Document:

EXHIBIT 10.11

                             TERM BONDING AGREEMENT

     This TERM BONDING AGREEMENT (this "Term Bonding Agreement") is made as of
August 1, 2002, among NATIONAL FIRE INSURANCE COMPANY OF HARTFORD ("CNA"),
APOLLO GOLD CORPORATION, an Ontario corporation ("Apollo Canada"), APOLLO GOLD,
INC., a Delaware corporation ("Apollo USA"), and MONTANA TUNNELS MINING, INC., a
Delaware corporation ("MTMI"), with reference to the following facts and
circumstances:

                                    RECITALS:

     A.  MTMI is the wholly-owned Subsidiary of Apollo USA.  Apollo USA is the
wholly-owned subsidiary of Apollo Canada.  As used in this Term Bonding
Agreement and in the agreements and other documents attached as Exhibits to this
Term Bonding Agreement (the "Ancillary Agreements"), the term "Affiliates"
means, collectively, Apollo USA, Apollo Canada, and MTMI.

     B.  CNA is the surety, and MTMI's predecessor by reorganization was the
principal, under that certain HARD ROCK RECLAMATION BOND NO. 137564969 in the
current penal sum of $14,450,000 issued for the benefit of the STATE OF MONTANA,
DEPARTMENT OF ENVIRONMENTAL QUALITY (successor to STATE OF MONTANA, BOARD OF
LAND COMMISSIONERS) (the "Beneficiary"), on or about July 31, 1994, and amended
by INCREASE and DECREASE RIDERS (as modified, amended, and in effect, the
"Reclamation Bond"), and covering MTMI's Operating Permit No. 00113 for MTMI's
Montana Tunnels Mine located in Jefferson County, Montana (the "Mine").

     C.  CNA is the surety, and MTMI's predecessor by reorganization was the
principal, under that certain HARD ROCK RECLAMATION BOND NO. 137564972 in the
current penal sum of $53,186 issued for the benefit of the Beneficiary on or
about July 31, 1994, and amended by INCREASE RIDER dated on or about September
12, 1996 (as modified, amended, and in effect, the "Exploration Bond"), and
covering MTMI's Exploration License No. 00277.  The Reclamation Bond and the
Exploration Bond are sometimes collectively referred to in this Term Bonding
Agreement as the "CNA Bonds."

     D.  On February 5, 1999, MTMI became the principal under the CNA Bonds
pursuant to the plan of reorganization and the confirmation order confirming
said plan entered December 28, 1998, in the bankruptcy proceedings styled In re
MONTANA TUNNELS MINING, INC., Debtor, United States Bankruptcy Court for the
District of Nevada, Case No. BK-N-98-30095.

     E.  Minding under MTMI's current Mine plan has concluded, and, but for the
investments proposed to be made by the Affiliates, MTMI standing alone lacks the
unencumbered financial resources necessary to complete the reclamation
obligations secured by the CNA Bonds.

     F.  The Affiliates require as a condition to making the investments
necessary to return MTMI to active mining operations, that CNA and the
Affiliates who are parties to such agreements enter into this Term Bonding
Agreement, the Collateral Trust Agreement substantially in the form of Exhibit A
attached to this Term Bonding Agreement (the "Trust Agreement"), the General
Indemnity Agreement (Canada), substantially in the form set forth in Exhibit B
attached to this Term Bonding Agreement (the "Apollo Canada Indemnity
Agreement"), the General Indemnity Agreement (USA), substantially in the form
set forth in Exhibit C attached to this Term Bonding Agreement (the "Apollo USA
Indemnity Agreement"), so as to provide for continuity of the CNA Bonds while
the pit expansion project is carried out.

     G.  CNA requires, as a condition to granting to MTMI the continuity of the
CNA Bonds during the Stand-Still Period and other benefits contemplated by this
Term Bonding Agreement, that the Affiliates enter into this Term Bonding
Agreement and the Ancillary Agreements, so as to provide CNA with a security

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interest in the funds and investments ("Assets") to be deposited by one or more
of the Affiliates into and held in the Trust Account provided for in the Trust
Agreement (the "Trust Account").

                                   AGREEMENT:

     NOW, THEREFORE, in consideration of the foregoing, the mutual agreements
set forth below, and other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, CNA and the Affiliates (collectively,
"the Parties") agree as follows:

     SECTION 1.  INCREASES AND DECREASES IN PENAL SUMS.
                                                      -

          1.1    INITIAL INCREASE.  Within 5 business days after the Effective
Date (the "Closing Date"), and to take effect as of August 1, 2002, CNA shall
execute and deliver to the Beneficiary an Increase Rider substantially in the
form of Exhibit D attached to this Term Bonding Agreement, having the effect of
increasing the penal sum of the Reclamation Bond by $537,688 to an aggregate
total Reclamation Bond penal sum of $14,987,688; PROVIDED, HOWEVER, that the
Affiliates shall deposit (or shall cause MDEQ to deposit) $687,688 into the
Trust Account.  The Affiliates' deposit into the Trust Account will occur prior
to or simultaneously with CNA's execution and delivery of the Increase Rider to
the Beneficiary.

          1.2    SUBSEQUENT CHANGES IN PENAL SUMS.  From time to time during
the effective term of this Term Bonding Agreement, CNA shall execute and deliver
all such "Decrease Riders (a CNA Bond Rider having the effect of reducing the
penal sum of either of the CNA Bonds) as may be requested by MTMI and consented
to by the Beneficiary.  From time to time during the effective term of this Term
Bonding Agreement, CNA may, in CNA's sole discretion, but CNA shall not be
required to, execute and deliver any such further "Increase Riders" (a CNA Bond
Rider having the effect of increasing the penal sum of either of the CNA Bonds)
as may be requested by MTMI and accepted by the Beneficiary; PROVIDED, HOWEVER,
that, the Affiliates shall concurrently with the effectiveness of any Increase
Rider deposit into the Trust Account an additional amount of money equal in
value to the amount by which the penal sum of the affected CNA Bond is to be
increased by such Increase Rider.

     SECTION 2.  PREMIUM.  CNA hereby acknowledges full payment of all premium,
commission, and other amounts payable with respect to the CNA Bonds for all
periods through and including July 31, 2002.  For all periods on and after
August 1, 2002, no premium, commission, or other amounts in the nature of
premium or commission shall be payable with respect to the CNA Bonds.  CNA shall
be solely responsible for any claim by, or liability to, any broker or agent
claiming entitlement to any premium, commission, or payment in the nature of
premium or commission on account of the CNA Bonds' remaining outstanding without
such broker or agent receiving premium or commission on and after August 1,
2002.  CNA shall have sole responsibility to file any rate tariffs or other
documents, if any, necessary to permit the CNA Bonds to remain outstanding
during the Standstill Period as provided in this Term Bonding Agreement.  On and
after August 1, 2002, the premiums on the aggregate penal sum of the CNA Bonds
shall accrue at a rate of 1.4% per annum.  Accrued premiums shall not be due and
owing until such time as the total value of the Trust Account equals the then
current aggregate penal sum of the CNA Bonds.  When the total value of the Trust
Account equals the then current aggregate penal sum of the CNA Bonds, the
Monthly Deposit Amount (as defined infra.) shall be paid to CNA in lieu of the
Trust Account, in satisfaction of premiums which have accrued but have not been
paid on the CNA Bonds.  CNA shall be responsible for the payment of any
commissions to any agent or broker related to the CNA Bonds from the premiums
received by CNA.  The accrued and unpaid premium balance shall be reduced by the
amount of the Monthly Deposit Amounts paid to CNA until the balance of the
accrued premiums is zero.  Interest shall not accrue or be payable on the
accrued and unpaid premium balance or otherwise.  CNA shall deliver to MTMI
within 10 days after the end of each Bonding Year, and at any other reasonable

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interval upon request, a Premium Accrual Certificate setting forth the opening
balance, closing balance, and computation of premium accrued and paid for the
period since the last Premium Accrual Certificate in reasonable detail
sufficient to permit MTMI to confirm CNA's computations.

     SECTION 3.  TERM.  This Term Bonding Agreement will take effect on the
date upon which the last Party to do so executes and delivers this Term Bonding
Agreement to the other Parties (the "Effective Date"), and shall continue in
effect indefinitely until terminated as provided in section 7.

     SECTION 4.  INDEMNITY AGREEMENT.  Concurrent with the execution and
delivery of this Term Bonding Agreement, Apollo Canada shall execute and deliver
to CNA the Apollo Canada Indemnity Agreement and Apollo USA and MTMI shall
execute and deliver to CNA the Apollo USA Indemnity Agreement (collectively, the
"Indemnity Agreements").  Once executed and delivered by MTMI, the Apollo USA
Indemnity Agreement shall supersede the General Agreement of Indemnity executed
by MTMI in CNA's favor on January 6, 2000, and any other prior indemnity
agreement executed by MTMI.  The Parties acknowledge and agree that, in the
absence of an Event of Default, the terms, conditions and remedies set forth in
the indemnity agreements will not be implemented.  Accordingly, although the
Indemnity Agreements are executed and delivered by the Affiliates on the
Effective Date, the rights and remedies of CNA and the other entities included
within the term "Company," as defined in the Indemnity Agreements, may not be
exercised during the effective term of this Term Bonding Agreement unless an
Event of Default has occurred and is continuing.

     SECTION 5.  TRUST ACCOUNT

          5.1    DEPOSITS TO THE TRUST ACCOUNT.  On or before the Effective
Date, the Parties shall execute, deliver, and perform the Trust Agreement.
During the effective term of this Term Bonding Agreement, one or more of the
Affiliates shall make deposits into the Trust Account: (i) in the amount
calculated as provided in paragraph 5.2 during each month of the effective term
of this Term Bonding Agreement, commencing with August 2002, and continuing
until the value of the Trust Account is equal to the aggregate outstanding penal
sum of the CNA Bonds (each, a Monthly Deposit Amount"); and (ii) concurrently
with any increase in the aggregate penal sum outstanding under the CNA Bonds, in
the amount and as required pursuant to paragraph 1.2.

          5.2    CALCULATION OF MONTHLY DEPOSIT OBLIGATIONS.  Each successive
12-month period commencing each August 1 during the effective term of this Term
Bonding Agreement is referred to in the Term Bonding Agreement as a "Bonding
Year."  The Monthly Deposit Amount for each Bonding Year shall be calculated as
follows:

               5.2.1  The Monthly Deposit Amount for the 12 Monthly Deposits to
     be made during the Bonding Year commencing August 1, 2002, shall be $75,000
     per month and shall not be subject to adjustment; PROVIDED, HOWEVER, that
     the $687,688 to be deposited in the Trust Account as a condition to the
     Increased Rider provided for in paragraph 1.1 of this Term Bonding
     Agreement includes as an integral component thereof the Monthly Deposit
     Amounts otherwise payable on August 1, 2002 and September 1, 2002.

               5.2.2  Starting in August 2003, if the arithmetic mean of the New
     York Spot Market closing gold bid prices for all days when such market was
     open during the Bonding Year then just ended as reported by KITCO, INC., on
     its Internet reporting service accessible at http://www.kitco.com (the
                                                  --------------------
     "Average Gold Price") falls between $300 per ounce and $350 per ounce,
     inclusive, then the Monthly Deposit Amount for the 12 Monthly Deposits to
     be made during the Bonding Year then just commenced shall be $75,000.

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               5.2.3  Starting in August 2003, if the Average Gold Price for the
     Bonding Year then just ended is greater than $350 per ounce, then the
     Monthly Deposit Amount for the 12 Monthly Deposits to be made during the
     Bonding Year then just commenced shall be the value derived by solving for
     x in the formula x = $75,000 + [$1,000 * (a - $350], where a equals the
     Average Gold Price for the Bonding Year then just ended rounded to the
     nearest whole Dollar. By way of example and without limiting the generality
     of the foregoing, a hypothetical Average Gold Price of $375 for any Bonding
     Year would result in a Monthly Deposit Amount of $100,000 for the following
     Bonding Year, calculated as follows: $100,000 = 75,000 + [$1,000 * ($375 -
     $350)].

               5.2.4  Starting in August 2003, if the Average Gold Price for the
     Bonding Year then just ended is less than $300 per ounce, then the
     Monthly Deposit Amount for the 12 Monthly Deposits to be made during the
     Bonding Year then just commenced shall be the value derived by solving for
     x in the formula x = $75,000 - [$1,000 * ($300 - a)], where a equals the
     Average Gold Price for the Bonding Year then just ended rounded to the
     nearest whole Dollar. By way of example and without limiting the generality
     of the foregoing, a hypothetical Average Gold Price of $275 for any Bonding
     Year would result in a Monthly Deposit Amount of $50,000 for the following
     Bonding Year, calculated as follows: $50,000 = 75,000 - [$1,000 * ($300 -
     $275)].

               5.2.5 Notwithstanding the foregoing, at no time shall the Monthly
     Deposit Amount be less than $0 per month.

               5.2.6  Notwithstanding the foregoing, the Affiliates shall not be
     obligated to make any Monthly Deposit Amount into the Trust Account at any
     time when the value of the Trust Account shall then be equal to or greater
     than the aggregate outstanding penal sum of the CNA Bonds. However, once
     the value of the Trust Account is equal to or greater than the aggregate
     outstanding penal sum of the CNA Bonds, the Monthly Deposit Amount shall be
     paid to CNA, not the Trust Account, and shall reduce the outstanding
     balance of the accrued and unpaid premiums. After the balance of the unpaid
     premiums and commissions is reduced to zero, the Monthly Deposit Amounts
     shall cease to be paid by the Affiliates. If any accrued and unpaid premium
     shall be outstanding at a time when the value of the Assets in the Trust
     Account exceeds the aggregate penal sum of the CNA Bonds, such surplus
     shall be released to CNA as a payment of accrued and unpaid premium payable
     under this Term Bonding Agreement. If all accrued premium payable under
     this Term Bonding Agreement shall have been paid in full, then CNA shall
     promptly release from the Trust Account to the sole control of the
     Affiliates upon request any Assets held in the Trust Account that have the
     effect of causing the Trust Account to have a value greater than the
     aggregate penal sum of the CNA Bonds then outstanding.

               5.2.7  Within 10 days after each August 1 during the effective
     term of this Term Bonding Agreement, commencing with August 1, 2003, the
     Affiliates shall deliver a Monthly Deposit Amount Calculation Certificate,
     substantially in the form of Exhibit E attached to this Term Bonding
     Agreement, executed by an authorized officer on behalf of each of the
     Affiliates setting forth (i) the Average Gold Price for the Bonding Year
     then just ended; (ii) setting forth all of the closing bid price data used
     to calculate such Average Gold Price; and (iii) the Monthly Deposit Amount
     for each of the 12 Monthly Deposits to be made during the Bonding Year then
     just started, calculated as provided in this section 5.

               5.2.8  All Monthly Deposit Amounts shall be received in the Trust
     Account on or before the first business day of each month, except that (i)
     the Monthly Deposit Amount for August 2002 and any subsequent month that
     commences before the Closing Date shall be payable on the Closing Date; and

<PAGE>
     (ii) the Monthly Deposit Amount for each August after August 2002 shall be
     received on or before the 15th business day of that month in order to
     permit computation of the Monthly Deposit Amount for the Bonding Year then
     just commenced.

          5.3    SECURITY INTERESTS.  Each of the Affiliates that hold an
interest in the Trust Accounts shall execute and file all such Form UCC-1
financing statements with the Delaware Secretary of State, and shall do all such
further acts and things as shall be necessary or convenient, in order to grant
to CNA and to continue in good standing a fully-perfected, first-priority
security interest in the full value of the Trust Account Assets (but no other
assets) in accordance with Article 9 of the Uniform Commercial Code as in effect
in the State of Delaware from time to time, such security interest to remain in
effect with respect to all assets held in the Trust Account until the CNA Bonds
are released.

          5.4    USE OF ACCOUNT ASSETS.  Unless earlier withdrawn under another
provision of this Term Bonding Agreement or the Ancillary Agreements, the Trust
Account Assets shall remain in the Trust Account until completion of mining at
MTMI's Mine and shall be used to secure MTMI's obligations to CNA pursuant to
the CNA Bonds.

     SECTION 6.  STAND-STILL.  CNA Agrees that, during the effective term of
this Term Bonding Agreement but only so long as no Event of Default has occurred
and is continuing (the "Stand-Still Period"), CNA shall refrain from any
cancellation of the CNA Bonds, issuing any notice of cancellation of the CNA
Bonds, and any other act or omission aimed at cancellation of the CNA Bonds,
actual or purported.

     SECTION 7.  TERMINATION.  So long as no Event of Default (as defined below)
has occurred and is continuing, this Term Bonding Agreement and the Ancillary
Agreements shall continue in effect indefinitely until terminated under any one
of the following the termination provisions:

          7.1    TERMINATION UPON RELEASE OF CNA BONDS.  This Term Bonding
Agreement and the Ancillary Agreements shall terminate automatically and without
notice when the Beneficiary shall have released the CNA Bonds.  The Affiliates
may obtain release of the CNA Bonds by delivering substitute bonding to the
Beneficiary at any time.  Upon the Affiliates' request, CNA will cooperate
through appropriate escrow arrangements whereby CNA's interests in the Trust
Account will be released simultaneously with the delivery of substitute bonding
so that the Trust Account assets can serve as security to the issuer of the
substitute bonding simultaneously with the release of the CNA Bonds.

          7.2    TERMINATION WITHOUT CAUSE.  So long as no Event of Default has
occurred and is continuing, CNA may not terminate this Term Bonding Agreement or
the Ancillary Agreements during the period from the Effective Date through the
July 31, 2017 (the "Stand-Still Period").  After the Stand-Still Period, CNA may
unilaterally terminate this Term Bonding Agreement and the Ancillary Agreements
without cause by giving not less than thirty (30) days written notice of
termination to the Affiliates.  Until notice of termination is given, the Term
Bonding Agreement and the Ancillary Agreements shall continue in effect.

          7.3    TERMINATION BY CNA FOR CAUSE.  CNA may unilaterally terminate
this Term Bonding Agreement for cause, thereby giving CNA the unilateral right
to avail itself of the remedies under the indemnity agreements, if, but only if,
any of the following events shall occur and shall continue uncured for ten (10)
days after the Affiliates' receipt of CNA's written notice of the occurrence of
such event and demand for performance (each an "Event of Default").

               7.3.1  CNA receives notice from the Beneficiary that CNA is
     required to make payment of all or any portion of the penal sum of either
     the CNA Bonds to the Beneficiary under the terms of either of the CNA Bonds

<PAGE>
     on account of MTMI's refusal or failure to perform any of MTMI's
     obligations to Beneficiary which are secured by either of the CNA Bonds;

               7.3.2  the Affiliates shall fail to deliver copies of Apollo
     Canada's consolidated and consolidating quarterly and annual financial
     statements to CNA within 30 days after the same are required to be
     delivered to stockholders pursuant to applicable laws;

               7.3.3  the Affiliates shall fail to make any deposit of funds
     into the Trust Account when due in accordance with section 5 of this Term
     Bonding Agreement;

               7.3.4  the Affiliates shall breach any material obligation to CNA
     under this Term Bonding Agreement or and of the Ancillary Agreements; or

               7.3.5 the Affiliates shall fail to permit, at the request of CNA
     on reasonable notice, CNA's designated representative(s), in reasonable
     numbers and at reasonable intervals, to inspect the MTMI Mine site.

          7.4    EFFECT OF CNA BONDS' INVALIDITY.  In the event the State of
Montana shall withdraw CNA's certificate of authority to issue surety bonds or
otherwise take any action against CNA whereby the CNA Bonds are not deemed by
the State of Montana to satisfy bonding requirements applicable to MTMI to the
full extent of the CNA Bonds then penal sum without fault by CNA and MTMI is
ordered by the State of Montana to cease mining operations as a result, then, in
addition to any other remedies available under this Term Bonding Agreement or
applicable laws, the obligations of the Affiliates to make Monthly Deposits to
the Reclamation Account shall be suspended until mining operations are permitted
to resume.  Once the CNA Bonds are released by the Beneficiary, monies in the
Trust Account shall be released to the Affiliates so as to enable the Affiliates
to use the money as collateral to obtain full substitute bonding from third
parties.

          7.5    In the event of a Termination pursuant to sections 7.1, 7.2,
or 7.3 the Affiliates obligation to pay the accrued premiums and commissions
shall become due.  In the event of a termination pursuant to section 7.1 the
Affiliates obligation to pay CNA the outstanding balance of the accrued premiums
and commissions shall survive the Termination and the Affiliates shall continue
to make Monthly Deposit Amount payments to CNA until the outstanding balance of
the accrued premiums and commissions is zero.

     SECTION 8.  MISCELLANEOUS.

          8.1    FEES AND COSTS.  Each of the Parties to this Term Bonding
Agreement shall pay its own respective attorneys' fees and expenses incurred in
connection with the negotiation and administration of this Term Bonding
Agreement and the Ancillary Agreements, if any.  In the event of litigation
alleging a right to damages on account of a material breach of this Term Bonding
Agreement or the Ancillary Agreements, the prevailing party shall be entitled to
recover its costs and reasonable attorneys' fees.

          8.2   DEFINED TERMS AND VARIANTS OF DEFINED TERMS.  Any plural,
singular, possessive, feminine, masculine, past, present or future variant of
any of the terms defined parenthetically or otherwise in this Term Bonding
Agreement or any Ancillary Agreement shall have the correlative meaning of the
term of which it is a variant.  As used in this Bonding Agreement: the symbol
"$" and the term "Dollars" each means United States Dollars; and the term
"ounces" and the abbreviation "oz." each means Troy Ounces.

<PAGE>
          8.3   ENTIRE AGREEMENT.  Except as expressly provided in the
Ancillary Agreements, this Term Bonding Agreement contains the entire
understanding and agreement between the Parties in connection with the subject
matter hereof, and there are no oral or written collateral agreements between
the Parties.  If there is any conflict between the provisions of this Term
Bonding Agreement and the Trust Agreement, the provisions of the Trust Agreement
shall prevail.  The Term Bonding Agreement shall prevail if there is a conflict
between its provisions and that of any Ancillary Agreement except the Trust
Agreement.

          8.4   EFFECT OF AMBIGUITIES.  This Term Bonding Agreement and the
Ancillary Agreements are the result of extensive negotiations and shall be
deemed to have been jointly prepared by the Parties hereto.  Any ambiguities
that may exist within this Term Bonding Agreement or any of the Ancillary
Agreements shall be construed neither in favor of nor against any Party or any
Affiliate but rather in accordance with the fair meaning thereof.

          8.5   AMENDMENTS.  Neither this Term Bonding Agreement nor any of
the Ancillary Agreements may to be altered or varied except in writing duly
signed by all of the Parties and all Affiliates that are parties thereto.

          8.6   RELIANCE.  Each Party acknowledges that it has been fully
advised by legal counsel of its choice with regard to this Term Bonding
Agreement and the Ancillary Agreements, and that, in executing this Term Bonding
Agreement and the Ancillary Agreements, it is relying fully upon its own
judgment and advice of such counsel and not upon any representation or warranty
of the other Party or such Party's Affiliates that is not expressly set forth in
writing in the Term Bonding Agreement or in the Ancillary Agreements.

          8.7   THIRD-PARTY BENEFICIARIES.  Except as otherwise provided in
this Term Bonding Agreement or the Ancillary Agreements, nothing in this Term
Bonding Agreement, either expressed or implied, is intended to confer upon or to
give any person (other than the Parties) any rights or remedies, or to release
any person from any liability or obligation, by reason of any term, provision,
condition, undertaking, warranty, representation, or agreement contained in this
Term Bonding Agreement.  Without limiting the generality of the foregoing,
neither this Term Bonding Agreement nor any of the Ancillary Agreements is
intended to create any public or private trust for the benefit of the State of
Montana or any other person interested in the reclamation of MTMI's Mine site.
In executing and delivering the Term Bonding Agreement and the Ancillary
Agreements and in participating in the transactions contemplated by the Term
Bonding Agreement and the Ancillary Agreements, each of the Parties is acting as
an independent contractor in pursuit of its own interests and not as a
representative, employee, agent, or other fiduciary of any other Party.

          8.8   NOTICES.  All notices, instructions, or demands of any kind
that any Party desires to give or to make upon the other Party in connection
with this Term Bonding Agreement or the Ancillary Agreements shall be in writing
and shall be deemed to be delivered by depositing the notice, instruction or
demand in the United States mail, certified or registered,
return-receipt-requested, with first class or priority-mail postage,
certification or registration-fees, and return receipt fees pre-paid, and
addressed to the other Party as follows:

     If to CNA, to:                CNA
                                   CNA Plaza, 13 South
                                   Chicago, IL 60685-0001

                                   ATTN:  Sharon A. Sartori, Executive Vice
                                          President And Chief Underwriting
                                          Officer

<PAGE>
                                   ATTN:  Thomas P. Greasel, Vice President and
                                          Chief Claims Officer

     If to the Affiliates, to:     Montana Tunnels Mining, Inc.
                                   Denver Executive Offices
                                   4601 DTC Boulevard, Ste. 750
                                   Denver, CO 80237-2571

                                   ATTN:  General Counsel

Any Party may change its address for receiving notices stated above by giving
notice to the other Party as provided above.

          8.9   COUNTERPARTS.  This Term Bonding Agreement and the Ancillary
Agreements may be executed in counterparts with the same force and effect as if
all signatures were set forth on a single instrument.

          8.10  DUE AUTHORITY.  Each party expressly warrants to the other
Party: (i) that it has the power and authority to execute and to deliver the
Term Bonding Agreement and the Ancillary Agreements to which it is a Party and
to perform its obligations thereunder; and (ii) that all necessary formalities
have been observed in executing this Term Bonding Agreement and the Ancillary
Agreements to which it is a Party.

          8.11  EXHIBITS.  Each of the Exhibits marked as Exhibit A through
Exhibit E and attached to this Term Bonding Agreement (the "Exhibits"), is
incorporated into this Term Bonding Agreement by this reference.

          8.12  SUCCESSORS AND ASSIGNS.  This Term Bonding Agreement, the
Ancillary Agreements, and the obligations, rights, and benefits of CNA and the
Affiliates thereunder, shall be binding upon and shall inure to the benefit of
their respective successors and assigns.

          8.13  FURTHER ASSURANCES.  The Parties shall do, or cause to be
done, all such further acts and things, as shall be reasonably necessary or
convenient to the end that the parties and the Affiliates will receive the
intended benefits of this Term Bonding Agreement.  Without limiting the
generality of the foregoing, so long as an Event of Default has not occurred and
is not continuing CNA will from time to time when reasonably requested by an
Affiliate: (i) execute and deliver an estoppel certificate to any current or
prospective lender or vendor of any Affiliate that may request such
certification, so as to assure such lender or vendor that, as of the date of the
certificate, to the best knowledge of CNA: (A) an Event of Default has not
occurred and is not continuing; and (B) that CNA does not then claim a security
interest in any assets of the Affiliates other than the assets held in the Trust
Account: and, (ii) if requested by such lender or vender, CNA shall execute and
deliver a subordination agreement having the effect of subordinating any
security interests held by CNA to the security interests held or to be granted
by any Affiliate to such lender or vendor.  Any request for an estoppel
certificate or a subordination agreement made to CNA under this paragraph 8.13
shall be accompanied by a certificate signed by a duly authorized officer on
behalf of all of the Affiliates certifying that, to the best knowledge of the
certifying officer, no Event of Default has occurred and is continuing, and CNA
may rely on such certificate in executing and delivering the requested estoppel
certificate or subordination agreement.  Notwithstanding the above, in no event
shall CNA be required to execute an estoppel certificate or subordination
agreement for any Assets in the Trust Account.

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     IN WITNESS WHEREOF, the Parties have each executed this Term Bonding
Agreement by their duly authorized officers as of and with effect from the
Effective Date.

"CNA"                                   "MTMI"

NATIONAL FIRE INSURANCE COMPANY OF      MONTANA TUNNELS MINING, INC.
HARTFORD

By:  /s/ Thomas P. Greasal              By:  /s/ Donald W. Vagstad
   -------------------------------         ----------------------------
     THOMAS P. GREASEL                        Donald W. Vagstad
Its: VICE PRESIDENT & CHIEF CLAIMS      Its:  Vice President
     OFFICER

                                        Executed by MTMI on September 26, 2002,
Executed by CNA on September 25,        at Helena, Montana.
2002, at CNA Plaza, Chicago,
IL 60685

"Apollo USA"                            "Apollo Canada"

APOLLO GOLD, INC.                       APOLLO GOLD CORPORATION

By:  /s/ Donald W. Vagstad              By:  /s/ Donald W. Vagstad
   --------------------------              ----------------------------
     Donald W. Vagstad                        Donald W. Vagstad
Its: Vice President                     Its:  Vice President

Executed by Apollo USA on               Executed by Apollo Canada on
September 26, 2002, at Helena,          September 26, 2002, at Helena, Montana
Montana

<PAGE>
                                INDEX TO EXHIBITS

A.     Collateral Trust Agreement

B.     General Agreement of Indemnity (Canada)

C.     General Agreement of Indemnity

D.     Increase Rider

E.     Monthly Deposit Amount Calculation Certificate

<PAGE>
                           COLLATERAL TRUST AGREEMENT

THIS  COLLATERAL  TRUST  AGREEMENT,  dated  as  of  September  26,  2002  (the
"Agreement"), among Montana Tunnels Mining, Inc. (the "Grantor"), Western Surety
Company (the "Beneficiary"), and THE NORTHERN TRUST COMPANY, an Illinois banking
corporation  (the  "Trustee").  The Grantor, the Beneficiary and the Trustee are
hereinafter  each  sometimes  referred  to  individually  as  a  "Party"  and
collectively  as  the  "Parties".

                                   WITNESSETH:

WHEREAS,  the  Trustee  is  a member of the Federal Reserve System of the United
States of America and is not a Parent, Subsidiary or Affiliate of the Grantor of
the  Beneficiary;

WHEREAS,  the  Grantor  has  been  issued a Hard Rock Reclamation Surety Bond by
National  Fire  Insurance  Company  of  Hartford  (hereinafter  "National Fire")
attached  hereto  as  Exhibit  1  (the  "Bond");

WHEREAS,  the  Grantor desires to transfer to the Trustee for deposit to a trust
account  (the  "Trust Account") money for the account of the Beneficiary for the
purpose  of securing any and all of Grantor's obligations to National Fire under
the Bond and the agreements between Grantor and National Fire in connection with
the  Bond,  (all  such  obligations,  together  with  any and all obligations of
Grantor  to  Beneficiary  under  this  Collateral  Trust  Agreement, hereinafter
collectively  "Grantor's  Obligations"  or  "Obligations");

WHEREAS,  the  Trustee  has agreed to act as Trustee hereunder, and to hold such
assets  in  trust  in  the  Trust  Account  for  the sole use and benefit of the
Beneficiary  for the purpose of facilitating the placement of money in the Trust
Account  in  order  to  secure  the Grantor's Obligations to the Beneficiary and
National  Fire  under  the Bond, and for the purpose of setting forth the duties
and  powers  of  the  Trustee  with  respect  to  the  Trust  Account;

WHEREAS,  the  Trust  Account  is  established  under  the  laws of the State of
Illinois:

NOW,  THEREFORE, for and in consideration of the premises and for other good and
valuable  consideration,  the  receipt  and  sufficiency  of  which  are  hereby
acknowledged,  and  the  Parties  hereby  agree  as  follows:

Sec.1.     Deposit  and  Maintenance  of  Assets  to  the  Trust  Account.
           ---------------------------------------------------------------

     (a)     The  Grantor  hereby  establishes  an  irrevocable  Trust  Account,
pursuant  to  the terms of this Agreement to be held in trust by Trustee for the
benefit of the Beneficiary.  All money deposited in the Trust Account by Grantor
is absolutely and irrevocably transferred to the Trustee for management pursuant
to  this  Agreement.  Grantor,  Beneficiary,  and  Trustee intend that no party,
including  third  parties,  have  access  to  any  Assets  in the Trust Account.

     (b)     The Grantor shall establish the Trust Account by transferring to it
an  initial  amount  of $687,688 prior to October 1, 2002, with the Trustee, who
shall  administer  the Trust Account in its name as Trustee for the Beneficiary.
No  withdrawal of the Assets (as hereinafter defined) of the Trust Account shall
be  made  except at the express direction of the Beneficiary as provided herein.

     (c)     The Grantor shall transfer to the Trustee, for deposit to the Trust
Account,  the  initial  sum  of  $687,688,  and may transfer to the Trustee, for
deposit  to  the  Trust  Account,  such  other  amounts as may be allowed and/or
required  under  this  Agreement,  the Term Bonding Agreement, and the Bond (all

<PAGE>
such  amounts  including  incomes thereon and proceeds and reinvestments thereof
are  herein  referred  to  as the "Assets").  The deposits shall consist only of
money  in  U.S.  dollars.  The  Trustee  shall  provide  to  the  Beneficiary  a
certification  of  its  receipt  of  the  Grantor's  initial  deposit.

     (d)     The  Trust Account will consist of the monies in the aforementioned
account,  any  other  cash  subsequently  deposited  into the Trust Account, the
investments  and  reinvestments  thereof and all earnings, interest, and profits
thereon, less any Withdrawal, Reduction or payments made by the Trustee pursuant
to  this  Agreement.

     (e)     The Grantor shall deliver any Assets to be deposited into the Trust
Account  to  the Trustee via wire transfer, except for the initial deposit which
may  be  made  by  checks.  The  Trustee  shall have no duty to collect from the
Grantor  or  any other person any amounts that may be required by this Agreement
to  be  deposited  into  the  Trust  Account.

     (f)     Grantor  agrees that it will not, without the prior written consent
of  the  Beneficiary,  assign  or  transfer,  and  will  not mortgage, pledge or
otherwise  encumber or suffer to exist any lien on or with respect to, any money
in  the  Trust  Account.

     (g)     Notwithstanding  the  foregoing, the parties intend that this Trust
be  a "Grantor Trust" for federal income tax purposes and that all the income of
the trust shall be taxable on a current basis to the Grantor.  The Trustee shall
prepare  and  file  the  appropriate  tax  returns.

Sec.2.     Withdrawal  of  Assets  from  the  Trust  Account.
           --------------------------------------------------

     (a)     Upon  default  in  the performance of any of Grantor's Obligations,
the  Beneficiary  shall  have  the  right, at any time and from time to time, to
withdraw from the Trust Account, upon written notice to the Trustee at Trustee's
address  as  set forth in Section 17 herein below (the "Withdrawal Notice"), any
quantity  or  amount  of such Assets as are specified in such Withdrawal Notice.
Any  Withdrawal  Notice  must be received by the Trustee no later than 3:00 p.m.
Chicago  time the business day prior to execution of the withdrawal transaction.
The  Withdrawal  Notice  may  designate  a  third party (the "Designee") to whom
Assets  specified  therein shall be delivered and may condition delivery of such
Assets to such Designee upon receipt, and deposit to the Trust Account, of other
Assets specified in such Withdrawal Notice, all as determined by Beneficiary and
as  set  forth  in  the  Withdrawal  Notice.  The  Beneficiary  need  present no
statement  or  documentation  in  addition  to  a  Withdrawal Notice in order to
withdraw  any  Assets.

     (b)     Upon  receipt  of  a  Withdrawal  Notice,  the  Trustee  shall,  at
Beneficiary's  written  direction,  promptly transfer such Assets to, or for the
account  of,  Beneficiary  or  such  Designee  as  is  specified in such written
direction.

     (c)     To  the extent Beneficiary and Grantor agree that the Assets in the
Trust  Account  exceed  Grantor's  Obligations,  Grantor shall have the right to
withdraw  Assets  from  the  Trust  Account  upon providing Trustee with written
notice  (The  "Reduction  Notice").  The  Reduction  Notice shall be prepared by
Grantor,  but  shall  have  no  force  or  effect unless and until confirmed and
approved  by the Beneficiary in writing.  The Reduction Notice shall reflect the
amount  to be withdrawn from the Trust Account.  Upon Beneficiary's confirmation
and  approval  of  the  Reduction Notice, Trustee shall deliver the amount to be
withdrawn  per  the  written  instructions  of  the  Grantor as contained in the
Reduction  Notice.

     (d)     Notwithstanding  paragraphs  (a), (b), and (c) of the Section 2 and
of this Agreement, in the absence of a Withdrawal Notice or Reduction Notice the
Trustee  shall  allow  no  withdrawal  of  any  Assets  from  the Trust Account.

<PAGE>
     (e)     The  Trustee  shall  have  no liability for any losses to the Trust
Account  that  may  be  incurred as a result of any liquidation of Assets of the
Trust  Account  in  order to satisfy a request for a distribution in cash or for
the  validity,  enforceability,  perfection  or  priority  of  any lien, charge,
security interest or other encumbrance claimed by any person against, in or with
respect  to  the  Trust  Account  or  any  Asset  thereof.

Sec.3.     Application  of  Assets.
           ------------------------

     (a)     The  Beneficiary  hereby covenants to the Grantor that it shall use
and  apply  any  withdrawn  Assets  for  the  following  purposes  only:

          i)   to  pay  or  reimburse  the  Beneficiary or National Fire for any
               unpaid  or  unreimbursed  portion  of  Grantor's  Obligations;

          ii)  to  pay  or  reimburse  the  Beneficiary or National Fire for any
               amounts  due  to  Beneficiary  or  National  Fire  as a result of
               Grantor's  default  under  any  Bond;

          iii) to  reimburse  the  Beneficiary  or National Fire for any amounts
               advanced by the Beneficiary or National Fire on behalf of Grantor
               for  services  performed  by third parties in accordance with the
               Bond  or  Grantor's  Obligations,  and

          iv)  where  any  of  the Grantor's Obligations remain unliquidated and
               undischarged ten days prior to the termination date (as set forth
               in  Section  10), to withdraw the Assets and deposit such amounts
               in  a  separate account, apart from its other assets, in the name
               of the Beneficiary, in any bank or trust company organized in the
               United  States,  in  trust for the uses and purposes specified in
               subparagraphs  (i)  through  (iii)  of  this  paragraph  (a).

     (b)     The  Trustee  shall  have  no  duty,  responsibility  or  authority
whatsoever  to  determine  that  any  Assets  withdrawn  from  the Trust Account
pursuant  to  Section 2 of this Agreement will be used and applied in the manner
contemplated  by  paragraph  (a)  of this Section 3, or to take, or refrain from
taking any action on account of the use or application any Assets in relation to
the  provisions  of  said  paragraph  (a)  of  this  Section  3.

Sec.4.     Income.
           -------

     The  Trustee  shall  make  such  investments of any cash at any time in the
Trust  Account  as  the  Beneficiary may specifically direct in writing.  In the
absence  of  such direction the Trustee shall invest such cash in one or more of
its  propriety  money  market mutual funds.  All payments of interest, dividends
and  other  income  in  respect  of  Assets in the Trust Account received by the
Trustee  shall be deposited into the Trust Account, to become a part thereof for
all  purposes hereunder, until such time as the Trustee is directed otherwise by
the  Beneficiary.  The  parties  hereby  direct  the  Trustee to treat the Trust
Account as a grantor-type trust for federal and Illinois income tax purposes and
the  Grantor  shall  provide  the  Trustee with a completed IRS Form W-9 and any
other  documents  the  Trustee  may  reasonably  request in order to comply with
federal  income  tax  withholding  rules  and  regulations  then  in  force.

Sec.5          Corporate  Actions.
               -------------------

     The  Trustee  shall  advise  the  Grantor  and  Beneficiary upon receipt by
Trustee  of  notice  of  any  corporate action affecting any Assets in the Trust
Account.  The  Trustee  shall  forward  all corporate action materials, and such
other  materials  it regularly sends to its customers relating to the securities
it  holds,  to  the  Grantor, with a copy to the Beneficiary.  The Trustee shall

<PAGE>
follow  instructions signed by the Grantor and Beneficiary with regard to voting
such  corporate  actions, and to the extent necessary, shall execute and deliver
such  corporate  actions  to  the  appropriate  party.

Sec.6.     Additional  Rights  and  Duties  of  the  Trustee.
           --------------------------------------------------

     (a)     The Trustee shall notify the Grantor and the Beneficiary in writing
within  ten  (10)  days  following each deposit to, or withdrawal from the Trust
Account.

     (b)     The  Trustee shall accept and open all mail directed to the Grantor
or  the  Beneficiary  in  care  of  the  Trustee.

     (c)     The  Trustee  shall  furnish  to  the Grantor and the Beneficiary a
complete  statement  of  all  Assets  and  their  market valuations in the Trust
Account  upon  the  inception  of  the  Trust  Account  and  monthly thereafter.

     (d)     Upon  reasonable  notice  from  the Grantor or the Beneficiary, the
Trustee  shall  promptly permit the Grantor or the Beneficiary, their respective
agents, employees or independent auditors to examine, audit, excerpt, transcribe
and  copy  at  their  expenses,  during the Trustee's normal business hours, any
books,  documents,  papers  and  records  relating  to  the Trust Account or the
Assets.

     (e)     Except  as  otherwise  provided  in  this Agreement, the Trustee is
authorized  to  follow  and  rely  upon  the  instructions,  and  shall be fully
protected in acting in accordance with such instructions given by officers named
in  incumbency  certificates  furnished  to the Trustee from time to time by the
Grantor and the Beneficiary, respectively, and by Attorneys-in-fact acting under
written  authority  furnished  to the Trustee by the Grantor or the Beneficiary,
including,  without  limitation,  instructions  given  by  letter,  facsimile
transmission  or  electronic  media,  if  the  Trustee  reasonably believes such
instructions  to  be  genuine  and to have been signed, sent or presented by the
proper  party  or  parties and further provided such instructions are consistent
with  the terms of this Agreement.  The Trustee shall not be charged with notice
of  any  change in authority of an officer or attorney-in-fact of either Grantor
or  Beneficiary  until Trustee receives written notification of such change from
the  party  for  which  it  will  be effective.  The Trustee shall not incur any
liability  to  anyone resulting from actions taken by the Trustee in reliance on
such  instructions.  The  Trustee  shall  not  incur  any liability in executing
instructions  (i)  from any attorney-in-fact prior to receipt by it of notice of
the revocation of the written authority of the attorney-in-fact or (ii) from any
officer  of  the  Grantor  or the Beneficiary named in an incumbency certificate
delivered  hereunder  prior  to  receipt  by  it  of a more current certificate.

     (f)     The duties and obligations of the Trustee shall only be such as are
specifically  set  forth  in  this  Agreement,  as  it  may from time to time be
amended,  and no implied duties or obligations shall be read into this Agreement
against  the  Trustee.  The  Trustee  shall  not  be  subject to, nor obliged to
recognize,  any  other  instrument  governing  the rights or duties of the other
parties  to  this  Agreement (including the Bond), even though reference thereto
may  be made in this Agreement.  The Trustee shall be liable for its own and its
agents'  negligence,  willful  misconduct,  or  lack  of  good  faith, its being
understood  that  central banks, depositories and clearing organizations are not
the  agents  of  the  Trustee.  In  no  event shall the Trustee be liable to any
person  for  punitive,  special,  indirect or consequential damages of any kind,
even  if it is advised of the possibility thereof.  In the event of such loss or
damage  to  the  Assets  resulting from the Trustee's or its agents' negligence,
willful  misconduct,  or  lack  of good faith, the Trustee, at its option, shall
promptly  replace  (at  its  own  expense)  said  Assets (by, among other means,
posting  appropriate  security or bond with issuers of such Assets and obtaining
their  reissuance) with other Assets of like kind and quality, or their value as
of  the  date  of  discovery  of  the  loss.

<PAGE>
     (g)     The  Trustee  shall have no responsibility to determine whether the
Assets  in  the Trust are sufficient to secure the Grantor's liability under the
Bond.

Sec.7.     The  Trustee's  Compensation  and  Expenses.
           --------------------------------------------

     (a)     Annual  Fees.  The  Grantor  shall pay the Trustee, as compensation
for  its services under this Agreement, an annual fee for applicable services as
may  be mutually agreed from time to time by the parties.  The Grantor shall pay
the  annual fee to the Trustee no later than 30 days after the execution date of
this  Agreement, and within 30 days after each anniversary of the execution date
thereafter.  However,  in  the  event  that  the  number  of transactions exceed
twenty-five  in  one month the Trustee reserves the right to invoice the Grantor
on  a  quarterly basis with payment due no later than thirty days after the date
of  the  invoice.  If  the  Grantor  fails  to pay the annual fee to the Trustee
within  the  allotted  time,  then  the  Trustee  shall have the right to resign
pursuant  to  Section  9  herein.

     (b)     Other Fees.  The Grantor shall pay or reimburse the Trustee for all
of  the  Trustee's  reasonable expenses and disbursements in connection with its
duties  under  this Agreement (including, but not limited to attorney's fees and
expenses,  on-line  reporting  fees,  and  other  extraordinary expenses such as
shipping,  special  report  requests,  etc.),  except  any  such  expense  or
disbursement  resulting  from  the  Trustee's negligence, willful misconduct, or
lack  of  good  faith.

     (c)     No  Assets  shall  be  used or withdrawn from the Trust Account nor
lien,  encumbrance or security interest in the Assets permitted or perfected for
the  purpose  of  paying  compensation  to,  or reimbursement of the expenses or
indemnification  of,  the  Trustee.

     (d)     All  taxes of any kind that may be assessed or levied against or in
respect  of  the  Trust  Fund  shall  be  paid  or  reimbursed  by  Grantor.

Sec.8.     Trustee  Indemnification.
           -------------------------

     The  Grantor  hereby  indemnifies the Trustee for, and defends and holds it
harmless  against,  any loss, liability, costs or expenses (including attorney's
fees  and  expenses) incurred (whether in its individual capacity or as Trustee)
or made without negligence, willful misconduct or lack of good faith on the part
of  the  Trustee,  arising  out  of or in connection with the performance of its
obligations in accordance with provisions of this Agreement, including any loss,
liability,  costs or expenses arising out of or in connection with the status of
the  Trustee  or  its  nominee  as the holder of record of the Assets; provided,
however, that in the event that insolvency proceedings have been commenced by or
against  the  Grantor,  or  if  the Grantor fails for any reason to make payment
within  30  days  after  any  written request by the Trustee for indemnification
hereunder,  the  Beneficiary  shall be liable for the obligations of the Grantor
under  this  paragraph.  The Grantor and Beneficiary hereby acknowledge that the
foregoing  indemnities  shall  survive  the  resignation  of  the Trustee or the
termination  of  this  Agreement.

Sec.9.     Resignation  or  Removal  of  the  Trustee.
           -------------------------------------------

     (a)     Trustee  Resignation.

          i)   The  Trustee  may resign by giving not less than ninety (90) days
               written  notice  thereof  to  the Beneficiary and to the Grantor.
               Such  resignation  shall  become effective upon the acceptance of
               appointment  by  a  successor  Trustee  and  the transfer to such
               successor  Trustee  of  all  Assets  in  the  Trust  Account  in
               accordance  with  this  Agreement.

<PAGE>
          ii)  Upon  receipt of the Trustee's notice of resignation, the Grantor
               and  the  Beneficiary  shall  appoint  a  successor  Trustee. Any
               successor Trustee shall be a bank that is a member of the Federal
               Reserve  System  and  shall  not  be a Parent, a Subsidiary or an
               Affiliate  of  either  the  Grantor  or the Beneficiary. Upon the
               acceptance of the appointment as Trustee hereunder by a successor
               Trustee  and the transfer to such successor Trustee of all Assets
               in the Trust Account, the resignation of the Trustee shall become
               effective. Thereupon, such successor Trustee shall succeed to and
               become  vested with all the rights, powers, privileges and duties
               of  the  resigning  Trustee,  and  the resigning Trustee shall be
               discharged  from  any  future  duties  and obligations under this
               Agreement,  except  as  provided  in  Section  6(f)  hereof.

          iii) In  the  event  of the Trustee's resignation, if an instrument of
               acceptance  by  a  successor  Trustee  has  not been delivered to
               Trustee  within  60  days  after  the  giving  of  notice of such
               resignation, Trustee may, at the expense of Grantor, petition any
               court  of  competent  jurisdiction  for  the  appointment  of  a
               successor  Trustee  under  this  Agreement or appoint a successor
               trustee  meeting  the  qualifications  hereunder.

          iv)  The  Trustee  must  resign  upon becoming a Parent, Subsidiary or
               Affiliate  of  the  Grantor  or  the  Beneficiary.

          v)   Notwithstanding  Section  9(a)  above,  if  the  Trustee  resigns
               because  of  the  Grantor's  failure to pay the annual fee as set
               forth  in  Section  7(a)  of this Agreement, then it may do so by
               giving  not  less  than  sixty  (60)  days  written notice to the
               Grantor  and  the Beneficiary, and may at the expense of Grantor,
               petition  any court of competent jurisdiction for the appointment
               of  a successor Trustee under this Agreement within 30 days after
               giving  notice of such resignation or appoint a successor trustee
               meeting  the  qualifications  hereunder.

     (b)     Trustee  Removal.  The  Grantor  and  the  Beneficiary may, with or
without  cause,  jointly  remove  the  Trustee  by  giving not less than 90 days
written notice thereof to the Trustee.  Such removal shall become effective upon
the  acceptance  of  appointment  by  a  successor  Trustee  in  accordance with
paragraph  (a)(ii)  of  this  Section  9.

Sec.10.     Termination  of  the  Trust  Account.
            -------------------------------------

     (a)     The  Agreement  and  Trust Account may be terminated only after (i)
the  Grantor  or  the  Beneficiary  has  given the Trustee written notice of its
intention  to terminate the Trust Account (the  "Notice of Intention"), and (ii)
the  Trustee  has  given  the  Grantor  and  the  Beneficiary the written notice
specified  in  paragraph  (b) of this Section 10.  The Notice of Intention shall
specify  the  date  on  which  the  notifying Party intends the Trust Account to
terminate  (the  "Proposed  Date").

     (b)     Within  three  days following receipt by the Trustees of the Notice
of  Intention,  the  Trustee  shall  give written notification (the "Termination
Notice") to the Beneficiary and the Grantor of the date (the "Termination Date")
on  which  the  Trust  Account  shall  terminate.  The Termination Date shall be
between  30 and 45 days after the date that the Notice of Intention was received
by  the  Trustee.

     (c)     On  the  Termination  Date, and upon receipt of written approval of
the  termination  of  the  Trust Account from the Beneficiary, the Trustee shall
transfer to the Grantor any Assets remaining in the Trust Account, at which time
this  Agreement,  and  all duties and obligations of the Trustee with respect to
such  Assets  shall  cease.

<PAGE>
Sec.11.     Definitions.
            ------------

     Except  as  the  context shall otherwise require, the following terms shall
have  the  following meaning for all purposes of this Agreement (the definitions
to  be applicable to both the singular and the plural forms of each term defined
if  both  forms  of  such  term  are  used  in  this  Agreement):

     The  term  "Affiliate"  with  respect  to  any  corporation  shall  mean  a
corporation  which  directly,  or indirectly through one of more intermediaries,
controls or is controlled by, or is under common control with, such corporation.

     The  term  "Beneficiary"  shall  mean  the  Western  Surety Company and any
statutory successor of the Western Surety Company, including without limitation,
its  domiciliary  rehabilitator,  conservator  or  liquidator.

     The  term  "Bond" shall mean the original Surety Bond issued to the Grantor
by  National  Fire  or  any  Affiliate  or  Subsidiary of National Fire, and any
renewals,  extensions,  and  increase/decrease  riders  thereof.  See Exhibit 1.

     The  term  "control",  as it relates to corporate ownership, (including the
related  terms  "controlled  by" and "under common control with") shall mean the
ownership,  directly  or  indirectly,  of more than 50% of the voting stock of a
corporation.

     The  phrases  "deposit  to  the  Trust  Account," "deposited into the Trust
Account,"  and  similar  phrases  shall mean that (i) the Assets being deposited
have been physically deposited with or transferred to or credited to the account
of  the Trustee or its designated custodian and (ii) the Trustee has sent to the
Beneficiary  a  written  confirmation  of  such  deposit  or  transfer,  clearly
identifying  the  amount  and  date  received.

     The  term  "Grantor"  shall  mean  Montana  Tunnels  Mining,  Inc.  and any
successor  of  Montana  Tunnels  Mining, Inc., including without limitation, its
domiciliary  rehabilitator,  conservator  or  liquidator.

     The  term "National Fire" shall mean the National Fire Insurance Company of
Hartford  and  any statutory successor of the National Fire Insurance Company of
Hartford,  including  without  limitation,  its  domiciliary  rehabilitator,
conservator  or  liquidator.

     The  term  "Person"  shall mean and include an individual, a corporation, a
partnership,  an  association,  a  trust,  an  unincorporated  organization or a
government  or  political  subdivision  thereof.

     The  term  "Parent" shall mean an institution that, directly or indirectly,
controls  another  institution.

     The  term  "Subsidiary"  shall  mean  a  person  or institution controlled,
directly  or  indirectly,  by  another  person  or  institution.

     The  term  "Trustee"  shall  mean  The  Northern Trust Company, an Illinois
banking  corporation,  and  any  successor  trustee.

Sec.12.     Governing  Law.
            ---------------

     This  Agreement  shall  be  subject  to  and  governed  by and construed in
accordance with the laws of the State of Illinois without regard to its conflict
of  laws  rules.

<PAGE>
Sec.13.     Successors  and  Assigns;  Applicability  of  Terms.
            ----------------------------------------------------

     This Agreement shall be binding upon, and shall inure to the benefit of all
parties  to it as well as their respective successors and assigns, provided that
no  Party  may  assign  or  transfer  this  Agreement  or  any  of its rights or
obligations  hereunder,  whether  by  merger,  consolidation,  sale  of  all  or
substantially  all  of its assets, liquidation, dissolution or otherwise, except
as  expressly  permitted by this Section 12 of this Agreement.  Without limiting
the  generality  of the foregoing, no covenant, representation, or obligation of
one  party  to another under this Agreement shall apply to, or be enforceable by
any other person or entity, whether or not such person or entity is also a party
to  this  Agreement,  except  as  otherwise  expressly  provided  herein.  The
Beneficiary may assign, with the consent of the Trustee, which consent shall not
be  unreasonably  withheld,  to  another  Person (hereinafter referred to as the
"Transferee")  all,  but  not  part, of its right, title and interest in, to and
under  this Agreement; provided that (i) the Transferee shall have the requisite
power  and  authority  to enter into and carry out the transactions contemplated
hereby,  (ii)  the  Transferee shall have entered into an agreement, in form and
substance  reasonably  satisfactory  to  the  Trustee,  whereby  the  Transferee
confirms  that  it shall be deemed a party to this Trust Agreement, agrees to be
bound  by  all  of  the terms of, and to undertake all of the obligations of the
Beneficiary contained in this Trust Agreement, and (iii) such transfer shall not
violate  any  provision  of any applicable law, agreement or other instrument or
create a relationship which result in violation thereof.  Upon any such transfer
by  the  Beneficiary to a Transferee as above provided, such Transferee shall be
deemed  to  be the Beneficiary for all purposes of this Trust Agreement and each
reference herein to the Beneficiary shall thereafter be deemed to be a reference
to  such  Transferee.

Sec.14.     Severability;  Nonwaiver.
            -------------------------

     In the event that any provision of this Agreement shall be declared invalid
or  unenforceable  by  any  regulatory  body  or court having jurisdiction, such
invalidity  or  unenforceability shall not affect the validity or enforceability
of  the remaining portions of this Agreement.  Any forbearance, failure or delay
by  the  Beneficiary  in  exercising any right, power or remedy under this Trust
Agreement  shall  not  preclude the exercise or further exercise thereof.  Every
right,  power  and  remedy  of  the Beneficiary shall continue in full force and
effect  until  such  right,  power  or  remedy  is  specifically  waived  by the
Beneficiary.

Sec.15.     Entire  Agreement.
            ------------------

     This  Agreement  constitutes  the  entire  agreement among the Parties, and
there  are no understanding or agreements, conditions or qualifications relative
to this Agreement which are not fully expressed in this Agreement; provided that
this  provision shall not affect the contractual obligations between Grantor and
Beneficiary  as  between  themselves.

Sec.16.     Amendments.
            -----------

     This  trust  Agreement  may  be amended in writing by mutual consent by the
Beneficiary and the Grantor, provided that any amendment that changes the duties
or responsibilities of the Trustee shall also require the written consent of the
Trustee.

Sec.17.     Notices,  etc.
            --------------

     Unless  otherwise  provided  in  this  Agreement,  all notices, directions,
requests,  demands,  acknowledgments  and  other  communications  required  or
permitted  to  be  given  or made under the terms hereof shall be in writing and
shall  be  deemed  to  have  been  duly  given  or  made  (a)(i)  when delivered
personally,  (ii) when made or given by telecopier (provided that, where made or

<PAGE>
given  by telecopy, receipt of such telecopy is promptly confirmed by telephonic
inquiry),  or  (iii)  when  delivered  by  prepaid courier or overnight delivery
service;  and  (b)  when  addressed  as  follows:

     If  to  the  Grantor:          Montana  Tunnels  Mining,  Inc.
                                    Denver  Executive  Offices
                                    4601  DTC  Boulevard,  Ste.  750
                                    Denver,  CO  80237-2571

     If  to  the  Beneficiary:      Western  Surety  Company
                                    CNA  Plaza
                                    Chicago,  IL  60685
                                    Attention:  Thomas  Greasel

     If  to  the  Trustee:          The  Northern  Trust  Company
                                    50 South LaSalle Street
                                    Chicago,  Illinois  60675
                                    Attention:
                                    Facsimile  No.:

     Each Party may from time to time designate a different address or facsimile
transmission number for notices, directions, requests, demands, acknowledgements
and  other  communications  by giving written notice of such change to the other
Parties.  All notices, directions, requests, demands, acknowledgements and other
communications  relating  to  the  termination  of the Trust Account shall be in
writing  and may not be made or given by prepaid telex, telegraph, telecopier or
facsimile  transmission.  Notices  to  any  designee  or attorney-in-fact of the
Beneficiary  or Grantor shall be governed by this Section and shall be addressed
to  the location and person in writing advised to the Trustee from time to time.

Sec.18,     Representations  and  Warranties  of  Grantor.
            ----------------------------------------------

     The  Grantor  hereby represents and warrants to the Trustee and Beneficiary
that:

     (a)     This  Agreement has been duly and validly executed and delivered by
the  Grantor  and  constitutes  the  legal,  valid and binding obligation of the
Grantor.

     (b)     The  execution,  delivery  and  performance  by the Grantor of this
Agreement,  and  the  transfer  and conveyance of Assets by the Grantor pursuant
hereto,  do  not  and  will  not  (i)  violate  any  provision of any law, rule,
regulation,  order,  writ, judgment, decree, determination or award presently in
effect  having  applicability  to  the Grantor, of (ii) result in a breach of or
constitute  a  default  under  any indenture or loan or credit agreement, or any
other  agreement  or instrument, to which the Grantor is a party or by which the
Grantor  or  any  of  its  properties  may  be  bound  or  affected.

     (c)     No  authorization,  consent,  approval  license,  qualification  or
formal  exemption  from,  nor  any filing, declaration or registration with, any
court,  governmental  agency  or  regulatory  authority,  or with any securities
exchange  or  any  other  Person  is  required  in  connection  with
          (i)  the  execution,  delivery  or  performance by the Grantor of this
               Agreement  or

          (ii) the  transfer  and conveyance of the Assets by the Grantor in the
               manner  and  for  the  purposes  contemplated  by this Agreement.

<PAGE>
     (d)     At  the date of each delivery by the Grantor to the Trustee of each
deposit amount, the Trustee will then be the lawful owner of, and will have good
and  marketable  title  to  such  Assets,  free  and  clear  of  all  liens  or
encumbrances.

Sec.19.     Headings.
            ---------

     The  headings  of  the  Sections  have  been  inserted  for  convenience of
reference  only  and shall not be deemed to constitute a part of this Agreement.

Sec.20.     Counterparts.
            -------------

     This Agreement may be executed in any number of counterparts, each of which
when  so  executed  and  delivered  shall  constitute  an  original,  but  such
counterparts  together  shall  constitute  but  one  and  the  same  Agreement.

     IN  WITNESS  WHEREOF,  the  parties hereto have caused this Agreement to be
executed and delivered by their respective officers thereunto duly authorized as
of  the  date  first  above  written.

                         Montana Tunnels Mining, Inc. as Grantor

                         By:    _____________________________________/s/
                         Title: Vice  President
                         Date:  09-26-02

                         Western Surety Company as Beneficiary

                         By:    _____________________________________/s/
                         Title: Vice President & Chief Claims Officer
                         Date:  9-30-02

                         The Northern Trust Company, as Trustee

                         By:    _____________________________________/s/
                         Title: Vice  President
                         Date:  10-04-02

<PAGE>
CNA  SURETY

GENERAL AGREEMENT TO INDEMNITY (CANADA)

     THIS  AGREEMENT  is  made  and  delivered  by the undersigned person and/or
entities  (hereinafter individually and collectively called the "Indemnitor" for
the  use  and  benefit  of any and all of Continental Casualty Company, National
Fire  Insurance  Company  of  Hartford,  American  Casualty  Company of Reading,
Pennsylvania,  the Continental Insurance Company, Fireman's Insurance Company of
Newark,  New Jersey, Western Surety Company (U.S.), Universal Surety of America,
and Surety Bonding Company of America (hereinafter individually and collectively
called  the  "Company").

Recitals
--------

     1.     The  Company  is  comprised  of  insurers  licensed  in  various
jurisdictions  to  write  insurance  products  and  surety  bonds.

     2.     The  Indemnitor  has  requested  and  will, in the future, be making
various  requests  of  the  Company  to execute and deliver, construe, renew, or
substitute  (hereinafter  collectively  referred  to  as  "issue") surety bonds,
including  undertakings,  instruments  of  guarantee, and other like obligations
(hereinafter collectively referred to as "bond" or "bonds"), on its behalf or on
behalf of subsidiary companies and divisions, affiliates, partnerships, ventures
or  other  entities  and  enterprises,  whether  now in existence or hereinafter
created  or  acquired.  In which it has or may have an interest or participation
(hereinafter  referred  to  as  "Related  Parties").

     3.     The  Indemnitor acknowledges that if and any Related Parties will be
benefited by the issuance of the bonds and understands that the Company requires
the  indemnitor  to execute and deliver this Agreement as a condition of issuing
any  such  bond.

                                   Agreements
                                   ----------

          NOW  THEREFORE, in consideration of the Company's issuance of any bond
on behalf of the indemnitor or any Related Party, the Indemnitor, for itself and
for  its  successors  and  assigns,  agrees  as  follows:

     1.     Recitals.  The  above  Recitals  are  incorporated herein and made a
            --------
part  hereof  by  reference.

     2.     Premiums.  The  Indemnitor  shall pay to the Company, in care of and
            --------
to the attention of, CNA Surety - Canada, 250 Yonge Street, Suite 1500, Toronto,
Ontario  M5B  2L7  premiums  and  other  charges  at  the rates and at the terms
specified  with  respect to each bond issued in the Company's schedule of rates,
which,  with  any  additions  or amendments thereto, is by reference made a part
hereof,  and  shall  continue  to  pay the same, where such premium or charge is
annual,  until  the  Company  shall be discharged and released, to the Company's
satisfaction,  from  any  liability or responsibility arising from or related to
matters  arising  from  each  such  bond.

     3.     Right  to  Issue.  The  Company  is  not  required, by reason of any
            ----------------
applications  for  a  bond  or  by  reason  of having issued a previous bond, to
execute  or  procure  the  execution or participate in the execution of any such
bond,  and  the Company, at its option, may decline to execute or to participate
in  or  procure the execution of any such bond without impairing the validity of
this  Agreement.  The  Indemnitor understands and agrees, for itself and for any
Related  Party,  that  the  Company  may  not be licensed in (a) an Indemnitor's

<PAGE>
domicile or place(s) of business or (b) jurisdictions either in which parties in
whose  favor  bonds  are  or  will  be  issued  or  where transactions are to be
performed for which bonds are or will be issued.  The indemnitor understands and
agrees,  for itself and for any Related Party, that the Company is not obligated
to  obtain  any  license  in  any  jurisdiction  for  any  purpose.

     4.     Indemnity.  (a)  The  Indemnitor shall exonerate, indemnify and hold
            ---------
the  Company  harmless  from  and  against every claim, demand, liability, cost,
charge,  suit,  judgment,  or  expense of any kind whatsoever, including but not
limited  to  attorney's fees and costs, incurred or sustained by the Company due
to  any  or  all of the following:  (1) by having issued, procured, or reinsured
the issuance of bonds for the Indemnitor or any Related Party or any renewals or
continuations  thereof or substitutes therefore, (2) by reason of the failure of
any  Indemnitor  to  perform or to comply with the provisions of this Agreement.
(3)  by  bringing  legal  action  to enforce Indemnitor's obligations under this
Agreement,  (4)  by  making  an independent investigation of a claim, demand, or
suit,  and  (5)  by  attempting to procure or procuring the Company's release of
liability  or  responsibility  under  any  bond.

     (b)     The Indemnitor shall deposit with the Company an amount of money or
other collateral security acceptable to the Company, as soon as liability exists
or  is  asserted against the Company, whether or not the Company shall have made
any payment therefore, equivalent to the larger of (1) the amount of any reserve
set  by  the  Company  or  (2) such amount as the Company, in its sole judgment,
shall deem sufficient to protect it from loss.  The Company shall have the right
to  use  the  deposit,  or  any portion thereof, in payment or settlement of any
liability, loss, or expense for which Indemnitor would be obligated to Indemnify
the  Company  under  the  provisions  of  this Agreement.  If for any reason the
Company deems it necessary to increase a reserve to cover any possible liability
or  loss,  the  Indemnitor  shall deposit with the Company, immediately upon the
Company's  demand,  an  amount of money equal to any such increase.  The Company
shall  have no obligation to invest or to provide a return on any such deposits.
The  Company  may  sell or realize upon any and all such collateral security, at
public  or  private  sale, with or without notice to Indemnitor, or by any other
method  permitted  by  applicable  law.

     (c)     In  the  event  of payment by the Company, the Indemnitor agrees to
accept  the  Company's  voucher or other documentation of payment as prima facta
evidence  of the payment's propriety and Indemnitor's liability for the payment.

     (d)     If the Company issues  any  bond in connection with a contract, the
Company is hereby authorized, but not required, without notice to the Indemnitor
or  any Related Party, to consent to any change in the contract, or in the plans
or  specifications  relating thereto, and to make or guarantee advances or loans
for  the  purpose  of  the  contract  without  necessity  of  seeing  to  their
application.  The  Indemnitor  agrees  that  the  amount of all such advances or
loans, unless repaid with legal interest by the principal for whom any such bond
was  issued to the Company when due, shall be conclusively presumed to be a loss
under  this  Agreement.

     (e)     The Indemnitor shall continue to remain bound under the terms of
this Agreement even though the Company may, from time to time, without notice or
knowledge  to  Indemnitor,  accept  or  release other agreements of indemnity or
collateral  in  connection  with  the  issuance  of  the  bonds.

     (f)     The Indemnitor understands and  agrees  that  this  Agreement  is a
continuing  agreement  to  indemnify  over  an  indefinite period and that bonds
issued  by the Company pursuant to this Agreement may vary widely in amounts and
nature  and  that the Indemnitor and any Related Party will be bound by all such
bonds,  and  any  increases in the panel limits of such bonds. The Company shall
have the right, in its sole discretion, and is hereby authorized, without notice
to  any  Indemnitor  or  Related  Party, but is not obligated, to consent to the
increase  or  decrease the penal amount of any bond and to execute or consent to
any  continuations,  enlargements,  modifications,  and  renewals  of  any bond.

<PAGE>
     5.     Claims  against  the  Company.  (a)  upon  becoming  aware of any
               -----------------------------
demand, notice, or proceeding preliminary to fixing any liability with which the
Company  may  be  subsequently  charged  under  any  bond,  the Indemnitor shall
immediately  notify  the  Company  in  a writing delivered in care of and to the
attention of CNA Surety - Canada, 250 Yonge Street, Suite 1500, Toronto, Ontario
M5B  2L7,  to the attention of CNA Surety's Vice President. The Company reserves
the right to change periodically the address for delivery of notification by the
Company's  written  direction  delivered  to  the  Indemnitor.

    (b)     The  Company shall have the exclusive right to determine for itself,
the  Indemnitor, and any Related Party whether any claim or suit brought against
the Company or any principal, for which any bond was issued, shall be settled or
defended,  and  the  Company's decision shall be binding and conclusive upon the
Indemnitor.

     6.     Indemnitor.  (a)  The  Indemnitor  will,  upon  the  written request
            ----------
of  the Company, promptly procure the full and complete discharge of the Company
from  any  bonds  specified  in such request and all liability by reason of such
bonds. If such full and complete discharge is unattainable, the Indemnitor will,
if  requested  by  the  Company,  promptly provide to the Company an irrevocable
letter  of  credit  acceptable  to  the  Company,  as  collateral,  in an amount
sufficient,  in the Company's opinion, to cover all undischarged liability under
any  such  bond,  or promptly make other provisions acceptable to the Company to
collateralize  fully  such undischarged liability. The Indemnitor further agrees
that,  in  the event of its breach of the foregoing obligation, the Company will
have  no  adequate  remedy  at  law  and shall therefore be entitled to specific
performance  of  the  Indemnitor's  obligation.  The Company's failure to act to
enforce  its right to specific performance hereunder shall not be construed as a
waiver  of  that  right.

     (b)  The  Indemnitor  understands  and  agrees  that  the  circumstances,
financial  or  otherwise, of any Related Party may change substantially over the
period of this Agreement. The Indemnitor agrees to keep itself fully informed as
to the business activities and financial affairs of the Related Party and of the
risks in which they are being engaged so that it is always aware of the risks or
hazards  in  continuing  to  act  as  the  Indemnitor.

     (c)  The  Indemnitor hereby expressly waives any notice from the Company of
any  fact  or  information  coming  to  the  notice  or knowledge of the Company
affecting  its  rights  or  the  rights  or  liabilities  of  the  Indemnitor.

     (d)  In  the event of any claim or demand being made by the Company against
the Indemnitor, or any one or more of them, by reason of the execution of a bond
or  bonds,  the Company is hereby expressly authorized to settle with any one or
more  of  the Indemnitors individually, and without reference to the others, and
such  settlement  or  composition  shall  not affect the liability of any of the
others.  The  Indemnitor  hereby expressly waives the right to be discharged and
released  by  reason  of  the  release  of one or more of the joint debtors, and
hereby  consents  to  any  settlement or composition that may hereafter be made.

     (e)  In  the  event  the Indemnitor or any Related Party shall (1) abandon,
forfeit,  default, delay in performance of, or otherwise breach any contract for
which  the  Company  has  provided any bond, (2) breach any such bond, (3) fail,
neglect  or  refuse to pay for any labor or materials used in the prosecution of
such  contract,  (4)  have proceedings instituted against it alleging that it is
insolvent,  or  for  the appointment of a receiver or trustee for the benefit of
creditors, whether or not the Indemnitor or Related Party is insolvent, or admit
(in  writing or otherwise) its inability to pay its debts as they become due, or
makes or commences any voluntary assignment for the benefit of creditors, or any
petition  or  proceeding  for  relief  under  any  applicable  law  relating  to
bankruptcy,  liquidation  or  for relief from prosecution of creditors, (5) have

<PAGE>
proceedings  instituted  against it, the affect of which may be to hinder, delay
or impede the normal satisfactory performance of the Indemnitor's or any Related
Party's  obligations for which the Company issued any bond, or (6) fail, neglect
or refuse to give prompt written notice to the Company of material change in, or
change  materially, after notice to and objection by the Company, the character,
identity,  control, management, beneficial ownership, legal status, or existence
of  the Indemnitor, the Company shall have the right, but not the obligation, to
take  possession  of  any  work  under  the  contract and, at the expense of the
Indemnitor,  to complete the contract, or cause, or consent to the completion of
such  contract.  In  such  event,  the Indemnitor for itself and for any Related
Party  hereby  assigns,  transfers,  and  sets  over  this to the Company (to be
effective  as  of  the  date of such bond or bonds), and grants to the Company a
security  interest  in,  all  of the Indemnitor's and any Related Party's rights
under and interest in any and all such contracts, including the right, title and
interest  in  and to all subcontracts let in connection with such contracts, all
machinery,  plant equipment, tools and materials which shall be upon the site of
the work or elsewhere for the purposes of the contracts, including all materials
ordered  for  the contracts; and any and all sums due under the contracts at the
time  of  such  event, or which may thereafter become due. Indemnitor for itself
and  for  any Related Party hereby authorizes the Company, as such parties' true
and lawful attorney in fact, to endorse in the name of the payee, and to receive
and collect, and to disburse the proceeds of, any check, draft, warrant or other
instrument  made or issued in payment as a result of the performance of any such
contract.

     (f)  Upon  occurrence of any of the events described in clauses (1) through
(5)  of  subparagraph  6(e), and in addition to any and all other powers, rights
and  remedies  of  the  Company  under  this  Agreement or as provided at law or
otherwise,  the  Company  shall  have the rights and remedies of a secured party
under applicable personal property security legislation or similar or comparable
legislation  in  any jurisdiction where any of the Indemnitor or any property or
assets  in  which  the  Company has been granted rights under this Agreement, or
otherwise,  may  be  located.  Without  limitation,  the  Company may itself, or
through  an  agent  or  representative,  take possession of any such property or
assets  and  use  the  same  (without  compensation  to  the  applicable debtor,
Indemnitor  or  Related Party) for purposes of obtaining its release or avoiding
or  mitigating  any  loss,  for  completion  of  the work under any contract, or
otherwise,  to  perform its obligations with respect to any bond, or may sell or
otherwise  dispose  of  the  same in whole or in part at public or private sale,
with  or  without  notice to the debtor, Indemnitor, or Related party, or by any
other  method  permitted  by  applicable  law.

     (g)  At  any  time,  and until such time as the Company's obligations under
any bond are discharged and released, the Company shall have the right of access
to the books, records, and accounts of the Indemnitor and any Related Party, and
any person or entity, when requested by the Company, is hereby authorized by the
Indemnitor  and  any  Related  Party  to  furnish to the Company any information
requested  by  the  Company  from  such  person  or  entity.

     (h)  The  Indemnitor for itself and for any Related Party waives the notice
of  issuance  of any bond, notice or any default or act giving rise to any claim
under  any  bond,  any  liability of the Company under any bond, and any and all
liability  of  its  part  under  this  Agreement.

     (i)  The  Indemnitor  understands and agrees that other than for the entity
issuing  a bond, no other entity included within the definition of the "Company"
in  this Agreement assumes any obligation whatsoever with respect to either this
Agreement  or  such  bond.

     (j)  This Agreement may be terminated by the Indemnitor upon written notice
sent  by registered mail in care of and to the attention of CNA Surety - Canada,
250  Yonge Street, Suite 1500, Toronto, Ontario M5B 2L7, to the attention of CNA
Surety's  Vice  President,  of  not  less  than  twenty  (20) days. In no event,
however,  shall  any  such termination notice operate to modify, bar, discharge,
limit,  affect  or impair the liability of the Indemnitor, with respect to, upon
or  by  reason  of  any  and  all  such  bonds issued prior to such termination.

<PAGE>
     7.     Security Agreement.  The  Indemnitor  agrees  to execute and deliver
            ------------------
any  and all documents the Company deems necessary or convenient to create or to
maintain  its  interest in any assets provided by Indemnitor, from time to time,
for the benefit of the Company, including without limitation mortgage agreements
and/or  security  agreements, in form and substance satisfactory to the Company,
under which the Indemnitor gives the Company first priority mortgage or security
interest  over  certain  assets  of  the  Indemnitor  to secure the Indemnitor's
performance  of  its  obligations  under  this  Agreement.

     8.     Co-Sureties.  All  of  the terms, provisions, and conditions of this
            -----------
Agreement  shall  be  extended  to  and  for the benefit not only of the Company
either  as  a direct writing company or as a co-surety or reinsurer but also for
the  benefit  of  any  surety  or  insurance company or companies with which the
Company  may participate as a co-surety or reinsurer and also for the benefit of
any  other  company  which  may  issue any bond at the request of the Company on
behalf  of  the  Indemnitor  or  its  subsidiaries  or  affiliates.

     9.     Currency  Requirements.  (a)  All payments made by the Indemnitor to
            ----------------------
the  Company  under  this  Agreement shall be in either United States Dollars or
Canadian  Dollars,  whichever  is  determined  by  the  Company, and in no other
currency,  and shall be sent via wire transfer to any bank account designated by
the  Company  unless  the  Company  directs the Indemnitor otherwise in writing.

     (b)  The  Indemnitor  shall  apply  for  and  obtain  all  foreign exchange
approvals and validations (including the filing of a report and obtaining of the
acceptance  of  such  report)  from  any  foreign exchange authorities which are
necessary  for  this  Agreement  and  for  all undertakings contemplated by this
Agreement.  If  any  country of applicable jurisdiction has laws restricting the
transfer  of  money  from  such  country,  then the Indemnitor shall immediately
obtain  such  authorizations  and  approvals  as are necessary to transfer money
outside  of such country to the United States in an amount equal to 100% of each
bond  for  a period expiring no earlier than 24 months after the completion date
of  the contract being bonded or any warranty period, whichever is later. If the
completion date of the contract or the warranty period is extended or the amount
of the bond is increased, the Indemnitor shall obtain amended authorizations and
approvals  to reflect the extension or increases. Evidence of authorizations and
approvals  must  accompany  any bond application, any request for an increase in
the  bond amount or any request for a waiver of the extension of the contract or
warranty  period.  If  any  country  of  applicable  jurisdiction  enacts  laws
restricting  foreign  exchange after a bond is issued, then the indemnitor shall
immediately obtain authorizations and approvals with respect to that bond as set
forth  above.

     (c)  If,  for  the  purpose of obtaining or enforcing judgment in any court
in  any  jurisdiction,  it  becomes  necessary to convert into any currency (the
"Judgment  Currency")  an  amount  which  is  payable hereunder or in connection
herewith  in  another currency (the "Original Currency"), then the data selected
by  that  court  as  the  date  as  of  which  the rate of currency exchange for
conversion,  including  any  premiums  or  costs  payable in connection with the
currency  conversion,  is to be determined shall be deemed to be the "Conversion
Date."  If  there  is  any  change  in the rate of currency exchange between the
Conversion Date and the actual receipt by the payee, the party obligated to make
such  payment  shall,  notwithstanding  any such judgment, and as a separate and
additional  obligation,  pay  all such additional amounts as may be necessary to
ensure  that  the  amount  received  by the payee in the Judgment Currency, when
converted  at  the  rate of exchange prevailing at 4:00 p.m. (New York time), on
the  business  day  immediately  preceding the date of the payee's receipt, will
produce  the  amount  due  in  the  Original  Currency.

     10.     Dispute  Resolution and Choice of Law.  (a) The Company may, in its
             -------------------------------------
sole  discretion,  choose  to enforce this Agreement in either of the following:
(1)  the  Courts  of  Ontario or the Federal Court of Canada, or (2) arbitration
governed  by  the  Arbitration Act, 1991 (Ontario) as amended. If arbitration is
chosen  by the Company, the following terms of the arbitration apply (the "Rules

<PAGE>
of  Procedure");  (i)  the site of the arbitration shall be in Toronto, Ontario,
(ii) the arbitration proceedings shall be conducted in the English language, and
(iii)  the  arbitral award shall be final and binding on the parties. Insofar as
the  provisions of the Arbitration Act, 1991 (Ontario) are not inconsistent with
the  Rules  of Procedure, the provisions of such Act shall apply. This Agreement
shall be governed by and interpreted and enforced in accordance with the laws in
force  in the Province of Ontario (excluding any conflict of laws rule principle
which  might  refer  such  construction to the laws of another jurisdiction) and
shall  be treated in all respects as an Ontario contract. Each party irrevocably
submits  to  the  non-exclusive jurisdiction of the courts of Ontario and of the
Federal  Court  of  Canada.

     (b)  The  parties  hereby  acknowledge  that  they  have required that this
document  and  all  writings related hereto be drawn up in the English language.
Les  parties reconnaissant par les presentes avoir exige que le present document
ainsi  que  tous  documents  relies  soient  rediges  en  langue  anglais.

     (c)  The English language shall be the language used for the interpretation
of  this  Agreement. If there is any inconsistency, discrepancy or contradiction
between  the  English  language version of this Agreement and any translation of
this Agreement in any other language, the English language version shall prevail
over  any  such  translation.

     11.     Miscellaneous.  (a) This Agreement constitutes the entire agreement
             -------------
of  the parties with respect to the subject matter hereof. This Agreement may be
executed  in  counterparts, each of which shall be an original, but all of which
together  shall  constitute  one  and  the  same  instrument.

     (b)  This  Agreement  applies  to  bonds  issued  by  the Company on behalf
of  the  undersigned  Indemnitor  and any Related Party. Any notification by the
Company  to  any  one  individual  or  entity  comprising  the  Indemnitor shall
constitute  notice  to  the  remaining  individuals  and entities comprising the
Indemnitor  and  any  Related  Party.

     (c)  The Indemnitor  warrants  and represents that all necessary action has
been  taken  by  it  to  authorize the execution and delivery of this Agreement.

     (d)  If  the  Indemnitor includes more than one individual or legal entity,
then  the  obligations  of the Indemnitor arising under this Agreement are joint
and  several  among  those individuals and entities. If any person named by this
Agreement  as  an Indemnitor fails to execute this Agreement or if its execution
by  any  Indemnitor  shall be defective or invalid for any reason, such failure,
defect  or  invalidity  shall not in any manner diminish or otherwise affect the
obligation  or  liability  hereunder  of any other Indemnitor. The nature of any
bond  principal  to  sign any bond shall not relieve the Indemnitor of liability
under  this  Agreement.  The  Indemnitor  may  not  assign this Agreement or its
obligations  hereunder without the prior written consent of the president of CNA
Surety  Corporation.

     (e)  No  action  or failure to act by the Company shall constitute a waiver
of  any  right,  power,  or  remedy  afforded  it  by this Agreement, at law, or
otherwise, nor shall such action or inaction constitute approval or acquiescence
of  any  breach  by  the  Indemnitor,  except  as  may be specifically agreed in
writing.

     (f)  This  Agreement  may  be  amended  only  by  a writing executed by the
Indemnitor  and  by CNA Surety Corporation, not on its own behalf, but on behalf
of the Company. Paragraph headings are for the convenience of reference only and
are  not  a  part  of  this  Agreement.

     (g)  If any part of this Agreement shall be void or unenforceable under the
laws of any jurisdiction governing its construction, this Agreement shall not be
void  or  violated  thereby,  but  shall  be construed as enforced with the same
effect  as  though  such  part  was  omitted.

<PAGE>
          IN  WITNESS  WHEREOF,  the  Indemnitor has executed and delivered this
Agreement  this  24th  day of September (month) 2002 (year), and the Company has
accepted this Agreement in Toronto, Ontario, Canada, as of this date.

Witness/Attest                              Apollo  Gold  Corporation

____________________________________/s/     _________________________________/s/
Name:  Donald W. Vagstad, Secretary         Name/Title:  R. David Russell (seal)

Date:    09/24/02           Initial(s)                 President
       ---------------------                ------------------------------------

                            CORPORATE ACKNOWLEDGEMENT

State of Colorado
County of Arapahoe

On  this  24th  day  of  September, 2002 before me personally appeared Robert D.
Russell  to  me known, who, being by me duly sworn, did acknowledge and say that
he/she  is  the  President  of the Apollo Gold Corporation the corporation which
executed the foregoing agreement; that he/she knows the seal of the corporation;
that the seal affixed by order of the Board of Directors of the corporation, and
that  he/she  signed  his/her  name  to  the  foregoing agreement by like order.

                                   ___________________________________/s/
                                        Virginia  A.  McCullough

                                   Commission  Expires    2/13/2006
                                                        --------------

<PAGE>
Continental Casualty Company
National Fire Insurance Company of Hartford
American Casualty Company of Reading, Pennsylvania
The Continental Insurance Company
Firemen's Insurance Company of Newark, New Jersey
Western Surety Company
Universal Surety of America
Surety Bonding Company of America
--------------------------------------------------------------------------------
CNA Surety
333 South Wabash
Chicago, IL 60604
--------------------------------------------------------------------------------

                                GENERAL AGREEMENT
                                  OF INDEMNITY

This Agreement entered into by and between the undersigned, herein called the
Indemnitors, and Continental Casualty Company, National Fire Insurance Company
of Hartford, American Casualty Company of Reading, Pennsylvania, The Continental
Insurance Company, Firemen's Insurance Company of Newark, New Jersey, Western
Surety Company, Universal Surety of America, Surety Bonding Company of America
and their successors, assigns, affiliates, and subsidiary companies, CNA Surety,
333 South Wabash, Chicago, IL 60604, as the case may be, any one or all
hereinafter called the Company, witnesseth:

WHEREAS, in the transaction of business certain bonds, undertakings and other
writings obligatory in the nature of a bond, hereinafter referred to as "bond"
or "bonds," may have heretofore been, and may hereafter be, required by, for, or
on behalf of the undersigned Indemnitors or any one or more of the Indemnitors
whose bonds and undertakings the Indemnitors do hereby affirm to have a
substantial material or beneficial interest, and as a condition precedent to the
execution of any and all such bonds, the Company requires execution of this
General Agreement of Indemnity.

NOW, THEREFORE, in consideration of the premises, and of the execution or
continuance of such bonds, and for other good and valuable considerations, the
undersigned Indemnitors do, for themselves, their heirs, executors,
administrators and assigns, jointly and severally, agree with the Company as
follows:

     1.     The Indemnitors will pay to the Company, at its Office in Chicago,
Illinois, premiums and charges at the rates and at the times specified in
respect to each such bond in the Company's schedule of rates, which, with any
additions or amendments thereto, is by reference made a part hereof, and will
continue to pay the same where such premium or charge is annual, until the
company shall be discharged and released from any and all liability and
responsibility upon and from each such bond or matters arising therefrom, and
until the Indemnitors shall deliver to the Company at its Office in Chicago,
Illinois, competent written evidence satisfactory to the Company of its
discharge from all liability on such bond or bonds.

     2.     The Indemnitors will indemnify and save the Company harmless from
and against every claim, demand, liability, cost, charge, suit, judgment and
expense which the Company may pay or incur in consequence of having executed, or
procured the execution of such bonds, or any renewals or continuations thereof
or substitutes therefore, including, but not limited, to fees of attorneys,
whether on salary, retainer or otherwise, and the expense of procuring, or
attempting to procure, release from liability, or in bringing suit to enforce
the obligation of any of the Indemnitors under this Agreement.  In the event the

<PAGE>
Company deems if necessary to make an independent investigation of a claim,
demand or suit, the Indemnitors acknowledge and agree that all expense attendant
to such investigation is included as an indemnified expense.  In the event of
payments by the Company, the Indemnitors agree to accept the voucher or other
evidence of such payments as prima facie evidence of the propriety thereof, and
of the Indemnitors' liability therefore to the Company.

     3.     Payment shall be made to the Company by the Indemnitors as soon as
liability exists or is asserted against the Company, whether or not the Company
shall have made any payment therefor.  Such payment shall be either equal to the
larger of (a) the amount of any reserve set by the Company, or (b) such amount
as the Company, in its sole judgment, shall deem sufficient to protect it from
loss.  The Company shall have the right to use the deposit, or any part thereof,
in payment or settlement of any liability, loss or expense for which the
Indemnitors would be obligated to indemnify the Company under the terms of this
Agreement.  If for any reason the Company shall deem it necessary to increase a
reserve to cover any possible liability or loss, the Indemnitors will deposit
with the Company, immediately upon demand, a sum of money equal to any increase
thereof as collateral security to the Company for such liability or loss.

     4.     The Indemnitors immediately upon becoming aware of any demand,
notice, or proceeding preliminary to determining or fixing any liability with
which the Company may be subsequently charged under any such bond, shall notify
the Company thereof in writing at its Office,  CNA Surety, 333 South Wabash,
Chicago, Illinois 60604.

     5.     The Company shall have the exclusive right to determine for itself
and the Indemnitors whether any claim or suit brought against the Company or the
principal upon any such bond shall be settled or defended and its decision shall
be binding and conclusive upon the Indemnitors.

     6.     The Company, and its designated agents, shall, at any and all
reasonable times, have free access to the books and records of the Indemnitors.
The Indemnitors hereby authorize the Company to obtain a credit report at the
time this Agreement is secured, in any review or renewal, at the time of any
potential or actual claim, or for any other legitimate purpose as determined by
the Company in its reasonable discretion.

     7.     If such bond be given in connection with a contract, the Company is
hereby authorized, but not required, to consent to any change in the contract or
in the plans or specifications relating thereto and to make or guarantee
advances or loans for the purpose of the contract without necessity of seeing to
the application thereof, it being understood that the amount of all such
advances or loans, unless repaid with legal interest by the Contractor to the
Company when due, shall be conclusively presumed to be a loss hereunder.

     8.     In the event the Indemnitors, or any of them, shall (a) fail to pay
any premium charge when due, or (b) fail to pay any amounts due under paragraphs
2 or 3, or (c) abandon, forfeit or breach such contract, or (d) breach any bond
given in connection therewith, or (e) fail, neglect or refuse to pay for any
labor or materials used in the prosecution of such contract, or (f) have
proceedings instituted against them, or any of them, alleging that they are
insolvent, or for the appointment of a receiver or trustee for the benefit of
creditors, whether such Indemnitor(s) are insolvent or not, or (g) have
proceedings instituted against them, or any of them, the effect of which may be
to deprive any of them of the use of any part of the equipment used in
connection with the work under the contract so as to  hinder, delay or impede
the normal satisfactory progress of the work (hereinafter individually and
collectively referred to as "Event of Default"), the Company shall have the
right, but not the obligation, to take possession of the work under the contract
and under any other contract in connection with which the Company has given its

<PAGE>
bond or bonds within the purview of this Agreement and, at the expense of the
Indemnitors, to complete the contract(s), or cause, or consent, to the
completion thereof.

     9.     The Indemnitors hereby assign, transfer, and set over to the Company
(to be effective as of the date of such bond or bonds, but only in the Event of
Default), all of their rights under the contract(s), including their right,
title and interest in and to all subcontracts let in connection therewith; all
machinery, plant, equipment, tools and materials which shall be upon the site of
the work or elsewhere for the purposes of the contract(s), including all
materials ordered for the contract(s); and any and all sums due under the
contract(s) at the time of such default, or which may thereafter become due, and
the Indemnitors hereby authorize the Company to endorse in the name of the
payee, and to receive and collect any check, draft, warrant or other instrument
made or issued in payment of any such sum, and to disburse the proceeds thereof.

     10.     The Indemnitors understand and agree that the circumstances,
financial or otherwise, of any one or more of the Indemnitors may change
substantially over the period of this Agreement and the Indemnitors therefore
agree to keep themselves fully informed as to the business activities and
financial affairs of any one or more of the Indemnitors and of the risks being
engaged in so that the Indemnitors are always aware of the risks or hazards in
continuing to act as Indemnitors.  The Indemnitors hereby expressly waive any
notice from the Company of any fact or information coming to the notice or
knowledge of the Company affecting its rights or the rights or liabilities of
the Indemnitors.

     11.     In the event of any claim or demand being made by the Company
against the Indemnitors, or any one or more of the parties so designated, by
reason of the execution of a bond or bonds, the Company is hereby expressly
authorized to settle with any one or more of the Indemnitors individually, and
without reference to the others, and such settlement or composition shall not
affect the liability of any of the others, and the Indemnitors hereby expressly
waive the right to be discharged and released by reason of the release of one or
more of the joint debtors, and hereby consent to any settlement or composition
that may hereafter be made.

     12.     The Company is not required, by reason of any applications for a
bond or by reason of having issued a previous bond or bonds or otherwise, to
execute or procure the execution of or participate in the execution of any such
bond or bonds and the Company, at its option, may decline to execute or to
participate in or procure the execution of any such bond without impairing the
validity of this Agreement.  The Indemnitors understand and agree that other
than for the entity issuing a bond, no other entity included within the
definition of the "Company" in this Agreement assumes any obligation whatsoever
with respect to either this Agreement or such bond.

     13.     If the Company procures the execution of such bonds by other
companies, or executes such bonds with co-sureties, or reinsures any portions of
such bonds with reinsuring companies, then all the terms and conditions of this
Agreement shall apply and operate for the benefit of such other companies,
co-sureties and reinsurers as their interests may appear.

     14.     The liability of the Indemnitors hereunder shall not be affected by
the failure of the Indemnitors to sign any such bond, nor by any claim that
other indemnity or security was to have been obtained, nor by the release of any
indemnity, nor the return or exchange of any collateral that may have been
obtained and if any party signing this Agreement is not bound for any reason,
this Agreement shall still be binding upon each and every other party.

     15.     This Agreement may be terminated by the Indemnitors, or any one or
more of the parties so designated, upon written notice sent by registered mail
to the Office of the Company, CNA Surety, 333 South Wabash, Chicago, Illinois
60604, of not less than twenty (20) days.  In no event, however, shall any such

<PAGE>
termination notice operate to modify, bar, discharge, limit, affect or impair
the liability of any party hereto, with respect to, upon or by reason of any and
all such bonds, undertakings and obligations executed prior to the date of the
Company's receipt and notice of such termination.

     16.     Indemnitors agree that their liability shall be construed as the
liability of a compensated Surety, as broadly as the liability of the Company is
construed toward its obligee.

     17.     The Indemnitors understand and agree that this document is a
continuing agreement to indemnify over an indefinite period and that bonds and
undertakings issued by the Company pursuant to this Agreement may vary widely in
amounts and nature and that the Indemnitors will be bound by all such bonds and
undertakings, and any increases in the penal limits of such bonds and
undertakings.

     18.     If any provision or provisions, or portion thereof, of this
Agreement shall be void or unenforceable under the laws of any jurisdiction
governing its construction, this Agreement shall not be void or vitiated
thereby, but shall be construed and enforced with the same effect as though such
provision or provisions, or portion thereof, were omitted.

     19.     This Agreement shall constitute a Security Agreement and a
Financing Statement for the benefit of the Company in accordance with the
Uniform Commercial Code and any similar statute and may be used by the Company
without in any way abrogating, restricting or limiting the rights of the
Company.  The Company may add such schedules to this Agreement describing
specific items of security covered hereunder as shall be necessary.  For the
purpose of recording this Agreement, a photocopy of this Agreement acknowledged
before a Notary Public as being a true copy hereof shall be regarded as an
original  The foregoing rights of the Company to use this Agreement as a
Security Agreement and a Financing Statement and to add Schedules to this
Agreement shall be binding as of the effective date of this Agreement, but the
Company's right to exercise the rights granted to it under this paragraph shall
be conditioned upon the occurrence of an Event of Default.

     20.     This Agreement applies to bonds, undertakings and other writings
obligatory in nature of a bond, written by the Company on behalf of or for the
benefit of the undersigned Indemnitors and any and all of their wholly or
partially owned subsidiary companies, successive subsidiaries whether direct or
indirect, divisions or affiliates, partnerships, joint ventures or co-ventures
or limited liability companies, or other entities, in which any of the
undersigned Indemnitors, their wholly or partially owned subsidiary companies,
successive subsidiaries whether direct or indirect, divisions or affiliates have
an interest or participation whether open or silent, jointly, severally, or in
any combination with each other, now in existence or which may hereafter be
created or acquired.  This Agreement and the Indemnitors' obligations hereunder
may not be assigned without the prior written consent of the Company.

<PAGE>
IN TESTIMONY WHEREOF, the Indemnitors have hereunto set their hands and affixed
their seals this 24th day of September, 2002.

                                              Apollo Gold, Inc.

/s/ Donald W. Vagstad                         /s/ R. David Russell
------------------------------------          -------------------------
Witness/Attest Donald W. Vagstad,             R. David Russell, President
Secretary
4601 DTC Blvd., Ste. 750, Denver, CO          4601 DTC Blvd., Ste. 750,
------------------------------------          -------------------------
                          80237-2511          Denver, CO
                                              ----------
                                              80237-2511
Street or P.O. Box   City     State           Street or P.O. Box   City    State

                                              Montana Tunnels Mining, Inc.

/s/ Donald W. Vagstad                         /s/ R. David Russell
------------------------------------          -------------------------
Witness/Attest Donald W. Vagstad,             R. David Russell, President
Secretary
4601 DTC Blvd., Ste. 750, Denver, CO          4601 DTC Blvd., Ste. 750,
------------------------------------          -------------------------
                                              Denver, CO
                                              ----------
Street or P.O. Box   City     State           Street or P.O. Box   City    State

                         80237-2511                                   80237-2511

_________________________________             ______________________________(LS)
Witness/Attest

___________________________________           __________________________________
Street or P.O. Box   City     State           Street or P.O. Box   City   State

<PAGE>
STATE OF         CO              )
             --------------------
                                   ss
COUNTY OF       ARAPAHOE
             --------------------

On this 24th day of September, year 2002, before me personally appeared

Robert D. Russell
--------------------------------------------------------------------------------
to me known, who, being by me duly sworn, did acknowledge and say that he/she is
the President of the Apollo Gold, Inc. , the corporation which executed the
                    ------------------
foregoing agreement; that he/she knows the seal of the corporation; that the
seal affixed to the foregoing agreement is such corporate seal; that it was so
affixed by the order of the Board of Directors of the corporation, and that
he/she signed his/her name to the foregoing agreement by like order.

/s/ Virginia A. McCullough
---------------------------
          Notary Public

Commission expires 2/13/2006

STATE OF         CO              )
             -------------------
                                   ss
COUNTY OF       ARAPAHOE
              ------------------

On this 24th day of September, year 2002, before me personally appeared

Robert D. Russell
--------------------------------------------------------------------------------
to me known, who, being by me duly sworn, did acknowledge and say that he/she is
the President of the Montana Tunnels Mining, Inc., the corporation which
                     ----------------------------
executed the foregoing agreement; that he/she knows the seal of the corporation;
that the seal affixed to the foregoing agreement is such corporate seal; that it
was so affixed by the order of the Board of Directors of the corporation, and
that he/she signed his/her name to the foregoing agreement by like order.

/s/ Virginia A. McCullough
---------------------------
          Notary Public

Commission expires 2/13/2006

<PAGE>
                                                              Bond No. 137564969

                            INCREASE - DECREASE RIDER

     TO BE ATTACHED TO and to form part of Bond Number 137564969 issued by
NATIONAL FIRE INSURANCE COMPANY OF HARTFORD, as Surety, on behalf of MONTANA
TUNNELS MINING, INC., of Spokane, Washington, hereinafter referred to as the
Principal, and in favor of the STATE OF MONTANA, DEPARTMENT OF ENVIRONMENTAL
QUALITY, of Helena, Montana, hereinafter referred to as the Obligee, effective
the 31st day of July 1994.

     IN CONSIDERATION of the premium charged for the attached bond and other
good and valuable consideration, it is understood and agreed that, effective the
1st day of August 2002, and subject to all the terms, conditions and limitations
of the attached bond, the penal sum thereof shall be, and the same is hereby,
increased from the penal sum of FOURTEEN MILLION FOUR HUNDRED FIFTY THOUSAND AND
NO HUNDREDTHS UNITED STATES DOLLARS (US$14,450,000.00) to the penal sum of
FOURTEEN MILLION NINE HUNDRED EIGHTY-SEVEN THOUSAND SIX HUNDRED EIGHTY-EIGHT AND
NO HUNDREDTHS UNITED STATES DOLLARS (US$14,987,688.00).  In no event, however,
shall the aggregate liability of the Surety exceed the larger of the
aforementioned sums, it being the intent hereof to preclude cumulative
liability.

     SIGNED, SEALED AND DATED this 25th day of September 2002.

Accepted by:

"Obligee"                                  "Principal"

STATE OF MONTANA, DEPARTMENT OF            MONTANA TUNNELS MINING, INC.
ENVIRONMENTAL QUALITY

By:  /s/  Warren McCullough                By:  /s/    R. David Russell
   --------------------------                 ---------------------------------
                                              R. David Russell, President [seal]
     Name:  Warren McCullough
            -----------------

     Title: Bureau Chief     [seal]
            -----------------------

                                        "Surety"

                                        NATIONAL FIRE INSURANCE COMPANY
                                        OF HARTFORD

                                        By:  /s/  Richard J. White
                                           ----------------------------------
                                           Richard J. White, Attorney in Fact
                                           [seal]

<PAGE>
CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT

State of    California
          ---------------------------

County of   Sacramento
          ---------------------------

On  September 25, 2002      before me,   Thelma D. Dulay, Notary Public
    ------------------                -----------------------------------------
                 Date                 NAME, TITLE OF OFFICER, "JANE DOE, NOTARY
                                      PUBLIC"

personally appeared    Richard J. White
                    -----------------------------------------------------------
                                      NAME(S) OF SIGNER(S)

(x) personally known to me - OR - ( ) proved to me on the basis of satisfactory
evidence to be the person(s) whose name(s) is/are subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ies), and that by his/her/their signature(s)
on the instrument the person(s), or the entity upon behalf of which the
person(s) acted, executed the instrument.

                                    WITNESS my hand and official seal
     Seal
                                    /s/ Thelma D. Dulay
                                    ------------------------------------
                                          SIGNATURE OF NOTARY

                                    OPTIONAL

Though the data below is not required by law, it may prove valuable to persons
relying on the document and could prevent fraudulent reattachment of this form.

     CAPACITY CLAIMED BY SIGNER          DESCRIPTION OF ATTACHED DOCUMENT

(_) INDIVIDUAL
(_) CORPORATE OFFICER                    Increase/Decrease Rider Bond #137564969
                                         ---------------------------------------
                                              TITLE OR TYPE OF DOCUMENT

(_) PARTNER(S)       (_) LIMITED
                     (_) GENERAL                       One (1)
                                         ---------------------------------------
                                                   NUMBER OF PAGES

(X) ATTORNEY-IN-FACT
(_) TRUSTEE(S)
(_) GUARDIAN/CONSERVATOR
(_) OTHER_______________________                   September 25, 2002
                                         ---------------------------------------
    ____________________________                    DATE OF DOCUMENT

SIGNER IS REPRESENTING:
NAME OF PERSON(S) OR ENTITY(IES)
National Fire Insurance Company                      No Other Signers
-------------------------------          ---------------------------------------
_______________________________              SIGNER(S) OTHER THAN NAMED ABOVE

<PAGE>
            POWER OF ATTORNEY APPOINTING INDIVIDUAL ATTORNEY-IN-FACT

     Know All Men By These Presents, That Continental Casualty Company, an
Illinois corporation, National Fire Insurance Company of Hartford, a Connecticut
corporation, and American Casualty Company of Reading, Pennsylvania, a
Pennsylvania corporation (herein called "the CNA Companies"), are duly organized
and existing corporations having their principal offices in the City of Chicago,
and State of Illinois, and that they do by virtue of the signatures and seals
herein affixed hereby make, constitute and appoint
          Richard J. White, Nerissa S. Bartolome, Lillian G. White, Thelma D.
--------------------------------------------------------------------------------
Dulay, Individually
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
    of                     San Francisco, California
----  --------------------------------------------------------------------------
______their true and lawful Attorney(s)-in-Fact with full power and
authority hereby conferred to sign, seal and execute for and on their behalf
bonds, undertakings and other obligatory instruments of similar nature_____
      - In Unlimited Amounts -
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
and to bind them thereby as fully and to the same extent as if such instruments
were signed by a duly authorized officer of their corporations and all the acts
of said Attorney, pursuant to the authority hereby given is hereby ratified and
confirmed.

     This Power of Attorney is made and executed pursuant to and by authority of
the By-Law and Resolutions, printed on the reverse hereof, duly adopted, as
indicated, by the Boards of Directors of the corporations.

     In Witness Whereof, the CNA Companies have caused these presents to be
signed by their Vice President and their corporate seals to be hereto affixed on
this 10th day of October, 2001.

                              Continental Casualty Company
                              National Fire Insurance Company of Hartford
                              American Casualty Company of Reading, Pennsylvania

     SEAL                     /s/  Michael Genglar
                                 -----------------------------------------------
                                      Michael Genglar   Group Vice President

State of Illinois, County of Cook, ss:
     On this 10th day of October, 2001, before me personally came Michael
Genglar to me known, who, being by me duly sworn, did depose and say:  that he
resides in the City of Chicago, State of Illinois; that he is a Group Vice
President of Continental Casualty Company, an Illinois corporation, National
Fire Insurance Company of Hartford, a Connecticut corporation, and American
Casualty Company of Reading, Pennsylvania, a Pennsylvania corporation described
in and which executed the above instrument; that he knows the seals of said
corporations; that the seals affixed to the said instrument are such corporate
seals; that they were so affixed pursuant to authority given by the Boards of
Directors of said corporations and that he signed his name thereto pursuant to
like authority, and acknowledges same to be the act and deed of said
corporations.

     SEAL
                                             /s/  Eileen T. Pachuta
                                                --------------------------------
My Commission Expires June 5, 2004           Eileen T. Pachuta     Notary Public

<PAGE>
                                   CERTIFICATE
     I, Mary A. Ribikawskis, Assistant Secretary of Continental Casualty
Company, an Illinois corporation, National Fire Insurance Company of Hartford, a
Connecticut corporation, and American Casualty Company of Reading, Pennsylvania,
a Pennsylvania corporation do hereby certify that the Power of Attorney herein
above set forth is still in force, and further certify that the By-Law and
Resolution of the Board of Directors of the corporations printed on the reverse
hereof is still in force.  In testimony whereof I have hereunto subscribed my
name and affixed the seal of the said corporations this  25th  day of
                                                        ------
September     ,  2002 .
-------------  -------

                              Continental Casualty Company
                              National Fire Insurance Company of Hartford
                              American Casualty Company of Reading, Pennsylvania

     SEAL                      /s/  Mary A. Ribikawskis
                              --------------------------------------------------
                                    Mary A. Ribikawskis      Assistant Secretary

<PAGE>
EXHIBIT E
TO TERM BONDING AGREEMENT
PAGE 1 OF 1 PAGE
                                    [FORM OF]
                 MONTHLY DEPOSIT AMOUNT CALCULATION CERTIFICATE
   (for Monthly Deposits to be made during the Bonding Year commenced August 1,
                                      20[__])

TO:  NATIONAL FIRE INSURANCE COMPANY OF HARTFORD

     1.  Terms defined in the Term Bonding Agreement dated as of August 1, 2002,
among National Fire Insurance Company of Hartford, Montana Tunnels Mining, Inc.,
Apollo Gold, Inc., and Apollo Gold Corporation (the "Term Bonding Agreement")
and not otherwise defined in this certificate are used in this certificate as so
defined.

     2.  During the Bonding Year just ended on July 31, 20(), the arithmetic
mean of the New York Spot Market closing gold bid prices for all days when such
market was open during such Bonding Year as reported by KITCO, INC. (or other
mutually agreeable gold price index), on its Internet reporting service
accessible at http://www.kitco.com, was:  $__________ per Troy Ounce (the
              --------------------
"Average Gold Price").

     3.  Attached hereto is a schedule setting forth each such closing bid price
during such Bonding Year and the computation of the Average Gold Price set forth
in paragraph 1 above.

     4.  The Monthly Deposit Amount for each of the 12 Monthly Deposits to be
made during the Bonding Year just commenced is:  $__________ per month,
calculated as provided in section 5 of the Term Bonding Agreement as follows
[check applicable box]:

          -    The Average Gold Price reported in paragraph 2 falls between $300
               per ounce and $350 per ounce, inclusive. Therefore, the Monthly
               Deposit Amount for the Bonding Year just commenced is $75,000.

          -    The Average Gold Price reported in paragraph 2 is greater than
               $350 per ounce. Therefore, the Monthly Deposit Amount for the
               Bonding Year just commenced is the value derived by solving
               for x in the formula x = $75,000 + [$1,000  . (a -$350)],
               where a equals the Average Gold Price reported in paragraph 2
               above rounded to the nearest whole Dollar.

          -    The Average Gold Price reported in paragraph 2 above is less
               than $300 per ounce. Therefore the Monthly Deposit Amount for the
               Bonding Year just commenced is the value derived by solving for x
               in the formula x = $75,000 - [$1,000 . ($300 - a)], where a
               equals the Average Gold Price reported in paragraph 2 rounded to
               the nearest whole Dollar, but subject to the limitation that x
               may not be less than $0.

APOLLO GOLD CORPORATION                      APOLLO GOLD, INC.

By:___________________________               By:     ___________________________
Name: ________________________               Name:  ____________________________
Title:________________________               Title: ____________________________
Date:_________________________               Date:  ____________________________

MONTANA TUNNELS MINING, INC.

By: ___________________________
Name:  ________________________
Title: ________________________
Date:  ________________________

Attachment:  Schedule listing New York Spot Market closing gold bid prices and
showing computation.

<PAGE>EXHIBIT 10.12

                                APOLLO GOLD, INC.

                            AND AFFILIATED COMPANIES

                             COMPANY RETIREMENT PLAN

                              EMPLOYEE SAVINGS PLAN

                                                                        SUMMARY
                                                                           PLAN
                                                                    DESCRIPTION

<PAGE>
                     APOLLO GOLD, INC. EMPLOYEE SAVINGS PLAN

                            SUMMARY PLAN DESCRIPTION

                                TABLE OF CONTENTS
                                -----------------

                                                                            PAGE

1.   INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1

2.   PARTICIPATING IN THE PLAN. . . . . . . . . . . . . . . . . . . . . . . . .1

EMPLOYEE CONTRIBUTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
     Salary Reduction Contributions . . . . . . . . . . . . . . . . . . . . . .2
EMPLOYER CONTRIBUTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
VESTING OF CONTRIBUTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . .3
TERMINATION OF EMPLOYMENT . . . . . . . . . . . . . . . . . . . . . . . . . . .4

4.   BENEFITS AND DISTRIBUTIONS FROM THE PLAN . . . . . . . . . . . . . . . . .4

TIMING OF DISTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
     Normal Distribution Time . . . . . . . . . . . . . . . . . . . . . . . . .4
     Other Distribution Times . . . . . . . . . . . . . . . . . . . . . . . . .5
     Consent to Distribution. . . . . . . . . . . . . . . . . . . . . . . . . .5
FORMS OF DISTRIBUTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
     Normal Distribution. . . . . . . . . . . . . . . . . . . . . . . . . . . .5
     Optional Distributions . . . . . . . . . . . . . . . . . . . . . . . . . .5
FEDERAL INCOME TAX WITHHOLDING ON DISTRIBUTIONS . . . . . . . . . . . . . . . .5
DISTRIBUTIONS OF BENEFITS UPON YOUR DEATH . . . . . . . . . . . . . . . . . . .6
     Pre-retirement Death Benefits. . . . . . . . . . . . . . . . . . . . . . .6
     Post-retirement Death Benefits . . . . . . . . . . . . . . . . . . . . . .6

5.   MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6

     Investment of the Trust Fund . . . . . . . . . . . . . . . . . . . . . . .6
     Loans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
     Qualified Domestic Relations Orders. . . . . . . . . . . . . . . . . . . .7
     Top-Heavy Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
     Amendment and Termination of Plan. . . . . . . . . . . . . . . . . . . . .7
     Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
     Claims and Review Procedure. . . . . . . . . . . . . . . . . . . . . . . .7
     "Spendthrift" Provisions . . . . . . . . . . . . . . . . . . . . . . . . .8
     Trust Fund Not Insured . . . . . . . . . . . . . . . . . . . . . . . . . .8
     Inability to Locate Person to Receive Payment, Incompetent Beneficiary . .8
     Special Rights under ERISA . . . . . . . . . . . . . . . . . . . . . . . .9

5.   DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

     Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
     Employer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
     Hours of Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
     One-Year Break In Service. . . . . . . . . . . . . . . . . . . . . . . . 10

<PAGE>
     Participant. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
     Plan Year. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
     Vesting Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

7.   REFERENCES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

<PAGE>
                                I.  INTRODUCTION

This  is  a  summary of the Apollo Gold, Inc. Employee Savings Plan (the "Plan")
which  has  recently been established or amended.  The purpose of the Plan is to
provide  retirement  income  for employees eligible to participate by permitting
pre-tax  contributions to the Plan.  The effective date of the Plan or amendment
is  January  1,  2000.

Under  the  Apollo  Gold,  Inc.  Employees  Savings Plan, the current investment
choices  are:

Low Risk                                   Bonds
---------                                  -----
Scudder Stable Value                       PIMCO Total Return

Balanced                                   Large Company Value
--------                                   ---------------------
Kemper Total Return                        SAFECO Equity

Moderate Growth (now Large Cap. Growth)    Index
---------------------------------------    -----
Scudder Large Cap Growth                   Scudder Stock Index

Aggressive                                 Moderate Cap. Aggressive Growth
----------                                 -------------------------------
Scudder 21st Century Growth                INVESCO Dynamics

International                              Lifestyle  Funds
-------------                              ----------------
Scudder International                      Pathway Conservative
                                           Pathway Balanced
                                           Pathway Growth

                                           Specialty
                                           ---------
                                           Kemper Technology

                                           Emerging Markets
                                           ----------------
                                           Templeton Developing Markets

Information  about  the  investment  objectives  and  the  risk  and  return
characteristics  of  the  above  investment  choices  is  provided  in  the Plan
materials.

Investment  instructions  may be made by calling the Pilot Voice Response System
at  1-800-541-7705.  For  more  information, regarding the funds, please contact
your  local  Human  Resources  Department  or  the  Plan  Administrator.

     PLEASE  REMEMBER THAT THIS IS ONLY A SUMMARY AND THEREFORE CANNOT COVER ALL
THE  DETAILS  OF  THE  PLAN  OR  ACT AS A SUBSTITUTE FOR THE PLAN DOCUMENT WHICH
CONTAINS  ALL  OF  THE  PROVISIONS  OF  THE  PLAN.  IN  ADDITION,  WE  MAY  HAVE
UNINTENTIONALLY  LEFT OUT OR MISSTATED SOME ITEMS. IF THERE IS ANY INCONSISTENCY
BETWEEN  THIS  SUMMARY  AND  THE  ACTUAL  PROVISIONS  OF  THE  PLAN,  THE ACTUAL
PROVISIONS  SET  FORTH  IN  THE  PLAN  DOCUMENT  WILL  CONTROL.

                          2.  PARTICIPATING IN THE PLAN

Before  you  become  a  Participant  in  the  Plan,  you  must  satisfy  certain
eligibility  requirements.  These  requirements  are  explained in this section.

                                       1
<PAGE>
You have the right to make Salary Reduction Contributions and to receive Company
Matching  Contributions  made  to  the  Plan  after  you complete 1,000 hours of
continuous  service  with  Apollo  Gold,  Inc.  and/or  its  subsidiaries.

When  calculating  your  Hours of Service for each week during which you work at
least  one  hour for the Employer, your Employer will credit you with the actual
number  of  hours  for which you performed services for the Employer during that
week.

All  employees  who  have completed the necessary length of service stated above
are  eligible  to participate except non-resident aliens who work outside of the
United  States  and  individuals  covered  by a collective bargaining agreement.

You  will  become  a  Participant for Salary Reduction Contributions and Company
Matching  Contributions  on  the  first  day  of  the  following month after you
complete  all  of  the  above  applicable  requirements.

                          3.  CONTRIBUTIONS TO THE PLAN

EMPLOYEE CONTRIBUTIONS

SALARY REDUCTION CONTRIBUTIONS

You  may elect to have part of your Compensation contributed to the Plan through
salary  reductions.  These  contributions  are  called  "Salary  Reduction
Contributions."  You  may  contribute  up to 15% of your total cash compensation
(including  overtime)  to  the  Plan.  Highly  compensated  participants  may be
limited  to  a lower percentage in order to satisfy certain testing requirements
imposed  by  the  I.R.S.  This  contribution  is  made  before  taxes.

You can change how much you deduct from your pay on a monthly basis.  To request
a  change,  call the Pilot Voice Response System at 1-800-541-7705.  The request
will  be  effective  the  first  of  the  following  month.

As  stated  by  law,  there  is  a maximum 401(k) contribution you can make in a
calendar  year.  Since  this  maximum  contribution may increase as permitted by
law,  employees  will  be  notified  of  this  amount when it is known.  If your
contributions  reach  that amount, they will stop an then start automatically at
the  same  contribution  rate  at  the  beginning  of  the  next  calendar year.

EMPLOYER CONTRIBUTIONS

COMPANY CONTRIBUTIONS

When you contribute to the Plan, Apollo Gold matches $.75 for every $1.00 of the
first  6% of your before tax pay (from 7% to 15%, there will be no Company Match
although  the  contributions are still treated as before tax).  The advantage of
the  Apollo  Gold  matching contribution is that you receive an automatic profit
before  your  money  is  even  invested.

For example, if you invest 4% of your pay into the 401(k) Plan, Apollo Gold will
contribute  an  additional  3%.  If  you invest 6% of your pay, Apollo Gold will
contribute  4.5%.  Apollo  Gold's  matching  contribution  is  deposited to your
individual  Plan  account,  just  like  your  own  dollars.

                                       2
<PAGE>
EXAMPLE OF AN EMPLOYEE EARNING $30,000 PER YEAR
-----------------------------------------------

ANNUAL DEFERRAL                     COMPANY MATCH             TOTAL
PERCENTAGE               $
1%                $  300            $  225                    $  525
2%                $  600            $  450                    $1,050
3%                $  900            $  675                    $1,575
4%                $1,200            $  900                    $2,100
5%                $1,500            $  1,125                  $2,625
6%                $1,800            $  1,350                  $3,150
7%                $2,100            $  1,350                  $3,450
8%                $2,400            $  1,350                  $3,750
9%                $2,700            $  1,350                  $4,050
10%               $3,000            $  1,350                  $4,350
11%               $3,300            $  1,350                  $4,650
12%               $3,600            $  1,350                  $4,950
13%               $3,900            $  1,350                  $5,250
14%               $4,200            $  1,350                  $5,550
15%               $4,500            $  1,350                  $5,850

                            VESTING OF CONTRIBUTIONS

All  contributions  you  make  (e.g.,  Salary  Reduction Contributions, Rollover
Contributions)  are  fully  vested and non-forfeitable when made.  To the extent
assets  are  "vested" they are "non-forfeitable" and may not be lost, other than
for  fees  and/or  investment losses, or taken away, even if you leave your job.

All  Employer  Matching  Contributions  made on your behalf, and any earnings on
those contributions, will vest and become non-forfeitable at the following rate:

                              Vesting Years       Percent Vested
                              -------------       --------------

                                     1                   25%
                                     2                   50%
                                     3                   75%
                                     4                  100%

                            TAXATION OF CONTRIBUTIONS

All contributions made to your account are not currently subject to federal, and
most state, income taxes, but will be subject to federal, and possibly state and
local, income taxation along with their earnings when benefits are later paid to
you  or  your beneficiaries. Also, any distributions you receive before reaching
the age of 59 1/2  will be subject to a 10% IRS early withdrawal penalty, unless
the distribution  is:

          1)   Paid  on  account  of  your  disability
          2)   Paid  to  you  on  account of a separation from service after you
               have  reached age 55 and paid to you in either a lump sum payment
               or  in substantially equal payments based on your life expectancy
               or  the  joint  life  expectancy  of  you  and  your  beneficiary
               (provided that the installment payments extend for a period of at
               least  5  years)

                                       3
<PAGE>
          3)   Paid  on  account  of  your  death
          4)   Paid  to  a  spouse,  ex-spouse  or  other  party  pursuant  to a
               qualified  domestic  relations  order,
               or
          5)   Paid for medical expenses (only to the extent such expenses would
               be  deductible).

Regardless  if the 10% IRS early withdrawal penalty requirement will or will not
apply,  distributions  will  be  subject  to  federal  and  state  income taxes.

                            TERMINATION OF EMPLOYMENT

If you are a Plan Participant and you leave your job with the Employer, you will
no  longer  be eligible to make contributions to the Plan.  You may, however, be
entitled  to  receive  an  allocation of any Employer Contributions for the Plan
Year  during  which  you  terminated  employment  (see "EMPLOYER CONTRIBUTIONS,"
                                                        ----------------------
above).  If  you  return  to  work for the Employer within one year as a regular
status  employee,  you  will immediately become a Participant in the Plan again.

If you separate from service before you are 100% vested, you will be entitled to
take  distribution of only the vested portion of your account(s). The non-vested
portion  will be forfeited. However, if you return to work before incurring five
(5) consecutive One-Year Breaks in Service, and you repay to the Plan the entire
amount  of your vested portion of the distribution from the Plan account(s), the
Employer  will  reinstate  your  account(s),  including  the  amount  that  was
forfeited.  You  will  have  5 years from the date of your distribution check to
repay  the  amount  you  took  as a distribution. You should check with the Plan
Administrator  for  more  detailed  information concerning these rules and their
application  to  your  situation.

If  you  decide  to leave your account balance(s) in the Plan, the Employer will
not  forfeit the non-vested portion until you have incurred five (5) consecutive
One-Year  Breaks  in  Service, or until you elect to take a distribution of your
vested  portion,  whichever  is  earlier.

Forfeitures  will be applied to reduce the Employer's obligation to make a fixed
contribution  (e.g., Company Matching) for the Plan Year during the Plan Year in
               ----
which  the  forfeiture  occurred.

If  you  return to work for the Employer, and again participate in the Plan, any
Vesting  Years  you  accumulated  before  you  left  your  job  will  be used in
determining  the vested portion of any subsequent Employer Contributions you may
receive.  The  extent to which your future service with the Employer may be used
to  increase  the vested portion of Employer Contributions you received prior to
                                                                        --------
separation  depends  on how many One-Year Breaks in Service you incur before you
are  re-hired.  If  you  were not fully vested at the time you left your job but
you  did  not incur five (5) consecutive One-Year Breaks in Service, any Vesting
          ---
Service  you  accumulate after re-hire will be counted in determining the vested
portion of the Employer Contributions you received prior to your separation from
service.  If  you  did  incur  five  (or  more)  consecutive  One-Year Breaks in
Service,  the vested portion of the Employer Contributions you received prior to
separation  will  not be increased on account of your subsequent service and the
non-vested  portion  will  remain  forfeited.

                  4.  BENEFITS AND DISTRIBUTIONS FROM THE PLAN

TIMING OF DISTRIBUTIONS

NORMAL DISTRIBUTION TIME
Your  Normal  Retirement  Date will be when you reach the age of 65.  Unless you
elect  otherwise,  distribution  of  your  account  balance generally will begin
following  the  end  of  the  Plan  Year  in  which you either reach your Normal
Retirement  Date  or  you  stop  working  for  the Employer, whichever is later.

                                        4
<PAGE>
REQUIRED MINIMUM DISTRIBUTIONS

If  you are not a 5% owner, you are required to begin receiving required minimum
            ---
distributions  ("RMDs")  not later than April 1st of the calendar year following
the  later  of  (i)  the date you attain age 70 1/2, or (ii) the date you retire
from  service for the Employer. If you are a 5% owner, however, you are required
                                       ---
to  begin receiving RMDs not later than April 1st of the calendar year following
the  year  in which you attain age 70 1/2 -- regardless of whether you are still
employed  by  the  Employer.  In  any event, you must continue receiving RMDs by
December  31st  of  each  subsequent  year.

If  you do not receive your Required Minimum Distribution for any year, you will
be  subject  to  an  IRS  penalty  equal to 50% of the amount you did not timely
receive.

OTHER DISTRIBUTION TIMES

You  may  elect  an  earlier  time  for  distribution  to  begin,  provided that
distributions  do  not begin before you reach your Normal Retirement Date (which
is  age  65),  become  disabled,  or  separated  from service with the Employer.

CONSENT TO DISTRIBUTION

If  your  Plan  account  balance  (excluding your Rollover Account) is $5,000 or
less, the Plan Administrator may authorize distribution of your Plan accounts in
a  single  lump  sum  payment without your consent, once you have reached a time
when  distributions  can  begin (e.g., your termination of employment).  If your
                                 ----
account  balance (excluding your Rollover Account) is over $5,000, distributions
cannot  be  made  without  your  consent (except in the case of required minimum
distributions,  described  in  "NORMAL  DISTRIBUTION  TIME,"  above).
                               ---------------------------

                             FORMS OF DISTRIBUTIONS

NORMAL DISTRIBUTION

Your  vested account balance under the Plan will be distributed in the form of a
single  lump  sum  payment  unless  it exceeds $5,000 and you request one of the
Optional  Distributions  described  below.

OPTIONAL DISTRIBUTIONS

Instead  of  the  Normal  Distribution  Form,  described above, you may elect to
receive  distribution  of  your  vested  account balance in one (or a reasonable
combination) of the following Optional Distributions:  Lump sum distribution and
Installment  payments  in  a  fixed  amount.

                 FEDERAL INCOME TAX WITHHOLDING ON DISTRIBUTIONS

Most  distributions paid directly to you will be subject to a 20% federal income
tax  withholding requirement, regardless of your age.  (Certain state income tax
withholding  obligations  may also apply.)  However, the withholding requirement
can  be  avoided  under  the  following  circumstances:

     1.   If  you  receive  substantially  equal  installment  payments designed

          a)   to  be  paid  over  a  period  of  at  least  10  years;  or

                                        5
<PAGE>
          b)   to  be paid for the duration of your life (or life expectancy) or
               the  joint  lives  (or  joint  life expectancies) of you and your
               beneficiary,

          the  20%  withholding requirement will not apply. However, federal and
          state  income  taxes  will  apply  to  these  distributions.

     2.   If  all  or  a  portion  of  the  distribution  is a "required minimum
          distribution"  under  Section  401(a)(9) of the Internal Revenue Code,
          the  20% withholding requirement will not apply to the portion that is
          a  required  minimum distribution. The "required minimum distribution"
          is  considered  taxable  income,  however.

     3.   If  your distribution is eligible for rollover treatment, you can have
          your  distribution  directly  rolled  over  into  an  IRA  or  another
          qualified retirement plan (i.e., not paid to you) and the distribution
                                     ----
          will  not  be  subject  to  the  20%  withholding.

     Regardless  if  the  20%  withholding  requirement  will or will not apply,
     distributions  may  be subject to federal and state income taxes as well as
     the 10% penalty for early withdrawal if taken before age 59 1/2. Check with
     the  Human  Resources  Department  for  more  information  on  these rules.

                    DISTRIBUTIONS OF BENEFITS UPON YOUR DEATH

PRE-RETIREMENT DEATH BENEFITS

If  you  are  married  and  you  die  before distribution of your vested account
balance  has  begun,  your  vested  account  balance will be distributed to your
spouse,  unless  you designate an alternative Beneficiary (or Beneficiaries) for
all or a portion of your account.  To designate a Beneficiary (or Beneficiaries)
other  than  your  spouse, you must obtain your spouse's written consent. If you
are  unmarried  at  the  time of your death, your vested account balance will be
paid  to  your  designated  Beneficiary  (or  Beneficiaries).

Distribution(s) to your spouse or Beneficiary (or Beneficiaries) will be made in
the  form(s)  elected  by your spouse or each Beneficiary, unless you previously
designated  the  form  of  distribution.

POST-RETIREMENT DEATH BENEFITS

If  you die after the distribution of your vested account balance has commenced,
the remainder of the distributions will continue to be paid, in the same manner,
to  your  spouse  or  any Beneficiary (or Beneficiaries) you properly designated
before  your  death.

                                5.  MISCELLANEOUS

INVESTMENT OF THE TRUST FUND

All  contributions  made  on your behalf are held in a Trust Fund, in a separate
account  maintained in your name and invested by the Trustee.  The Trust Fund is
maintained strictly for the benefit of Participants and their Beneficiaries; the
Trustee  is  required  to act only in their interests.  Investment decisions for
individual  accounts  are  the  sole  responsibility  of  the  participant.

LOANS

Loans are permitted from the Apollo Plan.  Loans are made only from your account
and  are subject to the nondiscriminatory terms and conditions prescribed by the
Administrator.  A  copy  of  the  Loan Policy is available from your local Human
Resources  Department.

                                        6
<PAGE>
QUALIFIED DOMESTIC RELATIONS ORDERS

While  federal  law protects your Plan assets from creditors, qualified domestic
relations  orders  are  an exception.  A qualified domestic relations order is a
court  order  that gives an alternate payee (such as a spouse, former spouse, or
child)  a  right  to  part  or all of your Plan assets.  Such an order can force
payment  of  benefits  while  you are working even though the Plan may otherwise
prohibit  distributions  earlier  than  retirement,  termination,  death  or
disability.  The  Plan  Administrator  will  notify  you  I  the Plan receives a
domestic relations order relating to you and must determine, within a reasonable
time,  if  he  order  is  qualified.  If  you have any questions about qualified
domestic  relations  orders,  you  should  contact  the  Plan  Administrator.

TOP-HEAVY PLAN

For  any  Plan  Year the Plan is determined to be Top-Heavy, the Employer may be
required  to  make  additional  minimum  contributions  on behalf of the non-Key
Employees  and/or  to  accelerate  vesting.

AMENDMENT AND TERMINATION OF PLAN

The  Employer  intends  to  maintain  the  Plan indefinitely.  Nevertheless, the
Employer does have the right to amend or terminate the Plan at any time.  In the
event  the  Plan  is ever amended or terminated, the Plan contains the following
provisions  designed  to  protect  your  benefits:  once the Employer has made a
valid  contribution  to  the  Trust, the Employer cannot recover it.  Similarly,
once  you  have  a vested benefit, it cannot be taken away.  Finally, unless the
law  requires it, or the government gives special permission, the amount in your
account cannot be reduced, other than for fees and/or investment losses, and the
Plan's  distribution  options  cannot  be  restricted.

Once  you  become a Participant in the Plan, you will maintain your interest, in
all future Employer contributions regardless of whether the Employer changes the
Plan's  eligibility and/or vesting requirements.  If the Plan's vesting schedule
is  changed, Participants with three (3) or more Vesting Years (five (5) or more
Vesting  Years  for  Participants  who  have  not  been credited with an Hour of
Service  in  a  Plan  Year  beginning after 12/31/88) may choose to keep the old
vesting  schedule  for  their  accounts.

If  the  Plan  is  combined in any way with another plan, your benefit under the
combined  plan  will  not  be  less  than  it  would  have  been if the Plan had
terminated,  instead  of  being  combined  with  the  other  plan.

If  the  Plan  terminates or the Employer completely discontinues contributions,
the  Plan  Administrator  will  instruct  the  Trustee  as to whether and how to
distribute  Participants'  accounts.

The Employer has delegated a limited power to amend the Plan to Scudder Investor
Services,  Inc.

ADMINISTRATION

The  individual  or  entity  whose  name  appears  on page 12 will serve as Plan
Administrator.  It is the Plan Administrator's job to keep lists of Participants
and  their  Beneficiaries,  to  process  disbursement  orders,  to  take care of
bookkeeping  and  record  keeping,  and  to  prepare  reports  for employees and
government  agencies.  The  Plan  Administrator  will also have the authority to
decide  all  questions  about  the Interpretation of Plan provisions and to hold
hearings  on  disputed  claims  for  benefits.

CLAIMS AND REVIEW PROCEDURE

The  Plan  Administrator  will administer the Plan to provide benefits to you as
soon  as you are entitled to receive them.  The following procedure is, however,
available  to  you  if  you  feel that you are entitled to a benefit you are not
receiving:

                                        7
<PAGE>
     (a)  Making  a  Claim
          ----------------
          You  must make a claim to the Plan Administrator in writing unless the
                                                           ----------
          Plan  Administrator  agrees  that  this  formality  is  not  required.

     (b)  Notice  of  Reason  For  Denial
          -------------------------------
          If  the  Plan  Administrator  denies your claim to a benefit, you must
          receive  written notice of the denial within 60 days after the day you
          filed your claim. This notice must give you the reasons for the denial
          and  a  description  of what your rights are for review of the denial.

     (c)  Review
          ------
          You will have 60 days from the day you received a denial from the Plan
          Administrator to make a written application for review. You may have a
          hearing  at  that  review  session if you ask for it. If you request a
          hearing,  you  may  have  a  lawyer with you, you may examine the Plan
          documents,  and  you  may  submit  your  own  comments  in  writing.

The Plan Administrator must make a decision on the review within 60 days of your
application,  except  that  up  to  60  more  days  may  be  taken  if  the Plan
Administrator finds that special circumstances exist, such as the need to hold a
hearing.  You  will  receive  the  Plan  Administrator's  decision  in  writing,
including  reasons  for  that  decision.

"SPENDTHRIFT" PROVISIONS

Generally,  the Plan does not allow you to pledge, give away or sell your rights
to  your  account.  Except  to  the extent that the Plan permits you to take out
loans  on your account, and except as ordered by a court pursuant to a qualified
domestic  relations  order,  your  account  balance  may  not be reduced for any
reason.

TRUST FUND NOT INSURED

The  funds  in  the  Plan are not insured because insurance is not available for
this  type of retirement plan.  Pension insurance is available only for plans in
which  the  actual  dollar  amount  of the benefits is known.  In this Plan, the
actual  dollar  amount  of  the  contributions varies from year to year, and the
amount in your account depends on the investment results in the Trust Fund.  The
value  in  dollars  of  your  benefits will therefore not be known until you are
entitled to receive them.  Consequently, the Plan is not eligible for insurance.

INABILITY TO LOCATE PERSON TO RECEIVE PAYMENT, INCOMPETENT BENEFICIARY

If the person eligible to receive any benefit from the Plan cannot be located or
identified,  the  Plan  Administrator,  in  his/her  discretion,  may direct the
Trustee  to:  (1)  forfeit  and  reallocate  the  benefit  to  the  remaining
Participants,  (2)  retain the benefit in the Trust, or (3) pay the benefit to a
court  pending judicial determination of who is entitled to the benefit.  If the
benefit  is forfeited and reallocated, however, the Employer will be required to
reinstate  the  benefit  if  the person eligible to receive the benefit is later
located  or  identified.

If  the Plan Administrator decides that any person to whom a benefit is payable,
is  physically  or  mentally incapable of handling his or her financial affairs,
the  Plan  Administrator  may  direct  the  Trustee  to make payments that would
normally  be due to that individual, to the individual's legal representative or
custodian,  or  to apply such payments directly for the individual's support and
maintenance.

                                        8
<PAGE>
SPECIAL RIGHTS UNDER ERISA

As  a participant in the Plan, you are entitled to certain rights and protection
under  ERISA  (Employee Retirement Income Security Act of 1974).  ERISA provides
that  all  participants  will  be  entitled  to:

     (a)  Examine  without  charge, at the Plan Administrator's office, all Plan
          documents  including  insurance  contracts and copies of all documents
          filed  by  the  plan with the U.S. Department of Labor, such as annual
          reports  and  Plan  descriptions.

     (b)  Obtain  copies  of  all Plan documents and other Plan information upon
          written  request to the Plan Administrator. The Plan Administrator may
          make  a  reasonable  charge  for  the  copies.

     (c)  Receive  a  summary  of  the  Plan's annual financial report. The Plan
          Administrator  is  required  by law to furnish each participant with a
          copy  of  this  summary  financial  report.

     (d)  Obtain  a  statement telling you whether you have a right to receive a
          pension  at normal retirement age, and if so, what your benefits would
          be at normal retirement age if you stop working under the Plan now. If
          you  do not have a right to a benefit, the statement will tell you how
          many  more  years  you  have to work to have a right to a benefit. You
          must  request this statement in writing. The Plan Administrator is not
          required  to  provide  this  statement more than once a year, but must
          provide  the  statement  free  of  charge.

     (e)  In  addition  for creating rights for plan participants, ERISA imposes
          duties  upon  the  people who are responsible for the operation of the
          employee  benefit  plan.  The  people  who  operate the Plan, the Plan
          Administrator  and  the Trustee, are called "fiduciaries" of the Plan,
          and  have a duty to act prudently and in the interest of you and other
          Plan  Participants  and  Beneficiaries.

          No  one,  including  the fiduciaries, your Employer, your union or any
          other  person,  may  fire you or otherwise discriminate against you in
          any  way to prevent you from obtaining a pension benefit or exercising
          your rights under ERISA. If your claim for a pension benefit is denied
          in  whole  or  in part, the Plan Administrator must provide you with a
          written  explanation  of  the reason for the denial. You also have the
          right to have the Plan Administrator review and reconsider your claim.

          You  can  take  the  following steps to enforce the above rights under
          ERISA:

          1.   If  you  request materials from the Plan Administrator and do not
               receive  them  within  30  days,  you  may file suit in a federal
               court.  In  such  a  case,  the  court  may  require  the  Plan
               Administrator  to  provide the materials and pay you up to $100 a
               day  until  you  receive the materials, unless the materials were
               not  sent  because  of  reasons  beyond  the  control of the Plan
               Administrator.

          2.   If  you  have a claim for benefits which is denied or ignored, in
               whole  or in part, you may file suit in a state or federal court.

          3.   If  the  Plan  fiduciaries misuse the Plan's money, or if you are
               discriminated  against for asserting your rights, you may ask for
               assistance  from  the  U.S.  Department of Labor, or you may file
               suit  in  a  federal  court. The court will decide who should pay
               court  costs and legal fees. If you are successful, the court may
               order  the  person  you have sued to pay these costs and fees. If
               you lose, the court may order you to pay these costs and fees if,
               for  example,  it  finds  your  claim  is  frivolous.

                                        9
<PAGE>
If  you  have  any  questions  about  the  Plan,  you  should  contact  the Plan
Administrator.  If  you  have  any  questions about this statement or about your
rights under ERISA, you should contact the nearest Area Office of the U.S. Labor
-Management  Services  Administration,  Department  of  Labor or the Division of
Technical Assistance and Inquiries, Pension and Welfare Benefits Administration,
U.S.  Department of Labor, 200 Constitution Avenue N.W., Washington, D.C. 20210.

                                 5.  DEFINITIONS

Listed  below  are  definitions  for  some  terms  that are used throughout this
Summary  and  the  Plan.  Since these words may have technical meanings slightly
different  from  their ordinary meanings, please refer to these definitions when
you  are  reading  this  Summary  or  the  Plan  document.

     COMPENSATION

          Compensation means cash compensation

          The  above  definition  of  Compensation  will apply for allocating or
          determining  Salary  Reduction  Contributions,  Employer  Matching
          Contributions,  nondiscrimination tests contained in Article VI of the
          Plan,  and  Section  415  Limitations  on  Allocations.

          Compensation  shall  include  a  Participant's  Salary  Reduction
          Contributions  and other amounts which are excluded from an Employee's
          gross  income  on  a  pre-tax basis. This will apply for allocating or
          determining  Employer  Matching  Contributions,  and nondiscrimination
          testing.

          Compensation shall not include amounts paid during that portion of the
          Plan  Year during which the Employee is not eligible to participate in
          the  Plan.

     EMPLOYER

          Employer means Apollo Gold, Inc. and its subsidiaries.

     HOURS OF SERVICE

          Hours  of  Service  means  any  hours for which you are either paid or
          entitled to be paid by the Employer for performing duties or for other
          reasons  such as vacation, holidays, sick days, maternity or paternity
          leave,  disability,  jury or military duty, layoff or authorized leave
          of  absence.  Hours  of  Service are used when determining whether you
          have  met  the  eligibility  and  vesting  requirements  of  the Plan.

          Please note that Hours of Service you may have accumulated for reasons
          other than performing duties, such as vacation, maternity leave, etc.,
          cannot exceed 501 hours for each continuous period during which you do
          not  perform  any  duties.

     ONE-YEAR BREAK IN SERVICE

          One-Year  Break  in  Service  is  a  12-month  period during which you
          complete  500  or  fewer  Hours of Service (see definition above). The
          12-month  periods  are measured from the day you began working for the
          Employer in the same manner as Years of Service are determined. (Note:
          If  a  "Year  of Service" is defined below as a 12-month period during
          which you complete 501 or less Hours of Service, then a One-Year Break
          in  Service  is a 12-month period during which you do not complete the
          number  of  Hours  of  Service  specified  in  the  "Year  of Service"
          definition  below.)

                                       10
<PAGE>
     PARTICIPANT

          Participant  means  an  employee  who  has  satisfied  the eligibility
          requirements of the Plan and is thereby eligible to participate in the
          Plan.  See  Section  2  of  this  Summary  for  the Plan's eligibility
          requirements.

     PLAN YEAR

          Plan Year means the 12-month period ending on the last day of December
          over  which  Plan  records  are  maintained.

     TOP HEAVY

          Top Heavy describes a Plan in which the sum of account balances of key
          employees  -  that  is,  corporate  officers  and  highly  compensated
          employees  -  exceeds  60%  of  the  sum  of  account  balances of all
          Participants.

     YEAR OF SERVICE

          A  Year  of  Service is a 12-consecutive-month period during which you
          complete  1,000  Hours  of  Service.

     VESTING YEAR

          Vesting  Year  means a year to be accrued on the vesting schedule (see
          "VESTING  OF  CONTRIBUTIONS," page 3). A Vesting Year will be credited
           --------------------------
          to  you for the appropriate measuring period during which you complete
          1000  Hours  of  Service.

          A  Vesting  Year  will  be measured on the 12-consecutive-month period
          beginning  on  the  first  day  you  complete an Hour of Service or an
          anniversary  of  that  date.

                                       11
<PAGE>
                                 7.  REFERENCES

Name of Plan:                            Apollo Gold, Inc. Employee Savings Plan
------------

Plan Number:                             001
-----------

Plan Year:                               The 12 month period ending on the last
-----------                              day of December.

Name, Address and Phone Number
------------------------------
Of Employer:                             Apollo Gold, Inc.
-----------                              601 West First Avenue, Ste. 1500
                                         Spokane, WA 99201
                                         (509) 624-4653

Employer Identification Number:          91-1724754
------------------------------

Employer's Fiscal Year:                  The 12-month period ending on the last
------------------------                 day of December.

Name and Address of Plan Administrator:  Ms. Gayle Newnham
--------------------------------------   Apollo Gold, Inc.
                                         601 West First Avenue, Suite 1500
                                         Spokane, WA 99201

Name and Address of Agent for
-----------------------------
Service of Legal Process:                Donald W. Vagstad
-------------------------                Senior Vice President and
                                         General Counsel
                                         Apollo Gold, Inc.
                                         601 West First Avenue, Suite 1500
                                         Spokane, WA 99201

Name and Address of Trustee:             Scudder Trust Company
---------------------------              11 Northeastern Blvd.
                                         Salem, NH 03079

                                       12
<PAGE>

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