EXHIBIT
10.1

      


      APOLLO
GOLD CORPORATION

       

      5655
S. Yosemite Street, Suite 200

      Greenwood
Village, CO 80111

       

                                                                                                                        December
9, 2009

      Elkhorn
Goldfields LLC

      P.O. Box
370657

      Denver,
CO  80237

      


      Attention:  Patrick
W.M. Imeson, Chairman

      


      Dear
Pat:

      


      
        	
                Re:

              	
                Letter
      of Intent (the "Letter of Intent") dated September 30, 2009, as amended
      October 21, 2009, between Elkhorn Goldfields LLC ("Elkhorn") and Apollo
      Gold Corporation ("Apollo")

              


      

      


      Subject
to the completion of all necessary due diligence investigations by Apollo and
the satisfaction of the other closing conditions described herein, this letter
(the "Letter" or "Letter Agreement") amends and
replaces the Letter of Intent between Elkhorn and Apollo, which is attached
hereto as Schedule "A", pursuant to which Elkhorn has agreed to purchase all the
outstanding capital stock in Montana Tunnels Mining Inc. ("MTMI"), an indirect wholly
owned subsidiary of Apollo, which includes the 50% interest held by MTMI in the
joint venture agreement with Elkhorn Tunnels, LLC (an affiliate of Elkhorn), the
Diamond Hill mine and mill and any and all ancillary assets, for a purchase
price of US$9,462,091 (less pre-paid adjustments see #4), payable as described
in the Letter of Intent (the "Transaction"). This Letter
Agreement provides the amended terms upon which Elkhorn, Apollo and the other
parties hereto intend to complete the Transaction along with the related
transactions described herein.  The parties hereto agree as
follows:

       

       

      
        	
                1.

              	
                Assignment
      of Debt and Related Security.  Elkhorn and the
      beneficiaries identified in those Deeds of Trust (the "Deeds of Trust") listed
      on part 1 of the attached Schedule "B" (collectively, the "Lenders") shall assign
      and transfer to Apollo that certain Promissory Note dated August 1,
      2003, from Calais Resources, Inc. and Aardvark Agencies, Inc., as
      Borrowers, in favor of the Note Holders listed therein, as amended by that
      Allonge to Promissory Note dated December 15, 2005 (collectively, and
      together with any replacements or amendments thereto or thereof, the
      "Original Notes") in the amount of
      (including principal and interest) approximately US$7,700,000, as well as
      their interest in the August 1, 2003 Loan Agreement related thereto,
      and all of the beneficiaries' right, title and interest in and to those
      Deeds of Trust, which are registered, as security for the repayment of the
      Original Notes, against the Cross-Caribou Mine property located in
      Caribou, Colorado near Nederland, as detailed hereto in the attached
      Schedule "C" (the "Caribou
      Property").  The Caribou Property is owned in fee simple
      by Calais Resources, Inc. ("Calais"), as to the
      properties set forth in Part 1 of Schedule C, and Aardvark
      Agencies, Inc. ("Aardvark"), as to the
      properties set forth in Part 2 of Schedule C.  Those
      Deeds of Trust give the beneficiaries thereto a perfected, first priority
      security interest in the Caribou Property.  In addition to the
      amount represented by the Original Notes, Calais has borrowed
      approximately US$1,382,091 (the "Additional Caribou
      Loan") from Elkhorn and the Lenders which is not currently
      represented by any promissory notes or related security documentation, and
      such amount has been expended on the Caribou Property.  Calais
      has also borrowed approximately US$380,000 (the "Congo Loan") from
      Elkhorn and the Lenders pursuant to an unsecured promissory note (the
      "Congo Note"),
      such Congo Loan having been used by Calais to purchase a mining property
      known as the Congo Chief Mine which is located in the Consolidated Caribou
      Mines District, as detailed hereto in the attached Schedule
      "D".  Elkhorn and the Lenders shall also assign and transfer to
      Apollo their interest as creditors in the Additional Caribou Loan and the
      Congo Loan, the latter being represented by the Congo Note, as well as any
      loan agreements and security documents related
  thereto.

              


      

       

      
        
           


        

        
          5

          
            

          

        

        
           


        

      

       

      
        	
                2.

              	
                Additional
      Promissory Note.  Calais shall enter into promissory
      note, for $1,382,091, in favor of Apollo, to evidence the obligation to
      repay the Additional Caribou Loan (the "Caribou Note"), secured
      by Calais' interest in the Caribou
Property.

              


      

       

      
        	
                3.

              	
                Transfer
      of MTMI.  As consideration for the assignments described
      in Section 1 hereto, Apollo shall at the closing of the Transaction
      transfer to Elkhorn clear title to all of the issued and outstanding
      securities of MTMI such that Elkhorn will become the 100% owner of
      MTMI.

              


      

       

      
        	
                4.

              	
                Back-in
      Right to Caribou Property and Other Properties.  Apollo
      may in its sole discretion engage in negotiations with Calais to convert
      Apollo’s interest in the Original Notes, the Congo Note and the Caribou
      Note (collectively the "Notes") into a joint
      venture interest with Calais for development of the Caribou Property and
      other Calais properties (the "Calais JV
      Interest").  Should Apollo do so prior to June 1, 2010,
      Elkhorn shall have the right to acquire 50% of Apollo’s interest in the
      Calais JV Interest by making a cash payment to Apollo by July 1, 2010 of
      $5,000,000, and thereafter timely contributing $3,750,000 to the JV
      development budget submitted by Apollo  (Matching value of
      US$9,462,091 less $250,000 in advance payments, less accrued cash credit
      differential of approximately $462,091 ($9,462,091 - $250,000 - $462,091 =
      $8,750,000.), for an approximate payment of no less than
      $8,750,000.  For example, if Apollo enters into a joint venture
      on the Caribou Property with Apollo having a 60% interest and Calais a 40%
      interest, Elkhorn shall have the right to earn 50% of Apollo's 60% JV
      Interest (i.e. a 30% interest in the joint venture) by making total cash
      payments totalling $8,750,000 as set forth above.  Upon Elkhorn
      exercising the option described in this Section 4, Elkhorn would be
      subject to all rights and obligations of a joint venture participant as
      detailed in the joint venture documentation agreed to by Apollo and
      Calais.  Should Apollo not be successful in converting its
      interest in the Notes into the Calais JV Interest by June 1, 2010,
      Elkhorn shall have the option to acquire the Notes by payment to Apollo on
      or before July 1, 2010 of $8,750,000 plus (i) accrued interest and (ii) if
      acquired by Apollo, the face value of the indebtedness obligation in
      respect of the Secondary Lien (as defined in Section 5 below), regardless
      of the actual amount of cash or other consideration paid by Apollo to
      acquire that indebtedness obligation.  Further, should Apollo
      acquire 100% of the issued and outstanding securities of Calais such that
      Calais becomes a wholly owned subsidiary of Apollo, Elkhorn shall have the
      right to participate on the same basis as Apollo to acquire up to 50% of
      the position acquired by Apollo.  If additional capital is spent
      on the Caribou Property prior to June 1, 2010, the final purchase price
      payment of US$8,750,000 shall be adjusted on the basis of the capital
      expended within the JV.

              


      

       

      
        
           


        

        
          6

          
            

          

        

        
           


        

      

       

      
        	
                5.

              	
                Secondary
      Lien.  In addition to the liens described in Section 1
      hereto, the Caribou Property is subject to a secondary lien in favor of
      the Duffy Group, as set forth on part 2 of Schedule "B" (the "Secondary Lien") to
      secure a repayment obligation (including principal and interest) of
      approximately US$850,000.  In the event that Apollo purchases
      the Secondary Lien and the indebtedness secured thereby, if Elkhorn
      exercises the option described in Section 4 hereto, at the time of
      exercising such option Elkhorn shall be required to reimburse Apollo in
      cash for 50% of the purchase price for the Secondary
  Lien.

              


      

       

      
        	
                6.

              	
                Due
      Diligence Investigations.  Elkhorn and Calais will
      forthwith make available (and Elkhorn shall cause the Lenders to make
      available) to Apollo and its authorized representatives all pertinent
      documents, including title, ownership, corporate, financial and technical
      information and other data relating to the Notes, the Deeds of Trust, the
      Additional Caribou Loan, the Congo Loan, the Secondary Lien and the
      Caribou Property.  In the event Apollo provides Elkhorn with
      notice prior to the execution of definitive documents that Apollo is not
      satisfied with its due diligence investigations, none of the parties shall
      have any further rights or obligations to the other pursuant to this
      Letter Agreement effective as of the date of such
  notice.

              


      

       

      
        	
                7.

              	
                Conditions
      to Closing.  The closing of the Transaction described
      herein is subject to the satisfaction of following
    conditions:

              


      

       

      
        	
                 
      

              	
                (a)

              	
                satisfactory
      completion by Apollo (in its sole discretion) of it due diligence
      investigations;

              


      

       

      
        	
                 
      

              	
                (b)

              	
                the
      receipt of all requisite board approvals and third-party approvals,
      including without limitation Apollo's secured lenders;
  and

              


      

       

      
        	
                 
      

              	
                (c)

              	
                the
      execution and delivery by all of the appropriate parties, including
      without limitation the Lenders, of formal binding agreements, which shall
      contain standard representations and warranties of the parties
      thereto.

              


      

       

      The
closing of the Transaction shall occur at the date and time set forth in the
formal binding agreements.  In the event that the closing conditions
described in this Section 7 are not satisfied by December 30, 2009, subject to
the provisions of the following sentence, this Letter Agreement shall terminate
immediately and the existing joint venture agreement with respect to the Montana
Tunnels mine shall remain in full force and effect and Apollo shall continue to
have such rights and remedies available therein, as supplemented by paragraph 3
of the side letter dated October 21, 2009 (the “October 21 Side Letter”)
between Apollo and Elkhorn. If the closing conditions described in this Section
7 are not met by December 30, 2009, or should respective Boards or third
parties fail to approve this transaction, or for any other reasons should this
Letter Agreement be terminated, Elkhorn shall have 3 business days from such
termination date to make any and all payments that are in arrears under the
October 21, 2009 agreement, and if Elkhorn timely does so, the Letter of
Intent, as modified by the October 21 Side Letter, shall be
reinstated.

       

      
        
           


        

        
          7

          
            

          

        

        
           


        

      

       

      
        	
                8.

              	
                Further
      Assurances. The parties shall
      execute or cause to be executed all such instruments and other documents
      and shall do or cause to be done all such other acts and things as may be
      necessary or desirable to carry out and give effect fully to the
      provisions and intent of this Letter Agreement.  Without
      limiting the foregoing, Elkhorn shall specifically be responsible for
      obtaining the consent of all of the Lenders to this Letter Agreement and
      the transactions contemplated
hereby.

              


      

       

      
        	
                9.

              	
                Confidentiality.  Information
      concerning this Letter Agreement and the formal agreements or any matters
      arising from or in connection therewith will be treated as confidential by
      the parties and will not be disclosed by any party to any other person
      (other than an affiliate or any legal, accounting or other professional
      advisors) without the prior written consent of the other party, such
      consent not to be unreasonably withheld, except to the extent that such
      disclosure may be necessary for observance of any applicable laws or stock
      exchange requirements or for accomplishment of the purposes of this Letter
      Agreement or the formal agreements.  Notwithstanding the
      foregoing, the parties agree that Apollo shall issue a press release
      announcing the entry into this Letter Agreement, which Elkhorn shall have
      the opportunity to review and comment
on.

              


      

       

      
        	
                10.

              	
                Governing
      Law.  This Agreement shall be interpreted in accordance
      with the laws of the State of Colorado applicable therein (other than any
      conflicts of law principles that would result in the application of the
      laws of any other jurisdiction) and the parties agree to attorn to the
      non-exclusive jurisdiction of the courts of the State of
      Colorado.

              


      

       

      
        	
                11.

              	
                Expenses.  Each party
      will be responsible for their own costs of completing the Transaction
      contemplated by this Letter
Agreement.

              


      

       

      
        	
                12.

              	
                Counterparts; Invalidity. This
      Letter Agreement may be executed in one or more counterparts, including by
      facsimile, each of which, when so executed, will be deemed to be an
      original, but all such counterparts will be one and the same Letter
      Agreement. The invalidity or unenforceability of any provision shall not
      affect the validity or enforceability of the other
    provisions.

              


      

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

       

      
        	
                

                  13.

                

              	
                Acceptance.  If
      the foregoing is acceptable to all of the parties set out below, please
      sign in the spaces provided below and return it to us by no later than
      5:00 p.m. (Denver, Colorado local time) on December 9, 2009. If not
      accepted by all of the parties below by such time on such date, this
      proposal shall terminate automatically without liability on the part of
      any party. This letter may be signed in one or more counterparts (by
      original or facsimile or electronic signature), each of which when so
      executed shall be deemed to be an original, and such counterparts together
      shall constitute one and the same
instrument.

              


      

       

      Yours
truly,

      


      APOLLO GOLD CORPORATION

      


      


      Per:  /s/ R. David
Russell

      R. David Russell

      President and Chief Executive
Officer

      


      The above
proposal is hereby accepted this 9th day of
December, 2009.

      


      ELKHORN
GOLDFIELDS LLC

      


      


      Per:
/s/ Patrick W.M.
Imeson

          Patrick W.M.
Imeson, Chairman

      


      


      Accepted
and agreed to this 9th day of
December, 2009.

      


      


      CALAIS
RESOURCES, INC.,

      and

      CALAIS
RESOURCES COLORADO, INC.

      


      Per:
/s/ David K.
Young

      Name:
David K. Young

      Title:  President
and
CEO                                                      

       

      
        
           


        

        
          9