Document:

EX 4.2

    EXHIBIT
      4.2

     

    
      	
              Certificate
                No. (Specimen)

               

               

               

               

               

               

               

               

              CONVERTIBLE
                DEBENTURE

               

              OF

               

              APOLLO
                GOLD CORPORATION

               

               

               

               

              Issue
                of Series 2007- A of a Maximum of US$8,580,000 of

               

              Convertible
                Debentures

               

              of
                Various Denominations

               

               

               

               

               

               

               

               

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    TABLE
      OF CONTENTS

     

    
      	
              Article
                1 INTERPRETATION

            	
              2

            
	
              Article
                2 PROMISE TO PAY

            	
              3

            
	
              Article
                3 INTEREST

            	
              4

            
	
              Article
                4 SERIES OF DEBENTURES

            	
              5

            
	
              Article
                5 CONVERSION OF DEBENTURE

            	
              5

            
	
              Article
                6 DEFAULT

            	
              8

            
	
              Article
                7 WAIVER

            	
              9

            
	
              Article
                8 OTHER RIGHTS OF THE HOLDER

            	
              10

            
	
              Article
                9 ADMINISTRATIVE PROVISIONS

            	
              10

            
	
              Article
                10 MISCELLANEOUS

            	
              11

            
	
              Article
                11 NOTICE

            	
              11

            

    

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              No.
                _____________

            	
              Principal
                Amount US$

            

    

     

    THIS
      SECURITY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
      1933,
      AS AMENDED (THE "SECURITIES ACT"), AND ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
      EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE
      HOLDER (1) REPRESENTS THAT (A) IT IS AN ACCREDITED INVESTOR (AS DEFINED IN
      REGULATION D UNDER THE SECURITIES ACT); OR (B) IT IS NOT A U.S. PERSON AND
      IS
      ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION
      S ADOPTED UNDER THE SECURITIES ACT; (2) AGREES THAT IT WILL NOT RESELL OR
      OTHERWISE TRANSFER THE SECURITY EVIDENCED HEREBY OR THE COMMON SHARES ISSUABLE
      UPON CONVERSION OF SUCH SECURITY, EXCEPT (1) (A) TO THE ISSUER OR A SUBSIDIARY
      THEREOF; (B) TO PERSONS OTHER THAN U.S. PERSONS OUTSIDE THE UNITED STATES IN
      COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT; (C) PURSUANT TO THE
      EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 ADOPTED UNDER THE SECURITIES
      ACT OR ANOTHER AVAILABLE EXEMPTION UNDER THE SECURITIES ACT (IF AVAILABLE);
      OR
      (D) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT,
      AND (2) AGREES THAT IT WILL, PRIOR TO ANY TRANSFER OF THIS SECURITY, FURNISH
      TO
      THE ISSUER SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS MAY
      BE
      REQUIRED TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION
      FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF
      THE
      SECURITIES ACT. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED
      STATES" AND "U.S. PERSON" HAVE THE MEANING GIVEN TO THEM BY REGULATION S UNDER
      THE SECURITIES ACT. IN ANY CASE, THE HOLDER HEREOF WILL NOT, DIRECTLY OR
      INDIRECTLY, ENGAGE IN ANY HEDGING TRANSACTION WITH REGARD TO THIS SECURITY
      OR
      ANY COMMON SHARES ISSUABLE UPON CONVERSION OF SUCH SECURITY, EXCEPT AS PERMITTED
      BY THE SECURITIES ACT.

     

    THIS
      DEBENTURE
      HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES
      ACT
      OF 1933, AS AMENDED (THE "SECURITIES ACT"). THE SECURITIES TO BE ISSUED UPON
      EXERCISE OF THIS DEBENTURE WERE NOT INITIALLY REGISTERED AND MAY OR MAY NOT
      HAVE
      BEEN REGISTERED FOR RESALE UNDER THE SECURITIES ACT. THIS DEBENTURE MAY NOT
      BE
      EXERCISED BY OR ON BEHALF OF ANY U.S. PERSON, AS SUCH TERM IS DEFINED IN
      REGULATION S PROMULGATED PURSUANT TO THE SECURITIES ACT, UNLESS REGISTERED
      UNDER
      THE SECURITIES ACT OR AN EXEMPTION FROM SUCH REGISTRATION IS
      AVAILABLE.

     

    UNLESS
      PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THE SECURITIES SHALL
      NOT
      TRADE THE SECURITIES BEFORE JUNE 24, 2007.

     

    CONVERTIBLE
      DEBENTURE

     

    APOLLO
      GOLD CORPORATION

     

    A
      corporation existing under the laws of the Yukon Territory

     

    WHEREAS
      this
      Debenture is issued to the Holder as part of a private placement of up to
      US$8,580,000 of convertible debentures being offered by the Corporation as
      a
      series of like debentures except as to Principal Sum;

     

    NOW
      THEREFORE it
      is
      hereby covenanted, agreed and declared as follows:

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ARTICLE 1

    INTERPRETATION

     

    
      	
              1.1

            	
              Definitions.  In
                this Debenture, including the preamble, unless there is something
                in the
                subject matter or context inconsistent therewith, the following
                expressions shall have the following meanings
                namely:

            

    

     

    
      	 	
              (a)

            	
              "AMEX"
                means the American Stock Exchange;

            

    

     

    
      	 	
              (b)

            	
              "Business
                Day"
                means any day other than a Saturday, Sunday, legal holiday or a day
                on
                which banking institutions are closed in Toronto, Ontario and Denver
                Colorado;

            

    

     

    
      	 	
              (c)

            	
              "Change
                of Control of the Corporation"
                means where any person, including a group acting jointly or in concert,
                acquires or becomes the beneficial owner of, or a combination of
                persons
                acting jointly or in concert acquire or become the beneficial owner
                of,
                either directly or indirectly, more than fifty (50) percent of the
                voting
                securities of the Corporation, whether through the acquisition of
                previously issued and outstanding voting securities, or voting securities
                that have not been previously issued, or any combination thereof,
                or any
                other transaction having a similar
                effect;

            

    

     

    
      	 	
              (d)

            	
              "Common
                Shares"
                means the common shares of the Corporation as such shares were constituted
                on the date hereof;

            

    

     

    
      	 	
              (e)

            	
              "Corporation"
                means Apollo Gold Corporation, a corporation formed under the laws
                of the
                Yukon Territory and its successors and
                assigns;

            

    

     

    
      	 	
              (f)

            	
              "Conversion
                Date"
                means the date which is 10 Business Days following receipt by the
                Corporation of a Conversion Notice;

            

    

     

    
      	 	
              (g)

            	
              "Conversion
                Notice"
                has the meaning ascribed to that term in Section 5.1
                hereto;

            

    

     

    
      	 	
              (h)

            	
              "Conversion
                Price"
                means the price per Common Share at which the portion of the Principal
                Sum
                outstanding under this Debenture shall from time to time be convertible
                into Common Shares, being US$0.50 per Common
                Share;

            

    

     

    
      	 	
              (i)

            	
              "this
                Debenture",
                the "Debenture",
                "herein",
                "hereby",
                "hereof",
                "hereto",
                "hereunder"
                and similar expressions mean or refer to this convertible, subordinated,
                secured debenture and any debenture, deed or instrument supplemental
                or
                ancillary thereto and any schedules hereto or thereto and not to
                any
                particular article, section, subsection, clause, subclause or other
                portion hereof;

            

    

     

    
      	 	
              (j)

            	
              "Event
                of Default"
                means any of the events specified in Article 6
                hereof;

            

    

     

    
      	 	
              (k)

            	
              "Holder"
                or
                "Debentureholder"
                has the meaning ascribed hereto in Section 2.1
                hereto;

            

    

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (l)

            	
              "Maturity
                Date"
                means February 23, 2009;

            

    

     

    
      	 	
              (m)

            	
              "Offering"
                means the offering by the Corporation of a maximum of US$8,580,000
                Principal Sum of Debentures, issuable in
                series;

            

    

     

    
      	 	
              (n)

            	
              "person"
                means an individual, corporation, partnership, unincorporated syndicate,
                unincorporated organization, trust, trustee, executor, administrator,
                or
                other legal representative, or any group or combination
                thereof;

            

    

     

    
      	 	
              (o)

            	
              "Principal
                Sum"
                means the sum of US$___________;
                and

            

    

     

    
      	 	
              (p)

            	
              "TSX"
                means the Toronto Stock Exchange.

            

    

     

    
      	
              1.2

            	
              Gender.
                Whenever used in this Debenture, words importing the singular number
                only
                shall include the plural, and vice versa, and words importing the
                masculine gender shall include the feminine
                gender.

            

    

     

    
      	
              1.3

            	
              Numbering
                of Articles, etc.
                Unless otherwise stated, a reference herein to a numbered or lettered
                article, section, subsection, clause, subclause or schedule refers
                to the
                article, section, subsection, clause, subclause or schedule bearing
                that
                number or letter in this Debenture.

            

    

     

    
      	
              1.4

            	
              Day
                not a Business Day.
                In the event that any day on or before which any action is required
                to be
                taken hereunder is not a Business Day, then such action shall be
                required
                to be taken on or before the requisite time on the next succeeding
                day
                that is a Business Day. If the payment of any amount is deferred
                for any
                period, then such period shall be included for purposes of the computation
                of any interest payable hereunder.

            

    

     

    
      	
              1.5

            	
              Computation
                of Time Period.
                Except to the extent otherwise provided herein, in the computation
                of a
                period of time from a specified date to a later specified date, the
                word
                "from" means "from and including" and the words "to" and "until"
                each mean
                "to but excluding".

            

    

     

    ARTICLE 2

    PROMISE
      TO PAY

     

    
      	
              2.1

            	
              Indebtedness.
                The Corporation, for value received, and in consideration of the
                premises
                hereby acknowledges itself indebted and promises and covenants to
                pay to
                _____________________, the registered holder hereof for the time
                being
                (the "Holder"):

            

    

     

    
      	 	
              (a)

            	
              the
                principal sum of US$____________ (the "Principal
                Sum")
                on February 23, 2009 (the "Maturity Date") or sooner upon the occurrence
                of an Event of Default or upon such other date as specified herein
                at the
                principal office of the Corporation in the city of Greenwood Village,
                Colorado;

            

    

     

    
      	 	
              (b)

            	
              interest
                on any monies owing by the Corporation to the Holder hereunder, all
                as
                specifically calculated hereunder;
                and

            

    

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (c)

            	
              all
                other monies which may be owing by the Corporation to the Holder
                pursuant
                to this Debenture.

            

    

     

    ARTICLE 3

    INTEREST

     

    
      	
              3.1

            	
              Calculation
                and Payment of Interest, etc.
                The Corporation shall pay interest on that portion of the Principal
                Sum
                outstanding from time to time from the date hereof up to and including
                the
                date of payment of the Principal Sum at the rate
                of:

            

    

     

    
      	 	
              (a)

            	
              1%
                per month for the first 12 months from the date of issuance of this
                Debenture (12% per annum simple interest not compounded), in like
                money at
                the said place, calculated and payable yearly in arrears (less any
                tax
                required by law to be deducted) with the payment due on February
                23, 2008;
                and

            

    

     

    
      	 	
              (b)

            	
              1.5%
                per month for the final 12 months prior to the Maturity Date (18%
                per
                annum simple interest not compounded), in like money at the said
                place,
                calculated and payable yearly in arrears (less any tax required by
                law to
                be deducted) with the payment due on February 23,
                2009.

            

    

     

    
      	
              3.2

            	
              Taxation.
                The Corporation shall make all payments of the Principal Sum and
                interest
                (including payments on account of a Conversion Notice, a Forced Conversion
                under Section 5.2, and interest on amounts in default) on the Debenture,
                free and clear of, and without withholding of or deduction for or
                on
                account of any present or future taxes, levies, imposts, deductions,
                charges, withholdings and all related liabilities ("Taxes")
                imposed or levied by any taxing authority with jurisdiction over
                the
                payment ("Taxing
                Authority")
                unless such Taxes are required to be withheld or deducted by the
                Corporation by law or by interpretation or administration thereof,
                or upon
                demand of any such Taxing Authority. The Corporation shall make any
                withholdings or deductions in respect of the Taxes required by law
                or by
                the interpretation or administration thereof, and shall remit the
                full
                amount withheld or deducted to the relevant Taxing Authority in accordance
                with applicable law and shall provide the Holder with full particulars
                thereof in writing. In the event that such withholdings or deductions
                are
                so required, or if the Holder of the Debenture shall be obligated
                to pay
                any Taxes of or in respect of any payment under the Debenture, then
                the
                Corporation shall pay such additional amounts to the Holder of the
                Debenture as may be necessary to ensure that the Holder of the Debenture
                receives a net amount equal to the full amount that it would have
                been
                entitled to receive had the payments of Principal Sum and interest
                been
                made without such withholdings or deductions, and the Corporation
                shall
                indemnify the Holder to the extent that the Holder does not receive
                such
                additional amounts, except that no additional amounts shall be payable
                with respect to any payment on the Debenture in respect of any Taxes
                payable in respect of the net income or capital of the Holder of
                the
                Debenture.

            

    

     

    
      	
              3.3

            	
              Overdue
                Interest.
                All interest payable hereunder on becoming overdue shall be forthwith
                treated, as to the payment of interest thereon, as principal and
                thereafter shall bear interest calculated at the same rate and in
                the same
                manner as if it were principal. Overdue interest shall be payable
                forthwith without demand by the
                Holder.

            

    

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

     

    
      	
              3.4

            	
              No
                Merger In Judgement.
                The covenant of the Corporation to pay interest at the rate provided
                herein shall not merge in any judgement in respect of any obligation
                of
                the Corporation hereunder and such judgement shall bear interest
                in the
                manner set out in this Article 3
                and be payable on the same days when interest (whether hereunder
                or
                otherwise) is payable hereunder.

            

    

     

    ARTICLE 4

    SERIES
      OF DEBENTURES

     

    
      	
              4.1

            	
              Series.
                This Debenture is one of a series of like debentures, except as to
                principal amount, of the Corporation issued and to be issued for
                evidencing a principal sum not exceeding in the aggregate of US$8,580,000
                all bearing interest at the rate and in the manner provided in Articles
                2
                and 3 hereof. All Debentures of the said series are to rank pari
                passu
                without any preference or priority one over
                another.

            

    

     

    ARTICLE 5

    CONVERSION
      OF DEBENTURE

     

    
      	
              5.1

            	
              Conversion.
                The Holder may, at its election, upon surrender (either in person,
                by mail
                (postage prepaid) or other means of delivery) of this Debenture along
                with
                a completed a notice of conversion (the "Conversion
                Notice")
                in the form attached hereto as Schedule "A" at the principal office
                of the
                Corporation in the city of Greenwood Village, Colorado at any time
                prior
                to the close of business on February 13, 2009, convert the Principal
                Sum,
                in whole or in part, into fully paid and non-assessable Common Shares,
                as
                presently constituted (without adjustment for interest accrued hereon
                or
                for dividends on Common Shares issuable upon conversion). The Debenture
                may be converted on or prior to the Maturity Date at a conversion
                price of
                U.S.$0.50 per Common Share (as adjusted for share splits, share
                consolidations and other similar events) (the "Conversion
                Price"),
                being a rate of 2,000 Common Shares per US$1,000 principal amount
                of
                Debentures. The endorsement of the Conversion Notice by the Holder
                and the
                surrender of the Debenture shall be deemed to constitute a contract
                between the Holder and the Corporation whereby (i) the Holder subscribes
                for the number of Common Shares which he shall be entitled to receive
                upon
                such conversion, (ii) the Holder releases the Corporation from all
                liability thereon or from all liability with respect to the portion
                of the
                principal amount thereof to be converted, as the case may be, and
                (iii)
                the Corporation agrees that the surrender of the Debenture for conversion
                constitutes full payment of the subscription price for the Common
                Shares
                issuable on such conversion and to the extent
                thereof.

            

    

     

    As
      promptly as possible after receipt of the Conversion Notice and the Debenture
      but subject to Section 5.3
      hereto,
      the Corporation shall issue or cause to be issued and deliver or cause to be
      delivered to the Holder a certificate or certificates in the name or names
      of
      the person or persons specified in the Conversion Notice for the number of
      Common Shares deliverable upon the conversion of the Debenture. Upon completion
      of the conversion transaction, the rights of the Holder to receive, in respect
      of the amount hereof so converted, the Principal Sum and interest thereon,
      shall
      cease and the Holder or the other person or persons in whose name or names
      any
      certificate or certificates for Common Shares shall be deliverable upon such
      conversion shall be deemed to have become on such date the holder or holders
      of
      record of such Common Shares represented thereby.

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

     

    Any
      part,
      being $1,000 or an integral multiple thereof, of a Debenture of a denomination
      in excess of $1,000 may be converted as provided herein and all references
      herein to the conversion of the Debenture shall be deemed to include conversion
      of such parts. If the Holder converts only part of the Principal Sum, upon
      the
      exercise of his right of conversion, the Holder shall surrender such Debenture
      to the Corporation, and the Corporation shall cancel the same and shall, without
      charge, forthwith certify and deliver to the Holder a new Debenture or
      Debentures in an aggregate principal amount equal to the unconverted part of
      the
      Principal Sum of the Debenture so surrendered.

     

    
      	
              5.2

            	
              Forced
                Conversion.
                Subject to the restrictions set forth in Section 5.3 hereto, the
                Corporation shall have the right to force the Holder to convert the
                Principal Sum into Common Shares (a "Forced
                Conversion")
                under the terms described in Section 5.1
                if:

            

    

     

    
      	 	
              (a)

            	
              at
                any time after September 24, 2007, but prior to the Maturity Date,
                in the
                event that the 20 day weighted average trading price of the Common
                Shares
                on the AMEX (or if the Common Shares are not listed on the AMEX,
                the TSX,
                or if the Common Shares are not listed on the TSX, any other exchange
                on
                which the Common Shares are then listed) equals or exceeds US$0.90
                per
                share (as adjusted for share splits, share consolidations and other
                similar events); or

            

    

     

    
      	 	
              (b)

            	
              there
                is a Change of Control of the
                Corporation.

            

    

     

    In
      order
      to initiate a Forced Conversion, the Corporation must provide the Holder with
      written notice (the "Forced
      Conversion Notice")
      60
      days prior to the effective date (the "Forced
      Conversion Date")
      of the
      Forced Conversion.

     

    In
      the
      event that the Corporation forces conversion prior to February 23, 2008, the
      Corporation will be required to pay interest for the full first year. If the
      Corporation forces conversion after February 23, 2008, there will be no penalty
      beyond payment
      of accrued but unpaid interest to the Forced Conversion Date.
      

     

    Notwithstanding
      the forgoing, the Corporation may not implement a Forced Conversion unless
      the
      Common Shares issuable upon conversion may be freely resold by the Holder,
      as a
      selling shareholder and not as an underwriter, under an effective registration
      statement filed with the Securities and Exchange Commission and legal counsel
      to
      the Corporation has delivered an opinion letter to the Holder and the
      Corporation's transfer agent that the Common Shares issuable upon conversion
      may
      be sold in the United States under the registration statement or pursuant to
      an
      exemption without volume limitations or restriction.

     

    
      	
              5.3

            	
              Restriction
                on Conversion. 

            

    

     

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (a)

            	
              Notwithstanding
                anything contained herein to the contrary, the rights represented
                by this
                Debenture shall not be convertible by the Holder, in whole or in
                part,
                into Common Shares, and the Corporation shall not give effect to
                any such
                conversion, if, after giving effect to such conversion, the Holder,
                together with any person or company acting jointly or in concert
                with the
                Holder (the "Joint
                Actors")
                would in the aggregate beneficially own, or exercise control or direction
                over that number of voting securities of the Corporation which is
                9.99% or
                greater of the total issued and outstanding voting securities of
                the
                Corporation, immediately after giving effect to such
                conversion;
                provided,
                however, that upon a holder of this Debenture providing the Corporation
                with sixty-one (61) days notice (the "Waiver
                Notice")
                that such Holder would like to waive this paragraph with regard to
                any or
                all Common Shares issuable upon exercise of this Debenture , this
                paragraph will be of no force or effect with regard to all or a portion
                of
                the Debenture referenced in the Waiver Notice. For the purposes of
                this
                Section 5.3, beneficial ownership shall be calculated in accordance
                with
                Section 13(d), and the rules promulgated thereunder, of the Securities
                Exchange Act of 1934, as amended. For greater certainty, the rights
                represented by this Debenture shall not be convertible by the Holder,
                in
                whole or in part, into Common Shares, and the Corporation shall not
                give
                effect to any such conversion, if, after giving effect to such conversion,
                the Holder, together with its Joint Actors, would be deemed to hold
                a
                number of voting securities sufficient to materially affect the control
                of
                the Corporation.

            

    

     

    
      	 	
              (b)

            	
              Prior
                to exercising the rights represented by this Debenture, the Holder
                shall
                provide the Corporation with an officer's certificate or written
                statement
                (the "Officer's
                Certificate")
                stating the number of voting securities of the Corporation held by
                the
                Holder and its Joint Actors as of the date provided for in the Conversion
                Notice and the Corporation shall be entitled to rely on the Officer's
                Certificate in making any determinations regarding the total issued
                and
                outstanding voting securities of the Corporation to be held by the
                Holder
                and its Joint Actors after giving effect to the
                conversion.

            

    

     

    
      	 	
              (c)

            	
              If
                Section 5.3(a) hereto prohibits the Corporation from initiating a
                Forced
                Conversion that would otherwise be allowed pursuant to Section 5.2
                hereto
                if not for the inclusion of Section 5.3(a) hereto, the Corporation
                shall
                be allowed to initiate on the Forced Conversion Date a Forced Conversion
                of an amount of the Principal Sum such that the Holder will not own
                more
                than 9.99% of the total issued and outstanding voting securities
                of the
                Corporation upon completion of the Forced
                Conversion.

            

    

     

    
      	 	
              (d)

            	
              If
                Section
                5.3(a)
                hereto prohibits the Corporation from initiating a Forced Conversion
                that
                would otherwise be allowed pursuant to Section 5.2 hereto if not
                for the
                inclusion of Section 5.3(a) hereto, the interest on that portion
                of the
                Principal Sum outstanding shall be reduced to 0.5% per month (simple
                interest not compounded) commencing on the Forced Conversion Date,
                or on
                the date that would have been the Forced Conversion Date based on
                the date
                of the Forced Conversion Notice if a Forced Conversion of any portion
                of
                the Principal Sum is prohibited by Section 5.3(a), as
                applicable.

            

    

     

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

     

    
      	
              5.4

            	
              No
                Fractional Common Shares.
                Notwithstanding anything herein contained, the Corporation shall
                in no
                case be required to issue fractional Common Shares or to pay any
                cash
                adjustment in lieu of any fractional Common Share upon the conversion
                of
                the Debenture,
                provided that any fractional Common Shares of 0.5 or greater shall
                be
                rounded up to the next whole number, and any fraction less than 0.5
                shall
                be cancelled.

            

    

     

    
      	
              5.5

            	
              Reservation
                of Common Shares.
                The Corporation shall at all times while the Debenture remains convertible
                into Common Shares as herein provided, reserve and keep available
                out of
                its authorized but unissued Common Shares, for the purpose of effecting
                the conversion of the Debenture, such number of Common Shares as
                shall
                from time to time be sufficient to effect the conversion of the
                Debenture.

            

    

     

    ARTICLE 6

    DEFAULT

     

    
      	
              6.1

            	
              Acceleration
                of Maturity on Default.
                Upon the happening of any one or more of the following events (herein
                sometimes called "Events
                of Default")
                namely:

            

    

     

    
      	 	
              (a)

            	
              if
                the Corporation does not pay when due any principal, interest or
                other
                amount payable by it under the Debenture at the place and in the
                currency
                in which such amount is expressed to be payable;

            

    

     

    
      	 	
              (b)

            	
              if
                the Corporation or any subsidiary makes a general assignment for
                the
                benefit of creditors; or any proceeding is instituted by it seeking
                relief
                as debtor, or to adjudicate it a bankrupt or insolvent, or seeking
                liquidation, winding-up, reorganization, arrangement, adjustment
                or
                composition of it or its debts or for an order for similar relief
                under
                any law relating to bankruptcy, insolvency, reorganization or relief
                of
                debtors (including under any statutes relating to the incorporation
                of
                companies) or seeking appointment of a receiver or trustee, or other
                similar official for it or for any substantial part of its properties
                or
                assets; or any corporate or partnership action is taken to authorize
                any
                of the actions referred to in this Section 6.1(b);

            

    

     

    
      	 	
              (c)

            	
              if
                any proceedings are instituted against the Corporation or any subsidiary
                seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation,
                winding-up, reorganization, arrangement, adjustment or composition
                of it
                or its debts or an order for similar relief under any law relating
                to
                bankruptcy, insolvency, reorganization or relief of debtors (including
                under any statutes relating to the incorporation of companies) or
                seeking
                appointment of a receiver, trustee or other similar official for
                it or for
                any substantial part of its properties or
                assets;

            

    

     

    
      	 	
              (d)

            	
              if
                any proceedings with respect to the Corporation or any subsidiary
                are
                commenced under the Companies’
                Creditors Arrangement Act
                (Canada); 

            

    

     

    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (e)

            	
              if
                the Corporation or any subsidiary takes any corporate proceedings
                for its
                dissolution, liquidation or amalgamation with any other company or
                if the
                corporate existence of the Corporation shall be terminated by expiration,
                forfeiture or otherwise, or if the Corporation ceases or threatens
                to
                cease, to carry on all or a substantial part of its business;
                and

            

    

     

    
      	 	
              (f)

            	
              other
                than any transaction or series of transactions in connection with
                a sale
                of the Montana Tunnels project which does not include a sale of all
                or
                substantially all of the other assets of the Corporation, if the
                Corporation sells or otherwise disposes of all or a substantial part
                of
                its undertaking and property and assets including the shares of its
                subsidiaries, whether in one transaction or a series of related
                transactions. This does not include the assignment, transfer or sale
                of
                any participating interest in any of the Corporation’s permits, licences
                or joint venture interests approved by the board of directors of
                the
                Corporation in the ordinary course of business, if reasonable notice
                has
                been given to the Holder;

            

    

     

    then
      in
      each and every such event, the Principal Sum and accrued but unpaid interest
      on
      the Debenture shall forthwith become immediately due and payable to the Holder,
      anything herein contained to the contrary notwithstanding, and the Corporation
      shall forthwith pay to the Holder of the Debenture the amount of the Principal
      Sum and interest then accrued but unpaid on the Debenture and all other moneys
      payable under the provisions hereof together with interest at the rate of
      interest borne by the Debenture on such Principal Sum and interest from the
      date
      of the said Event of Default until payment is received by the Holder, and any
      moneys so received by the Holder shall be applied in the manner provided in
      Section 8.1.

     

    
      	
              6.2

            	
              Waiver
                of Company's Rights.
                To the full extent that it may lawfully do so, the Corporation for
                itself
                and its successors and assigns hereby waives and disclaims any benefit
                of,
                and shall not have or assert any right under, any statute or rule
                of law
                pertaining to the marshaling of assets, discussion, division or other
                matter whatever, to defeat, reduce or affect the rights of the Holder
                under the terms of this Debenture.

            

    

     

    ARTICLE 7

    WAIVER

     

    
      	
              7.1

            	
              Waiver.
                The Holder may waive any breach of any of the provisions contained
                in this
                Debenture or any default by the Corporation in the observance or
                performance of any covenant, condition or obligation required to
                be
                observed or performed by it under the terms of this Debenture. No
                waiver,
                consent, act or omission by the Holder shall extend to or be taken
                in any
                manner whatsoever to affect any other or subsequent breach or default
                or
                the rights resulting therefrom and no waiver or consent by the Holder
                shall bind the Holder unless it is in writing. The inspection or
                approval
                by the Holder of any document or matter or thing done by the Corporation
                shall not be deemed to be a warranty or holding out of the adequacy,
                effectiveness, validity or binding effect of such document, matter
                or
                thing or a waiver of the Corporation's
                obligations.

            

    

     

    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    

     

    ARTICLE 8

    OTHER
      RIGHTS OF THE HOLDER

     

    
      	
              8.1

            	
              No
                Rights of Set-Off.
                The Corporation acknowledges and agrees that the Principal Sum and
                the
                other obligations hereunder shall be paid, satisfied and discharged
                to the
                Holder without regard to such dealings as may from time to time occur
                as
                between any one or more of the Holder, the Corporation and any other
                person and without regard to such equities or rights of set-off or
                counterclaim which may from time to time exist between any one or
                more of
                the Holder, the Corporation or any other person, and that the Principal
                Sum and other obligations hereof shall be paid without regard to
                any
                equities between the Corporation and the Holder hereof or any set-off
                or
                cross-claims and the receipt of the Holder for the payment of the
                Principal Sum will be a good discharge to the Corporation in respect
                thereof.

            

    

     

    
      	
              8.2

            	
              No
                Merger.
                Neither the taking of any judgement nor the exercise of any rights
                hereunder shall operate to extinguish the obligation of the Corporation
                to
                pay the monies under this Debenture and shall not operate as a merger
                of
                any covenant in this Debenture, and the acceptance of any payment
                shall
                not constitute or create a novation, and the taking of a judgement
                or
                judgements under a covenant herein contained shall not operate as
                a merger
                of those covenants and affect the Holder's right to interest under
                this
                Debenture.

            

    

     

    ARTICLE 9

    ADMINISTRATIVE
      PROVISIONS

     

    
      	
              9.1

            	
              Transfer
                of Debentures.
                The Corporation will keep a register of Debentures at its office
                in the
                city of Greenwood Village, Colorado with addresses and descriptions
                of the
                Holder and the registered holders of all other Debentures of this
                issue
                and particulars of the Debentures held by them respectively. This
                Debenture may be transferred only (1) (a) to the Corporation or a
                subsidiary thereof; (b) to persons other than U.S. Persons outside
                the
                United States in compliance with Regulation S under the Securities
                Act;
                (c) pursuant to the exemption from registration provided by Rule
                144
                adopted under the Securities Act or another available exemption under
                the
                Securities Act (if available); or (d) pursuant to an effective
                registration statement under the Securities Act, and (2) agrees that
                it
                will, prior to any transfer of this Debenture, furnish to the Corporation
                such certifications, legal opinions or other information as may be
                required to confirm that such transfer is being made pursuant to
                an
                exemption from, or in a transaction not subject to, the registration
                requirements of the Securities Act. In
                addition, this
                Debenture may be transferred only by transfer in writing in the form
                attached hereto as Schedule "B", and will only be effective as regards
                the
                Corporation when delivered at the registered office of the Corporation
                in
                the city of Greenwood Village, Colorado accompanied by this Debenture
                together with such evidence of identity or title as the Corporation
                may
                reasonably require and upon payment of all applicable transfer taxes.
                Thereupon the Corporation will record such transfer on its books
                and issue
                a new debenture to the transferee in exchange for this
                Debenture.

            

    

     

    
      
        
        

      

      
        -10-

        
          

        

      

      
        
        

      

    

     

    
      	
              9.2

            	
              Registered
                Holders.
                The person in whose name this Debenture shall be registered shall
                be
                deemed and regarded as the owner and holder hereof for all purposes,
                and
                the payment to and/or receipt of any Holder for any Principal Sum
                or
                interest hereby evidenced shall be a good discharge of the Corporation
                for
                the same, and the Corporation shall not be bound to enter in the
                register
                notice of any trust or to enquire into the title of any Holder or
                to
                recognize any trust or equity affecting the title hereof save as
                ordered
                by some court of competent jurisdiction or as required by
                statute.

            

    

     

    ARTICLE 10

    MISCELLANEOUS

     

    
      	
              10.1

            	
              Time.
                Time shall be of the essence of this
                Debenture.

            

    

     

    
      	
              10.2

            	
              Governing
                Law.
                This Debenture shall be governed by, and construed in accordance
                with, the
                laws of the Province of Ontario and the laws of Canada applicable
                therein
                but the reference to such laws shall not, by conflict of laws rules
                or
                otherwise, require the application of the law of any jurisdiction
                other
                than the Province of Ontario. The Corporation hereby irrevocably
                attorns
                to the jurisdiction of the Courts of the Province of
                Ontario.

            

    

     

    
      	
              10.3

            	
              Severability.
                If any one or more of the provisions or parts thereof contained in
                this
                Debenture should be or become invalid, illegal or unenforceable,
                the
                remaining provisions or parts thereof contained herein shall be and
                shall
                be conclusively deemed to be, severable therefrom and the validity,
                legality or enforceability of such remaining provisions or parts
                thereof
                shall not in any way be affected or impaired by the severance of
                the
                provisions or parts thereof
                severed.

            

    

     

    
      	
              10.4

            	
              Headings.
                The headings of the articles, sections, subsections and clauses of
                this
                Debenture have been inserted for convenience and reference only and
                do not
                define, limit, alter or enlarge the meaning of any provision of this
                Debenture.

            

    

     

    
      	
              10.5

            	
              Binding
                Effect.
                This Debenture and all of its provisions shall enure to the benefit
                of the
                Holder, its successors and assigns, and shall be binding upon the
                Corporation and its successors and permitted assigns. The expression
                the
                "Holder" as used herein shall include the Holder's assigns whether
                immediate or derivative.

            

    

     

    
      	
              10.6

            	
              Costs.
                The
                Corporation shall pay to the Holder on demand all of the Holder's
                reasonable costs, charges and expenses including, without limitation,
                legal fees on a solicitor and his own client basis in connection
                with the
                enforcement by any means of any provisions hereof or the exercise
                of any
                rights, powers or remedies
                hereunder.

            

    

     

    ARTICLE 11

    NOTICE

     

    
      	
              11.1

            	
              Notices.
                Any notice required or permitted to be given under any of this Debenture
                or any tender or delivery of documents may be given by personal delivery
                or by facsimile transmission to the parties at the following
                addresses:

            

    

     

    
      
        
        

      

      
        -11-

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (a)

            	
              to
                the Holder at:

            

    

     

    
      	 	
              (b)

            	
              to
                the Corporation at:

            

    

     

    Apollo
      Gold Corporation

    5655
      South Yosemite Street, Suite 200

    Greenwood
      Village, Colorado 80111-3220

     

    Attention:
      President

     

    Any
      notice or delivery shall be given as herein provided or to such other addresses
      or telecopier number or in care of such other person as a party may from time
      to
      time advise by notice in writing as aforesaid. The date of receipt of such
      notice or delivery shall be the date of actual delivery to the address specified
      if delivered or the date of actual transmission to the telecopier number if
      telecopied, unless such date is not a Business Day, in which event the date
      of
      receipt shall be the next Business Day immediately following the date of such
      delivery or transmission.

     

     

    IN
      WITNESS WHEREOF
      the
      Corporation has duly executed these presents as of the date first above by
      its
      duly authorized officer.

     

     

    
      	 	
              APOLLO
                GOLD CORPORATION

               

               

               

              Per:

              
                

              

              Authorized
                Signatory

            

    

     

    
      
        
        

      

      
        -12-

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
      "A"

     

    CONVERSION
      FORM

     

    TO:Apollo
      Gold Corporation

     

    The
      undersigned registered holder (the "Holder")
      of the
      Series 2007-A convertible debenture (the "Debenture")
      represented by the within certificate hereby subscribes for Common Shares of
      Apollo Gold Corporation pursuant to the within Debenture certificate on the
      terms specified in the within Debenture certificate, which certificate is hereby
      surrendered to the Corporation and which will, upon due issuance of the Common
      Shares aforesaid, be null and void.

     

    On
      the
      date hereof, the Holder, together with any person(s) considered to be a Joint
      Actor pursuant to Section 5.3(a) of the Debenture, own collectively
      ____________________ Common
      Shares of Apollo Gold Corporation. 

     

    The
      Common Shares subscribed for will be issued as set forth below and will be
      mailed to the address set forth below.

     

    Amount
      of Principal Sum to be Converted:  
_________________________

     

    DATED
      this __________ day
      of
      __________,
      200__.

     

    If
      subscriber is a corporation:

     

     

     

    
      
        

      

    

    By:

    
      

    

    Name:

    Title:

     

    If
      subscriber is an individual:

     

    
      	 
	 	     

	
              Witness

            	 	
              Signature
                of Subscriber

            
	 	 	 

    

    Signature
      guaranteed:

     

    The
      signature must be guaranteed by a Canadian chartered bank or a member of a
      recognized stock exchange or other entity acceptable to Apollo Gold
      Corporation.

     

    Print
      below the name and address in full of the Person in whose name the Common Shares
      subscribed for are to be issued. If the Common Shares subscribed for are to
      be
      issued to more than one person, similar information must be provided for each
      person, as well as the number of Common Shares to be issued to each. (If any
      of
      the Common Shares are to be issued to a person or persons other than the holder
      of the within Debenture certificate, the holder must pay to the Corporation
      all
      requisite taxes.)

     

    
      
        
        

      

      
        -13-

        
          

        

      

      
        
        

      

    

     

    Name:

    
      

    

     

    Address:

    
      

    

     

    
      	
            	 	 

	
              Social
                Insurance Number

            	 	
              Postal
                Code

            

    

    
 

    
      
        
        

      

      
        -14-

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
      "B"

    TRANSFER
      FORM

     

    FOR
      VALUE
      RECEIVED, the undersigned hereby sells, assigns and transfers to (name of
      transferee) U.S.$ (indicate
      principal amount of debentures being transferred) principal
      amount Series 2007 - A convertible debentures of Apollo Gold Corporation
      represented by certificate(s) no.   (indicate
      number(s) of certificate(s) being transferred) and
      irrevocably constitutes and appoints  (indicate
      name of transferee) attorney
      to transfer such debenture(s) on the securities register of Apollo Gold
      Corporation, with full power of substitution.

     

    DATED:
      __________

     

    IF
      TRANSFEROR IS A CORPORATION:

     

     

      
        

      

    

    By:

    
      
        

      

    

    Name:
      

    Title:
      

     

    If
      transferor is an individual:

     

    
      	 
	 	 

	
              Witness

            	 	
              Signature
                of Transferor

            

    

    

    Signature
      guaranteed:

     

    The
      signature must be guaranteed by a Canadian chartered bank or a member of a
      recognized stock exchange or other entity acceptable to Apollo Gold
      Corporation.

    
      
        
        

      

      -15-EX 4.3

    EXHIBIT
      4.3

     

    THIS
      SECURITY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
      1933,
      AS AMENDED (THE "SECURITIES ACT"), AND ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
      EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE
      HOLDER (1) REPRESENTS THAT (A) IT IS AN ACCREDITED INVESTOR (AS DEFINED IN
      REGULATION D UNDER THE SECURITIES ACT); OR (B) IT IS NOT A U.S. PERSON AND
      IS
      ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION
      S ADOPTED UNDER THE SECURITIES ACT; (2) AGREES THAT IT WILL NOT RESELL OR
      OTHERWISE TRANSFER THE SECURITY EVIDENCED HEREBY OR THE COMMON SHARES ISSUABLE
      UPON CONVERSION OF SUCH SECURITY, EXCEPT (A) TO THE ISSUER OR A SUBSIDIARY
      THEREOF; (B) TO PERSONS OTHER THAN U.S. PERSONS OUTSIDE THE UNITED STATES IN
      COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT; (C) PURSUANT TO THE
      EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 ADOPTED UNDER THE SECURITIES
      ACT OR ANOTHER AVAILABLE EXEMPTION UNDER THE SECURITIES ACT (IF AVAILABLE);
      OR
      (D) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT,
      AND (3) AGREES THAT IT WILL, PRIOR TO ANY TRANSFER OF THIS SECURITY, FURNISH
      TO
      THE ISSUER SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS MAY
      BE
      REQUIRED TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION
      FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF
      THE
      SECURITIES ACT. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED
      STATES" AND "U.S. PERSON" HAVE THE MEANING GIVEN TO THEM BY REGULATION S UNDER
      THE SECURITIES ACT. IN ANY CASE, THE HOLDER HEREOF WILL NOT, DIRECTLY OR
      INDIRECTLY, ENGAGE IN ANY HEDGING TRANSACTION WITH REGARD TO THIS SECURITY
      OR
      ANY COMMON SHARES ISSUABLE UPON CONVERSION OF SUCH SECURITY, EXCEPT AS PERMITTED
      BY THE SECURITIES ACT.

     

    THIS
      WARRANT HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES
      SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"). THE SECURITIES TO
      BE
      ISSUED UPON EXERCISE OF THIS WARRANT WERE NOT INITIALLY REGISTERED AND MAY
      OR
      MAY NOT HAVE BEEN REGISTERED FOR RESALE UNDER THE SECURITIES ACT. THIS WARRANT
      MAY NOT BE EXERCISED BY OR ON BEHALF OF ANY U.S. PERSON, AS SUCH TERM IS DEFINED
      IN REGULATION S PROMULGATED PURSUANT TO THE SECURITIES ACT, UNLESS REGISTERED
      UNDER THE SECURITIES ACT OR AN EXEMPTION FROM SUCH REGISTRATION IS
      AVAILABLE.

     

    UNLESS
      PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT
      TRADE THE SECURITY BEFORE JUNE 24, 2007.

     

    Void
      after 5:00 p.m. (Toronto time) on the 23rd day of February, 2009.

     

    
      	
              Number
                of Warrants: l

            	
              Warrant
                Certificate No. 2007-01-l

            

    

     

    APOLLO
      GOLD CORPORATION

     

    (A
      corporation existing under the laws of the Yukon Territory)

     

    This
      is
      to certify that, for value received, l
      (the
      "Holder"),
      shall
      have the right to purchase from APOLLO GOLD CORPORATION (the "Corporation"),
      at
      any time and from time to time up to 5:00 p.m. (Toronto time) on February 23,
      2009 (the
      "Expiry
      Time"),
      one
      fully paid and non-assessable common share in the capital of the Corporation
      (a
      "Common
      Share")
      for
      each Warrant (individually, a "Warrant")
      represented hereby at a price of US$0.50 per Common Share (the "Exercise
      Price"),
      upon
      and subject to the terms and conditions set forth herein.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    1.    For
      the
      purposes of this Warrant Certificate, the term "Common
      Shares"
      means
      common shares without par value in the capital of the Corporation as constituted
      as of the date hereof, provided that in the event of a subdivision, redivision,
      reduction, combination or consolidation thereof or any other adjustment under
      section 8 herein, or successive such subdivisions, redivisions, reductions,
      combinations, consolidations or other adjustments, then subject to the
      adjustments, if any, having been made in accordance with the provisions of
      this
      Warrant Certificate, "Common
      Shares"
      shall
      thereafter mean the shares, other securities or other property resulting from
      such subdivision, redivision, reduction, combination or consolidation or other
      adjustment.

     

    2.    All
      Warrant Certificates shall be signed by an officer of the Corporation holding
      office at the time of signing, or any successor or replacement of such person
      and notwithstanding any change in any of the persons holding said offices
      between the time of actual signing and the delivery of the Warrant Certificate,
      the Warrant Certificate so signed shall be valid and binding upon the
      Corporation.

     

    3.    All
      rights under any of the Warrants in respect of which the right of subscription
      and purchase therein provided for shall not theretofore have been exercised
      shall wholly cease and such Warrants shall be wholly void and of no valid or
      binding effect after the Expiry Time.

     

    4.    The
      right
      to purchase Common Shares of the Corporation pursuant to the Warrants may only
      be exercised by the Holder at or before the Expiry Time by:

     

    
      	 	
              (a)

            	
              duly
                completing and executing a subscription substantially in the form
                attached
                as Schedule "A" (the "Subscription
                Form"),
                in the manner therein indicated;

            

    

     

    
      	 	
              (b)

            	
              surrendering
                this Warrant Certificate and the duly completed and executed Subscription
                Form to the Corporation prior to the Expiry Time at its
                principal office, 5655 S. Yosemite Street, Suite 200, Greenwood Village,
                Colorado, 80111-3220,
                together with payment of the purchase price for the Common Shares
                subscribed for in the form of certified cheque or bank draft payable
                to
                the Corporation in an amount equal to the then applicable Exercise
                Price
                multiplied by the number of Common Shares subscribed for;
                and'

            

    

     

    
      	 	
              (c)

            	
              notwithstanding
                anything contained herein to the contrary, the rights represented
                by this
                Warrant Certificate shall not be exercisable by the Holder, in whole
                or in
                part, and the Corporation shall not give effect to any such exercise,
                if,
                after giving effect to such exercise, the Holder, together with any
                person
                or company acting jointly or in concert with the Holder (the "Joint
                Actors")
                would in the aggregate beneficially own, or exercise control or direction
                over that number of voting securities of the Corporation which is
                9.99% or
                greater of the total issued and outstanding voting securities of
                the
                Corporation, immediately after giving effect to such exercise; provided,
                however, that upon a holder of this Warrant providing the Corporation
                with
                sixty-one (61) days notice (the "Waiver
                Notice")
                that such Holder would like to waive this paragraph with regard to
                any or
                all Common Shares issuable upon exercise of this Warrant, this paragraph
                will be of no force

            

    

    

    
      
        
          
          

        

        
          -2-

          
            

          

        

        
          
          

        

      

    

     

    or
      effect
      with regard to all or a portion of the Warrant referenced in the Waiver Notice.
      For the purposes of this paragraph, beneficial ownership shall be determined
      in
      accordance with Section 13(d) of the Securities Exchange Act of 1934, as
      amended. For greater certainty, the rights represented by this Warrant
      Certificate shall not be exercisable by the Holder, in whole or in part, and
      the
      Corporation shall not give effect to any such exercise, if, after giving effect
      to such exercise, the Holder, together with its Joint Actors, would be deemed
      to
      hold a number of voting securities sufficient to materially affect the control
      of the Corporation.

     

    Prior
      to
      exercising the rights represented by this Warrant, the Holder shall provide
      the
      Corporation with an officer's certificate stating the number of voting
      securities of the Corporation held by the Holder and its Joint Actors as of
      the
      date provided for in the subscription form (the "Officer's
      Certificate")
      and
      the Corporation shall be entitled to rely on the Officer's Certificate in making
      any determinations regarding the total issued and outstanding voting securities
      of the Corporation to be held by the Holder and its Joint Actors after giving
      effect to the exercise.

     

    5.    Upon
      delivery and payment as set forth in section 4 herein, the Corporation shall
      cause to be issued to the Holder the number of Common Shares subscribed for
      by
      the Holder and the Holder shall become a shareholder of the Corporation in
      respect of such Common Shares with effect from the date of such delivery and
      payment and shall be entitled to delivery of a certificate or certificates
      evidencing such shares. The Corporation shall cause such certificate or
      certificates to be mailed to the Holder at the address or addresses specified
      in
      the Subscription Form within five (5) business days of such delivery and payment
      as set forth in section 4 herein or, if so instructed by the Holder, held for
      pick-up by the Holder at the principal office of the Corporation.
      Notwithstanding any adjustment provided for in section 8 herein, the Corporation
      shall not be required upon the exercise of any Warrants to issue fractional
      Common Shares in satisfaction of its obligations hereunder and the Holder
      understands and agrees that it will not be entitled to any cash payment or
      other
      form of compensation in respect of a fractional Common Share that might
      otherwise have been issued; provided that any fractional Common Share of 0.5
      or
      greater shall be rounded up to the next whole number and any fraction less
      than
      0.5 shall be cancelled.

     

    6.    The
      holding of a Warrant shall not constitute the Holder a shareholder of the
      Corporation nor entitle him to any right or interest in respect thereof except
      as herein expressly provided.

     

    7.    The
      Corporation covenants and agrees that until the Expiry Time, while any of the
      Warrants shall be outstanding, it shall reserve and there shall remain unissued
      out of its authorized capital a sufficient number of Common Shares to satisfy
      the right of purchase herein provided, as such right of purchase may be adjusted
      pursuant to sections 8 and 9 herein. The Corporation further covenants and
      agrees that while any of the Warrants shall be outstanding, the Corporation
      shall (a) comply with the securities legislation applicable to it in
      order
      that the Corporation continue as a reporting issuer, or analogous
      entity,
      not in
      default of any requirements of such legislation; (b) use its commercially
      reasonable best efforts to do or cause to be done all things necessary to
      preserve and maintain its corporate existence; and (c) at its own expense
      expeditiously use its commercially reasonable best efforts to obtain
      the

    
      
        
          
          

        

        
          -3-

          
            

          

        

        
          
          

        

      

    

     

    listing
      of such Common Shares (subject to issue or notice of issue) on each stock
      exchange or over-the-counter market on which the Corporation’s Common Shares may
      be listed from time to time. All Common Shares which shall be issued upon the
      exercise of the right to purchase herein provided for, upon payment therefor
      of
      the amount at which such Common Shares may at the time be purchased pursuant
      to
      the provisions hereof, shall be issued as fully paid and non-assessable shares
      and the holders thereof shall not be liable to the Corporation or its creditors
      in respect thereof.

     

    8.    (a)    For
      the
      purpose of this section 8, unless there is something in the subject matter
      or
      context inconsistent therewith, the words and terms defined below shall have
      the
      respective meanings specified therefor:

     

    "Current
      Market Price"
      of the
      Common Shares at any date means the price per share equal to the weighted
      average price at which the Common Shares have traded on the American Stock
      Exchange (the "AMEX")
      or, if
      the Common Shares are not then listed on the AMEX, on the Toronto Stock Exchange
      or, if the Common Shares are not then listed on any stock exchange, in the
      over-the-counter market, during the period of any twenty consecutive trading
      days ending not more than five (5) business days before such date; provided
      that
      the weighted average price shall be determined by dividing the aggregate sale
      price of all Common Shares sold on the said exchange or market, as the case
      may
      be, during the said twenty consecutive trading days by the total number of
      Common Shares so sold; and provided further that if the Common Shares are not
      then listed on any Canadian stock exchange or traded in the over-the counter
      market, then the Current Market Price shall be determined by such firm of
      independent chartered accountants as may be selected by the directors of the
      Corporation;

     

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

     

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

     

    
      	
            	(b)	
              If
                and whenever at any time after the date hereof and prior to the Expiry
                Time the Corporation shall (i) subdivide or redivide its then outstanding
                Common Shares into a greater number of Common Shares, (ii) reduce,
                combine
                or consolidate its then outstanding Common Shares into a lesser number
                of
                Common Shares or (iii) issue Common Shares (or securities exchangeable
                for
                or convertible into Common Shares) to the holders of all or substantially
                all of its then outstanding Common Shares by way of a stock dividend
                or
                other distribution (any of such events herein called a "Common
                Share Reorganization"),
                then the Exercise Price shall be adjusted effective immediately
                after

            

    

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

    the
      effective date of any such event in (i) or (ii) above or the record date at
      which the holders of Common Shares are determined for the purpose of any such
      dividend or distribution in (iii) above, as the case may be, by multiplying
      the
      Exercise Price in effect on such effective date or record date, as the case
      may
      be, by a fraction, the numerator of which shall be the number of Common Shares
      outstanding on such effective date or record date, as the case may be, before
      giving effect to such Common Share Reorganization and the denominator of which
      shall be the number of Common Shares outstanding immediately after giving effect
      to such Common Share Reorganization including, in the case where securities
      exchangeable for or convertible into Common Shares are distributed, the number
      of Common Shares that would be outstanding if such securities were exchanged
      for
      or converted into Common Shares.

     

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

            

    

     

    
      	 	
              (i)

            	
              the
                numerator of which shall be the aggregate
                of

            

    

     

    
      	 	
              (A)

            	
              the
                number of Common Shares outstanding on the record date for the Rights
                Offering; and

            

    

     

    
      	 	
              (B)

            	
              the
                quotient determined by dividing

            

    

     

    
      	 	
              (I)

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

            

    

     

    
      	 	
              (II)

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

            

    

     

    
      	 	
              (ii)

            	
              the
                denominator of which shall be the aggregate of the number of Common
                Shares
                outstanding on such record date and the number of Common Shares offered
                pursuant to the Rights Offering (including in
                the

            

    

    

    
      
        
          
          

        

        
          -5-

          
            

          

        

        
          
          

        

      

    

     

    case
      of
      the issue or distribution of securities exchangeable for or convertible into
      Common Shares the number of Common Shares for or into which such securities
      may
      be exchanged or converted).

     

    If
      by the
      terms of the rights, options, or warrants referred to in this section 8(c),
      there is more than one purchase, conversion or exchange price per Common Share,
      the aggregate price of the total number of additional Common Shares offered
      for
      subscription or purchase, or the aggregate conversion or exchange price of
      the
      convertible or exchangeable securities so offered, shall be calculated for
      purposes of the adjustment on the basis of the lowest purchase, conversion
      or
      exchange price per Common Share, as the case may be. Any Common Shares owned
      by
      or held for the account of the Corporation shall be deemed not to be outstanding
      for the purpose of any such calculation. To the extent that any adjustment
      in
      the Exercise Price occurs pursuant to this section 8(c) as a result of the
      fixing by the Corporation of a record date for the issue or distribution of
      rights, options or warrants referred to in this section 8(c), the Exercise
      Price
      shall be readjusted immediately after the expiry of any relevant exchange,
      conversion or exercise right to the Exercise Price which would then be in effect
      based upon the number of Common Shares actually issued and remaining issuable
      after such expiry and shall be further readjusted in such manner upon the expiry
      of any further such right.

     

    If
      the
      Holder has exercised this Warrant Certificate in accordance herewith during
      the
      period beginning after the record date for a Rights Offering and ending on
      the
      last day of the Rights Period thereunder, the Holder will, in addition to the
      Common Shares to which it is otherwise entitled upon such exercise, be entitled
      to that number of additional Common Shares equal to the difference, if any,
      between (x) the result obtained when the Exercise Price in effect immediately
      prior to the end of such Rights Offering pursuant to this subsection is
      multiplied by the number of Common Shares received upon the exercise of this
      Warrant Certificate during such period, and the resulting product is divided
      by
      the Exercise Price as adjusted for such Rights Offering pursuant to this
      subsection provided that the provisions of section 9 herein will be applicable
      to any fractional interest in a Common Share to which such Holder might
      otherwise be entitled and (y) the number of Common Shares received upon the
      exercise of this Warrant Certificate during such period. Such additional Common
      Shares will be deemed to have been issued to the Holder immediately following
      the end of the Rights Period and a certificate for such additional Common Shares
      will be delivered to such Holder within ten (10) business days following the
      end
      of the Rights Period.

     

    
      	
            	(d)	
              If
                at any time after the date hereof and prior to the Expiry Time, the
                Corporation shall fix a record date for the issue or distribution
                to the
                holders of all or substantially all of the Common Shares
                of:

            

    

     

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

            

    

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

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

            

    

     

    
      	
            	(iii)	
              evidences
                of indebtedness of the Corporation;
                or

            

    

     

    
      	 	
              (iv)

            	
              any
                property or assets of the Corporation (for greater certainty, excluding
                a
                cash dividend);

            

    

     

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

     

    
      	
            	(A)	
              the
                numerator of which shall be the difference
                between

            

    

     

    
      	 	
              (I)

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

            

    

     

    
      	 	
              (II)

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

            

    

     

    
      	 	
              (B)

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

            

    

     

    Any
      Common Shares owned by or held for the account of the Corporation shall be
      deemed not to be outstanding for the purpose of such calculation. To the extent
      that any adjustment in the Exercise Price occurs pursuant to this section 8(d)
      as a result of the fixing by the Corporation of a record date for the issue
      or
      distribution of rights, options or warrants to acquire Common Shares or
      securities exchangeable for or convertible into Common Shares referred to in
      this section 8(d), the Exercise Price shall be readjusted immediately after
      the
      expiry of any relevant exercise, exchange or conversion right to the amount
      which would then be in effect if the fair market value had been determined
      on
      the basis of the number of Common Shares issued and remaining issuable
      immediately after such

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

    expiry,
      and shall be further readjusted in such manner upon the expiry of any further
      such right.

     

    
      	
            	(e)	
              If
                and whenever at any time after the date hereof and prior to the Expiry
                Time there is a capital reorganization of the Corporation or a
                reclassification or other change in the Common Shares (other than
                a Common
                Share Reorganization) or a consolidation or merger or amalgamation
                of the
                Corporation with or into any other corporation or other entity (other
                than
                a consolidation, merger or amalgamation which does not result in
                any
                reclassification of the outstanding Common Shares or a change of
                the
                Common Shares into other securities), or a transfer of all or
                substantially all of the Corporation's undertaking and assets to
                another
                corporation or other entity in which the holders of Common Shares
                are
                entitled to receive shares, other securities or other property (any
                of
                such events being called a "Capital
                Reorganization"),
                after the effective date of the Capital Reorganization the Holder
                shall be
                entitled to receive, and shall accept, for the same aggregate
                consideration, upon exercise of the Warrants, in lieu of the number
                of
                Common Shares to which the Holder was theretofore entitled upon the
                exercise of the Warrants, the kind and aggregate number of Common
                Shares
                and other securities or property resulting from the Capital Reorganization
                which the Holder would have been entitled to receive as a result
                of the
                Capital Reorganization if, on the effective date thereof, the Holder
                has
                been the registered holder of the number of Common Shares to which
                the
                Holder was theretofore entitled to purchase or receive upon the exercise
                of the Warrants. If necessary, as a result of any Capital Reorganization,
                appropriate adjustments shall be made in the application of the provisions
                of this Warrant Certificate with respect to the rights and interest
                thereafter of the Holder to the end that the provisions of this Warrant
                Certificate shall thereafter correspondingly be made applicable as
                nearly
                as may reasonably be possible in relation to any shares or other
                securities or property thereafter deliverable upon the exercise of
                this
                Warrant Certificate.

            

    

     

    
      	
            	(f)	
              If
                and whenever at any time after the date hereof and prior to the Expiry
                Time, any of the events set out in sections 8(a), (b), (c), (d) or
                (e)
                herein shall occur and the occurrence of such event results in an
                adjustment of the Exercise Price pursuant to the provisions of this
                section 8, then the number of Common Shares purchasable pursuant
                to this
                Warrant shall be adjusted contemporaneously with the adjustment of
                the
                Exercise Price by multiplying the number of Common Shares then otherwise
                purchasable on the exercise thereof by a fraction, the numerator
                of which
                shall be the Exercise Price in effect immediately prior to the adjustment
                and the denominator of which shall be the Exercise Price resulting
                from
                such adjustment.

            

    

     

    
      	
            	(g)	
              If
                the Corporation takes any action affecting its Common Shares to which
                the
                foregoing provisions of this section 8, in the opinion of the board
                of
                directors of the Corporation, acting in good faith, are not strictly
                applicable, or if strictly applicable would not fairly adjust the
                rights
                of the Holder against dilution in accordance with the intent and
                purposes
                hereof, or would otherwise materially affect the rights of the Holder
                hereunder, then the Corporation shall, subject to
                the

            

    

    

    
      
        
          
          

        

        
          -8-

          
            

          

        

        
          
          

        

      

    

     

    approval
      of the TSX and the AMEX (or such other stock exchange or quotation system on
      which the Common Shares are then listed and posted (or quoted) for trading,
      as
      applicable), execute and deliver to the Holder an amendment hereto providing
      for
      an adjustment in the application of such provisions so as to adjust such rights
      as aforesaid in such manner as the board of directors of the Corporation may
      determine to be equitable in the circumstances, acting in good faith. The
      failure of the taking of action by the board of directors of the Corporation
      to
      so provide for any adjustment on or prior to the effective date of any action
      or
      occurrence giving rise to such state of facts will be conclusive evidence that
      the board of directors has determined that it is equitable to make no adjustment
      in the circumstances.

     

    
      	9.	
              The
                following rules and procedures shall be applicable to the adjustments
                made
                pursuant to section 8 herein:

            

    

     

    
      	 	
              (a)

            	
              any
                Common Shares owned or held by or for the account of the Corporation
                shall
                be deemed not be to outstanding except that, for the purposes of
                section 8
                herein, any Common Shares owned by a pension plan or profit sharing
                plan
                for employees of the Corporation or any of its subsidiaries shall
                not be
                considered to be owned or held by or for the account of the
                Corporation;

            

    

     

    
      	 	
              (b)

            	
              no
                adjustment in the Exercise Price or the number of Common Shares
                purchasable pursuant to this Warrant shall be required unless a change
                of
                at least 1% of the prevailing Exercise Price or the number of Common
                Shares purchasable pursuant to this Warrant would result, provided,
                however, that any adjustment which, except for the provisions of
                this
                section 9(b), would otherwise have been required to be made, shall
                be
                carried forward and taken into account in any subsequent
                adjustment;

            

    

     

    
      	 	
              (c)

            	
              the
                adjustments provided for in section 8 herein are cumulative and shall
                apply to successive subdivisions, consolidations, dividends, distributions
                and other events resulting in any adjustment under the provisions
                of such
                item;

            

    

     

    
      	 	
              (d)

            	
              in
                the absence of a resolution of the board of directors of the Corporation
                fixing a record date for any dividend or distribution referred to
                in
                section 8(b)(iii) herein, the Corporation shall be deemed to have
                fixed as
                the record date therefor the date on which such dividend or distribution
                is effected;

            

    

     

    
      	 	
              (e)

            	
              if
                the Corporation sets a record date to take any action and thereafter
                and
                before the taking of such action abandons its plan to take such action,
                then no adjustment to the Exercise Price will be required by reason
                of the
                setting of such record date;

            

    

     

    
      	 	
              (f)

            	
              as
                a condition precedent to the taking of any action which would require
                any
                adjustment to the Warrants evidenced hereby, including the Exercise
                Price,
                the Corporation must take any corporate action which may be necessary
                in
                order that the Corporation shall have unissued and reserved in its
                authorized capital and may validly and legally issue as fully paid
                and
                non-assessable all of the shares or
                other

            

    

    

    
      
        
          
          

        

        
          -9-

          
            

          

        

        
          
          

        

      

    

     

    securities
      which the Holder is entitled to receive on the full exercise thereof in
      accordance with the provisions hereof;

     

    
      	 	
              (g)

            	
              forthwith,
                but no later than fourteen (14) days, after any adjustment to the
                Exercise
                Price or the number of Common Shares purchasable pursuant to the
                Warrants,
                the Corporation shall provide to the Holder a certificate of an officer
                of
                the Corporation certifying as to the amount of such adjustment and,
                in
                reasonable detail, describing the event requiring and the manner
                of
                computing or determining such
                adjustment;

            

    

     

    
      	 	
              (h)

            	
              any
                question that at any time or from time to time arises with respect
                to the
                amount of any adjustment to the Exercise Price or other adjustment
                pursuant to section 8 herein shall be conclusively determined by
                a firm of
                independent chartered accountants (who may be the Corporation's auditors)
                and shall be binding upon the Corporation and the
                Holder;

            

    

     

    
      	 	
              (i)

            	
              any
                adjustment to the Exercise Price under the terms of this Warrant
                Certificate shall be subject to the prior approval of the TSX and
                the AMEX
                (or such other stock exchange or quotation system on which the Common
                Shares are then listed and posted (or quoted) for trading, as applicable);
                and

            

    

     

    
      	 	
              (j)

            	
              in
                case the Corporation, after the date of issue of this Warrant Certificate,
                takes any action affecting the Common Shares, other than an action
                described in section 8 herein, which in the opinion of the directors
                of
                the Corporation would materially affect the rights of the Holder,
                the
                Exercise Price will be adjusted in such manner, if any, and at such
                time,
                by action by the directors of the Corporation but subject in all
                cases to
                any necessary regulatory approval, including approval of the TSX
                and the
                AMEX (or such other stock exchange or quotation system on which the
                Common
                Shares are then listed and posted (or quoted) for trading, as applicable).
                Failure of the taking of action by the directors of the Corporation
                so as
                to provide for an adjustment on or prior to the effective date of
                any
                action by the Corporation affecting the Common Shares will be conclusive
                evidence that the board of directors of the Corporation has determined
                that it is equitable to make no adjustment in the
                circumstances.

            

    

     

    
      	10.	
              On
                the happening of each and every such event set out in section 8 herein,
                the applicable provisions of this Warrant Certificate, including
                the
                Exercise Price, shall, ipso
                facto,
                be deemed to be amended accordingly and the Corporation shall take
                all
                necessary action so as to comply with such provisions as so
                amended.

            

    

     

    
      	11.	
              The
                Corporation shall not be required to deliver certificates for Common
                Shares while the share transfer books of the Corporation are properly
                closed, having regard to the provisions of sections 8 and 9 herein,
                prior
                to any meeting of shareholders or for the payment of dividends or
                for any
                other purpose and in the event of the surrender of any Warrant in
                accordance with the provisions hereof and the making of any subscription
                and payment for the Common Shares called for thereby during any such
                period, delivery of certificates for Common Shares may
                be

            

    

    

    
      
        
          
          

        

        
          -10-

          
            

          

        

        
          
          

        

      

    

     

    postponed
      for not more than five (5) business days after the date of the re-opening of
      said share transfer books; provided, however, that any such postponement of
      delivery of certificates shall be without prejudice to the right of the Holder
      so surrendering the same and making payment during such period to receive after
      the share transfer books shall have been re-opened such certificates for the
      Common Shares called for, as the same may be adjusted pursuant to sections
      8 and
      9 herein as a result of the completion of the event in respect of which the
      transfer books were closed.

     

    
      	12.	
              Subject
                as hereinafter provided, all or any of the rights conferred upon
                the
                Holder by the terms hereof may be enforced by the Holder by appropriate
                legal proceedings. No recourse under or upon any obligation, covenant
                or
                agreement contained herein shall be had against any shareholder or
                officer
                of the Corporation either directly or through the Corporation, it
                being
                expressly agreed and declared that the obligations under the Warrants
                are
                solely corporate obligations and that no personal liability whatever
                shall
                attach to or be incurred by the shareholders or officers of the
                Corporation or any of them in respect thereof, any and all rights
                and
                claims against every such shareholder, officer or director being
                hereby
                expressly waived as a condition of and as a consideration for the
                issue of
                the Warrants.

            

    

     

    
      	13.	
              The
                Holder may subscribe for and purchase any lesser number of Common
                Shares
                than the number of Common Shares expressed in any Warrant Certificate.
                In
                the case of any subscription for a lesser number of Common Shares
                than
                expressed in any Warrant Certificate, the Holder hereof shall be
                entitled
                to receive, at no cost to the Holder, a new Warrant Certificate in
                respect
                of the balance of Warrants not then exercised. Such new Warrant
                Certificate shall be mailed to the Holder by the Corporation or,
                at its
                direction, the transfer agent of the Corporation, contemporaneously
                with
                the mailing of the certificate or certificates representing the Common
                Shares issued pursuant to section 5
                herein.

            

    

     

    
      	14.	
              If
                any Warrant Certificate becomes stolen, lost, mutilated or destroyed,
                the
                Corporation shall, on such terms as it may in its discretion impose,
                acting reasonably, issue and sign a new Warrant Certificate of like
                denomination, tenor and date as the Warrant Certificate so stolen,
                lost,
                mutilated or destroyed for delivery to the
                Holder.

            

    

     

    
      	15.	
              The
                Holder may transfer the Warrants represented hereby
                by:

            

    

     

    
      	 	
              (a)

            	
              duly
                completing and executing the transfer form attached as Schedule "B"
                ("Transfer
                Form");
                and

            

    

     

    
      	 	
              (b)

            	
              surrendering
                this Warrant Certificate and the completed Transfer Form, together
                with
                such other documents as the Corporation may reasonably request, to
                the
                Corporation at the address set forth on the Transfer Form or such
                other
                office as may be specified by the Corporation, in a written notice
                to the
                Holder, from time to time,

            

    

     

    provided
      that all such transfers shall be effected in accordance with all applicable
      securities laws, and provided that, after such transfer, the term "Holder"
      shall
      mean and include any transferee or

    
      
        
          
          

        

        
          -11-

          
            

          

        

        
          
          

        

      

    

     

    assignee
      of the current or any future Holder. If only part of the Warrants evidenced
      hereby is transferred, the Corporation will deliver to the Holder and the
      transferee replacement Warrant Certificates substantially in the form of this
      Warrant Certificate.

     

    16.

    
      	 	
              (a)

            	
              The
                Holder acknowledges that the appropriate legend as follows will be
                placed
                upon certificates representing any Common Shares issued upon the
                exercise
                of the Warrants represented by this certificate prior
                to the date which is four months and one day after the date
                hereof:

            

    

     

    "UNLESS
      PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT
      TRADE THE SECURITY BEFORE JUNE 24, 2007."

     

    
      	 	
              (b)

            	
              The
                Holder understands that upon the original issuance thereof, and until
                such
                time as the same is no longer required under the applicable requirements
                of the U.S. Securities Act or applicable U.S. state laws and regulations,
                the certificates representing the Common Shares will bear a legend
                in
                substantially the following form:

            

    

     

    "THIS
      SECURITY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
      1933,
      AS AMENDED (THE "SECURITIES ACT"), AND ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
      EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE
      HOLDER (1) REPRESENTS THAT (A) IT IS AN ACCREDITED INVESTOR (AS DEFINED IN
      REGULATION D UNDER THE SECURITIES ACT); OR (B) IT IS NOT A U.S. PERSON AND
      IS
      ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION
      S ADOPTED UNDER THE SECURITIES ACT; (2) AGREES THAT IT WILL NOT RESELL OR
      OTHERWISE TRANSFER THE SECURITY EVIDENCED, EXCEPT (A) TO THE ISSUER OR A
      SUBSIDIARY THEREOF; (B) TO PERSONS OTHER THAN U.S. PERSONS OUTSIDE THE UNITED
      STATES IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT; (C) PURSUANT
      TO
      THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 ADOPTED UNDER THE
      SECURITIES ACT OR ANOTHER AVAILABLE EXEMPTION UNDER THE SECURITIES ACT (IF
      AVAILABLE); OR (D) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
      SECURITIES ACT, AND (3) AGREES THAT IT WILL, PRIOR TO ANY TRANSFER OF THIS
      SECURITY, FURNISH TO THE ISSUER SUCH CERTIFICATIONS, LEGAL OPINIONS OR
      OTHER

    
      
        
        

      

      
        -12-

        
          

        

      

      
        
        

      

    

     

    INFORMATION
      AS MAY BE REQUIRED TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO
      AN
      EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
      REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS "OFFSHORE
      TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANING GIVEN TO THEM
      BY REGULATION S UNDER THE SECURITIES ACT. IN ANY CASE, THE HOLDER HEREOF WILL
      NOT, DIRECTLY OR INDIRECTLY, ENGAGE IN ANY HEDGING TRANSACTION WITH REGARD
      TO
      THIS, EXCEPT AS PERMITTED BY THE SECURITIES ACT."

     

    provided,
      that if any of the Common Shares are being sold pursuant to Rule 144 of the
      1933
      Act, the legend may be removed by delivery to the Corporation’s transfer agent
      of an opinion of counsel satisfactory to the Corporation to the effect that
      such
      Underlying Securities are not "restricted securities" as defined in Rule 144
      under the 1933 Act and the legend is no longer required under applicable
      requirements of the 1933 Act or state securities laws.

     

    
      	 	
              (c)

            	
              The
                Holder acknowledges that the certificates representing the Common
                Shares
                and all certificates issued in exchange or substitution thereof,
                will bear
                a legend in substantially the following form as long as the legend
                referred to in either subsection 16(a) or 16(b) remains on such
                certificate:

            

    

     

    "THE
      SECURITIES REPRESENTED BY THIS CERTIFICATE ARE LISTED ON THE TORONTO STOCK
      EXCHANGE; HOWEVER, THE SAID SECURITIES CANNOT BE TRADED THROUGH THE FACILITIES
      OF SUCH EXCHANGE SINCE THEY ARE NOT FREELY TRADABLE, AND CONSEQUENTLY ANY
      CERTIFICATE REPRESENTING SUCH SECURITIES IS NOT 'GOOD DELIVERY' IN SETTLEMENT
      OF
      TRANSACTIONS ON THE TORONTO STOCK EXCHANGE."

     

     

    
      	17.	
              The
                Corporation will maintain a register of holders of Warrants at its
                principal office. The Corporation may deem and treat the registered
                holder
                of any Warrant Certificate as the absolute owner of the Warrants
                represented thereby for all purposes, and the Corporation shall not
                be
                affected by any notice or knowledge to the contrary except where
                the
                Corporation is required to take notice by statute or by order of
                a court
                of competent jurisdiction. A Holder shall be entitled to the rights
                evidenced by such Warrant free from all equities or rights of set-off
                or
                counterclaim between the Corporation and the original or any intermediate
                holder thereof and all persons may act accordingly and the receipt
                by any
                such Holder of the Common Shares purchasable pursuant to such Warrant
                shall be a good discharge to the Corporation for the same and the
                Corporation shall not be bound to inquire into the title of any such
                Holder except where the Corporation is required to take notice by
                statute
                or by order of a court of competent
                jurisdiction.

            

    

    

    
      
        
          
          

        

        
          -13-

          
            

          

        

        
          
          

        

      

    

     

    
      	18.	
              The
                Corporation shall notify the Holder forthwith of any change of the
                Corporation’s address.

            

    

     

    
      	19.	
              The
                registered holders of Warrants shall have the power from time to
                time by
                an extraordinary resolution (as hereinafter
                defined):

            

    

     

    
      	 	
              (a)

            	
              to
                sanction any modification, abrogation, alteration or compromise of
                the
                rights of the registered holders of Warrants against the Corporation
                which
                shall be agreed to by the Corporation;
                and/or

            

    

     

    
      	 	
              (b)

            	
              to
                assent to any modification of or change in or omission from the provisions
                contained herein or in any instrument ancillary or supplemental hereto
                which shall be agreed to by the Corporation;
                and/or

            

    

     

    
      	 	
              (c)

            	
              to
                restrain any registered holder of a Warrant from taking or instituting
                any
                suit or proceedings against the Corporation for the enforcement of
                any of
                the covenants on the part of the Corporation conferred upon the registered
                holders of Warrants by the terms of the
                Warrants.

            

    

     

    Any
      such
      extraordinary resolution as aforesaid shall be binding upon all the registered
      holders of Warrants whether or not assenting in writing to any such
      extraordinary resolution, and each registered holder of any of the Warrants
      shall be bound to give effect thereto accordingly. Such extraordinary resolution
      shall, where applicable, be binding on the Corporation which shall give effect
      thereto accordingly.

     

    The
      Corporation shall forthwith upon receipt of an extraordinary resolution provide
      notice to all registered holders of Warrants of the date and text of such
      resolution. The registered holders of Warrants assenting to an extraordinary
      resolution agree to provide the Corporation forthwith with a copy of any
      extraordinary resolution passed.

     

    The
      expression "extraordinary resolution" when used herein shall mean a resolution
      assented to in writing, in one or more counterparts, by the registered holders
      of Warrants calling in the aggregate for not less than seventy-five per cent
      (75%) of the aggregate number of Common Shares called for by all of the Warrants
      which are, at the applicable time, outstanding.

     

    
      	20.	
              All
                notices to be sent hereunder shall be deemed to be validly given
                to the
                registered holders of the Warrants if delivered personally or if
                sent by
                registered letter through the post addressed to such holders at their
                post
                office addresses appearing in the register of Warrant holders caused
                to be
                maintained by the Corporation, and such notice shall be deemed to
                have
                been given, if delivered personally when so delivered, and if sent
                by post
                on the fifth business day next following the post
                thereof.

            

    

     

    
      	21.	
              If
                for any reason, other than the failure or default of the Holder,
                the
                Corporation is unable to issue and deliver the Common Shares or other
                securities as contemplated herein to the Holder upon the proper exercise
                by the Holder of the right to purchase any of the Common Shares
                purchasable upon exercise of the Warrants represented hereby, the
                Corporation may

            

    

    

    
      
        
          
          

        

        
          -14-

          
            

          

        

        
          
          

        

      

    

     

    pay,
      at
      its option and in complete satisfaction of its obligations and the rights of
      the
      Holder hereunder, to the Holder, in cash, an amount equal to the difference
      between the Exercise Price and the Current Market Price of such Common Shares
      or
      other securities on the date of exercise by the Holder, and upon such payment
      the Corporation shall have no liability or other obligation to the Holder
      relating to or in respect of the Warrants or this Warrant
      Certificate.

     

    
      	22.	
              This
                Warrant Certificate shall be governed by the laws of the Province
                of
                Ontario and the federal laws of Canada applicable
                herein.

            

    

     

    
      	23.	
              All
                Warrants shall rank pari
                passu,
                whatever may be the actual date of issue of the
                same.

            

    

     

    
      	24.	
              This
                Warrant Certificate shall enure to the benefit of and shall be binding
                upon the Holder and the Corporation and their respective successors
                and
                assigns.

            

    

     

    
      	25.	
              All
                references herein to monetary amounts are references to lawful money
                of
                Canada, unless otherwise specified
                herein.

            

    

     

    
      	26.	
              Any
                notice, document or other communication required or permitted by
                this
                Compensation Warrant Certificate to be given by the Holder or the
                Corporation shall be in writing and is sufficiently given if delivered
                personally, or if delivered or if transmitted by any form of recorded
                telecommunication tested prior to transmission, to such person addressed
                as follows:

            

    

     

    
      	 	
              (a)

            	
              if
                to the Holder:

            

    

     

    to
      the
      address on the face page hereof

     

    
      	 	
              (b)

            	
              if
                to the Corporation:

            

    

     

    Apollo
      Gold Corporation

    5655
      S.
      Yosemite Street, Suite 200

    Greenwood
      Village, Colorado, 80111-3220

    Attention:Chief
      Financial Officer

    Telephone
      No.:(720)
      886-9656

    Facsimile
      No.: (720)
      482-0957

     

    Notice
      so
      delivered shall be deemed to have been given on the Business Day that it is
      received. Notices transmitted by a form of recorded telecommunication shall
      be
      deemed given on the day of transmission. The Holder or the Corporation may
      from
      time to time notify the other in the manner provided herein of any change of
      address or facsimile number which thereafter, until changed by like notice,
      shall be the address or facsimile number of such person for all purposes
      hereof.

      
        
          
          

        

        
          -15-

          
            

          

        

        
          
          

        

      

    IN
      WITNESS WHEREOF
      the
      Corporation has caused this Warrant Certificate to be signed by its duly
      authorized officer.

     

    DATED
      as
      of the 23rd
      day of
      February, 2007.

     

    
      	
              APOLLO
                GOLD CORPORATION

            
	 	 
	
              Per:

            	  

	 	
              Authorized
                Signatory

            
	 	 

    

     

    
      
        
        

      

      
        -16-

        
          

        

      

      
        
        

      

    

     

    Schedule
      "A"

     

    SUBSCRIPTION
      FORM

     

    TO
      BE COMPLETED IF WARRANTS ARE TO BE EXERCISED:

     

    
      	 	
              TO:

            	
              APOLLO
                GOLD CORPORATION

            

    

    5655
      S.
      Yosemite Street, Suite 200

    Greenwood
      Village, Colorado, 80111-3220

    

    The
      undersigned hereby subscribes for ____________________ Common
      Shares of Apollo
      Gold Corporation
      according to the terms and conditions set forth in the annexed Warrant
      Certificate (or such number of other securities or property to which such
      Warrant Certificate entitles the undersigned to acquire under the terms and
      conditions set forth in such Warrant Certificate).

     

    In
      connection with the exercise of the Warrant certificate, the undersigned
      represents as follows: (Please check the ONE
      box
      applicable):

     

     

    
      	 	
               ̈

            	
              1.

            	
              The
                undersigned hereby certifies that (i) it is not a U.S. Person (as
                defined
                in Regulation S under the United States Securities
                Act of 1933, as amended (“U.S. Securities Act”)),
                (ii) at the time of exercise it is not within the United States,
                and (iii)
                it is not exercising any of the Warrants represented by this Warrant
                certificate by or on behalf of any U.S. Person or person within the
                United
                States

            

    

     

    
      	 	 	
              2.

            	
              The
                undersigned is delivering a written opinion of U.S. counsel to the
                effect
                that the shares to be delivered upon exercise hereof have been registered
                under the U.S. Securities Act or
                are exempt from registration
                thereunder.

            

    

     

    
      	 	
               ̈

            	
              3.

            	
              The
                undersigned was the original purchaser in the Corporation’s private
                placement of the Units under which the Warrants were issued, (ii)
                it is an
                accredited investor as defined in Rule 501(a) of Regulation D of
                the U.S.
                Securities Act, and (iii) the representations and warranties made
                to the
                Corporation in connection with the acquisition of the Units remain
                true
                and correct on the date of this Subscription
                Form.

            

    

     

    Address
      for Delivery of Common Shares:

     

      
        

      

       

      
        

      

       

      
        

      

       

      Attention:
        

    

     

    Exercise
      Price

    Tendered
      (US$0.50 per Common Share)

    or
      as
      adjusted)        $_____________________________

    
      
        
        

      

      
        A-1

        
          

        

      

      
        
        

      

    

     

    Dated
      at
      ____________________,
      this
      ___ day
      of
      ____________________,
      200__.

     

    
      	
            	
              )

              )

              )

              )

              )
                

              )

              )

              )

            	    

	
              Witness:

            	
              Holder's
                Name

            
	
              Authorized
                Signature

            
	
              Title
                (if applicable)

            

    

    Signature
      guaranteed1:

     

      
        

      

    

    1.    If
      the
      Common Shares are to be registered in a name other than the name of the
      registered Warrant Holder, the signature of the Warrant Holder must be medallion
      guaranteed by a bank, trust company or a member of a stock exchange in
      Canada.

    
      
        
        

      

      
        A-2

        
          

        

      

      
        
        

      

    

     

    Schedule
      "B"

     

    WARRANT
      TRANSFER FORM

     

    FOR
      VALUE
      RECEIVED, subject to receipt of prior written approval of APOLLO GOLD
      CORPORATION (the "Company"),
      the
      undersigned (the "Transferor")
      hereby
      sells, assigns and transfers unto (name)
      ___________________________________________________________ (the
      "Transferee")
      of
      (residential address)

    
      

    

    
      
        
Warrants
        of the Company registered in the name of the undersigned represented by the
        within certificate, and irrevocably appoints the Company as the attorney
        of the
        undersigned to transfer the said securities on the register of transfers
        for the
        said Warrants, with full power of substitution.

    

     

    
      	
              NOTICE:

            	
              The
                signature of this assignment must correspond with the name as written
                upon
                the face of the certificate, in every particular, without alteration
                or
                enlargement or any change whatever, and must be guaranteed by a bank,
                trust company or a member of a recognized stock exchange. The guarantor
                must affix a stamp bearing the actual words "Signature
                Guaranteed".

            

    

     

    DATED
      this ____ day
      of
      __________,
      20__.

     

     

    
      
        	  
	 	  

	
                Signature
                  Guaranteed

              	 	
                (Signature
                  of transferring Warrantholder)

              
	 	 	 
	 	 	  

	 	 	Name
                (please print)
	 	 	
              
	 	 	   

	 	 	Address
	 	 	  

      

    

     

    

    
      
        
          
          

        

        
          B-1

          
            

          

        

        
          
          

        

      

    

     

    TRANSFEREE
      ACKNOWLEDGMENT

     

    In
      connection with this transfer (check one):

     

    
      	
              o

            	
              The
                undersigned transferee hereby certifies that (i) it was not offered
                the
                Warrants while in the United States and did not execute this certificate
                while within the United States; (ii) it is not acquiring any of the
                Warrants represented by this Warrant Certificate by or on behalf
                of any
                person within the United States; and (iii) it has in all other respects
                complied with the terms of Regulation S of United States Securities
                Act of
                1933, as amended (the "1933
                Act"),
                or any successor rule or regulation of the United States Securities
                and
                Exchange Commission as presently in
                effect.

            

    

     

    
      	
              o

            	
              The
                undersigned transferee is delivering a written opinion of U.S. Counsel
                acceptable to the Company to the effect that this transfer of Warrants
                has
                been registered under the 1933 Act or is exempt from registration
                thereunder.

            

    

     

     

    
      	  
	 	 
	
              (Signature
                of Transferee)

            	 	 
	 	 	 
	  
	 	  

	
              Date

            	 	
              Name
                of Transferee (please print)

            
	 	 	 

    

     

    The
      Warrants and the common shares issuable upon exercise of the Warrants shall
      only
      be transferable in accordance with applicable laws. The Warrants may only be
      exercised in the manner required by the certificate representing the Warrants
      and the Warrant Exercise Form attached thereto. Any common shares acquired
      pursuant to this Warrant shall be subject to applicable hold periods and any
      certificate representing such common shares will bear restrictive
      legends.

     

    
      
        
        

      

      B-2

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