Document:

Exhibit
10.1

     

    EMPLOYMENT
AGREEMENT

    

    THIS EMPLOYMENT AGREEMENT (the
“Agreement”) is entered into by and between WILLIAM H. SHEA, JR., a resident of the
Commonwealth of Pennsylvania (“Executive”), and PENN VIRGINIA RESOURCE GP,
LLC., a Delaware limited liability company (the “Company”), as of this
8th
day of March, 2010 (the “Commencement Date”).

    

    WHEREAS, the Company desires
to retain Executive, and Executive desires to be retained, to serve as President
and Chief Executive Officer of the Company on the terms set forth
herein.

    

    NOW, THEREFORE, in
consideration of the mutual covenants and obligations contained herein, and
intending to be legally bound, the parties agree as follows:

    

    1.      Duties.  Executive
shall have the title of President and Chief Executive Officer of the
Company.  Executive shall report exclusively to and receive
instructions from the Company’s Board of Directors (the “Board”) and shall have
such duties and responsibilities customary for the positions of president and
chief executive officer of public companies similarly
situated.  Executive shall be the most senior executive officer of the
Company and all other executives of the Company shall report to Executive or his
designee.

     

    2.      Term of
Employment.  The term of employment (the “Term”) shall be for a
period of three years commencing on the Commencement Date and ending at midnight
on March 7, 2013, unless terminated earlier pursuant to the terms of this
Agreement; provided, however, that commencing 365 days following the
Commencement Date and on each day thereafter, the Term of this Agreement shall
automatically be extended for one additional day unless the Company shall give
written notice to Executive that the Term shall cease to be so extended in which
event this Agreement shall terminate on the second anniversary of the date such
notice is given.  Notwithstanding anything in this Agreement to the
contrary, if a Change of Control occurs during the Term of this Agreement, the
Term shall automatically be extended until, and shall terminate on, the 24-month
anniversary of the date of the Change of Control.  Furthermore,
Executive’s employment may be terminated at any time prior to the end of the
Term for the following reasons:

     

    (a)          Termination for
Cause.  Notwithstanding the Term of this Agreement, the Company
may discharge Executive for Cause, which shall immediately terminate this
Agreement, and the Company shall not have any further liability hereunder except
to (i) pay to Executive the total amount of Base Salary pursuant to Section 3(a)
hereof, if any, accrued up to the date of termination and (ii) reimburse to
Executive any expenses then reimbursable to Executive under Section 3(f)
hereof.

     

    (b)          Death or
Disability.  In the event of the Disability of Executive for a
total of 180 consecutive days during the Term or in the event of the death of
Executive, this Agreement shall immediately terminate and the Company shall not
have any further liability hereunder except to (i) pay to Executive or his
estate the total amount of Base Salary pursuant to Section 3(a) hereof, if any,
accrued up to the date of termination and (ii) reimburse to Executive or
his estate any expenses then reimbursable to Executive under Section 3(f)
hereof.

     

    3.      Compensation
and Benefits.

     

    (a)          Base Salary.  The
Company shall pay to Executive a salary (the “Base Salary”) at the annual rate
of four hundred thousand dollars ($400,000) effective as of the Commencement
Date, payable in accordance with the Company’s normal practice.  The
Base Salary shall be inclusive of all applicable income, Social Security and
other taxes and charges which are required by law or requested to be withheld by
Executive and which shall be withheld and paid in accordance with the Company’s
normal practice.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

       

    

    (b)          Annual Cash Incentive
Compensation.  Executive shall be eligible to participate in
the Company’s cash incentive compensation program, which shall enable
Executive to earn cash bonus compensation in such amounts, if any, and payable
at such times, if any, as determined in the normal course by the Compensation
and Benefits Committee of the Board (the “Committee”).  Executive’s target
annual bonus shall be 100% of his Base Salary.

     

    (c)          Annual Equity
Incentives.  Executive shall be eligible to participate in the
Company’s equity-based incentive program, which shall enable Executive to earn
equity-based bonus compensation in such amounts, if any, and payable at such
times, if any, as determined in the normal course by the
Committee.  Executive’s target annual equity-based bonus shall be 175%
of his Base Salary.

     

    (d)          Initial Equity
Grant.  On the Commencement Date, the Committee shall grant to
Executive $700,000 worth of phantom units (the “Initial Units”) of the
Partnership pursuant to the Penn Virginia Resource GP, LLC Fifth Amended and
Restated Long-Term Incentive Plan (the “PVR LTIP”).  Executive agrees
that this award of Initial Units shall be subject to all of the terms and
conditions set forth in the PVR LTIP and the Initial Unit Award
Agreement.

     

    (e)          Fringe
Benefits.  Executive shall be entitled to participate in any
other benefit plans, programs, policies and fringe benefits which may be made
available from time to time to the Company’s executive officers, including,
without limitation, disability, medical, dental and life insurance, annual
physicals and benefits under the Company’s 401(k) savings plan.  In
addition, the Company shall pay to Executive an automobile allowance of $1,700
per month.

     

    (f)          Reimbursement of
Expenses.  The Company shall reimburse Executive for all
reasonable and necessary business expenses incurred and advanced by him in
carrying out his duties under this Agreement.  Executive shall present to
the Company an itemized account of all expenses in such form as may be required
by the Company from time to time.

     

    (g)          Vacation
Days.  Executive shall be entitled to four weeks paid vacation
during each calendar year.

     

    4.      Other
Business Activities.  Executive shall serve the Company
faithfully and shall devote his reasonable best efforts and all of his business
time, attention, skill and efforts to the performance of the duties required by
or appropriate for his position as President and Chief Executive
Officer.  In furtherance of the foregoing, and not by way of
limitation, for so long as Executive remains President and Chief Executive
Officer of the Company, Executive shall not directly or indirectly engage in any
other business activities, except for such other activities as would not
interfere with Executive’s ability to carry out his duties under this
Agreement.

     

    5.      Restrictive
Covenants.

     

    (a)          Confidential
Information.  Executive recognizes and acknowledges that, by
reason of his employment by and service to the Company, he has had and shall
continue to have access to confidential information of the Company and its
Affiliates, including, without limitation, analyses, interpretations,
compilations, reports, reservoir data, geologic and geophysical data, maps,
models, financial data, environmental data, information and knowledge pertaining
to products and services offered, plans, trade secrets, proprietary information,
customer lists and relationships among the Company and its Affiliates and
distributors, customers, suppliers and others who have business dealings with
the Company and its Affiliates (“Confidential
Information”).  Executive acknowledges that such Confidential
Information is a valuable and unique asset and covenants that he shall not,
either during or after his employment by the Company, disclose any such
Confidential Information to any Person for any reason whatsoever without the
prior written consent of the Board of Directors, unless such information is in
the public domain through no fault of Executive or except as may be required by
law.

     

    
      
         

      

      
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    (b)          Non-Solicitation.  Executive
shall not, directly or indirectly during the Term and for a period of two years
thereafter, solicit or divert business from, or attempt to convert any account
or customer of the Company or any of its Affiliates, whether existing at the
date hereof or acquired during Executive’s employment.

     

    6.      Equitable
Relief.

     

    (a)          Executive
acknowledges that the restrictions contained in Section 5 hereof are reasonable
and necessary to protect the legitimate interests of the Company and its
Affiliates, that the Company would not have entered into this Agreement in the
absence of such restrictions and that any violation of any provision of Section
5 shall result in irreparable injury to the Company.  Executive
further represents and acknowledges that (i) he has been advised by the
Company to consult his own legal counsel in respect of this Agreement and
(ii) he has had full opportunity, prior to execution of this Agreement, to
review thoroughly this Agreement with his counsel.

     

    (b)          Executive
agrees that the Company or any Affiliate shall be entitled to preliminary and
permanent injunctive relief, without the necessity of proving actual damages or
posting a bond, as well as to an equitable accounting of all earnings, profits
and other benefits arising from any violation of Section 5 hereof, which rights
shall be cumulative and in addition to any other rights or remedies to which the
Company or any Affiliate may be entitled.  In the event that any of
the provisions of Section 5 hereof should ever be adjudicated to exceed any
limitations permitted by applicable law in any jurisdiction, then such
provisions shall be deemed reformed in such jurisdiction to the maximum
limitations permitted by applicable law.

     

    (c)          Executive
irrevocably and unconditionally (i) agrees that any suit, action or other
legal proceeding arising out of Section 5 hereof, including without limitation,
any action commenced by the Company or any Affiliate for preliminary and
permanent injunctive relief or other equitable relief, may be brought in the
United States District Court for the Eastern District of Pennsylvania, or if
such court does not have jurisdiction or shall not accept jurisdiction, in any
court of general jurisdiction in Montgomery County, Pennsylvania,
(ii) consents to the non-exclusive jurisdiction of any such court in any
such suit, action or proceeding and (iii) waives any objection which
Executive may have to the laying of venue of any such suit, action or proceeding
in any such court.  Executive also irrevocably and unconditionally
consents to the service of any process, pleadings, notices or other papers in a
manner permitted by the notice provisions of Section 12 hereof. In the event of
a lawsuit by either party to enforce the provisions of Section 5 of this
Agreement, the prevailing party shall be entitled to recover reasonable costs,
expenses and attorneys’ fees from the other party.

     

    (d)          Executive
agrees that he shall provide, and that the Company may similarly provide, a copy
of Section 5 hereof to any business or enterprise (i) which he may directly
or indirectly own, manage, operate, finance, join, control or participate in the
ownership, management, operation, financing or control of or (ii) with
which he may be connected as an officer, director, employee, partner, principal,
agent, representative, consultant or otherwise, or in connection with which he
may use or permit his name to be used.

     

    
      
         

      

      
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    7.      Change of
Control Severance Benefits.

     

    (a)          If
at any time on or after the one year anniversary of the Commencement Date,
(i) Executive terminates his employment with the Company during the
Protected Period for a Good Reason event or (ii) the Company terminates
Executive’s employment during the Protected Period other than (x) for Cause
or (y) due to Executive’s inability to perform the primary duties of his
position for at least 180 consecutive days due to the Disability of Executive,
Executive shall receive the following compensation and benefits from the Company
subject to the execution (and non-revocation within eight days thereafter) and
delivery to the Company of a release, substantially in the form attached as
Exhibit A
hereto, with such changes as the Company reasonably determines must be made to
comply with applicable law at the time of such execution (the
“Release”):

     

    (A)              The
Company shall, at the time provided in Section 7(e), pay to Executive in a lump
sum, in cash, an amount equal to three times the sum of Executive’s
(1) Termination Base Salary and (2) Bonus.  This payment
shall satisfy any and all obligations of the Company to pay Executive
compensation provided in Section 3(a), (b), (c) and (e) above during the
Term.

     

    (B)              Except
to the extent any awards related to common units of Penn Virginia GP Holdings,
L.P., a Delaware limited partnership (“PVG”), or common units of the Partnership
have already vested or become exercisable, as the case may be, under the PVG GP,
LLC Amended and Restated Long-Term Incentive Plan (the “PVG LTIP”) or the PVR
LTIP, or under any successor or other similar plan, as of the date of
Executive’s termination of employment (1) all restricted PVG units and all
restricted Partnership units of Executive shall become 100% vested and all
restrictions thereon shall lapse and PVG and the Partnership shall promptly
deliver to Executive unrestricted PVG common units and unrestricted Partnership
common units, (2)  all PVG phantom units and all Partnership phantom units
of Executive shall become 100% vested and all restrictions thereon shall lapse
and PVG and the Partnership shall promptly deliver to Executive cash or
unrestricted PVG common units or unrestricted Partnership common units, as
applicable, and (3) each outstanding PVG unit option and Partnership unit
option of Executive shall become 100% exercisable and shall, notwithstanding
anything stated to the contrary in the PVG LTIP, the PVR LTIP, any successor or
other similar plan or any option agreement related thereto, remain exercisable
for the remainder of such option’s term or three years, whichever is
less.

     

    (C)              The
Company shall pay to Executive in a lump sum, at the time provided in Section
7(e), that amount equal to three times the product of (x) the total medical
and dental insurance premiums paid or payable by the Company with respect to
Executive and Executive’s eligible family members during the month in which
Executive’s employment terminates times (y) 12.

     

    (D)              For
the 24-month period beginning on the date on which Executive’s employment
terminates, or until Executive begins other full-time employment with a new
employer, whichever occurs first, Executive shall be entitled to receive
outplacement services that are directly related to Executive’s termination of
employment and are actually provided by an outplacement services firm, paid by
the Company, with a nationally prominent executive outplacement service firm
selected by the Company and reasonably acceptable to Executive; provided,
however, that the period during which the outplacement services shall be covered
and the reimbursements paid do not extend beyond the periods set forth in Treas.
Reg. §1.409A-1(b)(9)(v)(E).

     

    (b)          If
at any time prior to the one year anniversary of the Commencement Date a Change
of Control occurs and (i) Executive terminates his employment with the Company
for a Good Reason event or (ii) the Company terminates Executive’s employment
other than (x) for Cause or (y) due to Executive’s inability to perform the
primary duties of his position for at least 180 consecutive days due to the
Disability of Executive, Executive shall receive the following compensation and
benefits from the Company subject to the execution (and non-revocation within
eight days thereafter) and delivery to the Company of the Release:

     

    
      
         

      

      
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    (A)   The
Company shall, at the time provided in Section 7(e), pay to Executive $400,000
in cash.  This payment shall satisfy any and all obligations of the
Company to pay Executive compensation provided in Section 3(a), (b), (c) and (e)
above during the Term.

     

    (B)    The
Initial Units shall become 100% vested and all restrictions thereon shall lapse
and the Partnership shall promptly deliver to Executive cash or unrestricted
Partnership common units, as applicable, all in accordance with the Initial Unit
Award Agreement.

     

    (c)          Within
one week following the eighth day after the execution (without revocation) of
the Release, the Company shall provide to Executive a release substantially in
the form attached hereto as Exhibit B, with such
changes as the Company reasonably determines must be made to comply with
applicable law at the time of such execution. If the Company does not provide
the release required pursuant to this subsection (c), the Release shall be null,
void and without effect, and Executive shall still receive all of the payments
and benefits described in subsections (a) or (b), as applicable,
above.

     

    (d)          The
Company may withhold from any amounts or benefits payable under this Agreement
all such amounts as it shall be required to withhold pursuant to any applicable
law or regulation.

     

    (e)          Payment
of the amounts described in subsections (a) or (b) above, as applicable, shall
be made within 30 days of Executive’s date of termination (provided that the
Release has been executed and has not been revoked) and shall be made by mail to
the last address provided for notices to Executive pursuant to Section 12 of
this Agreement.  Any payment not timely made by the Company under this
Agreement shall bear interest at 18% per annum or, if less, at the highest
nonusurious rate permitted by applicable law.

     

    (f)          If
any payment to be made, or benefit to be provided, to or on behalf of Executive
pursuant to Section 7 of this Agreement (the “Payments”) results in Executive
being subject to the excise tax imposed by Section 4999 of the Code (or any
successor or similar provision) (the “Excise Tax”), the amount payable to
Executive under Section 7(a) or (b), as applicable, shall be reduced so that the
Payments do not result in Executive being subject to the Excise
Tax.  One or more determinations as to (i) whether any of the
Payments shall be subject to the Excise Tax and (ii) the amount of the
Excise Tax imposed thereon, shall be made by the Company in consultation with
such accounting and tax professionals as the Company considers necessary (with
all costs related thereto paid by the Company).  For purposes of
determining whether any of the Payments shall be subject to the Excise Tax,
(A) all of the Payments shall be treated as “parachute payments” (within
the meaning of section 280G of the Code) unless and to the extent that, in the
written advice of an independent accountant selected (and paid for) by the
Company and reasonably acceptable to Executive (the “Accountant”), certain
Payments should not constitute parachute payments, and (B) all “excess
parachute payments” (within the meaning of section 280G of the Code) shall be
treated as subject to the Excise Tax unless and only to the extent that the
Accountant advises the Company that such excess parachute payments are not
subject to the Excise Tax.

     

    (g)          To
the extent payment with respect to any restricted or phantom unit award under
clause (1) or clause (2) of subsections 7(a)(ii)(B) and 7(b)(ii)(B)
constitutes a payment event for purposes of section 409A of the Code, payment
shall be made at the time specified hereunder only if the transaction
constituting a Change of Control is a “change in control event” within the
meaning given such term under section 409A of the Code.  If the
transaction constituting a Change of Control is not a “change in control event”
within the meaning given such term under section 409A of the Code, payment with
respect to any such restricted or phantom unit awards shall be made at such time
or times as set forth in the PVG LTIP or the PVR LTIP, or any successor or other
similar plan or any grant agreement related thereto.

     

    
      
         

      

      
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    (h)          If
Executive’s employment with the Company terminates prior to, but within six
months of, the date on which a Change of Control occurs, and it is reasonably
demonstrated by Executive that such termination of employment was (1) by
the Company in connection with or in anticipation of the Change of Control or
(2) by Executive under circumstances which would have constituted Good
Reason if the circumstances arose on or after the Change of Control, then for
all purposes of this Agreement the Change of Control shall be deemed to have
occurred, and the Protected Period shall be deemed to have commenced, on the
date immediately prior to the date of such termination of Executive’s
employment; provided, however, that the amount of payments and benefits that
Executive is entitled to receive hereunder as a result of such Change of Control
shall be reduced by the amount of all other severance payments and benefits
previously received by Executive in connection with such termination and,
notwithstanding any provision to the contrary herein, shall be paid to Executive
within 30 days after the six-month anniversary of the date of Executive’s
termination of employment. If Executive’s employment with the Company terminates
as set forth in this Section 7(h), the amount of payments and benefits that
Executive is entitled to receive hereunder as a result of a Change of Control
shall be paid in the form of a lump sum only if the transaction constituting a
Change of Control is a “change in control event” within the meaning given such
term under section 409A of the Code. If the transaction constituting a Change of
Control is not a “change in control event” within the meaning given such term
under section 409A of the Code, the amount of payments and benefits that
Executive is entitled to receive hereunder as a result of a Change of Control
shall be paid in the same form as the other severance payments and benefits
previously received by Executive in connection with such
termination.

     

    8.      Defined
Terms.  For purposes of this Agreement:

     

    (a)          “Affiliate” shall
mean, with respect to any Person, any other Person that directly or indirectly
through one or more intermediaries controls, is controlled by or is under common
control with, the Person in question. As used herein, the term “control” means
the possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of a Person, whether through ownership
of voting securities, by contract or otherwise.

     

    (b)          “Bonus” shall mean an
amount equal to the highest annual cash bonus paid to Executive by the Company
pursuant to Section 3(b) during the two-year period prior to Executive’s
termination of employment.

     

    (c)          “Cause” shall mean
(i) the willful and continued failure by Executive to substantially perform
Executive’s duties with the Company or any Affiliate (other than any such
failure resulting from a Disability), (ii) Executive is convicted of a
felony, (iii) Executive willfully engages in gross misconduct materially
and demonstrably injurious to the Company or any Affiliate or
(iv) Executive commits one or more significant acts of dishonesty as
regards the Company or any Affiliate. For purposes of clause (i) above, no
act, or failure to act, on Executive’s part shall be deemed “willful” unless
done, or omitted to be done, by Executive not in good faith and without
reasonable belief that Executive’s act, or failure to act, was in the best
interest of the Company. In the case of clauses (i), (iii) and
(iv) above, the determination of whether Cause exists shall only be made by
a resolution duly adopted by the affirmative vote of not less than two-thirds of
the entire membership of the Board at a meeting of the Board that was called for
the purpose of considering such termination (after reasonable notice to
Executive and an opportunity for Executive, together with Executive’s counsel,
to be heard before the Board and, if possible, to cure the breach that was the
alleged basis for Cause) finding that, in the good faith opinion of the Board,
Executive was guilty of conduct constituting Cause and specifying the
particulars thereof in detail.

     

    
      
         

      

      
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    (d)          “Change of Control”
shall mean:

     

    (i)         Any
sale, lease, exchange or other transfer (in one or a series of related
transactions) of all or substantially all of the assets of the PVG General
Partner, PVG, the Company or the Partnership;

     

    (ii)         Any
Person or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the
Exchange Act) other than Penn Virginia or its Affiliates becomes the “beneficial
owner” (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of (A) equity securities of the PVG General Partner or the Company
representing more than 50% of the combined voting power of the PVG General
Partner or the Company or (B) equity securities of the Partnership or PVG
representing more than 75% of the combined voting power of PVG or the
Partnership; provided, however, that, notwithstanding the foregoing, if, at any
time during the Change of Control Waiver Period, Penn Virginia enters into an
agreement with any Person or group pursuant to which such Person or group would,
upon the consummation of the transaction contemplated by such agreement, become
the beneficial owner of equity securities described in this Section 8(d)(ii), no
Change of Control shall be deemed to have occurred, and no payment shall be due
to Executive under this Agreement, in connection with such
transaction.

     

    (iii)              The
equity security holders of PVG or the Partnership approve the consummation of a
merger or consolidation of PVG or the Partnership with any other entity, other
than a merger or consolidation which would result in the voting securities of
PVG or the Partnership immediately outstanding prior thereto continuing to
represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity) at least 75% of the combined voting power of
the voting securities of PVG or the Partnership outstanding immediately after
such merger or consolidation; or

     

    (iv)         A
Penn Virginia Change of Control if, at the time of such Penn Virginia Change of
Control, the Company is an Affiliate of Penn Virginia.

     

    (e)          “Change of Control Waiver
Period” shall mean the period commencing on the Commencement Date and
ending on the two month anniversary of the Commencement Date.

     

    (f)          “Code” shall mean the
Internal Revenue Code of 1986, as amended and the regulations promulgated
thereunder.

     

    (g)          “Disability” shall
have the meaning given such term in Section 409A(a)(2)(C) of the
Code.

     

    (h)          “Exchange Act” shall
mean the Securities Exchange Act of 1934, as amended.

     

    (i)          “Good Reason” shall
mean:

     

    (i)         a
reduction in Executive’s authority, duties, titles, status or responsibilities
from those in effect immediately prior to the Change of Control or the
assignment to Executive of duties or responsibilities inconsistent in any
respect from those of Executive in effect immediately prior to the Change of
Control, but excluding any action or omission by the Company that is immaterial,
isolated, insubstantial and inadvertent and which was not taken in bad faith by
the Company and is remedied by the Company promptly after receipt of notice
thereof given by Executive;

     

    (ii)         a
material breach of this Agreement by the Company;

     

    
      
         

      

      
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    (iii)              the
Company fails to obtain a written agreement from any successor or assigns of the
Company to assume and perform this Agreement as provided in Section 11 hereof;
or

     

    (iv)         the
relocation by more than 100 miles of the Company’s Houston, Texas office,
Dallas, Texas office or office at which the Executive is based immediately prior
to the Change of Control or the Company requires Executive, without Executive’s
written consent, to be based at any office other than the Company’s Houston,
Texas office, Dallas, Texas office or office at which the Executive was based
prior to the Change in Control if the new office location is more than 50 miles
away from the Houston, Dallas or original office location.

     

    Executive
shall give the Company notice in accordance with Section 12 below within 90 days
following an act or omission to act by the Company constituting Good Reason
hereunder of Executive’s intent to resign for Good Reason, and the Company shall
have 30 days from the date of such notice to cure the circumstances or events
giving rise to Executive’s right to resign for Good Reason, if capable of being
cured, so as to eliminate the existence of Good Reason for Executive’s
resignation, and, in the event the Company does not cure such circumstances or
events, then unless Executive terminates his employment upon the expiration of
the foregoing 30-day cure period, Executive’s continued employment after the
expiration of such 30-day cure period shall constitute Executive’s consent to,
and a waiver of Executive’s rights with respect to, such act or failure to
act.  [Executive’s right to terminate Executive’s employment for Good
Reason shall not be affected by Executive’s incapacity due to physical or mental
illness.]  Executive’s determination that an act or failure to act
constitutes Good Reason shall be presumed to be valid unless such determination
is deemed by an arbitrator to be unreasonable and not to have been made in good
faith by Executive.

     

    For
purposes of this Agreement, the Company shall be in material breach of this
Agreement pursuant to Section 8(i)(ii), if (A) the Company reduces
Executive’s Base Salary by an amount which results in Executive receiving a Base
Salary which is less than 95% of Executive’s Termination Base Salary or
(B) the Company fails to continue in effect any material incentive
compensation plan or arrangement (unless replacement plans providing Executive
with substantially similar benefits are adopted) or the Company takes any action
that would adversely affect Executive’s participation in any such plan or
arrangement or reduce Executive’s incentive compensation opportunities under
such plan or arrangement, as the case may be.

     

    (j)          “Initial Unit Award
Agreement” shall mean the agreement pursuant to which the Initial Units
are granted and shall be in the form of Exhibit C
hereto.

     

    (k)          “PVG” shall mean Penn
Virginia GP Holdings, L.P., a Delaware limited partnership.

     

    (l)          “PVG General Partner”
shall mean the general partner of PVG.

     

    (m)          “Partnership” shall
mean Penn Virginia Resource Partners, L.P., a Delaware limited
partnership.

     

    (n)          “Penn Virginia” shall
mean Penn Virginia Corporation, a Virginia corporation.

     

    (o)          “Penn Virginia Change of
Control” shall mean the occurrence of any of the following:

     

    (i)         any
Person or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the
Exchange Act), other than a trustee or other fiduciary holding securities under
an employee benefit plan of Penn Virginia, becomes the “beneficial owner” (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of Penn Virginia representing 25% or more of the combined voting
power of Penn Virginia’s then outstanding voting securities;

     

    
      
         

      

      
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    (ii)         during
any period of two consecutive years, individuals who at the beginning of such
period constitute the Board of Directors of Penn Virginia (the “Penn Virginia
Board”), and any new director (other than a director designated by a person who
has entered into an agreement with Penn Virginia to effect a transaction
described in clause (i), (iii) or (v) of this Penn Virginia Change of
Control definition and excluding any individual whose initial assumption of
office occurs as a result of either (x) an actual or threatened election
contest (as such terms are used in Rule 14a-11 of Regulation 14A promulgated
under the Exchange Act), or (y) an actual or threatened solicitation of
proxies or consents by or on behalf of a Person other than the Penn Virginia
Board) whose election by the Penn Virginia Board or nomination for election by
Penn Virginia’s shareholders was approved by a vote of at least two-thirds of
the directors then still in office who either were directors at the beginning of
the period or whose election or nomination for election was previously so
approved, cease for any reason (other than retirement) to constitute at least a
majority thereof;

     

    (iii)              the
shareholders of Penn Virginia approve the consummation of a merger or
consolidation of Penn Virginia with any other corporation, other than a merger
or consolidation which would result in the voting securities of Penn Virginia
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) at least 75% of the combined voting power of the voting
securities of Penn Virginia (or such surviving entity or parent entity, as the
case may be) outstanding immediately after such merger or consolidation;
or

     

    (iv)         the
shareholders of Penn Virginia approve a plan of complete liquidation of Penn
Virginia.

     

    (p)          “Person” shall mean an
individual or a corporation, limited liability company, partnership, joint
venture, trust, unincorporated organization, association, government agency or
political subdivision thereof or other entity.

     

    (q)          “Protected Period”
shall mean the 24-month period beginning on the effective date of a Change of
Control.

     

    (r)          “Termination Base
Salary” shall mean that amount equal to Executive’s Base Salary with the
Company at the rate in effect immediately prior to the Change of Control or, if
a greater amount, Executive’s Base Salary at the rate in effect at any time
thereafter.

     

    9.      Representation
of Executive.  Executive hereby represents and warrants to
Company that he is not now under any contractual or other obligation that is
inconsistent with or in conflict with this Agreement or that would prevent,
limit or impair the Executive’s performance of his obligations under this
Agreement.

     

    10.    Survival
of Provisions.  The provisions of this Agreement shall survive
the termination of Executive’s employment hereunder and the payment of all
amounts payable and delivery of all post-termination compensation and benefits
pursuant to this Agreement incident to any such termination of
employment.

     

    11.    Successors
and Assigns.  This Agreement shall inure to the benefit of and
be binding upon Company and its successors or permitted assigns and Executive
and his executors, administrators or heirs. The Company shall require any
successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the
Company to, and each successor shall, assume expressly in writing prior to the
effective date of such succession and agree to perform this Agreement in the
same manner and to the same extent that the Company would be required to perform
if no succession had taken place.  Failure of the successor to so
assume as provided herein shall constitute a breach of this Agreement and
entitle Executive to the payments and benefits hereunder as if triggered by a
termination of Executive by the Company other than for Cause on the date of such
succession.  Executive may not assign any obligations or
responsibilities under this Agreement or any interest herein, by operation of
law or otherwise, without the prior written consent of the Company.

     

    
      
         

      

      
        -9-

        
          

        

      

      
         

      

       

    

    12.    Notices. All
notices and other communications hereunder shall be in writing and shall be
given by hand delivery to the other party or by registered or certified mail,
return receipt requested, postage prepaid, addressed as set forth below or to
such other address as either party shall have furnished to the other in writing
in accordance herewith.  Notices and communications shall be effective
when actually received by the addressee:

     

    

    (a)          If
to Executive:

     

    Address
on file at the offices of the Company

    

    (b)          If
to the Company:

     

    7
Sheridan Square, Suite 400

    Kingsport,
Tennessee 37660

    Attn:
Chairman, Compensation and Benefits Committee

    

    13.    Mitigation. Executive
shall not be required to mitigate the amount of any payment provided for in this
Agreement by seeking other employment or otherwise nor shall the amount of any
payment or benefit provided for in this Agreement be reduced as the result of
employment by another employer or self-employment or offset against any amount
claimed to be owed by Executive to the Company or otherwise, except that
Executive shall waive, in a manner acceptable to the Company in its reasonable
judgment, all rights to receive any severance payments or benefits that
Executive is entitled to receive pursuant to any other Company severance plan or
program.

     

    14.    Entire
Agreement; Amendments.  This Agreement and any other documents,
instruments or other writings delivered or to be delivered in connection with
this Agreement as specified herein constitute the entire agreement among the
parties with respect to the subject matter of this Agreement and supersede all
prior and contemporaneous agreements, understandings, and negotiations, whether
written or oral, with respect to the terms of Executive’s employment by the
Company. This Agreement may be amended or modified only by a written instrument
signed by the Company and Executive that is approved by the Chairperson of the
Committee.  Termination of this Agreement shall not alter or impair
any rights of Executive arising hereunder on or before such
termination.

     

    15.    Waiver.  The
waiver of the breach of any term or provision of this Agreement shall not
operate as or be construed to be a waiver of any other or subsequent breach of
this Agreement.

     

    16.    Governing
Law.  This Agreement shall be governed and construed as to its
validity, interpretation and effect by the laws of the State of Delaware,
without regard to conflicts of laws principles.

     

    17.    Severability.  Any
provision of this Agreement that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions of this Agreement or such provisions, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

     

    
      
         

      

      
        -10-

        
          

        

      

      
         

      

       

    

    18.    Section Headings.  The
section headings in this Agreement are for convenience only; they form no part
of this Agreement and shall not affect its interpretation.

     

    19.    Counterparts.  This
Agreement may be executed in any number of counterparts, and each such
counterpart shall be deemed to be an original instrument, but all such
counterparts together shall constitute one and the same instrument.

     

    20.    Indemnification. In
any situation where under applicable law the Company has the power to indemnify,
advance expenses to and defend Executive in respect of any judgments, fines,
settlements, losses, costs or expenses (including attorneys’ fees) of any nature
related to or arising out of Executive’s activities as an agent, employee,
officer or director of the Company or any Affiliate or in any other capacity on
behalf of or at the request of the Company or any Affiliate, then the Company or
any Affiliate shall promptly on written request, fully indemnify Executive,
advance expenses (including attorneys’ fees) to Executive and defend Executive
to the fullest extent permitted by applicable law, including but not limited to
making such findings and determinations and taking any and all such actions as
the Company or any Affiliate may, under applicable law, be permitted to take so
as to effectuate such indemnification, advancement or defense. Such agreement by
the Company shall not be deemed to impair any other obligation of the Company
respecting Executive’s indemnification or defense otherwise arising out of this
or any other agreement or promise of the Company under any statute.

     

    21.    Arbitration. Any dispute about the
validity, interpretation, effect or alleged violation of this Agreement, other
than with respect to Section 5 or 6 (an “arbitrable dispute”), must be submitted
to confidential arbitration in Philadelphia, Pennsylvania. Arbitration shall
take place before an experienced employment arbitrator licensed to practice law
in such state and selected in accordance with the Model Employment Arbitration
Procedures of the American Arbitration Association. Arbitration shall be the
exclusive remedy of any arbitrable dispute. The Company shall bear all fees,
costs and expenses of arbitration, including its own, those of the arbitrator
and those of Executive unless the arbitrator provides otherwise with respect to
the fees, costs and expenses of Executive; in no event shall Executive be
chargeable with the fees, costs and expenses of the Company or the arbitrator.
The Company shall advance to Executive all expenses incurred by Executive in
connection with an arbitrable dispute and, if the arbitrator determines that
Executive is the losing party in such dispute, Executive shall reimburse such
expenses to the Company unless the arbitrator provides otherwise. Should any
party to this Agreement pursue any arbitrable dispute by any method other than
arbitration, the other party shall be entitled to recover from the party
initiating the use of such method all damages, costs, expenses and attorneys’
fees incurred as a result of the use of such method. Notwithstanding anything
herein to the contrary, nothing in this Agreement shall purport to waive or in
any way limit the right of any party to seek to enforce any judgment or decision
on an arbitrable dispute in a court of competent jurisdiction. Each party hereby
irrevocably submits to the exclusive jurisdiction of the federal courts in
Philadelphia, Pennsylvania and the state courts in Montgomery County,
Pennsylvania for the purposes of any proceeding arising out of this
Agreement.

     

    22.    Section
409A of the Internal Revenue Code.

     

    (a)          This
Agreement shall be interpreted to avoid any penalty sanctions under section 409A
of the Code. If any payment or benefit cannot be provided or made at the time
specified herein without incurring sanctions under section 409A of the Code,
then such benefit or payment shall be provided in full at the earliest time
thereafter when such sanctions shall not be imposed. For purposes of section
409A of the Code, all payments to be made upon a termination of employment under
this Agreement may only be made upon a “separation from service” within the
meaning of such term under section 409A of the Code and each payment under this
Agreement shall be treated as a separate payment. All reimbursements and in-kind
benefits provided under this Agreement shall be made or provided in accordance
with the requirements of section 409A of the Code, including, where applicable,
the requirement that (i) any reimbursement shall be for expenses incurred
during Executive’s lifetime (or during a shorter period of time specified in
this Agreement), (ii) the amount of expenses eligible for reimbursement, or
in-kind benefits provided, during a calendar year may not affect the expenses
eligible for reimbursement, or in-kind benefits to be provided, in any other
calendar year, (iii) the reimbursement of an eligible expense shall be made
on or before the last day of the calendar year following the year in which the
expense is incurred and (iv) the right to reimbursement or in-kind benefits
is not subject to liquidation or exchange for another benefit.

     

    
      
         

      

      
        -11-

        
          

        

      

      
         

      

       

    

    (b)          Notwithstanding
any provision of this Agreement to the contrary, if, at the time of Executive’s
“separation from service” with the Company, the Company has securities which are
publicly traded on an established securities market and Executive is a
“specified employee” (as defined in section 409A of the Code) and it is
necessary to postpone the commencement of any compensation payments or benefits
otherwise payable pursuant to this Agreement as a result of such “separation
from service” to prevent any accelerated or additional tax under section 409A of
the Code, then the Company shall postpone the commencement of the payment of any
such compensation payments or benefits hereunder (without any reduction in such
payments or benefits ultimately paid or provided to Executive) that are not
otherwise paid within the “short-term deferral exception” under Treas. Reg.
section 1.409A-1(b)(4) and the “separation pay exception” under Treas. Reg.
section 1.409A-1(b)(9)(iii), until the first payroll date that occurs after the
date that is six months following Executive’s “separation from service” with the
Company. If any payments or benefits are postponed due to such requirements,
such amounts shall be paid in a lump sum to Executive on the first payroll date
that occurs after the date that is six months following Executive’s “separation
from service” with the Company. If Executive dies during the postponement period
prior to the payment of the postponed amount, the amounts postponed on account
of section 409A of the Code shall be paid to the personal representative of
Executive’s estate within 60 days after the date of Executive’s death. In no
event shall Executive, directly or indirectly, designate the calendar year of
payment.

    

     

    

     

    [Remainder
of page intentionally left blank.]

     

    
      
         

      

      
        -12-

        
          

        

      

      
         

      

    

     

    IN WITNESS WHEREOF, the
parties have caused this Agreement to be executed the day and year first written
above.

     

    
      	 
      	
              COMPANY:

            
	 
      	
              PENN
      VIRGINIA RESOURCE GP, LLC

            
	 	 
	 
      	
              By: 
      Nancy M.
      Snyder                                       
      

            
	 
      	
              Name:
      Nancy M. Snyder

            
	 
      	
              Title:  
      Vice President

            
	 
      	 
      
	 
      	 
      
	 
      	
              EXECUTIVE:

            
	 
      	 
      
	 
      	
              By: 
      /s/ William H. Shea,
      Jr.                                
      

            
	 
      	
              William
      H. Shea, Jr.

            

    

    

    

    JOINDER:

    

    PVG GP, LLC hereby agrees to comply
with the provisions of Section 7(a)(ii)(B) hereof.

    

    
      	 
      	
              PVG
      GP, LLC

            
	 	 
	 
      	
              By: 
      Nancy M.
      Snyder                                        
      

            
	 
      	
              Name:
      Nancy M. Snyder

            
	 
      	
              Title:  
      Vice PresidentEXECUTION
COPY

    

    March 9,
2010

     

    
      
        	
                Linear
      Gold Corp.

                Suite
      502, 2000 Barrington Street

                Halifax,
      Nova Scotia

                B3J
      3K1

                Attention:  Wade K.
      Dawe

              	 
      	 
      

      

    

    

    Dear
Wade:

    

    Re:           Proposed
Business Combination

    

    Subject
to the terms and conditions set forth below, it is proposed that the businesses
of Linear Gold Corp. (“Linear”) and Apollo Gold
Corporation (“Apollo”)
will be combined upon the implementation of a plan of arrangement (the “Arrangement”) pursuant to the
provisions of the Canada
Business Corporations Act (the “CBCA”) on the basis set out
herein; however, the final structure will be determined mutually by Linear and
Apollo based on tax, securities and corporate laws and other considerations. The
acceptance of this binding letter of intent will be followed by the parties
entering into the Definitive Agreement (as hereafter defined).  All
documentation shall be in a form and content satisfactory to each of the
parties, acting reasonably and in good faith.

     

    
      	
              1.

            	
              Structure
      of the Arrangement

            

    

     

    The
completion of the Arrangement will be subject to the approval of the applicable
securityholders of Linear and Apollo.  Pursuant to the Arrangement, it
is expected that:

     

    
      	
               
      

            	
              (a)

            	
              Linear
      will be amalgamated with a wholly-owned subsidiary of Apollo to be
      incorporated under the federal laws of Canada (the “Amalgamation”);

            

    

     

    
      	
               
      

            	
              (b)

            	
              the
      common shares of Linear (“Linear Shares”) will be
      exchanged for common shares of Apollo (“Apollo Shares”) on the
      basis of 5.4742 Apollo Shares for each Linear Share (the “Exchange
      Ratio”);

            

    

     

    
      	
               
      

            	
              (c)

            	
              the
      warrants of Linear (the “Linear Warrants”) will
      be exchanged for warrants of Apollo (the “Apollo Warrants”) on the
      basis of the Exchange Ratio and the exercise price of the Linear Warrants
      will be adjusted as provided for in the certificates representing the
      Linear Warrants;

            

    

     

    
      	
               
      

            	
              (d)

            	
              the
      options of Linear (the “Linear Options”) granted
      under Linear's Stock Option Plan will be exchanged for options of Apollo
      (the “Apollo
      Options”) granted under Apollo's Stock Option Plan on the basis of
      the Exchange Ratio and the exercise price of the Linear Options will be
      adjusted on the same basis as the exercise price of the Linear Warrants
      shall be adjusted as provided for in Section 1(c) hereto, provided that
      current employees of Linear holding Linear Options whose employment is
      terminated in connection with the Arrangement shall have their Linear
      Options exchanged for Apollo Options which shall expire on the earlier of:
      (i) the current expiry date of the corresponding Linear Options; and (ii)
      the first anniversary of the date of completion of the Arrangement,
      regardless of whether such employees are otherwise “eligible persons”
      under the terms of the Apollo Stock Option Plan or applicable Toronto
      Stock Exchange (the “TSX”)
      rules.  In connection with the Arrangement, the number of Apollo
      Shares reserved for issuance under Apollo’s Stock Option Plan shall be
      increased to accommodate the grant of the number of Apollo Options
      required to be granted upon exchange of all outstanding Linear
      Options;

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    - 2 -

     

    
      	
               
      

            	
              (e)

            	
              Apollo
      Options held by current directors of Apollo that will not continue to be
      directors of Apollo upon completion of the Arrangement will be amended to
      provide that such Apollo Options shall expire on the earlier of: (i) the
      current expiry date of such Apollo Options; and (ii) the first anniversary
      of the date of completion of the Arrangement, regardless whether such
      directors are “eligible persons” under the terms of the Apollo Stock
      Option Plan or applicable TSX rules;
and

            

    

     

    
      	
               
      

            	
              (f)

            	
              the
      62,500,000 Apollo Shares acquired by Linear pursuant to the Private
      Placement (as hereinafter defined) shall be cancelled without any payment
      effective as of the date of closing of the
  Arrangement.

            

    

     

    
      	
              2.

            	
              Other
      Matters

            

    

     

    In
connection with the completion of the Arrangement:

     

    
      	
               
      

            	
              (a)

            	
              the
      parties will agree on a new name for Apollo;
and

            

    

     

    
      	
               
      

            	
              (b)

            	
              the
      Board of Directors of Apollo upon closing shall consist of seven (7)
      directors, including Wade Dawe who will be nominated as the Chairman of
      the Board of  Directors, four (4) current Apollo board members
      or Apollo nominees, one (1) Linear nominee and one (1) nominee who shall
      be a technical person mutually agreed upon by Apollo and
      Linear.

            

    

     

    
      	
              3.

            	
              Private
      Placement Financing

            

    

     

    As
promptly as reasonably possible following the execution of this letter of
intent, Apollo and Linear will prepare and, subject only to the approval of the
TSX and NYSE Amex Exchange (the “AMEX”), enter into customary
documents in respect of the private placement by Apollo to Linear of
approximately 62,500,000 Apollo Shares at a price of CAD$0.40 per share (the
“Private Placement”) for
aggregate gross proceeds of CAD$25,000,000 (the “Subscription Funds”).  The
Subscription Funds less the amount of Linear’s expenses incurred in connection
with the Private Placement as provided in Section 25 of this letter of intent
(the “Expenses”) shall
be payable upon closing of the Private Placement against delivery of definitive
certificates evidencing the Apollo Shares. Closing of the Private Placement
shall be subject to the terms and conditions set out in the subscription
agreement (the “Subscription Agreement”) to be entered into between the parties,
and shall include receipt of:

    

    
      	
               
      

            	
              ·

            	
              all
      necessary approvals of the TSX and AMEX to ensure, among other things,
      that the Apollo Shares issuable upon closing of the Private Placement
      shall be listed and posted for trading on such
  exchanges.

            

    

    

    
      	
               
      

            	
              ·

            	
              to
      the extent not delivered prior to closing of the Private Placement, Apollo
      shall have delivered (or caused its counsel to have delivered) to Linear
      customary corporate and securities law opinions in respect of Apollo, as
      well as title opinions in respect of the Black Fox, Grey Fox and Pike
      River properties, in each case in form and substance satisfactory to
      Linear and its counsel, acting
reasonably;

            

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    - 3 -

     

    
      	
               
      

            	
              ·

            	
              each
      of Macquarie Bank Limited
      and RMB Australia Holdings Limited (collectively, the “Lenders”) shall have
      entered into a support agreement, in form and substance satisfactory to
      the Linear, pursuant to which each Lender agrees, among other
      things, to support and vote in favour of the Arrangement;
      and

            

    

    

    
      	
               
      

            	
              ·

            	
              each
      of the Lenders shall have entered into a lock-up agreement, in form and
      substance satisfactory to Linear, pursuant to which each Lender agrees,
      among other things, not to, directly or indirectly, exercise or offer,
      sell, contract to sell, lend, swap, or enter into any other agreement to
      transfer the economic consequences of any of the Common Shares or common
      share purchase warrants of the Company held by them until December 31,
      2010.

            

    

    

    The
Apollo Shares issued pursuant to the Private Placement shall be subject to a
restricted period not to exceed four months and one day as set out in National
Instrument 45-102 and will be “restricted securities” under United States
federal and state securities laws.

    

    The
Private Placement shall not be conditional on the completion of the
Arrangement.  In the event the Arrangement is not completed for any
reason, Apollo covenants to, upon the request of Linear, file a registration
statement with the United States Securities and Exchange Commission in respect
of the Apollo Shares to register the resale of the Apollo Shares by Linear in
the United States.  Such registration statement shall be filed as soon
as practicable following the request of Linear and in any event within 60 days
of such request.

    

    The
Private Placement will close on or about March 10, 2010, subject to the
conditions set out therein.

     

    
      	
              4.

            	
              Definitive
      Agreement

            

    

     

    Linear
and Apollo shall enter into a definitive arrangement agreement (the “Definitive Agreement”) on or
before March 31, 2010 to implement the Arrangement to provide for the business
combination of Linear and Apollo, such Definitive Agreement to supersede this
letter of intent in its entirety.  All parties will work together to
achieve mutually agreeable structuring of the Arrangement before the execution
of the Definitive Agreement, having regard to relevant Canadian and U.S.
securities and corporate laws and regulatory, stock exchange, tax and economic
considerations.  It is intended that the Arrangement will be
structured to allow the holders of Linear Shares who are residents of Canada to
receive Apollo Shares on a tax-deferred basis for Canadian income tax purposes,
to allow holders of Linear Shares who are U.S. taxpayers to receive Apollo
Shares on a tax deferred rollover basis for United States tax purposes and to
provide that holders of Linear Options whose options are exchanged for Apollo
Options are not liable to pay Canadian income taxes in respect of such exchange
as a result of the Arrangement.  It is also intended that, assuming
the Arrangement is carried out by way of plan of arrangement, the Arrangement
will be structured to qualify for the exemption from registration provided by
Section 3(a)(10) of the U.S.
Securities Act of 1933, as amended.

     

    It is
intended that the Definitive Agreement shall contain, in addition to the
representations, warranties, covenants, conditions and other terms specified
herein, customary representations and warranties by each of the parties in
favour of the other parties, and such other customary terms, covenants and
conditions as would be customary for a transaction of this nature.

     

    
      	
              5.

            	
              Break
      Fee

            

    

     

    If Linear
terminates this letter of intent or the Definitive Agreement and abandons the
Arrangement prior to closing for any reason (other than as a result of the
failure of a condition to Linear's obligation to close contained in this letter
of intent or the Definitive Agreement not being satisfied, other than the
failure to obtain the approval of its shareholders of the Arrangement in the
required majority), Linear shall pay to Apollo an amount equal to CAD$4,000,000
(the “Linear Break
Fee”).

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    - 4 -

     

    If Apollo
terminates this letter of intent or the Definitive Agreement and abandons
the Arrangement prior to closing for any reason (other than as a result of the
failure of a condition to Apollo's obligation to close contained in this letter
of intent or the Definitive
Agreement not being satisfied, other than the failure to obtain the approval of
its shareholders of the Arrangement in the required majority), Apollo shall pay
to Linear an amount equal to CAD$4,000,000 (the “Apollo Break
Fee”).

     

    
      	
              6.

            	
              Management

            

    

     

    Management
terminations, buyouts and severance payments will be effected by Linear and paid
out to Linear management and staff on closing of the Arrangement in accordance
with management contracts and common law amounts and are expected to total
approximately CAD$3,400,000.

     

    
      	
              7.

            	
              Director
      and Officer Insurance

            

    

     

    Prior to
the completion of the Arrangement, Apollo shall purchase and maintain director
and officer liability “run-off” insurance for the benefit of the former
directors and officers of Linear for a period of not less than six (6) years
following the completion of the Arrangement, with coverage of not less than
CAD$10,000,000, with respect to claims arising from facts or events that
occurred on or before the closing of the Arrangement, including with respect to
the Arrangement.  Such insurance shall be at all times no less
favourable than any insurance coverage Apollo purchases and maintains for the
benefit of its then current directors and officers from time to time and Apollo
covenants and agrees to maintain such policy in full force and effect and not to
take any action to diminish the scope and extent of such insurance coverage for
and throughout such period. The former officers and directors of Linear shall be
indemnified by Apollo and Linear in accordance with the terms of the by-laws of
Linear as currently constituted, in addition to the terms of any indemnity
agreements entered into between Linear and such officers and directors, the
terms of which agreements shall be binding upon Apollo.

     

    
      	
              8.

            	
              Support
      Agreements

            

    

     

    
      	
               
      

            	
              (a)

            	
              Linear Support
      Agreements:  It will be a condition to Apollo entering
      into the Definitive Agreement that all directors and officers of Linear
      enter into support agreements (the “Linear Support
      Agreements”) under which they agree to vote in favour of the
      Arrangement all of the Linear Shares currently owned or controlled by
      them, being an aggregate of 3,415,887 Linear Shares representing, in
      aggregate, approximately 6.21% of the outstanding Linear Shares
      (calculated on a fully-diluted
basis).

            

    

     

    The
Linear Support Agreements will include the typical covenants, including, but not
limited to, covenants that the subject shareholders will:

    

    
      	
               
      

            	
              (i)

            	
              immediately
      cease and terminate existing discussions, if any, with any person with
      respect to any potential direct or indirect acquisition of, or any other
      business combination involving, Linear or any material part of its assets
      (a “Linear
      Proposal”) and will not, directly or indirectly, make, solicit,
      assist, initiate, encourage or otherwise facilitate any inquiries,
      proposals or offers from any person, other than Apollo or its affiliates,
      relating to any Linear Proposal or participate in, any discussions or
      negotiations regarding any information with respect to any Linear
      Proposal;

            

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    - 5 -

     

    
      	
               
      

            	
              (ii)

            	
              not
      sell, transfer or encumber in any way any of the subject shareholder's
      Linear Shares or securities convertible into such Linear Shares or
      restrict such shareholder's right to vote any of its Linear Shares, other
      than pursuant to the Arrangement;

            

    

     

    
      	
               
      

            	
              (iii)

            	
              not,
      prior to the public announcement by Apollo of the terms of the
      Arrangement, directly or indirectly, disclose to any person, the existence
      or the terms and conditions of the Linear Support Agreement, the
      Arrangement or the possibility of the Arrangement being
    made;

            

    

     

    
      	
               
      

            	
              (iv)

            	
              take
      such steps as are required to ensure that the subject shareholder has
      beneficial ownership, with good and marketable title, to such
      shareholder's Linear Shares;

            

    

     

    
      	
               
      

            	
              (v)

            	
              not
      do indirectly that which it may not do directly in respect of the
      restrictions on its rights with respect to the subject shareholder's
      Linear Shares pursuant to the applicable Linear Support Agreement by the
      sale of any direct or indirect holding company or the granting of a proxy
      on the shares of any direct or indirect holding company and which would
      have, indirectly, any effect prohibited by the Linear Support Agreement;
      and

            

    

     

    
      	
               
      

            	
              (vi)

            	
              vote
      all the subject shareholder's Linear Shares against any proposed action,
      other than in connection with the
Arrangement:

            

    

     

    in
respect of any amalgamation, merger, sale of Linear's or its affiliates' or
associates' assets, take-over bid, plan of arrangement, reorganization,
recapitalization, shareholder rights plan, liquidation or winding-up of, reverse
take-over or other business combination or similar transaction involving Linear
or any of its subsidiaries,

     

    
      	
               
      

            	
              A.

            	
              which
      would reasonably be regarded as being directed towards or likely to
      prevent or delay the successful completion of the Arrangement or an
      alternative transaction, or

            

    

     

    
      	
               
      

            	
              B.

            	
              which
      would reasonably be expected to result in a Material Adverse Effect on
      Linear.

            

    

     

     

    “Material Adverse Effect” when
used in connection with an entity means any change (including a decision to
implement such a change made by the board of directors or by senior management
who believe that confirmation of the decision by the board of directors is
probable), event, violation, inaccuracy, circumstance or effect that is
materially adverse to the business, assets (including intangible assets),
liabilities, capitalization, ownership, financial condition or results of
operations of such entity and its parent (if applicable) or subsidiaries, taken
as a whole;

     

    Linear
agrees to use its reasonable best efforts to cause significant institutional
shareholders of Linear
to enter into a Linear Support Agreement.

     

    
      	
               
      

            	
              (b)

            	
              Apollo Support
      Agreements: It will be a condition to Linear entering into the
      Definitive Agreement that all directors and officers of Apollo enter into
      support agreements (the “Apollo Support Agreements”)
      under which they agree to vote in favour of the Arrangement all of the
      Apollo Shares currently owned or controlled by them being an aggregate of
      3,736,273 Apollo Shares representing, in aggregate, approximately 1% of
      the outstanding Apollo Shares (calculated on a fully-diluted
      basis)

            

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    - 6 -

     

    The
Apollo Support Agreements will include the typical covenants, including, but not
limited to, covenants that the subject shareholders will:

    

    
      	
               
      

            	
              (i)

            	
              immediately
      cease and terminate existing discussions, if any, with any person with
      respect to any potential direct or indirect acquisition of, or any other
      business combination involving, Apollo or any material part of its assets
      (an “Apollo
      Proposal”) and will not, directly or indirectly, make, solicit,
      assist, initiate, encourage or otherwise facilitate any inquiries,
      proposals or offers from any person, other than Linear or its affiliates,
      relating to any Apollo Proposal or participate in, any discussions or
      negotiations regarding any information with respect to any Apollo
      Proposal;

            

    

     

    
      	
               
      

            	
              (ii)

            	
              not
      sell, transfer or encumber in any way any of the subject shareholder's
      Apollo Shares or securities convertible into such Apollo Shares or
      restrict such shareholder's right to vote any of its Apollo Shares, other
      than pursuant to the Arrangement;

            

    

     

    
      	
               
      

            	
              (iii)

            	
              not,
      prior to the public announcement by Apollo of the terms of the
      Arrangement, directly or indirectly, disclose to any person, the existence
      or the terms and conditions of the Apollo Support Agreements, the
      Arrangement or the possibility of the Arrangement being
    made;

            

    

     

    
      	
               
      

            	
              (iv)

            	
              take
      such steps are required to ensure that the subject shareholder has
      beneficial ownership, with good and marketable title, to such
      shareholder's Apollo Shares;

            

    

     

    
      	
               
      

            	
              (v)

            	
              not
      do indirectly that which it may not do directly in respect of the
      restrictions on its rights with respect to the subject shareholder's
      Apollo Shares pursuant to the applicable Apollo Support Agreement by the
      sale of any direct or indirect holding company or the granting of a proxy
      on the shares of any direct or indirect holding company and which would
      have, indirectly, any effect prohibited by the Apollo Support Agreement;
      and

            

    

     

    
      	
               
      

            	
              (vi)

            	
              vote
      all the subject shareholder's Apollo Shares against any proposed action,
      other than in connection with the
Arrangement

            

    

     

    in
respect of any amalgamation, merger, sale of Apollo's or its affiliates' or
associates' assets, take-over bid, plan of arrangement, reorganization,
recapitalization, shareholder rights plan, liquidation or winding-up of, reverse
take-over or other business combination or similar transaction involving Apollo
or any of its subsidiaries,

     

    
      	
               
      

            	
              A.

            	
              which
      would reasonably be regarded as being directed towards or likely to
      prevent or delay the successful completion of the Arrangement or an
      alternative transaction, or

            

    

     

    
      	
               
      

            	
              B.

            	
              which
      would reasonably be expected to result in an Apollo Material Adverse
      Effect.

            

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    - 7 -

     

    Apollo
agrees to use its reasonable best efforts to cause significant institutional
shareholders of Apollo to enter into an Apollo Support Agreement.

     

    
      	
              9.

            	
              Securityholder
      Approvals

            

    

     

    The
parties will prepare a joint information circular – proxy statement (the “Information Circular”) to be
mailed to applicable securityholders of Linear and Apollo for the purpose of
their respective securityholder meetings to be called to consider the
Arrangement and related matters. Each of the parties shall provide the others
with all information with respect to itself as may be required for inclusion in
the Information Circular and the Definitive Agreement will provide that they
will indemnify the other parties for any misrepresentation contained in such
information.

     

    
      	
              10.

            	
              Cooperation

            

    

     

    Each of
the parties intends to do all acts and things and take all steps required to
complete the Private Placement and the Arrangement.  Without limiting
the generality of the foregoing, each of the parties covenants and agrees to use
its reasonable commercial efforts within its power to cause to be fulfilled the
conditions precedent to the other party's obligations to complete the Private
Placement and the Arrangement and to not take any action that would cause such
conditions not to be fulfilled.  Further, and without restricting the
generality of the foregoing, each party intends to cooperate with the other
parties and their tax advisors in structuring the Arrangement in a tax effective
manner, and assist the other parties and their tax advisors in making such
investigations and inquiries with respect to such party in that regard, as the
other parties and their tax advisors shall consider necessary, acting
reasonably, provided that such party shall not be obligated to consent or agree
to any structuring that has the effect of reducing the consideration to be
received under the Arrangement by any of its securityholders.

     

    The
parties intend to use their reasonable commercial efforts to cause the effective
date (the “Effective
Date”) of the completion of the Arrangement to occur on or prior to July
2, 2010 and to cause the mailing of the Information Circular to the applicable
securityholders of Linear and Apollo to occur as soon as reasonably practicable
following the execution of the Definitive Agreement and in any event by June 3,
2010.

     

    
      	
              11.

            	
              Board
      Authorization

            

    

     

    
      	
               
      

            	
              (a)

            	
              The
      Board of Directors of Linear has approved this letter of intent and the
      completion of the Private Placement and Arrangement on the terms set forth
      in this letter of intent.

            

    

     

    
      	
               
      

            	
              (b)

            	
              The
      Board of Directors of Apollo has approved this letter of intent and the
      completion of the Private Placement and Arrangement on the terms set forth
      in this letter of intent.

            

    

     

    
      	
              12.

            	
              Linear
      Conditions

            

    

     

    Linear's
obligation to proceed with the Arrangement is subject to the following
conditions (each of which may be waived at the sole discretion of Linear), in
addition to such other conditions as shall be included in the Definitive
Agreement:

     

    
      	
               
      

            	
              (a)

            	
              Representations and
      Warranties:  The representations and warranties made by
      Apollo in this letter of intent shall be materially true and correct as of
      the Effective Date as if made on and as of such date (except to the extent
      such representations and warranties speak as of an earlier date or except
      as affected by transactions contemplated or permitted by this letter of
      intent or the Definitive Agreement), and Apollo shall have provided to
      Linear a certificate of two senior officers certifying such accuracy on
      the Effective Date.

            

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    - 8 -

     

    
      	
               
      

            	
              (b)

            	
              Covenants:  Apollo
      shall have complied in all material respects with its covenants herein and
      Apollo shall have provided to Linear a certificate of two senior officers
      certifying compliance with such covenants on the Effective
      Date.

            

    

     

    
      
        	
              	
                (c)

              	
                No Material Adverse
      Change:   No
      material adverse change shall have occurred in the affairs, operations or
      business of Apollo and its subsidiaries, taken as a whole, from and after
      the date hereof and prior to the Effective Date, and no material adverse
      change in the financial condition of Apollo and its subsidiaries, taken as
      a whole, shall have occurred prior to the date hereof or shall occur from
      and after the date hereof and prior to the Effective Date from that
      reflected in the audited consolidated financial statements of Apollo as at
      and for the fiscal year ending December 31, 2008, or in the unaudited
      financial statements of Apollo as at and for the nine months ending
      September 30, 2009 (other than a material adverse change resulting from:
      (i) conditions affecting the gold  industry generally in
      jurisdictions in which they carry on business, including changes in prices
      or taxes; (ii) general or economic, financial, currency, exchange,
      securities or commodities market conditions; or (iii) any matter permitted
      by this letter of intent or the Definitive Agreement, or consented to by
      Linear including, without limitation, the public announcement of the
      Private Placement and
Arrangement).

              

      

    

     

    
      	
               
      

            	
              (d)

            	
              No
      Actions:  No act, action, suit, proceeding, objection or
      opposition shall have been threatened or taken before or by any domestic
      or foreign court, tribunal or governmental agency or other regulatory or
      administrative agency or commission (a “Governmental Authority”)
      by any elected or appointed public official or private person in Canada or
      elsewhere, whether or not having the force of law and no law, regulation,
      policy, judgments, decision, order, ruling or directive (whether or not
      having the force of law) shall have been proposed, enacted, promulgated,
      amended or applied, in either case has had or, if the Arrangement was
      consummated, would result in a material adverse change within the meaning
      of paragraph 12(c),
      in the affairs, operations or business of Apollo or would have a material
      adverse effect on the ability of the parties to complete the
      Arrangement.

            

    

     

    
      	
               
      

            	
              (e)

            	
              No Material
      Breach:  Apollo shall not be in material breach of its
      obligations under this letter of
intent.

            

    

     

    
      	
               
      

            	
              (f)

            	
              Approvals:  Linear
      and Apollo shall obtain, on terms and conditions satisfactory to Linear,
      acting reasonably, the following:

            

    

     

    
      	
               
      

            	
              (i)

            	
              the
      approval of the securityholders of Linear and Apollo required for the
      Arrangement pursuant to applicable corporate law, the constating documents
      of Linear and Apollo, as applicable, and as required by the Superior Court
      of Justice of Ontario (the “Court”) and other
      matters relating to the
Arrangement;

            

    

     

    
      	
               
      

            	
              (ii)

            	
              all
      applicable regulatory approvals, orders, notices and consents (including,
      without limitation, under the Competition Act
      (Canada) and those of the Toronto Stock Exchange or other securities
      regulator authorities), and all applicable statutory or regulatory waiting
      periods shall have expired or been
terminated;

            

    

     

    
      	
               
      

            	
              (iii)

            	
              receipt
      of final order of Court approving the Arrangement;
  and

            

    

     

    
      	
               
      

            	
              (iv)

            	
              all
      consents, waivers, permissions and approvals necessary to complete the
      Arrangement by or from relevant third parties, on terms and conditions
      satisfactory to Linear , including the approval or consent of Linear's and
      Apollo's bankers and creditors, as required, except where the failure to
      obtain such approval or consent would not have a material adverse effect
      on the business or operations of Linear or Apollo, as
      applicable

            

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    - 9 -

     

    (collectively,
the “Third Party
Approvals”).

     

    
      	
               
      

            	
              (g)

            	
              Dissents:  If
      dissent rights are granted to securityholders by the Court in connection
      with the Arrangement, holders of not more than 5% of the issued and
      outstanding Linear Shares and holders of not more than 5% of the issued
      and outstanding Apollo Shares shall have exercised rights of dissent in
      relation to the Arrangement.

            

    

     

    
      	
              13.

            	
              Apollo
      Conditions

            

    

     

    Apollo's
obligation to proceed with the Arrangement is subject to the following
conditions (each of which may be waived at the sole discretion of
Apollo):

     

    
      	
               
      

            	
              (a)

            	
              Representations and
      Warranties:  The representations and warranties made by
      Linear in this letter of intent shall be materially true and correct as of
      the Effective Date as if made on and as of such date (except to the extent
      such representations and warranties speak as of an earlier date or except
      as affected by transactions contemplated or permitted by this letter of
      intent or the Definitive Agreement), and Linear shall have provided to
      Apollo a certificate of two senior officers certifying such accuracy on
      the Effective Date.

            

    

     

    
      	
               
      

            	
              (b)

            	
              Covenants:  Linear
      shall have complied in all material respects with its covenants herein and
      Linear shall have provided to Apollo a certificate of two senior officers
      certifying compliance with such covenants on the Effective
      Date.

            

    

     

    
      
        	
              	
                (c)

              	
                No Material Adverse
      Change:   No
      material adverse change shall have occurred in the affairs, operations or
      business of Linear and its subsidiaries, taken as a whole, from and after
      the date hereof and prior to the Effective Date, and no material adverse
      change in the financial condition of Linear and its subsidiaries, taken as
      a whole, shall have occurred prior to the date hereof or shall occur from
      and after the date hereof and prior to the Effective Date from that
      reflected in the audited consolidated financial statements of Linear as at
      and for the fiscal year ending March 31, 2009 or in the unaudited
      financial statements of Linear as at and for the nine months ending
      December 31, 2009 (other than a material adverse change resulting from:
      (i) conditions affecting the gold industry generally in jurisdictions in
      which they carry on business, including changes in prices or taxes; (ii)
      general or economic, financial, currency, exchange, securities or
      commodities market conditions; or (iii) any matter permitted by this
      letter of intent or the Definitive Agreement, or consented to by Apollo
      including, without limitation, the public announcement of the Private
      Placement and Arrangement); or (iv) Linear’s obligations under an
      agreement between Linear and Yantai Jinyan Mining Machinery Co.
      Ltd.

              

      

    

     

    
      	
               
      

            	
              (d)

            	
              No
      Actions:  No act, action, suit, proceeding, objection or
      opposition shall have been threatened or taken before or by any
      Governmental Authority
      by any elected or appointed public official or private person in
      Canada or elsewhere, whether or not having the force of law and no law,
      regulation, policy, judgments, decision, order, ruling or directive
      (whether or not having the force of law) shall have been proposed,
      enacted, promulgated, amended or applied, in either case has had or, if
      the Arrangement was consummated, would result in a material adverse change
      within the meaning of paragraph 13(c), in the affairs, operations or
      business of Linear or would have a material adverse effect on the ability
      of the parties to complete the
Arrangement.

            

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    - 10 -

     

    
      	
               
      

            	
              (e)

            	
              No Material
      Breach:  Linear shall not be in material breach of its
      obligations under this letter of
intent.

            

    

     

    
      	
               
      

            	
              (f)

            	
              Approvals:  Apollo
      and Linear shall obtain all consents, waivers, permissions and approvals
      necessary to complete the Arrangement by or from relevant third parties,
      on terms and conditions satisfactory to Apollo, acting reasonably,
      including without limitation, the Third Party
  Approvals.

            

    

     

    
      	
               
      

            	
              (g)

            	
              Dissents:  If
      dissent rights are granted to securityholders by the Court in connection
      with the Arrangement, holders of not more than 5% of the issued and
      outstanding Linear Shares and holders of not more than 5% of the issued
      and outstanding Apollo Shares shall have exercised rights of dissent in
      relation to the Arrangement.

            

    

     

    
      	
              14.

            	
              Linear
      Representations and Warranties

            

    

     

    Linear
represents and warrants to and in favour of Apollo and acknowledges that Apollo
is relying upon such representations and warranties in connection with the
matters contemplated by this letter of intent:

     

    
      	
               
      

            	
              (a)

            	
              Linear
      and each of the Linear Subsidiaries (as defined below) is a corporation
      duly incorporated, continued or amalgamated and validly existing under the
      laws of the jurisdiction in which it was incorporated, continued or
      amalgamated, as the case may be, has all requisite corporate power and
      authority and is duly qualified and holds all necessary material permits,
      licences and authorizations necessary or required to carry on its business
      as now conducted and to own, lease or operate its properties and assets
      and no steps or proceedings have been taken by any person, voluntary or
      otherwise, requiring or authorizing its dissolution or winding up, and
      Linear has all requisite power and authority to enter into this letter of
      intent and to carry out its obligations hereunder and
      thereunder;

            

    

    

    
      	
               
      

            	
              (b)

            	
              Linear
      has no subsidiaries other than the following (the “Linear Subsidiaries” and
      each an “Linear
      Subsidiary”) nor any investment or proposed investment in any
      person which, for the financial year ended March 31, 2009 accounted for
      more than five percent of the consolidated assets or consolidated revenues
      of Linear or would otherwise be material to the business and affairs of
      Linear on a consolidated basis:

            

    

    

    
      
        
          
            
              
                
                  
                    
                      	
                              Linear Subsidiaries

                            	 	
                              Corporate 

                              Jurisdiction

                            	 	
                              Percentage 

                              Ownership

                            	 
	 	 	 	 	 	 	 
	
                              Linear
      Gold Caribe, S.A.

                            	 	
                              Panama

                            	 	 	100	%
	
                              Linear
      Gold Holdings Corp.

                            	 	
                              Canada

                            	 	 	100	%
	
                              Linear
      Gold Mexico, S.A. de C.V.

                            	 	
                              Mexico

                            	 	 	100	%
	
                              Linear
      Gold Mineracao Ltda.

                            	 	
                              Brazil

                            	 	 	100	%
	
                              Servicios
      Ixhuatán, S.A. de C.V.

                            	 	
                              Mexico

                            	 	 	100	%
	
                              7153945
      Canada Inc.

                            	 	
                              Canada

                            	 	 	100	%

                    

                  

                

              

            

          

        

      

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    - 11 -

     

    
      	
               
      

            	
              (c)

            	
              Linear
      owns, directly or indirectly, the percentage of issued and outstanding
      shares of each of the Linear Subsidiaries set out above, all of the issued
      and outstanding shares of the Linear Subsidiaries are issued as fully paid
      and non-assessable shares, in each case, other than as disclosed in the
      Linear Disclosure Documents, free and clear of all mortgages, liens,
      charges, pledges, security interests, encumbrances,
      claims or demands whatsoever
      and no person, firm or corporation has any agreement, option, right or
      privilege (whether pre-emptive or contractual) capable of becoming an
      agreement, for the purchase from Linear or any of the Linear Subsidiaries
      of any interest in any of the shares in the capital of any of the Linear
      Subsidiaries.  For the purpose of this letter of intent, “Linear Disclosure
      Documents” shall mean all publicly available press releases,
      material change reports, annual information forms, information circulars,
      financial statements and other documents that have been disclosed by the
      Linear to the public and filed pursuant to applicable securities laws or
      otherwise posted on SEDAR after
      January 1, 2009;

            

    

    

    
      	
               
      

            	
              (d)

            	
              other
      than as disclosed in the Linear Disclosure Documents, Linear and each of
      the Linear Subsidiaries holds all requisite licences, registrations,
      qualifications, permits and consents necessary or appropriate for carrying
      on its business as currently carried on and all such licences,
      registrations, qualifications, permits and consents are valid and
      subsisting and in good standing in all material respects except where the
      failure to hold such licences, registrations, qualifications, permits and
      consents would not have a Material Adverse Effect on Linear or any Linear
      Subsidiary.  In particular, without limiting the generality of
      the foregoing, neither Linear nor any of the Linear Subsidiaries has
      received any notice of proceedings relating to the revocation or adverse
      modification of any material mining or exploration permit or licence, nor
      have any of them received notice of the revocation or cancellation of, or
      any intention to revoke or cancel, any mining claims, groups of claims,
      exploration rights, concessions or leases with respect to any of the
      resource properties described in the Linear Disclosure Documents where
      such revocation or cancellation would have a Material Adverse Effect on
      Linear or any Linear Subsidiary;

            

    

    

    
      	
               
      

            	
              (e)

            	
              except
      as disclosed in the Linear Disclosure Documents, (A) Linear and the Linear
      Subsidiaries are the absolute legal and beneficial owners of, and have
      good and marketable title to, all of the material property or assets
      thereof as described in the Linear Disclosure Documents, and no other
      Mining Rights (as hereinafter defined) are necessary for the conduct of
      the business of Linear or any Linear Subsidiary as currently conducted,
      (B) none of Linear or any Linear Subsidiary knows of any claim or the
      basis for any claim that might or could materially and adversely affect
      the right thereof to use, transfer or otherwise exploit such Mining Rights
      and (C) none of Linear or any Linear Subsidiary has any responsibility or
      obligation to pay any material commission, royalty, licence fee or similar
      payment to any person with respect to the Mining Rights
      thereof;

            

    

    

    
      	
               
      

            	
              (f)

            	
              Linear
      and the Linear Subsidiaries hold either freehold title, mining leases,
      mining concessions, mining claims or participating interests or other
      conventional property or proprietary interests or rights, recognized in
      the jurisdiction in which a particular property is located (collectively,
      “Mining Rights”),
      in respect of the ore bodies and minerals located in properties in which
      Linear and the Linear Subsidiaries have an interest as described in the
      Linear Disclosure Documents under valid, subsisting and enforceable title
      documents or other recognized and enforceable agreements or instruments,
      sufficient to permit Linear or the applicable Linear Subsidiary to explore
      the minerals relating thereto; all property, leases or claims in which
      Linear or any Linear Subsidiary has an interest or right have been validly
      located and recorded in accordance in all material respects with all
      applicable laws and are valid and subsisting except where the failure to
      be so would not have a Material Adverse Effect on Linear or any Linear
      Subsidiary; Linear and the Linear Subsidiaries have all necessary surface
      rights, access rights and other necessary rights and interests relating to
      the properties in which Linear and the Linear Subsidiaries have an
      interest as described in the Linear Disclosure Documents granting Linear
      or the applicable Linear Subsidiary the right and ability to explore for
      minerals, ore and metals for development purposes as are appropriate in
      view of the rights and interest therein of Linear or the applicable Linear
      Subsidiary, with only such exceptions as do not interfere with the use
      made by Linear or the applicable Linear Subsidiary of the rights or
      interest so held; and each of the proprietary interests or rights and each
      of the documents, agreements and instruments and obligations relating
      thereto referred to above is currently in good standing in the name of
      Linear or a Linear Subsidiary except where the failure to be so would not
      have a Material Adverse Effect on Linear or any Linear Subsidiary. The
      Mining Rights in respect of Linear’s properties, as disclosed in the
      Linear Disclosure Documents, constitute a description of all material
      Mining Rights held by Linear and the Linear
  Subsidiaries;

            

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    - 12 -

     

    
      	
               
      

            	
              (g)

            	
              Linear
      has made available to the respective authors thereof, prior to the
      issuance of the technical reports in respect of each of the Box mine and
      the Athona deposit for the purpose of preparing such technical reports,
      all information requested, and to the knowledge and belief of Linear, no
      such information contains any material misrepresentation. Linear does not
      have any knowledge of a material adverse change in any production, cost,
      price, reserves or other relevant information provided since the dates
      that such information was so
provided;

            

    

    

    
      	
               
      

            	
              (h)

            	
              to
      the best of the knowledge of Linear, the technical reports in respect of
      the Box mine and the Athona deposit, as supplemented by the disclosure in
      respect of such properties in the Linear Disclosure Documents, accurately
      and completely set forth all material facts relating to the properties
      that are subject thereto. Since the date of preparation of each of the
      technical reports in respect of the Box mine and the Athona deposit,
      respectively, there has been no change of which Linear is aware that would
      disaffirm any aspect of such reports in any material respect, other than a
      contemplated increase in capital
expenditures;

            

    

    

    
      	
               
      

            	
              (i)

            	
              the
      execution and delivery of this letter of intent, the performance by Linear
      of its obligations hereunder and the consummation of the transactions
      contemplated in this letter of intent, do not and will not conflict with
      or result in a breach or violation of any of the terms or provisions of,
      or constitute a default under, (whether after notice or lapse of time or
      both), (A) any statute, rule or regulation applicable to Linear including,
      without limitation, applicable securities laws and the policies, rules and
      regulations of the TSX; (B) the constating documents, by-laws or
      resolutions of Linear which are in effect at the date hereof; (C) any
      mortgage, note, indenture, contract, agreement, joint venture,
      partnership, instrument, lease or other document to which Linear is a
      party or by which it is bound; or (D) any judgment, decree or order
      binding Linear, any Linear Subsidiary or the property or assets
      thereof;

            

    

    

    
      	
               
      

            	
              (j)

            	
              Linear
      is in compliance in all material respects with its timely and continuous
      disclosure obligations under the Securities Laws and the rules and
      regulations of the TSX and, without limiting the generality of the
      foregoing, there has not occurred any material adverse change, financial
      or otherwise, in the assets, liabilities (contingent or otherwise),
      business, financial condition, capital or prospects of Linear and the
      Linear Subsidiaries (taken as a whole) since December 31, 2009, which has
      not been publicly disclosed on a non-confidential basis and all the
      statements set forth in the Linear Disclosure Documents were true, correct
      and complete in all material respects and did not contain any
      misrepresentation as of the date of such statements and Linear has not
      filed any confidential material change reports since the date of such
      statements which remains confidential as at the date
    hereof;

            

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    - 13 -

     

    
      	
               
      

            	
              (k)

            	
              except
      as disclosed in the Linear Disclosure Documents, neither Linear nor any
      Linear Subsidiary has approved, or has entered into any agreement in
      respect of, or has any knowledge
of:

            

    

    

    
      	
               
      

            	
              (A)

            	
              the
      purchase of any material property or assets or any interest therein, other
      than the purchase of the residual 16.875% participating interest in the
      Crackingstone Joint Venture for $50,000, or the sale, transfer or other
      disposition of any material property or assets or any interest therein
      currently owned, directly or indirectly, by Linear or any Linear
      Subsidiary whether by asset sale, transfer of shares or
      otherwise;

            

    

     

    
      	
               
      

            	
              (B)

            	
              the
      change in control (by sale, transfer or other disposition of shares or
      sale, transfer, lease or other disposition of all or substantially all of
      the property and assets of Linear) of Linear or any Linear Subsidiary;
      or

            

    

     

    
      	
               
      

            	
              (C)

            	
              a
      proposed or planned disposition of shares by any shareholder who owns,
      directly or indirectly, 10% or more of the outstanding shares of Linear or
      any Linear Subsidiary;

            

    

    

    
      	
               
      

            	
              (l)

            	
              the
      audited consolidated financial statements of Linear as at and for the year
      ended March 31, 2009 (the “Linear Audited Financial
      Statements”) and consolidated comparative financial statements for
      the nine months ended December 31, 2009 have been prepared in accordance
      with generally accepted accounting principles in Canada and present fully,
      fairly and correctly in all material respects, the consolidated financial
      condition of Linear as at the date thereof and the results of the
      operations and the changes in the financial position of Linear for the
      periods then ended and contain and reflect adequate provisions or
      allowance for all reasonably anticipated liabilities, expenses and losses
      of Linear and except as disclosed in the Linear Disclosure Documents,
      there has been no change in accounting policies or practices of Linear
      since December 31, 2009;

            

    

    

    
      	
               
      

            	
              (m)

            	
              all
      taxes (including income tax, capital tax, payroll taxes, employer health
      tax, workers’ compensation payments, property taxes, custom and land
      transfer taxes), duties, royalties, levies, imposts, assessments,
      deductions, charges or withholdings and all liabilities with respect
      thereto including any penalty and interest payable with respect thereto
      (collectively, “Taxes”) due and payable
      by Linear and the Linear Subsidiaries have been paid, except where the
      failure to pay such taxes would not constitute an adverse material fact in
      respect of Linear or any Linear Subsidiary or have a Material Adverse
      Effect on Linear or any Linear Subsidiary.  All tax returns,
      declarations, remittances and filings required to be filed by Linear and
      the Linear Subsidiaries have been filed with all appropriate governmental
      authorities and all such returns, declarations, remittances and filings
      are complete and accurate and no material fact or facts have been omitted
      therefrom which would make any of them misleading, except where the
      failure to file such documents would not constitute an adverse material
      fact in respect of Linear or have a Material Adverse Effect on Linear or
      any Linear Subsidiary.  To the best of the knowledge of Linear,
      no examination of any tax return of Linear or any Linear Subsidiary is
      currently in progress and there are no issues or disputes outstanding with
      any governmental authority respecting any taxes that have been paid, or
      may be payable, by Linear or any Linear Subsidiary, in any case, except
      where such examinations, issues or disputes would not constitute an
      adverse material fact in respect of Linear or have a Material Adverse
      Effect on Linear or any Linear
Subsidiary;

            

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    - 14 -

     

    
      	
               
      

            	
              (n)

            	
              Linear’s
      auditors who audited the Linear Audited Financial Statements and who
      provided their audit report thereon are independent public accountants as
      required under applicable securities laws and there has never been a
      reportable event (within the meaning of National Instrument 51-102 Continuous Disclosure
      Obligations) between Linear and Linear’s auditors or, to the
      knowledge of Linear, any former auditors of
  Linear;

            

    

    

    
      	
               
      

            	
              (o)

            	
              other
      than: (i) 8,177,764 Linear Shares issuable pursuant to outstanding stock
      options of Linear; and (ii) 2,770,000 Linear Shares issuable pursuant to
      outstanding common share purchase warrants of Linear; no person, firm or
      corporation has or will have at the Effective Date any agreement or
      option, or right or privilege (whether pre-emptive or contractual) capable
      of becoming an agreement or option, for the purchase of any unissued
      shares or securities of Linear or of any of the Linear
      Subsidiaries;

            

    

     

    
      	
               
      

            	
              (p)

            	
              to
      Linear’s knowledge, there is no agreement in force or effect which in any
      manner affects or will affect the voting or control of any of the
      securities of Linear or of the Linear
  Subsidiaries;

            

    

    

    
      	
               
      

            	
              (q)

            	
              except
      as disclosed in the Linear Disclosure Documents, none of the officers or
      employees of Linear or of any Linear Subsidiary, any person who owns,
      directly or indirectly, more than 10% of any class of securities of Linear
      or securities of any person exchangeable for more than 10% of any class of
      securities of Linear, or any associate or affiliate of any of the
      foregoing, had or has any material interest, direct or indirect, in any
      transaction or any proposed transaction (including, without limitation,
      any loan made to or by any such person) with Linear or any of the Linear
      Subsidiaries which, as the case may be, materially affects, is material to
      or will materially affect Linear on a consolidated
  basis;

            

    

    

    
      	
               
      

            	
              (r)

            	
              except
      as disclosed in the Linear Disclosure Documents, no legal or governmental
      proceedings or inquiries are pending to which Linear or any Linear
      Subsidiary is a party or to which its property is subject that would
      result in the revocation or modification of any material certificate,
      authority, permit or license necessary to conduct the business now owned
      or operated by Linear and the Linear Subsidiaries which, if the subject of
      an unfavourable decision, ruling or finding would have a Material Adverse
      Effect on Linear or any Linear Subsidiary and, to the knowledge of Linear,
      no such legal or governmental proceedings or inquiries have been
      threatened against or are contemplated with respect to Linear or with
      respect to its properties;

            

    

    

    
      	
               
      

            	
              (s)

            	
              except
      as disclosed in the Linear Disclosure Documents, there are no actions,
      suits, judgments, investigations or proceedings of any kind whatsoever
      outstanding, pending or, to the best of Linear’s knowledge, threatened
      against or affecting Linear, the Linear Subsidiaries, or their respective
      directors, officers or employees, at law or in equity or before or by any
      commission, board, bureau or agency of any kind whatsoever and, to the
      best of Linear’s knowledge, there is no basis therefor and neither Linear
      nor any Linear Subsidiary is subject to any judgment, order, writ,
      injunction, decree, award, rule, policy or regulation of any governmental
      authority, which, either separately or in the aggregate, may have a
      Material Adverse Effect on Linear or any Linear Subsidiary or that would
      adversely affect the ability of Linear to perform its obligations under
      this letter of intent;

            

    

    

    
      	
               
      

            	
              (t)

            	
              none
      of Linear nor any of the Linear Subsidiaries is in violation of its
      constating documents or in default of the performance or observance of any
      material obligation, agreement, covenant or condition contained in any
      contract, indenture, trust deed, mortgage, loan agreement, note, lease or
      other agreement or instrument to which it is a party or by which it or its
      property may be bound;

            

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    - 15 -

     

    
      	
               
      

            	
              (u)

            	
              Linear
      and each of the Linear Subsidiaries owns or has the right to use under
      licence, sub-licence or otherwise all material intellectual property used
      by Linear and the Linear Subsidiaries in its business, including
      copyrights, industrial designs, trade marks, trade secrets, know how and
      proprietary rights, free and clear of any and all
      encumbrances;

            

    

    

    
      	
               
      

            	
              (v)

            	
              except
      as disclosed in the Linear Disclosure Documents, any and all of the
      agreements and other documents and instruments pursuant to which Linear
      and the Linear Subsidiaries hold the property and assets thereof
      (including any interest in, or right to earn an interest in, any property)
      are valid and subsisting agreements, documents or instruments in full
      force and effect, enforceable in accordance with terms thereof, neither
      Linear nor any Linear Subsidiary is in default of any of the material
      provisions of any such agreements, documents or instruments nor has any
      such default been alleged and such properties and assets are in good
      standing under the applicable statutes and regulations of the
      jurisdictions in which they are situated, all material leases, licences
      and other agreements pursuant to which Linear or any Linear Subsidiary
      derives the interests thereof in such property and assets are in good
      standing and there has been no material default under any such lease,
      licence or agreement.  None of the properties (or any interest
      in, or right to earn an interest in, any property) of Linear or any Linear
      Subsidiary is subject to any right of first refusal or purchase or
      acquisition right which is not disclosed in the Linear Disclosure
      Documents;

            

    

    

    
      	
               
      

            	
              (w)

            	
              this
      letter of intent has been duly authorized and executed and delivered by
      Linear and constitutes a valid and binding obligation of Linear and each
      shall be enforceable against Linear in accordance with its terms, except
      as enforcement thereof may be limited by bankruptcy, insolvency,
      reorganization, moratorium and other laws relating to or affecting the
      rights of creditors generally and except as limited by the application of
      equitable principles when equitable remedies are sought, and by the fact
      that rights to indemnity, contribution and waiver, and the ability to
      sever unenforceable terms, may be limited by applicable
    law;

            

    

    

    
      	
               
      

            	
              (x)

            	
              the
      authorized capital of Linear consists of an unlimited number of Linear
      Shares, of which, as at the close of business on March 5, 2010, 44,222,573
      Linear Shares were issued and outstanding as fully paid and non-assessable
      shares of Linear;

            

    

    

    
      	
               
      

            	
              (y)

            	
              other
      than as set out in the Linear Disclosure Documents, neither Linear nor any
      of the Linear Subsidiaries has made any loans to or guaranteed the
      obligations of any person;

            

    

    

    
      	
               
      

            	
              (z)

            	
              with
      respect to each premises of Linear or the Linear Subsidiaries which is
      material to Linear and the Linear Subsidiaries on a consolidated basis and
      which Linear or any of the Linear Subsidiaries occupies as tenant (the
      “Linear Leased
      Premises”), Linear or such Linear Subsidiary occupies the Linear
      Leased Premises and has the exclusive right to occupy and use the Linear
      Leased Premises and each of the leases pursuant to which Linear and/or the
      Linear Subsidiaries occupies the Linear Leased Premises is in good
      standing and in full force and
effect;

            

    

    

    
      	
               
      

            	
              (aa)

            	
              the
      assets of Linear and the Linear Subsidiaries and their business and
      operations are insured against loss or damage with responsible insurers on
      a basis consistent with insurance obtained by reasonably prudent
      participants in comparable businesses, and such coverage is in full force
      and effect, and Linear has not failed to promptly give any notice of any
      material claim thereunder;

            

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    - 16 -

     

    
      	
               
      

            	
              (bb)

            	
              Linear
      and each of the Linear Subsidiaries is in compliance with all laws
      respecting employment and employment practices, terms and conditions of
      employment, pay equity and wages, except where non-compliance with such
      laws could not reasonably be expected to have a Material Adverse Effect on
      Linear or any Linear Subsidiary, and has not and is not engaged in any
      unfair labour practice;

            

    

    

    
      	
               
      

            	
              (cc)

            	
              there
      has not been in the last two years and there is not currently any labour
      disruption, grievance, arbitration proceeding or other conflict which
      could reasonably be expected to have a Material Adverse Effect on Linear’s
      or any of the Linear Subsidiaries’ business, taken as a whole, and Linear
      and each of the Linear Subsidiaries is in compliance with all provisions
      of all federal, provincial, local and foreign laws and regulations
      respecting employment and employment practices, terms and conditions of
      employment and wages and hours, except where non-compliance with any such
      provisions would not have a Material Adverse Effect on Linear or any of
      the Linear Subsidiaries;

            

    

    

    
      	
               
      

            	
              (dd)

            	
              no
      union has been accredited or otherwise designated to represent any
      employees of Linear or any of the Linear Subsidiaries and, to the
      knowledge of Linear, no accreditation request or other representation
      question is pending with respect to the employees of Linear or any of the
      Linear Subsidiaries and no collective agreement or collective bargaining
      agreement or modification thereof has expired or is in effect in any of
      Linear’s facilities and none is currently being negotiated by Linear or
      any Linear Subsidiary;

            

    

    

    
      	
               
      

            	
              (ee)

            	
              the
      Linear Disclosure Documents disclose, to the extent required by applicable
      Securities Laws, each material plan for retirement, bonus, stock purchase,
      profit sharing, stock option, deferred compensation, severance or
      termination pay, insurance, medical, hospital, dental, vision care, drug,
      sick leave, disability, salary continuation, legal benefits, unemployment
      benefits, vacation, incentive or otherwise contributed to, or required to
      be contributed to, by Linear for the benefit of any current or former
      director, officer, employee or consultant of Linear (the “Linear Employee Plans”),
      each of which has been maintained in all material respects with its terms
      and with the requirements prescribed by any and all statutes, orders,
      rules and regulations that are applicable to such Linear Employee
      Plans;

            

    

    

    
      	
               
      

            	
              (ff)

            	
              Linear
      maintains a system of internal accounting controls sufficient to provide
      reasonable assurances that (A) transactions are executed in accordance
      with management’s general or specific authorization, and (B) transactions
      are recorded as necessary to permit preparation of financial statements in
      conformity with Canadian generally accepted accounting principles and to
      maintain accountability for assets;

            

    

    

    
      	
               
      

            	
              (gg)

            	
              except
      as disclosed in the Linear Disclosure Documents, none of the directors,
      officers or employees of Linear or any associate or affiliate of any of
      the foregoing had or has any material interest, direct or indirect, in any
      material transaction or any proposed material transaction with Linear or
      its Linear Subsidiaries which materially affects, is material to or will
      materially affect Linear or any Linear
  Subsidiary;

            

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    - 17 -

     

    
      	
               
      

            	
              (hh)

            	
              the
      minute books and records of Linear and the Linear Subsidiaries made
      available to Apollo and its counsel in
      connection with their due diligence investigation of Linear for the
      periods from January, 2007 to the date hereof are all of the minute books
      and records of Linear and the Linear Subsidiaries and contain copies of
      all material proceedings (or certified copies thereof or drafts thereof
      pending approval) of the shareholders, the directors and all committees of
      directors of Linear and the Linear Subsidiaries to the date of review of
      such corporate records and minute books and there have been no other
      meetings, resolutions or proceedings of the shareholders, directors or any
      committees of the directors of Linear or any of its Linear Subsidiaries to
      the date hereof not reflected in such minute books and other
      records;

            

    

    

    
      	
               
      

            	
              (ii)

            	
              neither
      Linear  nor any of its Linear Subsidiaries has been in violation
      of, in connection with the ownership, use, maintenance or operation of its
      property and assets, including the Linear Leased Premises, any applicable
      federal, provincial, state, municipal or local laws, by-laws, regulations,
      orders, policies, permits, licences, certificates or approvals having the
      force of law, domestic or foreign, relating to environmental, health or
      safety matters (collectively the “Environmental Laws”)
      which would have a Material Adverse Effect on Linear or any of its Linear
      Subsidiaries;

            

    

    

    
      	
               
      

            	
              (jj)

            	
              without
      limiting the generality of the immediately preceding paragraph, Linear and
      each of its Linear Subsidiaries do not have any knowledge of, and have not
      received any notice of, any material claim, judicial or administrative
      proceeding, pending or threatened against, or which may affect, either
      Linear or any Linear Subsidiary or any of the property, assets or
      operations thereof, relating to, or alleging any violation of any
      Environmental Laws, Linear is not aware of any facts which could give rise
      to any such claim or judicial or administrative proceeding and neither
      Linear, nor any Linear Subsidiary nor any of the property, assets or
      operations thereof is the subject of any investigation, evaluation, audit
      or review by any governmental authority to determine whether any violation
      of any Environmental Laws has occurred or is occurring or whether any
      remedial action is needed in connection with a release of any contaminant
      into the environment, except for compliance investigations conducted in
      the normal course by any governmental authority, in each case which could
      reasonably be expected to have a Material Adverse Effect on Linear or any
      of its Linear Subsidiaries;

            

    

    

    
      	
               
      

            	
              (kk)

            	
              there
      are no orders, rulings or directives issued, pending or, to the best of
      Linear’s knowledge reasonably held, being based on due direction and
      enquiry of its personnel and advisors, threatened against Linear or any of
      its Linear Subsidiaries under or pursuant to any Environmental Laws
      requiring any work, repairs, construction or capital expenditures with
      respect to the property or assets of Linear or any of its Linear
      Subsidiaries (including the Linear Leased Premises) which would have a
      Material Adverse Effect on Linear or any of its Linear
      Subsidiaries;

            

    

    

    
      	
               
      

            	
              (ll)

            	
              Linear
      and the Linear Subsidiaries are not subject to any contingent or other
      liability relating to the restoration or rehabilitation of land, water or
      any other part of the environment (except for those derived from normal
      exploration activities) or non-compliance with Environmental Laws which
      could reasonably be expected to have a Material Adverse Effect on Linear
      or any of the Linear Subsidiaries;

            

    

    

    
      	
            	
              (mm)

            	
              all
      information which has been prepared by Linear and the Linear Subsidiaries
      relating to Linear and the Linear Subsidiaries and the business, property
      and liabilities thereof and either publicly disclosed, provided or made
      available to Apollo, including all financial, marketing, sales and
      operational information provided to Apollo is, as of the date of such
      information, true and correct in all material respects, taken as a whole,
      and no fact or facts have been omitted therefrom which would make such
      information materially misleading;
and

            

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    - 18 -

     

    
      	
               
      

            	
              (nn)

            	
              Linear
      is not aware of any circumstances presently existing under which liability
      is or could reasonably be expected to be incurred under Part XXIII – Civil
      Liability for Secondary Market Disclosure of the Securities Act
      (Ontario).

            

    

    

    
      	
              15.

            	
              Apollo
      Representations and Warranties

            

    

     

    Apollo
represents and warrants to and in favour of Linear and acknowledges that Linear
is relying upon such representations and warranties in connection with the
matters contemplated by this letter of intent:

     

    
      	
               
      

            	
              (a)

            	
              Apollo
      and each of the Apollo Subsidiaries (as defined below) is a corporation
      duly incorporated, continued or amalgamated and validly existing under the
      laws of the jurisdiction in which it was incorporated, continued or
      amalgamated, as the case may be, has all requisite corporate power and
      authority and is duly qualified and holds all necessary material permits,
      licences and authorizations necessary or required to carry on its business
      as now conducted and to own, lease or operate its properties and assets
      and no steps or proceedings have been taken by any person, voluntary or
      otherwise, requiring or authorizing its dissolution or winding up, and
      Apollo has all requisite power and authority to enter into this letter of
      intent and to carry out its obligations hereunder and
      thereunder;

            

    

    

    
      	
               
      

            	
              (b)

            	
              Apollo
      has no subsidiaries other than the following (the “Apollo Subsidiaries” and
      each an “Apollo
      Subsidiary”) nor any investment or proposed investment in any
      person which, for the financial year ended December 31, 2009 accounted for
      more than five percent of the consolidated assets or consolidated revenues
      of Apollo or would otherwise be material to the business and affairs of
      Apollo on a consolidated basis:

            

    

    

    
      
        
          
            
              
                
                  
                    	
                            Apollo Subsidiaries

                          	 	
                            Corporate 

                            Jurisdiction

                          	 	
                            Percentage 

                            Ownership

                          	 
	 	 	 	 	 	 	 
	
                            Apollo
      Gold, Inc.

                          	 	
                            Delaware

                          	 	 	100	%
	
                            Mine
      Development Finance, Inc.

                          	 	
                            Delaware

                          	 	 	100	%
	
                            Minera
      Sol de ORO S.A. de C.V.

                          	 	
                            Mexico

                          	 	 	100	%
	
                            Minas
      de Argonautas S de R.L. de C.V.

                          	 	
                            Mexico

                          	 	 	100	%

                  

                

              

            

          

        

      

    

    

    
      	
               
      

            	
              (c)

            	
              Apollo
      owns, directly or indirectly, the percentage of issued and outstanding
      shares of each of the Apollo Subsidiaries set out above, all of the issued
      and outstanding shares of the Apollo Subsidiaries are issued as fully paid
      and non-assessable shares, in each case, other than as disclosed in the
      Apollo Disclosure Documents (as hereinafter defined), free and clear of
      all mortgages, liens, charges, pledges, security interests, encumbrances,
      claims or demands whatsoever
      and no person, firm or corporation has any agreement, option, right or
      privilege (whether pre-emptive or contractual) capable of becoming an
      agreement, for the purchase from Apollo or any of the Apollo Subsidiaries
      of any interest in any of the shares in the capital of any of the Apollo
      Subsidiaries.  For the purpose of this letter of intent, “Apollo Disclosure
      Documents” shall mean all publicly available press releases,
      material change reports, annual information forms, information circulars,
      financial statements and other documents that have been disclosed by the
      Apollo to the public and filed pursuant to applicable securities laws or
      otherwise posted on SEDAR after January 1,
2009;

            

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    - 19 -

     

    
      	
               
      

            	
              (d)

            	
              other
      than as disclosed in the Apollo Disclosure Documents, Apollo and each of
      the Apollo Subsidiaries holds all requisite licences, registrations,
      qualifications, permits and consents necessary or appropriate for carrying
      on its business as currently carried on and all such licences,
      registrations, qualifications, permits and consents are valid and
      subsisting and in good standing in all material respects except where the
      failure to hold such licences, registrations, qualifications, permits and
      consents would not have a Material Adverse Effect on Apollo or any Apollo
      Subsidiary.  In particular, without limiting the generality of
      the foregoing, neither Apollo nor any of the Apollo Subsidiaries has
      received any notice of proceedings relating to the revocation or adverse
      modification of any material mining or exploration permit or licence, nor
      have any of them received notice of the revocation or cancellation of, or
      any intention to revoke or cancel, any mining claims, groups of claims,
      exploration rights, concessions or leases with respect to any of the
      resource properties described in the Apollo Disclosure Documents where
      such revocation or cancellation would have a Material Adverse Effect on
      Apollo or any Apollo Subsidiary;

            

    

    

    
      	
               
      

            	
              (e)

            	
              except
      as disclosed in the Apollo Disclosure Documents, (A) Apollo and the Apollo
      Subsidiaries are the absolute legal and beneficial owners of, and have
      good and marketable title to, all of the material property or assets
      thereof as described in the Apollo Disclosure Documents, and no other
      Mining Rights are necessary for the conduct of the business of Apollo or
      any Apollo Subsidiary as currently conducted, (B) none of Apollo or any
      Apollo Subsidiary knows of any claim or the basis for any claim that might
      or could materially and adversely affect the right thereof to use,
      transfer or otherwise exploit such Mining Rights, and (C) none of Apollo
      or any Apollo Subsidiary has any responsibility or obligation to pay any
      material commission, royalty, licence fee or similar payment to any person
      with respect to the Mining Rights
thereof;

            

    

    

    
      	
               
      

            	
              (f)

            	
              Apollo
      and the Apollo Subsidiaries hold Mining Rights in respect of the ore
      bodies and minerals located in properties in which Apollo and the Apollo
      Subsidiaries have an interest as described in the Apollo Disclosure
      Documents under valid, subsisting and enforceable title documents or other
      recognized and enforceable agreements or instruments, sufficient to permit
      Apollo or the applicable Apollo Subsidiary to explore the minerals
      relating thereto; all property, leases or claims in which Apollo or any
      Apollo Subsidiary has an interest or right have been validly located and
      recorded in accordance in all material respects with all applicable laws
      and are valid and subsisting except where the failure to be so would not
      have a Material Adverse Effect on Apollo or any Apollo Subsidiary; Apollo
      and the Apollo Subsidiaries have all necessary surface rights, access
      rights and other necessary rights and interests relating to the properties
      in which Apollo and the Apollo Subsidiaries have an interest as described
      in the Apollo Disclosure Documents granting Apollo or the applicable
      Apollo Subsidiary the right and ability to explore for minerals, ore and
      metals for development purposes as are appropriate in view of the rights
      and interest therein of Apollo or the applicable Apollo Subsidiary, with
      only such exceptions as do not interfere with the use made by Apollo or
      the applicable Apollo Subsidiary of the rights or interest so held; and
      each of the proprietary interests or rights and each of the documents,
      agreements and instruments and obligations relating thereto referred to
      above is currently in good standing in the name of Apollo or a Apollo
      Subsidiary except where the failure to be so would not have a Material
      Adverse Effect on Apollo or any Apollo Subsidiary. The Mining Rights in
      respect of Apollo’s properties, as disclosed in the Apollo Disclosure
      Documents, constitute a description of all material Mining Rights held by
      Apollo and the Apollo
Subsidiaries;

            

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    - 20
-

     

    
      	
               
      

            	
              (g)

            	
              Apollo
      has made available to the respective authors thereof, prior to the
      issuance of the technical reports in respect of each of the Black Fox
      project and the Huizopa project for the purpose of preparing such
      technical reports, all information requested, and to the knowledge and
      belief of Apollo, no such information contains any material
      misrepresentation. Apollo does not have any knowledge of a material
      adverse change in any production, cost, price, reserves or other relevant
      information provided since the dates that such information was so
      provided;

            

    

    

    
      	
               
      

            	
              (h)

            	
              to
      the best of the knowledge of Apollo, the technical reports in respect of
      the Black Fox project and the Huizopa project, as supplemented by the
      disclosure in respect of such properties in the Apollo Disclosure
      Documents, accurately and completely set forth all material facts relating
      to the properties that are subject thereto. Since the date of preparation
      of each of the technical reports in respect of the Black Fox project and
      the Huizopa project, respectively, there has been no change of which
      Apollo is aware that would disaffirm any aspect of such reports in any
      material respect;

            

    

    

    
      	
               
      

            	
              (i)

            	
              the
      execution and delivery of this letter of intent, the performance by Apollo
      of its obligations hereunder and the consummation of the transactions
      contemplated in this letter of intent, do not and will not conflict with
      or result in a breach or violation of any of the terms or provisions of,
      or constitute a default under, (whether after notice or lapse of time or
      both), (A) any statute, rule or regulation applicable to Apollo including,
      without limitation, applicable securities laws and the policies, rules and
      regulations of the TSX and the AMEX; (B) the constating documents, by-laws
      or resolutions of Apollo which are in effect at the date hereof; (C) any
      mortgage, note, indenture, contract, agreement, joint venture,
      partnership, instrument, lease or other document to which Apollo is a
      party or by which it is bound; or (D) any judgment, decree or order
      binding Apollo, any Apollo Subsidiary or the property or assets
      thereof;

            

    

    

    
      	
               
      

            	
              (j)

            	
              Apollo
      is in compliance in all material respects with its timely and continuous
      disclosure obligations under the Securities Laws and the rules and
      regulations of the TSX and AMEX and, without limiting the generality of
      the foregoing, there has not occurred any material adverse change,
      financial or otherwise, in the assets, liabilities (contingent or
      otherwise), business, financial condition, capital or prospects of Apollo
      and the Apollo Subsidiaries (taken as a whole) since September 30, 2009,
      which has not been publicly disclosed on a non-confidential basis and all
      the statements set forth in the Apollo Disclosure Documents were true,
      correct and complete in all material respects and did not contain any
      misrepresentation as of the date of such statements and Apollo has not
      filed any confidential material change reports since the date of such
      statements which remains confidential as at the date
    hereof;

            

    

    

    
      	
               
      

            	
              (k)

            	
              except
      as disclosed in the Apollo Disclosure Documents, neither Apollo nor any
      Apollo Subsidiary has approved, or has entered into any agreement in
      respect of, or has any knowledge
of:

            

    

    

    
      	
               
      

            	
              (D)

            	
              the
      purchase of any material property or assets or any interest therein or the
      sale, transfer or other disposition of any material property or assets or
      any interest therein currently owned, directly or indirectly, by Apollo or
      any Apollo Subsidiary whether by asset sale, transfer of shares or
      otherwise;

            

    

     

    
      	
               
      

            	
              (E)

            	
              the
      change in control (by sale, transfer or other disposition of shares or
      sale, transfer, lease or other disposition of all or substantially all of
      the property and assets of Apollo) of Apollo or any Apollo Subsidiary;
      or

            

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    - 21 -

     

    
      	
               
      

            	
              (F)

            	
              a
      proposed or planned disposition of shares by any shareholder who owns,
      directly or indirectly, 10% or more of the outstanding shares of Apollo or
      any Apollo Subsidiary;

            

    

    

    
      	
               
      

            	
              (l)

            	
              the
      audited consolidated financial statements of Apollo as at and for the year
      ended December 31, 2008 (the “Apollo Audited Financial
      Statements”) and consolidated comparative financial statements for
      the nine months ended September 30, 2009 have been prepared in accordance
      with generally accepted accounting principles in Canada and present fully,
      fairly and correctly in all material respects, the consolidated financial
      condition of Apollo as at the date thereof and the results of the
      operations and the changes in the financial position of Apollo for the
      periods then ended and contain and reflect adequate provisions or
      allowance for all reasonably anticipated liabilities, expenses and losses
      of Apollo and, except as disclosed in the Apollo Disclosure Documents,
      there has been no change in accounting policies or practices of Apollo
      since September 30, 2009;

            

    

    

    
      	
               
      

            	
              (m)

            	
              all
      Taxes due and payable by Apollo and the Apollo Subsidiaries have been
      paid, except where the failure to pay such taxes would not constitute an
      adverse material fact in respect of Apollo or any Apollo Subsidiary or
      have a Material Adverse Effect on Apollo or any Apollo
      Subsidiary.  All tax returns, declarations, remittances and
      filings required to be filed by Apollo and the Apollo Subsidiaries have
      been filed with all appropriate governmental authorities and all such
      returns, declarations, remittances and filings are complete and accurate
      and no material fact or facts have been omitted therefrom which would make
      any of them misleading, except where the failure to file such documents
      would not constitute an adverse material fact in respect of Apollo or have
      a Material Adverse Effect on Apollo or any Apollo
      Subsidiary.  To the best of the knowledge of Apollo, no
      examination of any tax return of Apollo or any Apollo Subsidiary is
      currently in progress and there are no issues or disputes outstanding with
      any governmental authority respecting any taxes that have been paid, or
      may be payable, by Apollo or any Apollo Subsidiary, in any case, except
      where such examinations, issues or disputes would not constitute an
      adverse material fact in respect of Apollo or have a Material Adverse
      Effect on Apollo or any Apollo
Subsidiary;

            

    

    

    
      	
               
      

            	
              (n)

            	
              Apollo’s
      auditors who audited the Apollo Audited Financial Statements and who
      provided their audit report thereon are independent public accountants as
      required under applicable securities laws and there has never been a
      reportable event (within the meaning of National Instrument 51-102 Continuous Disclosure
      Obligations) between Apollo and Apollo’s auditors or, to the
      knowledge of Apollo, any former auditors of
  Apollo;

            

    

    

    
      	
               
      

            	
              (o)

            	
              other
      than: (i) 11,594,371 Apollo Shares issuable pursuant to outstanding stock
      options of Apollo and an additional 100,000 Apollo Shares issuable
      pursuant ot stock options of Apollo to be granted after public
      announcement of the Arrangement; (ii) 104,138,178 Apollo Shares issuable
      pursuant to outstanding common share purchase warrants of Apollo; (iii)
      800,000 Apollo Shares issuable to RAB Special Situations (Master) Fund
      Limited (“RAB”)
      pursuant to the Third Amending Agreement dated February 26, 2010 between
      Apollo and RAB; (iv) 1,592,733 Apollo Shares issuable to Duane Duffy,
      Glenn Duffy, Luke Garvey and James Ober pursuant to a letter of intent
      dated February 22, 2010 among Apollo, Calais Resources, Inc.; (v)
      8,580,000 Apollo Shares issuable pursuant to convertible debentures and
      (vi) 2,448,390 Apollo Shares issuable pursuant to agents’ compensation
      units, and the foregoing persons, no person, firm or corporation has or
      will have at the Effective Date any agreement or option, or right or
      privilege (whether pre-emptive or contractual) capable of becoming an
      agreement or option, for the purchase of any unissued shares or securities
      of Apollo or of any of the Apollo
Subsidiaries;

            

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    - 22 -

     

    
      	
               
      

            	
              (p)

            	
              to
      Apollo's knowledge, there is no agreement in force or effect which in any
      manner affects or will affect the voting or control of any of the
      securities of Apollo or of the Apollo
  Subsidiaries;

            

    

    

    
      	
               
      

            	
              (q)

            	
              except
      than as set forth in the Apollo Disclosure Documents, none of the officers
      or employees of Apollo or of any Apollo Subsidiary, any person who owns,
      directly or indirectly, more than 10% of any class of securities of Apollo
      or securities of any person exchangeable for more than 10% of any class of
      securities of Apollo, or any associate or affiliate of any of the
      foregoing, had or has any material interest, direct or indirect, in any
      transaction or any proposed transaction (including, without limitation,
      any loan made to or by any such person) with Apollo or any of the Apollo
      Subsidiaries which, as the case may be, materially affects, is material to
      or will materially affect Apollo on a consolidated
  basis;

            

    

    

    
      	
               
      

            	
              (r)

            	
              except
      as disclosed in the Apollo Disclosure Documents, no legal or governmental
      proceedings or inquiries are pending to which Apollo or any Apollo
      Subsidiary is a party or to which its property is subject that would
      result in the revocation or modification of any material certificate,
      authority, permit or license necessary to conduct the business now owned
      or operated by Apollo and the Apollo Subsidiaries which, if the subject of
      an unfavourable decision, ruling or finding would have a Material Adverse
      Effect on Apollo or any Apollo Subsidiary and, to the knowledge of Apollo,
      no such legal or governmental proceedings or inquiries have been
      threatened against or are contemplated with respect to Apollo or with
      respect to its properties;

            

    

    

    
      	
               
      

            	
              (s)

            	
              except
      as disclosed in the Apollo Disclosure Documents, there are no actions,
      suits, judgments, investigations or proceedings of any kind whatsoever
      outstanding, pending or, to the best of Apollo’s knowledge, threatened
      against or affecting Apollo, the Apollo Subsidiaries, or their respective
      directors, officers or employees, at law or in equity or before or by any
      commission, board, bureau or agency of any kind whatsoever and, to the
      best of Apollo’s knowledge, there is no basis therefor and neither Apollo
      nor any Apollo Subsidiary is subject to any judgment, order, writ,
      injunction, decree, award, rule, policy or regulation of any governmental
      authority, which, either separately or in the aggregate, may have a
      Material Adverse Effect on Apollo or any Apollo Subsidiary or that would
      adversely affect the ability of Apollo to perform its obligations under
      this letter of intent;

            

    

    

    
      	
               
      

            	
              (t)

            	
              none
      of Apollo nor any of the Apollo Subsidiaries is in violation of its
      constating documents or in default of the performance or observance of any
      material obligation, agreement, covenant or condition contained in any
      contract, indenture, trust deed, mortgage, loan agreement, note, lease or
      other agreement or instrument to which it is a party or by which it or its
      property may be bound;

            

    

    

    
      	
               
      

            	
              (u)

            	
              Apollo
      and each of the Apollo Subsidiaries owns or has the right to use under
      licence, sub-licence or otherwise all material intellectual property used
      by Apollo and the Apollo Subsidiaries in its business, including
      copyrights, industrial designs, trade marks, trade secrets, know how and
      proprietary rights, free and clear of any and all
      encumbrances;

            

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    - 23 -

     

    
      	
               
      

            	
              (v)

            	
              except
      as disclosed in the Apollo Disclosure Documents, any
      and all of the agreements and other documents and instruments pursuant to
      which Apollo and the Apollo Subsidiaries hold the property and assets
      thereof (including any interest in, or right to earn an interest in, any
      property) are valid and subsisting agreements, documents or instruments in
      full force and effect, enforceable in accordance with terms thereof,
      neither Apollo nor any Apollo Subsidiary is in default of any of the
      material provisions of any such agreements, documents or instruments nor
      has any such default been alleged and such properties and assets are in
      good standing under the applicable statutes and regulations of the
      jurisdictions in which they are situated, all material leases, licences
      and other agreements pursuant to which Apollo or any Apollo Subsidiary
      derives the interests thereof in such property and assets are in good
      standing and there has been no material default under any such lease,
      licence or agreement.  None of the properties (or any interest
      in, or right to earn an interest in, any property) of Apollo or any Apollo
      Subsidiary is subject to any right of first refusal or purchase or
      acquisition right which is not disclosed in the Apollo Disclosure
      Documents;

            

    

    

    
      	
               
      

            	
              (w)

            	
              this
      letter of intent has been duly authorized and executed and delivered by
      Apollo and constitutes a valid and binding obligation of Apollo and each
      shall be enforceable against Apollo in accordance with its terms, except
      as enforcement thereof may be limited by bankruptcy, insolvency,
      reorganization, moratorium and other laws relating to or affecting the
      rights of creditors generally and except as limited by the application of
      equitable principles when equitable remedies are sought, and by the fact
      that rights to indemnity, contribution and waiver, and the ability to
      sever unenforceable terms, may be limited by applicable
    law;

            

    

    

    
      	
               
      

            	
              (x)

            	
              the
      authorized capital of Apollo consists of an unlimited number of Apollo
      Shares, of which, as at the close of business on March 5, 2010,
      273,081,000 Apollo Shares were issued and outstanding as fully paid and
      non-assessable shares of Apollo;

            

    

    

    
      	
               
      

            	
              (y)

            	
              other
      than as set out in the Apollo Disclosure Documents, neither Apollo nor any
      of the Apollo Subsidiaries has made any loans to or guaranteed the
      obligations of any person;

            

    

    

    
      	
               
      

            	
              (z)

            	
              with
      respect to each premises of Apollo or the Apollo Subsidiaries which is
      material to Apollo and the Apollo Subsidiaries on a consolidated basis and
      which Apollo or any of the Apollo Subsidiaries occupies as tenant (the
      “Apollo Leased
      Premises”), Apollo or such Apollo Subsidiary occupies the Apollo
      Leased Premises and has the exclusive right to occupy and use the Apollo
      Leased Premises and each of the leases pursuant to which Apollo and/or the
      Apollo Subsidiaries occupies the Apollo Leased Premises is in good
      standing and in full force and
effect;

            

    

    

    
      	
               
      

            	
              (aa)

            	
              the
      assets of Apollo and the Apollo Subsidiaries and their business and
      operations are insured against loss or damage with responsible insurers on
      a basis consistent with insurance obtained by reasonably prudent
      participants in comparable businesses, and such coverage is in full force
      and effect, and Apollo has not failed to promptly give any notice of any
      material claim thereunder;

            

    

    

    
      	
               
      

            	
              (bb)

            	
              Apollo
      and each of the Apollo Subsidiaries is in compliance with all laws
      respecting employment and employment practices, terms and conditions of
      employment, pay equity and wages, except where non-compliance with such
      laws could not reasonably be expected to have a Material Adverse Effect on
      Apollo or any Apollo Subsidiary, and has not and is not engaged in any
      unfair labour practice;

            

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    - 24 -

     

    
      	
               
      

            	
              (cc)

            	
              there
      has not been in the last two years and there is not currently any labour
      disruption, grievance, arbitration proceeding or other conflict which
      could reasonably be expected to have a Material Adverse Effect on Apollo’s
      or any of the Apollo Subsidiaries’ business, taken as a whole, and Apollo
      and each of the Apollo Subsidiaries is in compliance with all provisions
      of all federal, provincial, local and foreign laws and regulations
      respecting employment and employment practices, terms and conditions of
      employment and wages and hours, except where non-compliance with any such
      provisions would not have a Material Adverse Effect on Apollo or any of
      the Apollo Subsidiaries;

            

    

    

    
      	
               
      

            	
              (dd)

            	
              no
      union has been accredited or otherwise designated to represent any
      employees of Apollo or any of the Apollo Subsidiaries and, to the
      knowledge of Apollo, no accreditation request or other representation
      question is pending with respect to the employees of Apollo or any of the
      Apollo Subsidiaries and no collective agreement or collective bargaining
      agreement or modification thereof has expired or is in effect in any of
      Apollo’s facilities and none is currently being negotiated by Apollo or
      any Apollo Subsidiary;

            

    

    

    
      	
               
      

            	
              (ee)

            	
              the
      Apollo Disclosure Documents disclose, to the extent required by applicable
      Securities Laws, each material plan for retirement, bonus, stock purchase,
      profit sharing, stock option, deferred compensation, severance or
      termination pay, insurance, medical, hospital, dental, vision care, drug,
      sick leave, disability, salary continuation, legal benefits, unemployment
      benefits, vacation, incentive or otherwise contributed to, or required to
      be contributed to, by Apollo for the benefit of any current or former
      director, officer, employee or consultant of Apollo (the “Apollo Employee Plans”),
      each of which has been maintained in all material respects with its terms
      and with the requirements prescribed by any and all statutes, orders,
      rules and regulations that are applicable to such Apollo Employee
      Plans;

            

    

    

    
      	
               
      

            	
              (ff)

            	
              Apollo
      maintains a system of internal accounting controls sufficient to provide
      reasonable assurances that (A) transactions are executed in accordance
      with management’s general or specific authorization, and (B) transactions
      are recorded as necessary to permit preparation of financial statements in
      conformity with Canadian generally accepted accounting principles and to
      maintain accountability for assets;

            

    

    

    
      	
               
      

            	
              (gg)

            	
              except
      as disclosed in the Apollo Disclosure Documents, none
      of the directors, officers or employees of Apollo or any associate or
      affiliate of any of the foregoing had or has any material interest, direct
      or indirect, in any material transaction or any proposed material
      transaction with Apollo or its Apollo Subsidiaries which materially
      affects, is material to or will materially affect Apollo or any Apollo
      Subsidiary;

            

    

    

    
      	
               
      

            	
              (hh)

            	
              the
      minute books and records of Apollo and the Apollo Subsidiaries made
      available to Linear and its counsel in connection with their due diligence
      investigation of Apollo for the periods from January, 2007 to the date
      hereof are all of the minute books and records of Apollo and the Apollo
      Subsidiaries and contain copies of all material proceedings (or certified
      copies thereof or drafts thereof pending approval) of the shareholders,
      the directors and all committees of directors of Apollo and the Apollo
      Subsidiaries to the date of review of such corporate records and minute
      books and there have been no other meetings, resolutions or proceedings of
      the shareholders, directors or any committees of the directors of Apollo
      or any of its Apollo Subsidiaries to the date hereof not reflected in such
      minute books and other records;

            

    

    

    
      	
               
      

            	
              (ii)

            	
              neither
      Apollo  nor any of its Apollo Subsidiaries has been in violation
      of, in connection with the ownership, use, maintenance or operation of its
      property and assets, including the Apollo Leased Premises, any
      Environmental Laws which would have a Material Adverse Effect on Apollo or
      any of its Apollo Subsidiaries;

            

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    - 25 -

     

    
      	
               
      

            	
              (jj)

            	
              without
      limiting the generality of the immediately preceding paragraph, Apollo and
      each of its Apollo Subsidiaries do not have any knowledge of, and have not
      received any notice of, any material claim, judicial or administrative
      proceeding, pending or threatened against, or which may affect, either
      Apollo or any Apollo Subsidiary or any of the property, assets or
      operations thereof, relating to, or alleging any violation of any
      Environmental Laws, Apollo is not aware of any facts which could give rise
      to any such claim or judicial or administrative proceeding and neither
      Apollo, nor any Apollo Subsidiary nor any of the property, assets or
      operations thereof is the subject of any investigation, evaluation, audit
      or review by any governmental authority to determine whether any violation
      of any Environmental Laws has occurred or is occurring or whether any
      remedial action is needed in connection with a release of any contaminant
      into the environment, except for compliance investigations conducted in
      the normal course by any governmental authority, in each case which could
      reasonably be expected to have a Material Adverse Effect on Apollo or any
      of its Apollo Subsidiaries;

            

    

    

    
      	
               
      

            	
              (kk)

            	
              there
      are no orders, rulings or directives issued, pending or, to the best of
      Apollo’s knowledge reasonably held, being based on due direction and
      enquiry of its personnel and advisors, threatened against Apollo or any of
      its Apollo Subsidiaries under or pursuant to any Environmental Laws
      requiring any work, repairs, construction or capital expenditures with
      respect to the property or assets of Apollo or any of its Apollo
      Subsidiaries (including the Apollo Leased Premises) which would have a
      Material Adverse Effect on Apollo or any of its Apollo
      Subsidiaries;

            

    

    

    
      	
               
      

            	
              (ll)

            	
              Apollo
      and the Apollo Subsidiaries are not subject to any contingent or other
      liability relating to the restoration or rehabilitation of land, water or
      any other part of the environment (except for those derived from normal
      exploration activities) or non-compliance with Environmental Laws which
      could reasonably be expected to have a Material Adverse Effect on Apollo
      or any of the Apollo Subsidiaries;

            

    

    

    
      	
            	
              (mm)

            	
              all
      information which has been prepared by Apollo and the Apollo Subsidiaries
      relating to Apollo and the Apollo Subsidiaries and the business, property
      and liabilities thereof and either publicly disclosed, provided or made
      available to Linear, including all financial, marketing, sales and
      operational information provided to Linear is, as of the date of such
      information, true and correct in all material respects, taken as a whole,
      and no fact or facts have been omitted therefrom which would make such
      information materially misleading;
and

            

    

    

    
      	
               
      

            	
              (nn)

            	
              Apollo
      is not aware of any circumstances presently existing under which liability
      is or could reasonably be expected to be incurred under Part XXIII – Civil
      Liability for Secondary Market Disclosure of the Securities Act
      (Ontario).

            

    

    

    
      	
              16.

            	
              Material
      Changes

            

    

     

    From and
after the date of execution of this letter of intent and ending on the earlier
of the Effective Date or the termination of this letter of intent, each party
shall promptly notify the other party in writing of:

     

    
      	
               
      

            	
              (a)

            	
              any
      significant development or material change relating to its business,
      operations, assets or prospects promptly after becoming aware of any such
      development or change; or

            

    

     

    
      	
               
      

            	
              (b)

            	
              any
      event or state of facts which the occurrence or failure would, or would
      reasonably be likely to:

            

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    - 26 -

     

    
      	
               
      

            	
              (i)

            	
              cause
      any of the representations or warranties of such party contained herein to
      be untrue or inaccurate in any material respect on the date hereof or at
      the Effective Date (provided that this paragraph (a) shall not apply in
      the case of an event or state of facts resulting from actions or omissions
      of such party which are permitted or required by this letter of intent);
      or

            

    

     

    
      	
               
      

            	
              (ii)

            	
              result
      in the failure to comply with or satisfy any covenant, condition or
      agreement to be complied with or satisfied by such party hereunder prior
      to the Effective Date.

            

    

     

    
      	
              17.

            	
              Mutual
      Covenants Regarding
Non-Solicitation

            

    

     

    
      	
               
      

            	
              (a)

            	
              Each
      party shall immediately cease and cause to be terminated all existing
      discussions and negotiations (including, without limitation, through any
      advisors or other parties on its behalf), if any, with any parties
      conducted before the date of this letter of intent with respect to any
      Acquisition Proposal (as defined herein) and shall immediately request the
      return or destruction of all information provided to any third parties who
      have entered into a confidentiality agreement with such party relating to
      an Acquisition Proposal and shall use all reasonable commercial efforts to
      ensure that such requests are
honoured.

            

    

     

    
      	
               
      

            	
              (b)

            	
              Neither
      party shall, directly or indirectly, do or authorize or permit any of its
      officers, directors or employees or any financial advisor, expert or other
      representative retained by it to do, any of the
  following:

            

    

     

    
      	
               
      

            	
              (i)

            	
              solicit,
      facilitate, initiate or encourage any Acquisition
  Proposal;

            

    

     

    
      	
               
      

            	
              (ii)

            	
              enter
      into or participate in any discussions or negotiations regarding an
      Acquisition Proposal, or furnish to any other person any information with
      respect to its businesses, properties, operations, prospects or conditions
      (financial or otherwise) in connection with an Acquisition Proposal or
      otherwise cooperate in any way with, or assist or participate in,
      facilitate or encourage any effort or attempt of any other person to do or
      seek to do any of the foregoing;

            

    

     

    
      	
               
      

            	
              (iii)

            	
              waive,
      or otherwise forbear in the enforcement of, or enter into or participate
      in any discussions, negotiations or agreements to waive or otherwise
      forbear in respect of, any rights or other benefits under confidential
      information agreements, including, without limitation, any “standstill
      provisions” thereunder; or

            

    

     

    
      	
               
      

            	
              (iv)

            	
              accept,
      recommend, approve or enter into an agreement to implement an Acquisition
      Proposal;

            

    

     

    provided,
however, that notwithstanding any other provision hereof, each party and its
officers, directors and advisers may:

     

    
      	
               
      

            	
              (v)

            	
              enter
      into or participate in any discussions or negotiations with a third party
      who (without any solicitation, initiation or encouragement, directly or
      indirectly, after the date of this letter of intent, by such party or any
      of its officers, directors or employees or any financial advisor, expert
      or other representative retained by it) seeks to initiate such discussions
      or negotiations and, subject to execution of a confidentiality and
      standstill (provided that such confidentiality agreement shall provide for
      disclosure thereof (along with all information provided thereunder) to the
      other parties hereto as set out below) may furnish to such third party
      information concerning such party and its business, properties and assets,
      in each case if, and only to the extent
that:

            

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    - 27 -

     

    
      	
               
      

            	
              A.

            	
              the
      third party has first made a written bona fide Acquisition Proposal which
      the board of directors of such party determines in good faith: (1) that
      funds or other consideration necessary for the Acquisition Proposal are
      available; (2) (after consultation with its financial advisor) would, if
      consummated in accordance with its terms, result in a transaction
      financially superior for securityholders of the Receiving Party (as herein
      defined) than the transaction contemplated by this letter of intent; (3)
      after receiving the advice of outside counsel as reflected in minutes of
      the board of directors of such party, that the taking of such action is
      necessary for the board of directors in discharge of its fiduciary duties
      under applicable laws; (4) that is reasonably capable of being completed
      without undue delay, taking into account all legal, financial, regulatory
      and other aspects of such proposal and the party making such proposal; (5)
      which is not subject to a due diligence and/or access condition which
      would allow access to the books, records, personnel or properties of the
      such party or its  respective officers and employees beyond 5:00
      p.m. (Toronto time) on the fifth Business Day after which access is
      afforded to the third party making the Acquisition Proposal (provided,
      however, that the foregoing shall not restrict the ability of such person
      to continue to review information provided to it by such party during such
      five Business Day period); (6) that the board of directors has
      determined to recommend to the shareholders of such party; and (7) that
      was not solicited in contravention of this letter of intent (a “Superior Proposal”);
      and

            

    

     

    
      	
               
      

            	
              B.

            	
              prior
      to furnishing such information to or entering into or participating in any
      such discussions or negotiations with such third party, such party
      provides prompt notice to the other party to the effect that it is
      furnishing information to or entering into or participating in discussions
      or negotiations with such person or entity together with a copy of the
      confidentiality agreement referenced above and if not previously provided
      to the other party, copies of all information provided to such third party
      concurrently with the provision of such information to such third party,
      and provided further that such party shall notify the other parties orally
      and in writing of any inquiries, offers or proposals with respect to a
      Superior Proposal from such third party (which written notice shall
      include, without limitation, a copy of any such proposal (and any
      amendments or supplements thereto), the identity of the person making it,
      if not previously provided to the other parties, copies of all information
      provided to such party and all other information reasonably requested by
      the other parties), within 24 hours of the receipt thereof, shall keep the
      other party informed of the status and details of any such inquiry, offer
      or proposal and answer the other party's questions with respect thereto;
      or

            

    

     

    
      	
               
      

            	
              (vi)

            	
              comply
      with Canadian Securities Administrators' Multilateral Instrument 62-104
      and OSC Rule 62-504 (as applicable) relating to the provision of
      directors' circulars and make appropriate disclosure with respect thereto
      to its securityholders; and

            

    

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    - 28 -

     

    
      	
               
      

            	
              (vii)

            	
              accept,
      recommend, approve or enter into an agreement to implement a Superior
      Proposal from a third party, but only if (1) prior to such acceptance,
      recommendation, approval or implementation, the board of directors shall
      have concluded in good faith, after considering all proposals to adjust
      the terms and conditions of this letter of intent in accordance with
      paragraph 17(c) and after receiving the advice of outside counsel as
      reflected in minutes of the board of directors of such party, that the
      taking of such action is necessary for the board of directors in discharge
      of its fiduciary duties under applicable laws (2) such party has complied
      with its obligations set forth in paragraph 17(c) and (3) such party
      terminates this letter of intent in accordance with Section
      20.

            

    

     

    
      	
               
      

            	
              (c)

            	
              The
      party in receipt of a Superior Proposal (a “Receiving Party”) shall
      give the other party (the “Responding Party”),
      orally and in writing, at least 72 hours advance notice of any decision by
      its board of directors to accept, recommend, approve or enter into an
      agreement to implement such Superior Proposal, which notice shall confirm
      that the board of directors of the Receiving Party has determined that
      such Acquisition Proposal constitutes a Superior Proposal, shall identify
      the third party making the Superior Proposal and shall provide a true and
      complete copy thereof and any amendments thereto. During such 72 hour
      period, the Receiving Party agrees not to accept, recommend, approve or
      enter into any agreement to implement such Superior Proposal and not to
      release the party making the Superior Proposal from any confidentiality or
      standstill provisions and shall not withdraw, redefine, modify or change
      its recommendation in respect of the Arrangement. In addition, during such
      72 hour period the Receiving Party shall, and shall cause its financial
      and legal advisors to, negotiate in good faith with the Responding Party
      and their financial and legal advisors to make such adjustments in the
      terms and conditions of this letter of intent and the Arrangement as would
      cause such Acquisition Proposal to no longer constitute a Superior
      Proposal hereunder. In the event the Responding Party offers in writing to
      amend this letter of intent and the Arrangement prior to the expiry of
      such 72 hour period, the board of directors of the Receiving Party shall
      review such offer and determine in good faith if the Acquisition Proposal
      would no longer constitute a Superior Proposal, in which event (i) the
      parties hereto will enter into an amendment to this letter of intent to
      reflect such offer, and (ii) the board of directors of the Receiving Party
      shall not accept, recommend, approve or enter into any agreement to
      implement such Superior Proposal and shall not release the party making
      the Superior Proposal from any confidentiality or standstill provisions
      and shall not withdraw, redefine, modify or change its recommendation in
      respect of the Arrangement.

            

    

     

    
      	
               
      

            	
              (d)

            	
              Each
      party agrees that all information that may be provided to it by the other
      party with respect to any Superior Proposal pursuant to this Section
      17 shall be
      treated as if it were “Confidential Information” as that term is defined
      in the confidentiality agreement dated January 6, 2010 between Apollo and
      Linear.

            

    

     

    
      	
               
      

            	
              (e)

            	
              Each
      party hereby represents and warrants to the other party that, as of the
      date hereof, it is not in active discussions or negotiations with any
      person (other than the other party to this letter of intent) with respect
      to any actual or potential Acquisition Proposal.  Except to the
      extent otherwise permitted pursuant to Section 17(b), each party shall
      deny access to non-public information under any confidentiality agreement,
      and shall not consent in favour of, or release from or fail to enforce
      against, any person under any confidentiality agreement or standstill
      agreement or similar obligation in favour of such
  party.

            

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    - 29 -

     

    
      	
               
      

            	
              (f)

            	
              Each
      party shall ensure that its officers, directors and employees and any
      investment bankers or other advisers or representatives retained by it are
      aware of the provisions of this Section 17. Each party shall be
      responsible for any breach of this Section 17 by its officers, directors,
      employees, investment bankers, advisers or
  representatives.

            

    

     

    
      	
               
      

            	
              (g)

            	
              “Acquisition Proposal”
      means, with respect to any party, any inquiry or the making of any
      proposal to such party or its shareholders, from any person which
      constitutes, or may reasonably be expected to lead to (in either case
      whether in one transaction or a series of transactions): (i) an
      acquisition from such party or its shareholders, of any securities of such
      party or its subsidiaries; (ii) any acquisition of a substantial amount of
      assets of such party or its subsidiaries; (iii) an amalgamation,
      arrangement, merger, or consolidation involving such party or its
      subsidiaries; or (iv) any take-over bid, issuer bid, exchange offer,
      recapitalization, liquidation, dissolution, reorganization into a royalty
      trust or income fund or similar transaction involving such party or its
      subsidiaries or any other transaction, the consummation of which would or
      could reasonably be expected to impede, interfere with, prevent or delay
      the transactions contemplated by this letter of intent or the Arrangement
      or which would or could reasonably be expected to materially reduce the
      benefits to the other party under this letter of intent or the
      Arrangement.

            

    

     

    
      	
              18.

            	
              Business
      Activities

            

    

     

    Each
party agrees that during the period from the date of execution of this letter of
intent and ending on the earlier of the Effective Date or the termination of
this letter of intent, except as required by law or as otherwise expressly
permitted or specifically contemplated by this letter of intent,
it:

     

    
      	
               
      

            	
              (a)

            	
              shall
      conduct its business only in the usual and ordinary course of business and
      consistent with past practice, and it shall use all reasonable commercial
      efforts to maintain and preserve its business, assets and advantageous
      business relationships, provided that it shall be entitled and authorized
      to comply with all pre-emptive rights, first purchase rights or rights of
      first refusal that are applicable to its assets and become operative by
      virtue of this letter of intent or any of the transactions contemplated by
      this letter of intent;

            

    

     

    
      	
               
      

            	
              (b)

            	
              shall
      not, except in connection with an internal reorganization implemented in
      conjunction with the Arrangement: (i) amend its constating documents; (ii)
      declare, set aside or pay any dividend or make any other distribution or
      payment (whether in cash, shares, or property) in respect of its
      outstanding securities; (iii) issue or agree to issue any shares or
      securities convertible into or exchangeable or exercisable for, or
      otherwise evidencing a right to acquire, shares, other than the issuance
      of shares pursuant to the exercise of currently outstanding rights to
      acquire shares or to employees hired after the date hereof in a manner
      consistent with past practice and other than in connection with the
      Private Placement, the RAB Issuance or the Duffy Issuance; (iv) redeem,
      purchase or otherwise acquire any of its outstanding shares or other
      securities (other than redemptions required pursuant to its constating
      documents); (v) split, combine or reclassify any of its securities; (vi)
      adopt a plan of liquidation or resolutions providing for its liquidation,
      dissolution, merger, consolidation or reorganization; or (vii) enter into
      or modify any contract, agreement, commitment or arrangement with respect
      to any of the foregoing;

            

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    - 30 -

     

    
      	
               
      

            	
              (c)

            	
              shall
      not, except as previously disclosed in writing to the other parties or
      expressly publicly disclosed by such party in documents filed on Sedar.com
      prior to the date hereof, without prior consultation with and the consent
      of the other party, such consent not to be unreasonably withheld, directly
      or indirectly: (i) sell, pledge, dispose of or encumber any assets other
      than in the ordinary course of business for consideration in excess of
      US$500,000 individually or US$1 million in the aggregate; (ii) expend or
      commit to expend more than US$1 million individually or US$2 million in
      the aggregate with respect to any capital expenditures prior to the date
      hereof; (iii) expend or commit to expend any amounts with respect to any
      operating expenses other than in the ordinary course of business or
      pursuant to the Arrangement; (iv) acquire (by merger, amalgamation,
      consolidation or acquisition of shares or assets) any corporation,
      partnership or other business organization or division thereof which is
      not a subsidiary or affiliate of such party, or make any investment
      therein either by purchase of shares or securities, contributions of
      capital or property transfer with an acquisition cost in excess of US$1
      million in the aggregate; (v) acquire any assets with an acquisition cost
      in excess of US$1 million in the aggregate; (vi) incur any indebtedness
      for borrowed money in excess of existing credit facilities, or any other
      material liability or obligation or issue any debt securities or assume,
      guarantee, endorse or otherwise become responsible for, the obligations of
      any other individual or entity, or make any loans or advances, other than
      in respect of fees payable to legal, financial and other advisors in the
      ordinary course of business or in respect of the Arrangement; (vii)
      authorize, recommend or propose any release or relinquishment of any
      material contract right; (viii) waive, release, grant or transfer any
      material rights of value or modify or change in any material respect any
      existing material license, lease, contract or other material document;
      (ix) enter into or terminate any hedges, swaps or other financial
      instruments or like transactions, other than the termination of certain
      existing hedges as contemplated in the Consent Letter of even date
      herewith among Apollo, Macquarie Bank Limited  and RMB Australia
      Holdings Limited (together “Financiers”), as financiers and RMB Resources
      Inc. (“Agent”), as agent and security agent for and on behalf of the
      Financiers, or a restructuring of such hedges with the consent of Linear;
      or (x) authorize or propose any of the foregoing, or enter into or modify
      any contract, agreement, commitment or arrangement to do any of the
      foregoing;

            

    

     

    
      	
               
      

            	
              (d)

            	
              shall
      not make any payment to any employee, officer or director outside of their
      ordinary and usual compensation for services provided, except to the
      extent that any such entitlement to payment to a former employee or
      officer has accrued prior to the date
hereof;

            

    

     

    
      	
               
      

            	
              (e)

            	
              shall
      not: (i) grant any officer, director or employee a material increase in
      compensation in any form; (ii) grant any general salary increase; (iii)
      take any action with respect to the amendment or grant of any severance or
      termination pay policies or arrangement for any directors, officers or
      employees; (iv) amend any stock option plan or trust unit incentive plan
      or the terms of any outstanding options or rights thereunder; nor (v)
      advance any loan to any officer, director or any other party not at arm's
      length, other than as may be agreed to by the
  parties;

            

    

     

    
      	
               
      

            	
              (f)

            	
              shall
      not adopt or amend or make any contribution to any bonus, employee benefit
      plan, profit sharing, share or deferred compensation, insurance, incentive
      compensation, other compensation or other similar plan, agreement, share
      or incentive or purchase plan, fund or arrangement for the benefit of
      employees, except as is necessary to comply with the law or with respect
      to existing provisions of any such plans, programs, arrangement or
      agreements;

            

    

     

    
      	
               
      

            	
              (g)

            	
              shall
      use reasonable commercial efforts to maintain in force its current
      policies of insurance and will pay all premiums in respect of such
      insurance policies that become due after the date
  hereof;

            

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    - 31 -

     

    
      	
               
      

            	
              (h)

            	
              shall
      not take any action, refrain from taking any action, permit any action to
      be taken or not taken, inconsistent with this letter of intent, which
      might directly or indirectly interfere or affect the consummation of the
      Arrangement; and

            

    

     

    
      	
               
      

            	
              (i)

            	
              agrees
      to keep the other parties fully apprised in a timely manner of every
      circumstance, action, occurrence or event occurring or arising after the
      date hereof that could reasonably result in a breach by such party of the
      representations and warranties contained herein. Both Apollo and Linear
      shall confer with and obtain the other party's approval (not to be
      unreasonably withheld or delayed), prior to taking action (other than in
      emergency situations) with respect to any operational matters involved in
      its business which may constitute a material change for that
      party.

            

    

     

    
      	
              19.

            	
              Access
      to Information

            

    

     

    Each of
the parties hereto, the Financiers, the Agent and their respective accountants,
legal counsel, technical and financial advisors and other representatives
thereof shall be entitled to, subject to obtaining any necessary consents, have
full access during normal business hours to all properties, information and
records relating to any other party, including, but not limited to, all related
facilities, buildings, equipment, assets, drill cores, assay results, maps and
diagrams, books, contracts, financial statements, forecasts, financial
projections, studies, records, operating permits and licences and any other
documentation (whether in writing or stored in computerized, electronic, disk,
tape, microfilm or any other form) or materials of any nature
whatsoever.

     

    Any
investigation made by a party and its advisors shall not mitigate, diminish or
affect the representations made to such party by the other party
hereto.

    

    
      	
              20.

            	
              Termination

            

    

     

    This
letter of intent may be terminated:

     

    
      	
               
      

            	
              (a)

            	
              by
      mutual written consent of both
parties;

            

    

     

    
      	
               
      

            	
              (b)

            	
              by
      a party which accepts, recommends, approves or enters into an agreement to
      implement a Superior Proposal in accordance with Section 17; provided that
      concurrently with any such termination, the terminating party shall have
      paid the Linear Break Fee or the Apollo Break Fee, as applicable,
      following which the payor party shall have no further liabilities arising
      hereunder other than for a breach of any section of this letter of intent;
      and

            

    

     

    
      	
               
      

            	
              (c)

            	
              by
      either party if the Definitive Agreement is not executed by both parties
      on or before 5:00 pm (Toronto time) on March 31, 2010; provided that
      concurrently with any such termination, the terminating party shall have
      paid the Linear Break Fee or the Apollo Break Fee, as applicable,
      following which the payor party shall have no further liabilities arising
      hereunder other than for a breach of any section of this letter of
      intent.

            

    

     

    
      	
              21.

            	
              Announcements

            

    

     

    It is the
agreed intention of each of the parties to issue a joint press release or
separate press releases disclosing the Arrangement contemplated hereby
immediately following execution of this letter of intent and after consultation
with each other as to the timing and content of such release(s). Neither party
will otherwise make any disclosure of this letter of intent or its contents to
any third parties without the prior written consent of the other party, provided
however that such disclosure may be made, after consultation with the other
party, in response to requirements of applicable law or the policies, rules or
requirements of securities regulatory' authorities or stock
exchanges.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    - 32 -

     

    
      	
              22.

            	
              Privacy
      Matters

            

    

     

    The
parties acknowledge that they are responsible for compliance at all times with
applicable privacy laws which govern the collection, use and disclosure of
personal information acquired by or disclosed to the parties pursuant to or in
connection with this letter of intent (the “Disclosed Personal
Information”). None of the parties shall use the Disclosed Personal
Information for any purposes other than those relating to the performance of
this letter of intent and the completion of the Arrangement.

     

    
      	
              23.

            	
              Assignment

            

    

     

    Neither
this letter of intent nor any of the rights, interests or obligations hereunder
shall be assigned by either of the parties hereto without the prior written
consent of the other party.

     

    
      	
              24.

            	
              No
      Finder's Fee

            

    

     

    
      	
               
      

            	
              (a)

            	
              Linear
      represents and warrants to Apollo that Linear has not entered into any
      arrangement whereby Linear will have any liability for financial
      advisor's, broker's or finder's fees (including without limitation any
      disbursements, expenses or fairness opinion) in respect of this
      transaction, except for Linear's fees and disbursements to its financial
      advisors.  Linear has provided to Apollo true and correct copies
      of its agreements with each of its financial
  advisors.

            

    

     

    
      	
               
      

            	
              (b)

            	
              Apollo
      represents and warrants to Linear that Apollo has not entered into any
      arrangement whereby Apollo or the other parties will have any liability
      for financial advisor's, broker's or finder's fees (including without
      limitation any disbursements, expenses or fairness opinion) in respect of
      this transaction, except for Apollo's fees and disbursements to its
      financial advisors. Apollo has provided to Linear true and correct copies
      of its agreements with each of its financial
  advisors.

            

    

     

    
      	
              25.

            	
              Costs

            

    

     

    Except as
set forth immediately below, all fees, costs and expenses incurred in connection
with this letter of intent and the transactions contemplated hereby shall be
paid by the party incurring such cost or expense, whether or not the Arrangement
is completed.  Apollo hereby agrees to pay the fees and expenses of
Linear in connection with the Private Placement to a maximum of CAD$50,000,
exclusive of GST and disbursements.

     

    
      	
              26.

            	
              Governing
      Law

            

    

     

    This
letter of intent shall be governed by and construed in accordance with the laws
of the Province of Ontario and the parties hereto irrevocably attorn to the
jurisdiction of the courts of the Province of Ontario.

     

    
      	
              27.

            	
              Obligations

            

    

     

    The
parties acknowledge that the provisions of this letter of intent shall be
binding on the parties hereto.

     

    —
SIGNATURE PAGE FOLLOWS —

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    - 33 -

     

    If the
terms of this letter of intent are acceptable to you, please sign below on the
enclosed duplicate copy of this letter and return the same to
Apollo.  This letter of intent may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
taken together shall constitute one agreement.  Delivery of an
executed counterpart of this letter of intent by facsimile or transmitted
electronically in legible form, including without limitation in portable
document format (PDF), shall be equally effective as delivery of a manually
executed counterpart of this letter of intent.

     

    
      
        	 
      	 
      	
                Yours
      truly,

              
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
                APOLLO
      GOLD CORPORATION

              
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
                Per:

              	/s/
      R. David Russell
	 
      	 
      	 
      	 
      	 
      
	
                AGREED
      TO this 9th day of March, 2010 

                by:

              	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	
                LINEAR
      GOLD CORP.

              	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	
                Per:

              	/s/
      Wade Dawe

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