212.38       7.00     78,332.79  1,843,788.72
Dec-19-02         3  1,843,788.72          0.00     89,545.17   10,755.45       7.00     78,789.72  1,764,999.00
                                   ------------  ------------  ----------             ------------
                                   2,000,000.00    268,635.51   33,634.51               235,001.00

Jan-19-03         4  1,764,999.00          0.00     89,545.17   10,295.84       7.00     79,249.33  1,685,749.67
Feb-19-03         5  1,685,749.67          0.00     89,545.17    9,833.48       7.00     79,711.69  1,606,037.98
Mar-19-03         6  1,606,037.98          0.00     89,545.17    9,368.58       7.00     80,176.59  1,525,861.39
Apr-19-03         7  1,525,861.39          0.00     89,545.17    8,900.86       7.00     80,644.31  1,445,217.08
May 19-03         8  1,445,217.08          0.00     89,545.17    8,430.43       7.00     81,114.74  1,364,102.34
Jun-19-03         9  1,364,102.34          0.00     89,545.17    7,957.25       7.00     81,587.92  1,282,514.42
Jul-19-03        10  1,282,514.42          0.00     89,545.17    7,481.33       7.00     82,063.84  1,200,450.58
Aug-19-03        11  1,200,450.58          0.00     89,545.17    7,002.66       7.00     82,542.51  1,117,908.07
Sep-19-03        12  1,117,908.07          0.00     89,545.17    6,521.13       7.00     83,024.04  1,034,884.03
Oct-19-03        13  1,034,884.03          0.00     89,545.17    6,036.86       7.00     83,508.31    951,375.72
Nov-19-03        14    951,375.72          0.00     89,545.17    5,549.63       7.00     83,995.54    867,380.18
Dec-19-03        15    867,380.18          0.00     89,545.17    5,059.69       7.00     84,485.48    782,894.70
                                   ------------  ------------  ----------             ------------
                                           0.00  1,074,542.04   92,437.74               982,104.30

Jan-19-04        16    782,894.70          0.00     89,545.17    4,566.90       7.00     84,978.27    697,916.43
Feb-19-04        17    697,916.43          0.00     89,545.17    4,071.16       7.00     85,474.01    612,442.42
Mar-19-04        18    612,442.42          0.00     89,545.17    3,572.54       7.00     85,972.63    526,469.79
Apr-19-04        19    526,469.79          0.00     89,545.17    3,071.07       7.00     86,474.10    439,995.69
May-19-04        20    439,995.69          0.00     89,545.17    2,566.63       7.00     86,978.54    353,017.15
Jun-19-04        21    353,017.15          0.00     89,545.17    2,059.20       7.00     87,485.97    265,531.18
Jul-19-04        22    265,531.18          0.00     89,545.17    1,548.95       7.00     87,996.22    177,534.96
Aug-19-04        23    177,534.96          0.00     89,545.17    1,035.66       7.00     88,509.51     89,025.45
Sep-19-04        24     89,025.45          0.00     89,545.17      519.72       7.00     89,025.45          0.00
                                   ------------  ------------  ----------             ------------
                                           0.00    805,906.53   23,011.83               782,894.70

TOTAL                              2,000,000.00  2,149,084.08  149,084.08             2,000,000.00
                                   ------------  ------------  ----------             ------------
</TABLE>


Ending balance not equal to early buy out amount.


<PAGE>
                               GUARANTY OF PAYMENT

THIS  GUARANTY  ("Guaranty")  is  made  and  entered into as of      10/9/02
                                                               -----------------
by  and  between  each  of  the undersigned parties (hereinafter, referred to in
their  individual  capacity  and  collectively  as  "Guarantor")  in  favor  of
Caterpillar  Financial  Services  Corporation,  2120 West End Avenue, Nashville,
Tennessee  37203-0001  (hereinafter  referred  to  as  "Caterpillar Financial"),
guaranteeing  the  Indebtedness  (as  hereinafter  defined) of APOLLO GOLD, INC.
(hereinafter  referred  to  as  "Obligor").

WITNESSETH:

FOR  VALUE  RECEIVED, and/or as an inducement to Caterpillar Financial to now or
hereafter  enter  into,  purchase  or otherwise acquire the agreements, accounts
and/or  other  obligations evidencing and/or securing Obligor's Indebtedness and
in consideration of and for credit and financial accommodations now or hereafter
extended  to  or  for  the  account  of  the Obligor (which includes Caterpillar
Financial's  consent  to  an  assignment and/or assumption of the Indebtedness),
which  is  in  the  best  interest  of  Guarantor  and which would not have been
extended  but  for  this  Guaranty,  the  Guarantor  agrees  as  follows:

SECTION 1.     GUARANTY OF OBLIGOR'S INDEBTEDNESS.  Guarantor hereby absolutely,
-------------------------------------------------
irrevocably  and  unconditionally  agrees to, and by those presents does hereby:
(a)  guarantee  the prompt and punctual payment, performance and satisfaction of
all  present  and  future indebtedness and obligations of Obligor to Caterpillar
Financial which Obligor now owes Caterpillar Financial or which Obligor shall at
any  time or from time to time hereafter owe Caterpillar Financial when the same
shall  become  due  in connection with or arising out of that certain PROMISSORY
NOTE & SECURITY AGREEMENT by and between Obligor and Caterpillar Financial dated
     10/9/02     ,  including  any  and  all  existing  and  future  additional
-----------------
schedules,  amendments  and/or  related  agreements  thereto  (the  "Contract"),
whether direct or contingent, due or to become due, joint or several, primary or
secondary, liquidated or unliquidated, secured or unsecured, original or renewed
or  extended, or by open account or otherwise, and whether representing rentals,
principal, interest and/or late charges or other charges of an original balance,
an  accelerated balance, a balance reduced by part payment or a deficiency after
sale of collateral or otherwise and (b) undertake and guarantee to pay on demand
and  indemnify  Caterpillar  Financial  against  all liabilities, losses, costs,
attorney's  fees, and expenses which may be suffered by Caterpillar Financial by
reason  of  Obligor's default or default of the Guarantor (with all of Obligor's
indebtedness  and/or  obligations as stated above (including all costs, fees and
expenses) being hereinafter individually and collectively referred to under this
Guaranty  as  Obligor's "Indebtedness", which Indebtedness shall be conclusively
presumed  to  have  been  created  in  reliance  upon  this  Guaranty).

SECTION  2.     JOINT, SEVERAL AND SOLIDARY LIABILITY.  Guarantor further agrees
-----------------------------------------------------
that  its  obligations  and  liabilities  for  the  prompt and punctual payment,
performance  and  satisfaction  of Obligor's Indebtedness are independent of any
agreement  or  transaction  with  any third parties and shall be on a "joint and
several"  and  "solidary" basis along with Obligor to the same degree and extent
as  if  Guarantor  had  been  and/or will be a co-borrower, co-principal obligor
and/or co-maker of Obligor's Indebtedness.  In the event that there is more than
one  guarantor  under


<PAGE>
this  Guaranty,  or  in  the  event  that there are other guarantors, endorsers,
sureties  or  any  other  party who may at any time become liable for all or any
portion  of  Obligor's  Indebtedness  (each, an "Other Obligor"), the provisions
hereof shall be read with all grammatical changes thereby rendered necessary and
each  reference  to  the  Guarantor  shall  include  each and every one of those
parties  liable  for  all  or  any  portion  of  Obligor's Indebtedness and each
Guarantor's  obligations  and  liabilities  hereunder  shall  be on a "joint and
several"  and  "solidary"  basis  along  with  such  Other  Obligors.

SECTION  3.     DURATION;  CANCELLATION  OF  GUARANTY.  This  Guaranty  and
-----------------------------------------------------
Guarantor's obligations and liabilities hereunder shall remain in full force and
effect  until  such  time  as  Obligor's Indebtedness shall be fully and finally
paid,  performed  and/or  satisfied,  until  such  time  as this Guaranty may be
cancelled  by  Caterpillar  Financial under a written cancellation instrument in
favor  of  Guarantor  or  otherwise  as  stated  herein.

SECTION 4.     DEFAULT BY OBLIGOR.  Immediately upon Obligor's default under any
---------------------------------
of its Indebtedness in favor of Caterpillar Financial, Caterpillar Financial may
make  demand  upon Guarantor and Guarantor unconditionally and absolutely agrees
to  pay the full then unpaid amount of all of Obligor's Indebtedness (whether at
stated maturity, by required prepayment, declaration, acceleration or otherwise)
and/or  perform any covenant or agreement hereunder guaranteed.  Such payment or
payments  shall be made immediately following demand by Caterpillar Financial at
Caterpillar  Financial's  offices  indicated  above.

SECTION  5.     ADDITIONAL COVENANTS.  Guarantor further agrees that Caterpillar
------------------------------------
Financial  may,  at its sole option, at any time, and from time to time, without
the  consent  of  or  notice  to  Guarantor,  or to any other party, and without
incurring  any  responsibility  to  Guarantor or to any other party, and without
affecting,  impairing  or  releasing  the  obligations  of  Guarantor under this
Guaranty:  (a)  discharge  or  release any party (including, but not limited to,
Obligor, secondary obligors of Obligor's indebtedness, or any co-guarantor under
this  Guaranty)  who  is or may be liable to Caterpillar Financial for Obligor's
Indebtedness;  (b)  sell  at  public or private sale, exchange, release, impair,
surrender, substitute, realize upon or otherwise deal with, in any manner and in
any order and upon such terms and conditions as Caterpillar Financial deems best
at  its  uncontrolled  discretion,  any  leased  equipment and/or any collateral
listed  in  the  Contract  or  now or hereafter otherwise directly or indirectly
securing  repayment  of Obligor's Indebtedness (all such leased equipment and/or
all  such  collateral  shall  hereinafter  be  referred  to as the "Equipment"),
including without limitation, the purchase of all or any part of such collateral
for  Caterpillar  Financial's own account; (c) change the manner, place or terms
of  payment  and/or  available  credit (including without limitation increase or
decrease  in  the  amount of such payments available credit or any interest rate
adjustments),  or change or extend the time of payment of or renew, as often and
for  such  periods  as  Caterpillar  Financial may determine, or alter Obligor's
Indebtedness  or  grant  any  other  indulgence  to Obligor and/or any secondary
obligors  of Obligor's Indebtedness or any co-guarantor under this Guaranty; (d)
settle  or compromise Obligor's Indebtedness with Obligor and/or any third party
or  refuse  any  offer of performance with respect to, or substitutions for, the
Indebtedness;  (e)  take or accept any other security or guaranty for any or all
of  Obligor's  Indebtedness;  and/or  (f)  enter into, deliver, modify, amend or
waive  compliance  with,  any  instrument,  agreement or arrangement evidencing,
securing  or  otherwise  affecting,  all  or any part of Obligor's Indebtedness.


<PAGE>
SECTION 6.     NO RELEASE OF GUARANTOR.  Guarantor's obligations and liabilities
--------------------------------------
under  this  Guaranty  shall  not  be  released,  impaired, reduced or otherwise
affected  by,  and  shall continue in full force and effect, notwithstanding the
occurrence  of  any  event,  including without limitation any one or more of the
following  events:  (a)  death, insolvency, bankruptcy, arrangement, adjustment,
composition,  liquidation, disability, dissolution or lack of authority (whether
corporate,  partnership  or trust) of Obligor (or any person acting on Obligor's
behalf) or any Other Obligor or any other defense based on or arising out of the
lack  of  validity  or  unenforceability of the Indebtedness or any agreement or
instrument  relating  thereto or any provisions thereof and/or Obligor's absence
or  cessation  of  liability  thereunder  for  any  reason,  including  without
limitation,  Caterpillar  Financial's  failure  to  preserve any right or remedy
against  Obligor;  (b)  any change in Obligor's financial condition; (c) partial
payment  or  payments  of  any  amount  due  and/or  outstanding under Obligor's
Indebtedness;  (d)  any  change  in Obligor's management, ownership, identity or
business  or  organizational
structure;  (e)  any  payment  by  Obligor  or  any  other  party to Caterpillar
Financial  that  is  held  to constitute a preferential transfer or a fraudulent
conveyance under any applicable law, or for any reason, Caterpillar Financial is
required  to  fund  such  payment  or pay such amount to Obligor or to any other
person; (f) any sale, lease or transfer, whether or not commercially reasonable,
of  all  or  any  part  of  Obligor's  assets and/or any assignment, transfer or
delegation  of  Obligor's Indebtedness to any third party (whereby this Guaranty
shall  continue  to  extend  to  all sums due from or for the account of Obligor
and/or the new or substituted legal entity); (g) any failure to perfect any lien
or  security  interest securing the Indebtedness or preserve any right, priority
or  remedy  against  any Equipment; (h) any interruption, change or cessation of
relations  between  Guarantor  and  Obligor;  (i)  any  defect  in,  damage  to,
destruction  of  or  loss  of  or  interference  with  possession  or use of any
Equipment for any reason by Obligor or any other person; (j) any act or omission
by Caterpillar Financial which increase the scope of Guarantor's risk, including
without  limitation,  negligent  administration  of  transactions  with Obligor;
and/or  (k)  any other occurrence or circumstance whatsoever, whether similar or
dissimilar  to  the  foregoing,  which  might  otherwise  constitute  a legal or
equitable  discharge, release or defense of a guarantor or surety or which might
otherwise  limit  recourse  against  Guarantor.

SECTION  7.     WAIVERS  BY  GUARANTOR.  Guarantor  waives,  for  the benefit of
--------------------------------------
Caterpillar  Financial  (which  waivers  shall  survive  until  this Guaranty is
released  or  terminated in writing by Caterpillar Financial): (a) notice of the
acceptance of this Guaranty; (b) notice of the existence, creation or incurrence
of  new  and/or additional debt owing from Obligor to Caterpillar Financial; (c)
presentment,  protest  and  demand,  and  notice of protest, demand, nonpayment,
nonperformance  and  dishonor  of  any  and  all  agreements,  notes  or  other
obligations  signed,  accepted,  endorsed  or  assigned  to  or  by  Caterpillar
Financial  or agreed to between Obligor and Caterpillar Financial; (d) notice of
adverse  change  in  Obligor's financial condition or any other fact which might
materially increase the risk of Guarantor; (e) any and all rights in and notices
or  demands relating to any Equipment, including without limitation, all rights,
notices,  advertisements or demands relating, whether directly or indirectly, to
the  foreclosure,  sale or other disposition of any or all such Equipment or the
manner  of  such sale or other disposition; (f) any claim, right or remedy which
Guarantor  may  now  have  or  hereafter acquire against the Obligor that arises
hereunder  and/or  from  the  performance by an Other Obligor including, without
limitation,  any  claim,  remedy  or  right  of  subrogation,  reimbursement,
exoneration,  contribution,


<PAGE>
indemnification,  or  participation in any claim, right or remedy of Caterpillar
Financial  against  the  Obligor or any security which Caterpillar Financial now
has  or  hereafter  acquires  with  respect  to the Obligor, whether or not such
claim, right or remedy arises in equity, under contract (express or implied), by
statute, under common law or otherwise; (g) notice of  any default by Obligor or
any  other  person  obligated  in any manner for all or any portion of Obligor's
Indebtedness  and  notice of any legal proceedings against such parties; (h) any
right  of contribution from any Other Obligors; (i) notice and hearing as to any
prejudgment  remedies;  (j)  any defense which is premised on an alleged lack of
consideration  of  the  obligation  undertaken  by  Guarantor, including without
limitation,  any  defense  to  the  enforcement  of this Guaranty based upon the
timing  of execution of this Guaranty and/or that the Guaranty had been executed
after  the execution date of any agreements evidencing the Indebtedness; (k) all
exemptions  and  homestead  laws;  (l) any other demands and notices required by
law;  (m)  all  setoffs  and counterclaims against Caterpillar Financial and/;or
Obligor;  (n)  any  defense  based on the claim that Guarantor's liabilities and
obligations exceed or are more burdensome than those of Obligor; (o) any defense
which  the  Guarantor  may  assert  or  be  able  to  assert  on  the underlying
Indebtedness or which may be asserted by Guarantor, including but not limited to
(i)  breach  of  warranty, (ii) fraud, (iii) statue of frauds, (iv) infancy, (v)
statute  of  limitations,  (vi) lender liability, (vii) accord and satisfaction,
(viii)  payment  and/or  (ix)  usury.

SECTION  8.     ENFORCEMENT  OF  GUARANTOR'S  OBLIGATIONS  AND  LIABILITIES.
---------------------------------------------------------------------------
Guarantor agrees that, should Caterpillar Financial deem it necessary to file an
appropriate collection action to enforce Guarantor's obligations and liabilities
under  this  Guaranty,  Caterpillar  Financial  may commence such a civil action
against  Guarantor  without  the  necessity  of  first (i) attempting to collect
Obligor's  Indebtedness  from Obligor or from any Other Obligor, whether through
filing  of suit or otherwise, (ii) attempting to exercise any rights Caterpillar
Financial  may  have against any Equipment, whether through re-lease, the filing
of  any  appropriate foreclosure action or otherwise, (iii) including Obligor or
any  Other  Obligor as an additional party defendant in such a collection action
against  Guarantor, or (iv) pursuing any other remedy in Caterpillar Financial's
power  or  to  mitigate  damages. If there is more than one guarantor under this
Guaranty, such Guarantor additionally agrees that Caterpillar Financial may file
an  appropriate  collection and/or enforcement action against any one or more of
them,  without  impairing  the rights of Caterpillar Financial against any other
guarantor  under  this  Guaranty.

SECTION 9.     COUNTERACTION.  This writing is intended as a final expression of
----------------------------
this  Guaranty  agreement and is a complete and exclusive statement of the terms
of  that agreement, provided however, that the provisions of this Guaranty shall
be  in  addition  to  and  cumulative  of,  and not in substitution, novation or
discharge  of,  any and all prior or contemporaneous written guaranties or other
written  agreements  by  Guarantor  (or  any  one  or more of them), in favor of
Caterpillar  Financial  or  assigned  to Caterpillar Financial by others, all of
which  shall be construed as complementing each other.  Nothing hereto contained
shall  prevent  Caterpillar  Financial  from  enforcing  any  and all such other
guaranties  or  agreements  in  accordance  with  their  respective  terms.

SECTION  10.  SUCCESSORS  AND  ASSIGNS  BOUND.  Guarantor's  obligations  and
---------------------------------------------
liabilities  under  this  Guaranty shall be binding upon Guarantor's successors,
heirs,  legatees,  devisees, administrators, executors and assigns.  Caterpillar
Financial may assign this Guaranty and any


<PAGE>
and  all  rights  and  interests included herein in Caterpillar Financial's sole
discretion  without  notice  to Guarantor and the rights and remedies granted to
Caterpillar  Financial  under  this  Guaranty shall also inure to the benefit of
Caterpillar  Financial's  successors  and  assigns,  as  well  as to any and all
subsequent  holder  or  holders of any of Obligor's Indebtedness subject to this
Guaranty,  without  setoff,  counterclaim,  reduction,  recoupment,  abatement,
deduction  or  defense based on any claim Guarantor may have against Caterpillar
Financial,  such  successors  and  assigns  or  subsequent  holders of Obligor's
Indebtedness. Guarantor shall not assign this Guaranty without the prior written
consent  of  Caterpillar  Financial.

SECTION  11.  TERMINATION.  This  Guaranty  is irrevocable and may be terminated
-------------------------
only  as  to  indebtedness  created  sixty  (60)  days  after  actual receipt by
Caterpillar Financial of written notice of termination hereof, provided however,
that  all  Indebtedness incurred, created or arising pursuant to a commitment of
Caterpillar  Financial made prior to the effective date of such termination (the
"Termination  Date")  and  any  extensions,  renewals  or  modifications of such
Indebtedness (including without limitation loan and/or other commitments) agreed
to  or  instituted  by Caterpillar Financial prior to the Termination Date shall
not  be  effected  by such termination and shall be deemed to have been incurred
prior  to  termination  (irrespective of whether Indebtedness arising thereunder
occurs  after the Termination Date) and shall be fully covered by this Guaranty.
Any  termination  of  this  Guaranty  shall  be  ineffective  unless  upon  the
Termination Date Guarantor deposits with Caterpillar Financial collateral in the
form  of  cash  in  an  amount  not  less  than  the  amount of the Indebtedness
outstanding  on  the  Termination  Date.  Such cash shall be held by Caterpillar
Financial in a separate account and shall be returned to Guarantor upon the full
and  indefeasible  payment  of  all  of  the  Indebtedness.

SECTION  12.  GOVERNING  LAW;  WAIVER OF JURY.  This Guaranty shall be construed
---------------------------------------------
liberally  in favor of Caterpillar Financial and shall be governed and construed
in accordance with the substantive laws of the State of Tennessee without regard
to  the  conflicts  of  laws principals thereof.  ANY ACTION, SUIT OR PROCEEDING
RELATING  DIRECTLY  OR  INDIRECTLY  TO THIS GUARANTY OR THE RELATIONSHIP BETWEEN
GUARANTOR  AND  CATERPILLAR  FINANCIAL,  WILL  BE  TRIED IN A COURT OF COMPETENT
JURISDICTION  BY  A  JUDGE WITHOUT A JURY.  AS SUCH, GUARANTOR HEREBY WAIVES ANY
RIGHT  TO  A JURY TRIAL IN ANY SUCH ACTION, SUIT OR PROCEEDING.  IN THE EVENT OF
LITIGATION,  THIS  GUARANTY  MAY  BE  FILED AS A WRITTEN CONSENT TO TRIAL BY THE
COURT.

SECTION  13.  SEVERABILITY.  If  any  provision  of  this Guaranty is held to be
--------------------------
illegal,  invalid or unenforceable under present or future laws effective during
the term hereof, such provision shall be fully severable, this Guaranty shall be
construed  and enforceable as if the illegal, invalid or unenforceable provision
had  never comprised a part of it, and the remaining provisions of this Guaranty
shall  remain in full force and effect and shall not be affected by the illegal,
invalid  or  unenforceable  provision  or  by  its  severance  herefrom.

IN WITNESS WHEREOF, Guarantor has executed this Guaranty in favor of Caterpillar
Financial  on  the  day,  month  and  year  first  written  above.


<PAGE>
GUARANTOR HAS READ AND FULLY UNDERSTANDS ALL OF THE PROVISIONS OF THIS GUARANTY.

                                       (Complete Address, Phone, SSN if
                                       Guarantor is an Individual)

Guarantor: APOLLO GOLD CORPORATION     Address:
                                               ---------------------------------
Signature:  /s/  RL Chapman
          ------------------------     -----------------------------------------

Name (PRINT): RL Chapman               Phone:
             ---------------------           -----------------------------------

Title:  Chief Financial Officer        SSN:
      ----------------------------         -------------------------------------


Guarantor:  MONTANA TUNNELS MINING,    Address:
              INC.                             ---------------------------------

Signature:  /s/  RL Chapman
          ------------------------     -----------------------------------------

Name (PRINT):  RL Chapman              Phone:
             ---------------------           -----------------------------------

Title:  Chief Financial Officer        SSN:
      ----------------------------         -------------------------------------


<PAGE>