Document:

SUBSCRIPTION
AGREEMENT

    

    TO:                      APOLLO GOLD CORPORATION (the
“Company”)

    

    Linear
Gold Corp. (the “Purchaser”) hereby irrevocably
subscribes for and agrees to purchase the number of common shares of the Company
(the “Shares”) set out
below, at a price of $0.40 per Share, subject to the following terms and
conditions.  This agreement, which for greater certainty includes and
incorporates the attached schedule, is referred to herein as the “Subscription
Agreement”.  The Purchaser and the Company agree to be bound by
the terms and conditions set forth in the attached “Terms and Conditions of
Subscription” including without limitation the representations, warranties and
covenants set forth in the schedule attached thereto.  The Purchaser
and the Company further agree, without limitation, that the other party and its
counsel may rely on the representations, warranties and covenants contained in
such documents.

    

    
      
        	
                Issuer:

              	
                Apollo
      Gold Corporation

              	
                Issue:  Common
      Shares

              

      

    

    

    Price Per
Share:  $0.40

    

    No. of Shares
Purchased:  62,500,000

    

    Total Subscription
Price:  $25,000,000

    

    DATED this 9th day of March,
2010.

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          	
                                                  Name
      and Address of Purchaser

                                                	 
      	
                                                   

                                                  Suite
      502, 2000 Barrington Street

                                                
	
                                                  Linear
      Gold Corp.

                                                	 
      	
                                                  Halifax,
      Nova Scotia  B3J 3K1

                                                
	
                                                  (Name
      of Purchaser - please print)

                                                	 
      	
                                                  (Purchaser’s
      Address)

                                                
	 
      	 
      	 
      	 
      
	
                                                  by:

                                                	President
      and CEO	 
      	 
      
	 
      	
                                                   (Official
      Capacity or Title - please print)

                                                	 
      	 
      
	 	 	 	 
	/s/
      Wade Dawe	 
      	
                                                  (902) 422-1421

                                                
	Authorized
      Signature	 
      	
                                                  (Telephone
      Number)

                                                
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
                                                  (902)
      491-4281

                                                
	(Please
      print name of individual whose signature appears above if different than
      the name of the Purchaser printed above.)	 
      	
                                                  (Facsimile
      Number)

                                                

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                	
                                                        Registration
      Instructions:

                                                         

                                                      	 
      	
                                                        Delivery
      Instructions:

                                                      
	
                                                        Name

                                                      	 
      	 
      
	 	 	 
	 
      	 
      	 
      
	
                                                        Account
      reference, if applicable

                                                      	 
      	
                                                        Account
      reference, if applicable

                                                      
	 	 	 
	 
      	 
      	 
      
	
                                                        Address

                                                      	 
      	
                                                        Contact
      Name

                                                      
	 
      	 
      	 
      
	 
      	 
      	
                                                        Address

                                                      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 	 	 
	 	 	 
	 
      	 
      	 
      
	 
      	 
      	
                                                        Telephone
      Number

                                                      
	 	 	 
	 
      	 
      	 
      
	 
      	 
      	
                                                        Facsimile
      Number

                                                      

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    ACCEPTANCE

     

    The
foregoing is acknowledged, accepted and agreed to this 9th day of March,
2010.

    

    APOLLO
GOLD CORPORATION

    

    
      
        
          
            	
                    Per:

                  	/s/
      R. David Russell
	 
      	
                    Authorized
      Signing
Officer

                  

          

        

      

    

    
      
         

      

      
        – 2 –

        
          

        

      

      
         

      

    

    TERMS AND CONDITIONS OF
SUBSCRIPTION

     

    1.           Subscription.  The
Purchaser hereby tenders to the Company this Subscription Agreement which, upon
acceptance by the Company, will constitute an irrevocable agreement of the
Purchaser to purchase from the Company, and of the Company to sell to the
Purchaser, an aggregate of 62,500,000 Shares at a price of $0.40 per Share (the
“Purchase Price”), all
on the terms and subject to the conditions set out in this Subscription
Agreement (the “Private
Placement”).  The Company is a public company listed on the
Toronto Stock Exchange (the “TSX”) and the NYSE Amex
Equities Exchange (the “AMEX”).

     

    2.           Execution.  At the
Execution Time on the Execution Date, the Company and the Purchaser shall duly
execute this Subscription Agreement pursuant to which the Purchaser shall
irrevocably subscribe for, and the Company shall irrevocably accept this
subscription by the Purchaser of, 62,500,000 Shares, subject to the conditions
set out in Section 11 hereof (which conditions may be waived by the Purchaser in
its sole discretion) which, for greater certainty, include: (i) the approval of
AMEX of the Private Placement (the “AMEX Approval”); (ii) the
entering into of a Support Agreement and a Lock-Up Agreement by each of the
Lenders; (iii) the receipt by the Purchaser of the legal opinions referred to in
subsections 11(i) and (k) hereof; and (iv) the receipt by the Purchaser of the
undertaking of the Company referred to in subsection 11(l) (collectively, the
“Closing Date
Conditions”).  The Closing shall occur immediately following
satisfaction or waiver by the Purchaser of the last of the Closing Date
Conditions to be satisfied or waived, it being understood that the Closing shall
not occur until such time as all of the Closing Date Conditions have either been
satisfied or waived by the Purchaser.

     

    3.           Definitions.  In
this Subscription Agreement, unless the context otherwise requires:

     

    
      	
               
      

            	
              (a)

            	
              “affiliate” and “distribution” have the
      respective meanings ascribed to them in the Securities Act
      (Ontario);

            

    

     

    
      	
               
      

            	
              (b)

            	
              “Arrangement” means the
      proposed transaction pursuant to which the businesses of the Company and
      the Purchaser will be combined pursuant to a plan of arrangement to be
      completed under the Canada Business Corporations
      Act;

            

    

     

    
      	
               
      

            	
              (c)

            	
              “Black Fox Report” means
      the technical report entitled “NI 43-101 Technical Report, Apollo Gold
      Corporation, Black Fox Project, Timmins, Ontario, Canada” prepared by SRK
      (US), Inc., AMEC Americas Limited and Samuel Engineering, Inc. dated April
      14, 2008 and filed on the Company’s SEDAR profile on April 14,
      2008;

            

    

     

    
      	
               
      

            	
              (d)

            	
              “Closing” means the
      completion of the issue and sale by the Company and the purchase by the
      Purchaser of the Shares pursuant to the provisions of this Subscription
      Agreement;

            

    

     

    
      	
               
      

            	
              (e)

            	
              “Closing Date” means the
      date on which the last of the Closing Date Conditions to be satisfied is
      satisfied or waived by the Purchaser or such other date as the Company and
      the Purchaser may agree;

            

    

     

    
      	
               
      

            	
              (f)

            	
              “Closing Time” means such
      time on the Closing Date immediately following the satisfaction or waiver
      by the Purchaser of the last of the Closing Date Conditions to be
      satisfied or waived or such other time as the Company and the Purchaser
      may agree;

            

    

     

    
      	
               
      

            	
              (g)

            	
              “Common Shares” means the
      common shares in the capital of the
Company;

            

    

     

    
      	
               
      

            	
              (h)

            	
              “Company’s Auditors”
      means such firm of chartered accountants as the Company may have appointed
      or may from time to time appoint as auditors of the
    Company;

            

    

     

    
      	
               
      

            	
              (i)

            	
              “Disclosure Documents”
      means all publicly available press releases, material change reports,
      annual information forms, information circulars, financial statements and
      other documents that have been disclosed by the Company to the public and
      filed pursuant to applicable Securities Laws or otherwise posted on SEDAR
      or EDGAR;

            

    

    
      
         

      

      
        – 3 –

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (j)

            	
              “Execution Date” means
      March 9, 2010 or such other date as the Company and the Purchaser may
      agree;

            

    

     

    
      	
               
      

            	
              (k)

            	
              “Execution Time” means
      8:00 a.m. (Toronto time) on the Execution Date or such other time as the
      Company and the Purchaser may
agree;

            

    

     

    
      	
               
      

            	
              (l)

            	
              “Expenses” means the
      Purchaser’s fees and expenses incurred in connection with the Private
      Placement, including GST and disbursements, for which the Company shall be
      responsible, to a maximum of $50,000, exclusive of GST and
      disbursements;

            

    

     

    
      	
               
      

            	
              (m)

            	
              “Lenders” means,
      collectively, Macquarie Bank Limited and RMB Australia Holdings Limited,
      being the lenders to the Company under the Project Facility
      Agreement;

            

    

     

    
      	
               
      

            	
              (n)

            	
              “Lock-Up Agreement” has
      the meaning ascribed thereto in subsection 11(c)
  hereof;

            

    

     

    
      	
               
      

            	
              (o)

            	
              “Governmental Authority”
      means and includes, without limitation, any national, federal government,
      province, state, municipality or other political subdivision of any of the
      foregoing, any entity exercising executive, legislative, judicial,
      regulatory or administrative functions of or pertaining to government and
      any corporation or other entity owned or controlled (through stock or
      capital ownership or otherwise) by any of the
  foregoing;

            

    

     

    
      	
               
      

            	
              (p)

            	
              “Huizopa Report” means
      the technical report entitled “Report on the Geology and Current Status of
      the Huizopa Gold-Silver Property, Chihuahua, Mexico” prepared by John G.
      Cleary, Consulting Geologist, dated May 20, 2009 and filed on the
      Company’s SEDAR profile on August 19,
2009;

            

    

     

    
      	
               
      

            	
              (q)

            	
              “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;

            

    

     

    
      	
               
      

            	
              (r)

            	
              “NI 45-102” means
      National Instrument 45-102 Resale of Securities as
      such instrument is in effect at Closing in the Province of Nova Scotia in
      which the Purchaser resides;

            

    

     

    
      	
               
      

            	
              (s)

            	
              “NI 45-106” means
      National Instrument 45-106 Prospectus and Registration
      Exemptions as such instrument is in effect at Closing in the
      Province of Nova Scotia in which the Purchaser
  resides;

            

    

     

    
      	
               
      

            	
              (t)

            	
              “person” means an
      individual, firm, corporation, syndicate, partnership, trust, association,
      unincorporated organization, joint venture, investment club, government or
      agency or political subdivision thereof and every other form of legal or
      business entity of whatsoever nature or
kind;

            

    

     

    
      	
               
      

            	
              (u)

            	
              “Personal Information”
      means any information about a Purchaser disclosed by the Purchaser in this
      Subscription Agreement and the Schedules
hereto;

            

    

     

    
      	
               
      

            	
              (v)

            	
              “Project Facility
      Agreement” means the agreement among the Company, the Lenders and
      RMB Resources Inc. dated February 20, 2009, as amended, relating to the
      Company’s credit facility in respect of the Company’s Black Fox
      project;

            

    

     

    
      	
               
      

            	
              (w)

            	
              “Properties” means,
      collectively, the properties of the Company that are the subject of the
      Black Fox Report and the Huizopa
Report;

            

    

     

    
      	
               
      

            	
              (x)

            	
              “Purchaser” means Linear
      Gold Corp.;

            

    

    
      
         

      

      
        – 4 –

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (y)

            	
              “Qualifying Jurisdiction”
      means the Province of Nova
Scotia;

            

    

     

    
      	
               
      

            	
              (z)

            	
              “Reporting Provinces”
      means, collectively, the provinces of British Columbia, Alberta,
      Saskatchewan, Manitoba, Ontario, New Brunswick, Nova Scotia, Prince Edward
      Island, Newfoundland;

            

    

     

    
      	
               
      

            	
              (aa)

            	
              “SEC” means the U.S.
      Securities and Exchange Commission;

            

    

     

    
      	
               
      

            	
              (bb)

            	
              “Securities Commission”
      means the Nova Scotia Securities
Commission;

            

    

     

    
      	
               
      

            	
              (cc)

            	
              “Securities Laws” means,
      unless the context otherwise requires, all applicable securities laws in
      the Qualifying Jurisdiction and the United
      States and
      the respective regulations made thereunder, together with applicable
      published fee schedules, prescribed forms, policy statements, national or
      multilateral instruments, orders, blanket rulings and other regulatory
      instruments of the securities regulatory authorities in such
      jurisdictions;

            

    

     

    
      	
               
      

            	
              (dd)

            	
              “Support Agreement” has
      the meaning ascribed thereto in subsection 11(b)
  hereof;

            

    

     

    
      	
               
      

            	
              (ee)

            	
              “United States” means the
      United States of America, its territories and possessions, any State of
      the United States and the District of
Columbia;

            

    

     

    
      	
               
      

            	
              (ff)

            	
              “U.S. Person” means a
      U.S. person as defined in Rule 902(k) of Regulation S under the U.S.
      Securities Act; and

            

    

     

    
      	
               
      

            	
              (gg)

            	
              “U.S. Securities Act”
      means the United States Securities Act of 1933, as
  amended.

            

    

     

    4.           Delivery and
Payment.  The Purchaser agrees that the following shall be
delivered:

     

    
      	
               
      

            	
              (a)

            	
              to
      the Company at the Execution Time, a completed and duly signed copy of
      this Subscription Agreement together with a duly completed and executed
      copy of the Accredited Investor Status Certificate in the form attached
      hereto as Schedule A; and

            

    

     

    
      	
               
      

            	
              (b)

            	
              at
      the Closing Time, a certified cheque or bank draft made payable on or
      before the Closing Date in same day freely transferable Canadian funds at
      par in Toronto, Ontario to “Fogler, Rubinoff LLP, in Trust” representing
      the aggregate Purchase Price payable by the Purchaser for the Shares, less
      the Expenses, or such other method of payment of the same amount against
      delivery of the Shares as the Company may
  accept.

            

    

     

    The
Purchaser acknowledges and agrees that any document referred to in this Section
4, when executed and delivered by the Purchaser, will form part of and will be
incorporated into this Subscription Agreement with the same effect as if each
constituted a representation and warranty or covenant of the Purchaser hereunder
in favour of the Company.  The Purchaser consents to the filing of
such documents as may be required to be filed with the Securities Commission,
the SEC, the TSX and AMEX in connection with the transactions contemplated
hereby.

    

    5.           Closing.  The
transactions contemplated hereby will be completed at the offices of Fogler,
Rubinoff LLP, counsel to the Company, in Toronto, Ontario on the Closing Date at
the Closing Time or such other date or time as the Purchaser and the Company may
agree upon.  At or prior to the Closing Time, the Company shall duly
and validly deliver to the Purchaser one or more certificates in definitive form
representing the Shares registered as directed by the Purchaser in writing,
against payment at the direction of the Company, in lawful money of Canada by
certified cheque, banker’s draft or wire transfer payable at par in the City of
Toronto, of an amount equal to the aggregate purchase price for the Shares being
issued and sold hereunder, less the Expenses.

    
      
         

      

      
        – 5 –

        
          

        

      

      
         

      

    

     

    6.           Covenants of the
Company.  The Company hereby covenants to the Purchaser and its
permitted assigns, and acknowledges that the Purchaser is relying on such
covenants in purchasing the Shares, that the Company shall:

     

    
      	
               
      

            	
              (a)

            	
              allow
      the Purchaser and its representatives to conduct all due diligence
      regarding the Company which the Purchaser may reasonably require to be
      conducted prior to the Closing Date.  Without limiting the
      generality of the foregoing, the Company shall make available its
      directors, senior management, audit committee, auditors, technical
      advisors, legal counsel and other experts to any questions the Purchaser
      may have;

            

    

    

    
      	
               
      

            	
              (b)

            	
              use
      its best efforts to fulfill, at or before the Closing Date, each of the
      conditions set out in Section 11;

            

    

    

    
      	
               
      

            	
              (c)

            	
              duly
      execute and deliver this Subscription Agreement at the Execution Time, and
      comply with and satisfy all terms, conditions and covenants herein
      contained to be complied with or satisfied by the
  Company;

            

    

    

    
      	
               
      

            	
              (d)

            	
              ensure
      that at the Closing Time the Shares are duly issued as fully paid and
      non-assessable shares in the capital of the Company on payment of the
      purchase price therefor;

            

    

    

    
      	
               
      

            	
              (e)

            	
              use
      US$10,000,000 of the net proceeds of the Private Placement to repay
      indebtedness under the Project Facility Agreement and use the balance of
      the net proceeds for working capital
purposes;

            

    

    

    
      	
               
      

            	
              (f)

            	
              subject
      to compliance with applicable Securities Laws, obtain the prior approval
      of the Purchaser as to the content and form of any press release relating
      to the Private Placement or the
Arrangement;

            

    

    

    
      	
               
      

            	
              (g)

            	
              execute
      and file with the Securities Commission and the SEC all forms, notices and
      certificates relating to the Private Placement required to be filed by it
      pursuant to the Securities Laws in the time required by applicable
      Securities Laws;

            

    

    

    
      	
               
      

            	
              (h)

            	
              execute
      and file with the TSX and AMEX all necessary documents and use its
      commercially reasonable efforts to ensure that the Shares have been
      approved for listing and trading on the TSX and AMEX as of their date of
      issuance;

            

    

    

    
      	
               
      

            	
              (i)

            	
              ensure
      that the Shares shall not be subject to a restricted period or statutory
      hold period under applicable Securities Laws or to the resale restriction
      under the policies of the TSX which extends beyond four months and one day
      after the Closing Date; provided, however, that the Shares shall be
      “restricted securities” under the U.S. Securities
  Act;

            

    

    

    
      	
               
      

            	
              (j)

            	
              for
      a period of five (5) years following the Closing Date, use commercially
      reasonable efforts to maintain its status as a “reporting issuer” under
      the Securities Laws of at least one jurisdiction in Canada not in default
      of any requirement of such Securities Laws, unless during such period the
      Company is acquired by another entity through a formal takeover bid, plan
      of arrangement or other form of merger, reorganization or business
      combination;

            

    

    

    
      	
               
      

            	
              (k)

            	
              for
      a period of five (5) years following the Closing Date, use commercially
      reasonable efforts to maintain the listing of the Common Shares on the TSX
      and AMEX, or such other recognized stock exchange or quotation system as
      the Purchaser may approve, acting reasonably, unless during such period
      the Company is acquired by another entity through a formal takeover bid,
      plan of arrangement or other form of merger, reorganization or business
      combination;

            

    

    

    
      	
               
      

            	
              (l)

            	
              in
      the event the Arrangement is not completed for any reason: (i) upon the
      request of the Purchaser, file a registration statement with the SEC in
      respect of the Shares to register the resale of the Shares by the
      Purchaser in the United States, which registration statement shall be
      filed as soon as practicable following the request of the Purchaser and in
      any event within 30 days of such request; and (ii) use its commercially
      reasonable best efforts to resolve all comments of the SEC (if any) and to
      take all necessary steps in order to have such registration statement
      declared effective by the SEC as expeditiously as possible following the
      date of such filing;

            

    

    
      
         

      

      
        – 6 –

        
          

        

      

      
         

      

    

    

    
      	
               
      

            	
              (m)

            	
              during
      the period between the Execution Time and the Closing Time, not do or
      cause, permit or suffer to be done any act or thing which would have the
      effect of making untrue any representation or warranty of the Company
      contained in this Subscription Agreement, nor fail or omit to do or fail
      or omit to cause to be done any act or thing the non-performance of which
      would have the effect of making untrue any representation or warranty
      contained in this Subscription Agreement;
and

            

    

    

    
      	
               
      

            	
              (n)

            	
              during
      the period between the Execution Time and the Closing Time, not do or
      cause, permit or suffer to be done any act or thing which would reasonably
      be regarded as being directed towards or likely to prevent or delay the
      successful completion of the transactions contemplated in this
      Subscription Agreement.

            

    

    

    7.           Representations and Warranties of the
Company.  The Company represents and warrants to the Purchaser
and its permitted assigns, and acknowledges that the Purchaser is relying upon
such representations and warranties in connection with the execution of this
Subscription Agreement and the completion of the Private Placement,
that:

    

    
      	
               
      

            	
              (i)

            	
              the
      Company and each of the Subsidiaries (as hereinafter defined) 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 the Company has all requisite power and authority to enter
      into this Subscription Agreement and to carry out its obligations
      hereunder;

            

    

    

    
      	
               
      

            	
              (ii)

            	
              the
      Company has no subsidiaries other than the following (the “Subsidiaries” and each a
      “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 the Company
      or would otherwise be material to the business and affairs of the Company
      on a consolidated basis:

            

    

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            	
                                    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	%

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    

    
      	
               
      

            	
              (iii)

            	
              the
      Company owns, directly or indirectly, the percentage of issued and
      outstanding shares of each of the Subsidiaries set out in subsection 7(ii)
      above, all of the issued and outstanding shares of the Subsidiaries are
      issued as fully paid and non-assessable shares, in each case, other than
      as disclosed in the 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 the Company or any of the Subsidiaries of
      any interest in any of the shares in the capital of any of the
      Subsidiaries;

            

    

    
      
         

      

      
        – 7 –

        
          

        

      

      
         

      

    

    

    
      	
               
      

            	
              (iv)

            	
              other
      than as disclosed in the Disclosure Documents, the Company and each of the
      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 the Company or any
      Subsidiary.  In particular, without limiting the generality of
      the foregoing, neither the Company nor any of the 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 Disclosure Documents where such
      revocation or cancellation would have a Material Adverse Effect on the
      Company or any Subsidiary;

            

    

    

    
      	
               
      

            	
              (v)

            	
              except
      as disclosed in the Disclosure Documents, (a) the Company and the
      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 Disclosure Documents, and no other Mining
      Rights (as hereinafter defined) are necessary for the conduct of the
      business of the Company or any Subsidiary as currently conducted, (b) none
      of the Company or any 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 the Company or any 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;

            

    

    

    
      	
               
      

            	
              (vi)

            	
              the
      Company and the 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
      the Company and the Subsidiaries have an interest as described in the
      Disclosure Documents under valid, subsisting and enforceable title
      documents or other recognized and enforceable agreements or instruments,
      sufficient to permit the Company or the applicable Subsidiary to explore
      the minerals relating thereto; all property, leases or claims in which the
      Company or any 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 the Company or any
      Subsidiary; the Company and the Subsidiaries have all necessary surface
      rights, access rights and other necessary rights and interests relating to
      the properties in which the Company and the Subsidiaries have an interest
      as described in the Disclosure Documents granting the Company or the
      applicable 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 the Company or the applicable Subsidiary,
      with only such exceptions as do not interfere with the use made by the
      Company or the applicable 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 the Company or a
      Subsidiary except where the failure to be so would not have a Material
      Adverse Effect on the Company or any Subsidiary. The Mining Rights in
      respect of the Company’s properties, as disclosed in the Disclosure
      Documents, constitute a description of all material Mining Rights held by
      the Company and the Subsidiaries;

            

    

    

    
      	
               
      

            	
              (vii)

            	
              the
      Company has made available to the respective authors thereof, prior to the
      issuance of the Black Fox Report and the Huizopa Report for the purpose of
      preparing the Black Fox Report and the Huizopa Report, respectively, all
      information requested, and to the knowledge and belief of the Company, no
      such information contains any material misrepresentation. The Company 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;

            

    

    
      
         

      

      
        – 8 –

        
          

        

      

      
         

      

    

    

    
      	
               
      

            	
              (viii)

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

            

    

    

    
      	
               
      

            	
              (ix)

            	
              the
      Company is a reporting issuer under the Securities Laws of each of the
      Reporting Provinces, is not in default of any requirement of such
      Securities Laws and the Company is not included on a list of defaulting
      reporting issuers maintained by the securities regulatory authorities of
      such provinces;

            

    

    

    
      	
               
      

            	
              (x)

            	
              at
      the Execution Time, all consents, approvals, permits, authorizations or
      filings as may be required to be made or obtained by the Company under the
      Securities Laws necessary for the execution and delivery of this
      Subscription Agreement, and the consummation of the transactions
      contemplated herein, will have been made or obtained, as applicable (other
      than the AMEX Approval);

            

    

    

    
      	
               
      

            	
              (xi)

            	
              at
      the Closing Time, the AMEX Approval will have been obtained and other than
      the filing of reports required under applicable Securities Laws within the
      prescribed time periods and the filing of standard documents with the SEC,
      TSX and AMEX, which documents shall be filed as soon as practicable after
      the Closing Date, no consents, approvals, permits, authorizations or
      filings will be required by the Company under the Securities Laws
      necessary for the consummation of the transactions contemplated
      herein;

            

    

    

    
      	
               
      

            	
              (xii)

            	
              the
      Shares will not be subject to a restricted period or to a statutory hold
      period under the Securities Laws in Canada or to any resale restriction
      under the policies of the TSX which extends beyond four months and one day
      after the Closing Date;

            

    

    

    
      	
               
      

            	
              (xiii)

            	
              the
      execution and delivery of this Subscription Agreement, the performance by
      the Company of its obligations hereunder, the issue and sale of the Shares
      hereunder and the consummation of the transactions contemplated in this
      Subscription Agreement, 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 the Company including, without
      limitation, the Securities Laws, the policies, rules and regulations of
      the TSX and, subject to the receipt of the AMEX Approval, the policies,
      rules and regulations of the AMEX; (B) the constating documents, by-laws
      or resolutions of the Company 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 the Company is a
      party or by which it is bound; or (D) any judgment, decree or order
      binding the Company, any Subsidiary or the property or assets
      thereof;

            

    

    

    
      	
               
      

            	
              (xiv)

            	
              the
      Company 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 the
      Company and the 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 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 the Company has
      not filed any confidential material change reports since the date of such
      statements which remains confidential as at the date
    hereof;

            

    

    

    
      	
               
      

            	
              (xv)

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

            

    

    
      
         

      

      
        – 9 –

        
          

        

      

      
         

      

    

    

    
      	
               
      

            	
              (A)

            	
              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 the
      Company or any 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 the Company) of the Company or any 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 the
      Company or any Subsidiary;

            

    

    

    
      	
               
      

            	
              (xvi)

            	
              the
      audited consolidated financial statements of the Company as at and for the
      year ended December 31, 2008 (the “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 the Company as at the date thereof and the results of the
      operations and the changes in the financial position of the Company for
      the periods then ended and contain and reflect adequate provisions or
      allowance for all reasonably anticipated liabilities, expenses and losses
      of the Company and, except as disclosed in the Disclosure Documents, there
      has been no change in accounting policies or practices of the Company
      since September 30, 2009;

            

    

    

    
      	
               
      

            	
              (xvii)

            	
              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 the Company and the Subsidiaries have been paid, except where the
      failure to pay such taxes would not constitute an adverse material fact in
      respect of the Company or any Subsidiary or have a Material Adverse Effect
      on the Company or any Subsidiary.  All tax returns,
      declarations, remittances and filings required to be filed by the Company
      and the 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 the Company or have a Material Adverse Effect on the
      Company or any Subsidiary.  To the best of the knowledge of the
      Company, no examination of any tax return of the Company or any 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 the Company or any Subsidiary, in any case, except
      where such examinations, issues or disputes would not constitute an
      adverse material fact in respect of the Company or have a Material Adverse
      Effect on the Company or any Subsidiary;

            

    

    

    
      	
            	
              (xviii)

            	
              the
      Company’s Auditors who audited the 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 the Company and the Company’s Auditors or, to
      the knowledge of the Company, any former auditors of the
      Company;

            

    

    

    
      	
               
      

            	
              (xix)

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

            

    

    
      
         

      

      
        – 10 –

        
          

        

      

      
         

      

    

    

    
      	
               
      

            	
              (xx)

            	
              to
      the Company’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 the Company or of the
  Subsidiaries;

            

    

    

    
      	
               
      

            	
              (xxi)

            	
              except
      as disclosed in the Disclosure Documents, none of the officers or
      employees of the Company or of any Subsidiary, any person who owns,
      directly or indirectly, more than 10% of any class of securities of the
      Company or securities of any person exchangeable for more than 10% of any
      class of securities of the Company, 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
      the  Company or any of the Subsidiaries which, as the case may
      be, materially affects, is material to or will materially affect the
      Company on a consolidated basis;

            

    

    

    
      	
               
      

            	
              (xxii)

            	
              except
      as disclosed in the Disclosure Documents, no legal or governmental
      proceedings or inquiries are pending to which the Company or any
      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 the Company and the Subsidiaries which, if the subject of
      an unfavourable decision, ruling or finding would have a Material Adverse
      Effect on the Company or any Subsidiary and, to the knowledge of the
      Company, no such legal or governmental proceedings or inquiries have been
      threatened against or are contemplated with respect to the Company or with
      respect to its properties;

            

    

    

    
      	
            	
              (xxiii)

            	
              except
      as disclosed in the Disclosure Documents, there are no actions, suits,
      judgments, investigations or proceedings of any kind whatsoever
      outstanding, pending or, to the best of the Company’s knowledge,
      threatened against or affecting the Company, the 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 the Company’s knowledge, there is no basis therefor and
      neither the Company nor any 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 the Company or any Subsidiary or that
      would adversely affect the ability of the Company to perform its
      obligations under this Subscription
Agreement;

            

    

    

    
      	
            	
              (xxiv)

            	
              no
      approval, authorization, consent or other order of, and no filing,
      registration or recording with, any Governmental Authority or other person
      is required of the Company in connection with the execution and delivery
      of or with the performance by the Company of this Subscription Agreement
      except in compliance with the Securities Laws with regard to the
      distribution of the Shares in the Qualifying Jurisdiction and other
      routine filings with the SEC;

            

    

    

    
      	
               
      

            	
              (xxv)

            	
              none
      of the Company nor any of the 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;

            

    

    

    
      	
            	
              (xxvi)

            	
              the
      Company and each of the Subsidiaries owns or has the right to use under
      licence, sub-licence or otherwise all material intellectual property used
      by the Company and the 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;

            

    

    
      
         

      

      
        – 11 –

        
          

        

      

      
         

      

    

    

    
      	
            	
              (xxvii)

            	
              except
      as disclosed in the Disclosure Documents, any and all of the agreements
      and other documents and instruments pursuant to which the Company and the
      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 the Company nor any
      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 the
      Company or any 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 the Company or any Subsidiary is subject to any right of
      first refusal or purchase or acquisition right which is not disclosed in
      the Disclosure Documents;

            

    

    

    
      	
            	
              (xxviii)

            	
              subject
      to the receipt by the Company of the AMEX Approval, all actions required
      to be taken by or on behalf of the Company, including the passing of all
      requisite resolutions of its directors, necessary to carry out its
      obligations under this Subscription Agreement, have been or will, by the
      Execution Time, be completed;

            

    

    

    
      	
            	
              (xxix)

            	
              at
      the Execution Time, this Subscription Agreement shall have been duly
      authorized and executed and delivered by the Company and upon such
      execution and delivery each shall constitute a valid and binding
      obligation of the Company and shall be enforceable against the Company 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;

            

    

    

    
      	
               
      

            	
              (xxx)

            	
              at
      the Closing Time, all necessary corporate action will have been taken by
      the Company to allot and authorize the issuance of the Shares as fully
      paid and non-assessable shares of the
Company;

            

    

    

    
      	
            	
              (xxxi)

            	
              the
      Common Shares are listed and posted for trading on the TSX and all
      necessary notices and filings will have been made before the Execution
      Time with and all necessary consents, approvals and authorizations
      obtained by the Company from the TSX to ensure that, subject to fulfilling
      the conditions contained in a letter from the TSX dated March 5, 2010 in
      connection with the conditional acceptance of the Private Placement, the
      Shares will be listed and posted for trading on the TSX upon their
      issuance;

            

    

    

    
      	
            	
              (xxxii)

            	
              the
      Common Shares are listed and posted for trading on the AMEX and all
      necessary notices and filings will have been made before the Execution
      Time with the AMEX to ensure that, subject to receipt of the AMEX
      Approval, the Shares will be listed and posted for trading on the
      AMEX upon their issuance;

            

    

    

    
      	
            	
              (xxxiii)

            	
              no
      order, ruling or determination having the effect of suspending the sale or
      ceasing the trading in any securities of the Company (including the
      Shares) has been issued by any regulatory authority and is continuing in
      effect and no proceedings for that purpose have been instituted or, to the
      knowledge of the Company, are pending, contemplated or threatened by any
      regulatory authority;

            

    

    

    
      	
            	
              (xxxiv)

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

            

    

    

    
      	
            	
              (xxxv)

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

            

    

    
      
         

      

      
        – 12 –

        
          

        

      

      
         

      

    

    

    
      	
            	
              (xxxvi)

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

            

    

    

    
      	
            	
              (xxxvii)

            	
              the
      assets of the Company and the 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 the Company has not failed to promptly give any notice of
      any material claim thereunder;

            

    

    

    
      	
            	
              (xxxviii)

            	
              the
      Company and each of the 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
      the Company or any Subsidiary, and has not and is not engaged in any
      unfair labour practice;

            

    

    

    
      	
            	
              (xxxix)

            	
              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 the
      Company’s or any of the Subsidiaries’ business, taken as a whole, and the
      Company and each of the 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 the Company or any
      of the Subsidiaries;

            

    

    

    
      	
               
      

            	
              (xl)

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

            

    

    

    
      	
               
      

            	
              (xli)

            	
              the
      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 the Company for the benefit of any current or former
      director, officer, employee or consultant of the Company (the “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 Employee
  Plans;

            

    

    

    
      	
               
      

            	
              (xlii)

            	
              the
      Company 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;

            

    

    

    
      	
               
      

            	
              (xliii)

            	
              except
      as disclosed in the Disclosure Documents, none of the directors, officers
      or employees of the Company 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 the Company
      or its Subsidiaries which materially affects, is material to or will
      materially affect the Company or any
Subsidiary;

            

    

    
      
         

      

      
        – 13 –

        
          

        

      

      
         

      

    

    

    
      	
               
      

            	
              (xliv)

            	
              CIBC
      Mellon Trust Company, at its office in the City of Toronto, Ontario has
      been duly appointed as registrar and transfer agent for the Common
      Shares;

            

    

    

    
      	
               
      

            	
              (xlv)

            	
              the
      minute books and records of the Company and the Subsidiaries made
      available to the Purchaser and its counsel in connection with their due
      diligence investigation of the Company for the periods from January 2002
      to the date hereof are all of the minute books and records of the Company
      and the 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 the Company
      and the 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 the Company or any of its Subsidiaries to the date hereof not
      reflected in such minute books and other
  records;

            

    

    

    
      	
               
      

            	
              (xlvi)

            	
              neither
      the Company nor any of its Subsidiaries has been in violation of, in
      connection with the ownership, use, maintenance or operation of its
      property and assets, including the 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 the Company or any of its
      Subsidiaries;

            

    

    

    
      	
            	
              (xlvii)

            	
              without
      limiting the generality of the immediately preceding paragraph, the
      Company and each of its 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 the Company or any Subsidiary or any of the property,
      assets or operations thereof, relating to, or alleging any violation of
      any Environmental Laws, the Company is not aware of any facts which could
      give rise to any such claim or judicial or administrative proceeding and
      neither the Company, nor any 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 the Company or
      any of its Subsidiaries;

            

    

    

    
      	
            	
              (xlviii)

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

            

    

    

    
      	
               
      

            	
              (xlix)

            	
              the
      Company and the 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 the
      Company or any of the Subsidiaries;

            

    

    

    
      	
               
      

            	
              (l)

            	
              all
      information which has been prepared by the Company and the Subsidiaries
      relating to the Company and the Subsidiaries and the business, property
      and liabilities thereof and either publicly disclosed, provided or made
      available to the Purchaser, including all financial, marketing, sales and
      operational information provided to the Purchaser 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;

            

    

    
      
         

      

      
        – 14 –

        
          

        

      

      
         

      

    

    

    
      	
               
      

            	
              (li)

            	
              the
      Company 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); and

            

    

    

    
      	
               
      

            	
              (lii)

            	
              there
      is no person acting or purporting to act at the request  of or
      on behalf of the Company that is entitled to any brokerage or finder’s fee
      or other compensation in connection with the transactions contemplated by
      this Subscription Agreement.

            

    

     

    8.           Purchaser’s Representations and
Warranties.  The Purchaser represents and warrants to the
Company as follows and acknowledges that the Company is relying on such
representations and warranties in connection with the transactions contemplated
in this Subscription Agreement:

     

    
      	
               
      

            	
              (i)

            	
              the
      Purchaser is duly incorporated and is a valid and existing corporation,
      has the necessary corporate capacity and authority to execute and deliver
      this Subscription Agreement, to subscribe for the Shares and to observe
      and perform its covenants and obligations hereunder and has taken all
      necessary corporate action in respect thereof and upon acceptance by the
      Company, this Subscription Agreement will constitute a legal, valid and
      binding agreement of the Purchaser enforceable against the Purchaser in
      accordance with its terms and will not result in a violation of or create
      a state of facts which, after notice, lapse of time or both, would
      constitute a default or breach of any of the Purchaser’s constating
      documents, by-laws or authorizing resolutions (if applicable), any
      agreement to which the Purchaser is a party or by which the Purchaser is
      bound or any law applicable to the Purchaser or any judgment, decree,
      order, statute, rule or regulation applicable to the
      Purchaser;

            

    

     

    
      	
               
      

            	
              (ii)

            	
              the
      Purchaser was offered the Shares in, and is a resident of, the Qualifying
      Jurisdiction, intends that the Securities Laws of that jurisdiction do and
      shall govern any transaction involving the Shares subscribed for by the
      Purchaser and that such addresses of the Purchaser as set out on the face
      page of this Subscription Agreement was not created and are not used
      solely for the purpose of acquiring the
Shares;

            

    

     

    
      	
               
      

            	
              (iii)

            	
              the
      Purchaser has properly completed, executed and delivered to the Company
      the certificate (dated as of the date hereof) set forth in Schedule A
      attached hereto and the information contained therein is true and correct
      as of the Execution Time and the representations, warranties and covenants
      contained in the schedule attached hereto will be true and correct as at
      the Closing Time;

            

    

     

    
      	
               
      

            	
              (iv)

            	
              as
      of the Execution Time, the Purchaser will not beneficially own any Common
      Shares or securities convertible into Common
  Shares;

            

    

     

    
      	
               
      

            	
              (v)

            	
              the
      Purchaser is purchasing the Shares as principal (as defined in all
      applicable Securities Laws) for its own account, and not for the benefit
      of any other person;

            

    

     

    
      	
               
      

            	
              (vi)

            	
              the
      Purchaser is purchasing the Shares for investment only and not with a view
      to resale or distribution of all or any of the
  Shares;

            

    

     

    
      	
               
      

            	
              (vii)

            	
              there
      is no person acting or purporting to act in connection with the
      transactions contemplated herein who is entitled to any brokerage or
      finder’s fee and if any person establishes a claim that any fee or other
      compensation is payable in connection with this subscription for the
      Shares;

            

    

     

    
      	
               
      

            	
              (viii)

            	
              none
      of the funds being used to purchase the Shares are to the Purchaser’s
      knowledge proceeds obtained or derived directly or indirectly as a result
      of illegal activities.  The funds being used to purchase the
      Shares which will be advanced by the Purchaser to the Escrow Agent
      hereunder will not represent proceeds of crime for the purposes of the
      Proceeds of Crime (Money
      Laundering) Act (Canada) (the “PCMLA”) and the
      Purchaser acknowledges that the Company may in the future be required by
      law to disclose the Purchaser’s and other information relating to this
      Subscription Agreement and the Purchaser's subscription hereunder, on a
      confidential basis, pursuant to the PCMLA. To the best of its knowledge
      (i) none of the funds to be provided by the Purchaser are being
      tendered on behalf of a person or entity who has not been identified to
      the Purchaser, and (ii) it shall promptly notify the Company if the
      Purchaser discovers that any of such representations cease to be true, and
      to provide the Company with appropriate information in connection
      therewith;

            

    

     

    
      
         

      

      
        – 15 –

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (ix)

            	
              the
      Purchaser was not created or being used solely to permit purchases of or
      to hold securities without a prospectus in reliance on a prospectus
      exemption;

            

    

     

    
      	
               
      

            	
              (x)

            	
              the
      Purchaser acknowledges that this Subscription Agreement requires the
      Purchaser to provide certain Personal Information to the
      Company.  Such information is being collected and will be used
      by the Company for the purposes of completing the proposed Private
      Placement which includes, without limitation, determining the Purchaser’s
      eligibility to purchase the Shares under applicable Securities Laws and
      completing filings required by the SEC, the Securities Commission and/or
      the TSX or AMEX. The Purchaser agrees that the Purchaser’s Personal
      Information may be disclosed by the Company to: (a) stock exchanges
      and applicable securities regulatory authorities, (b) the Company’s
      registrar and transfer agent, and (c) any of the other parties
      involved in the proposed Private Placement, including legal counsel, and
      may be included in record books in connection with the Private
      Placement.  By executing this Subscription Agreement, the
      Purchaser consents to the foregoing collection, use and disclosure of the
      Purchaser’s Personal Information. The Purchaser also consents to the
      filing of copies or originals of any of the Purchaser’s documents
      described in Section 4 hereof as may be required to be filed with any
      stock exchange or securities regulatory authority in connection with the
      transactions contemplated hereby;

            

    

     

    
      	
               
      

            	
              (xi)

            	
              the
      Purchaser is not a “U.S. Person” (as that term is defined by Regulation S
      under the U.S. Securities Act, which definition includes, but is not
      limited to, an individual resident in the United States, an estate or
      trust of which any executor or administrator or trustee, respectively, is
      a U.S. Person and any partnership or company organized or incorporated
      under the laws of the United States (or any State thereof)) and is not
      acquiring the Shares for the account or benefit of a U.S. Person or a
      person in the United States;

            

    

     

    
      	
               
      

            	
              (xii)

            	
              the
      Shares have not been offered to the Purchaser in the United States, and
      the individuals making the order to purchase the Shares and executing and
      delivering this Subscription Agreement on behalf of the Purchaser were not
      in the United States when the order was placed and this Subscription
      Agreement was executed and
delivered;

            

    

     

    
      	
               
      

            	
              (xiii)

            	
              the
      Purchaser undertakes and agrees that it will not offer or sell the Shares
      in the United States unless such shares are registered under the U.S.
      Securities Act and the securities laws of all applicable states of the
      United States or another exemption from such registration requirements is
      available, and further that it will not resell the Shares except in
      accordance with the provisions of applicable securities legislation,
      regulations, rules, policies and orders and stock exchange
      rules;

            

    

     

    
      	
               
      

            	
              (xiv)

            	
              the
      Purchaser will not engage in hedging transactions with regard to the
      Shares unless conducted in compliance with the U.S. Securities Act;
      and

            

    

     

    
      	
               
      

            	
              (xv)

            	
              the
      Purchaser acknowledges that the Company and its transfer agent will refuse
      to register any transfer of any of the Shares not made in accordance with
      the provisions of Regulation S of the U.S. Securities Act, pursuant to an
      available exemption from registration under the U.S. Securities Act or
      under an effective registration statement under the U.S. Securities
      Act.

            

    

     

    9.           Purchaser’s
Acknowledgements.  The Purchaser acknowledges and agrees, and
without in any way limiting the foregoing that:

    
      
         

      

      
        – 16 –

        
          

        

      

      
         

      

    

    
      	
              (a)

            	
              (i)
      no agency, securities commission, governmental authority, regulatory body,
      stock exchange or other entity has reviewed or passed on, made any finding
      or determination as to the merit for investment of, nor have any such
      agencies, securities commissions or governmental authorities made any
      recommendation or endorsement with respect to the Shares or the Private
      Placement; (ii) there is no government or other insurance covering the
      Shares; and (iii) there are risks associated with the purchase of the
      Shares;

            

    

     

    
      	
              (b)

            	
              the
      purchase of the Shares has not been or will not be (as applicable) made
      through, or as a result of, and the distribution of the Shares is not
      being accompanied by, a general solicitation or advertisement including
      articles, notices or other communications published in any newspaper,
      magazine or similar media or broadcast over radio or television, or any
      seminar or meeting whose attendees have been invited by general
      solicitation or general
advertising;

            

    

     

    
      	
              (c)

            	
              no
      prospectus or other offering document has been filed by the Company with a
      securities commission or other securities regulatory authority in any
      province of Canada, or any other jurisdiction in or outside of Canada
      (including the United States) in connection with the issuance of the
      Shares and such issuance is exempt from the prospectus requirements
      otherwise applicable under the provisions of Securities Laws and, as a
      result, in connection with its purchase of the Shares hereunder, as
      applicable:

            

    

     

    
      	
               
      

            	
              (i)

            	
              the
      Company has advised the Purchaser that the Company is relying on an
      exemption from the requirements to provide the Purchaser with a prospectus
      and to sell the Shares through a person registered to sell securities
      under the Securities Laws and that the Purchaser is restricted from using
      most of the protections, rights and remedies available under Securities
      Laws including, without limitation, statutory rights of rescission or
      damages;

            

    

     

    
      	
               
      

            	
              (ii)

            	
              the
      Purchaser will not receive information that may otherwise be required to
      be provided to the Purchaser under applicable Securities Laws or contained
      in a prospectus prepared in accordance with applicable Securities
      Laws;

            

    

     

    
      	
               
      

            	
              (iii)

            	
              the
      Company is relieved from certain obligations that would otherwise apply
      under such applicable Securities Laws;
and

            

    

     

    
      	
               
      

            	
              (iv)

            	
              there
      are restrictions on the Purchaser’s ability to resell the Shares and it is
      the responsibility of the Purchaser to find out what these restrictions
      are and to comply with them before reselling such
    securities.

            

    

     

    
      	
              (d)

            	
              the
      Shares will be subject to certain resale restrictions under the Securities
      Laws and the Purchaser agrees to comply with such
      restrictions.  The Purchaser also acknowledges that it has been
      advised to consult its own legal advisors with respect to applicable
      resale restrictions and that it is solely responsible (and the Company is
      not in any manner responsible) for complying with such
      restrictions.  For purposes of complying with the Securities
      Laws and NI 45-102, the Purchaser understands and acknowledges that upon
      the issuance of the Shares, all the certificates representing the Shares
      shall bear a legends substantially in the following
  form:

            

    

     

    “UNLESS
PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT
TRADE THE SECURITY BEFORE [THE
DATE THAT IS FOUR MONTHS PLUS ONE DAY FROM THE CLOSING
DATE].”;

    

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

    

    In
addition, the certificate(s) representing the Shares will also bear a legend
substantially in the following form as required by the U.S. Securities
Act:

    
      
         

      

      
        – 17 –

        
          

        

      

      
         

      

    

    

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

    

    provided
that in the event that the Purchaser proposes to sell, transfer or assign the
Shares, the Company and the Purchaser shall cooperate and use their mutual
commercially reasonable best efforts to deliver and provide or cause to be
delivered and provided all such information and documents (including
declarations and, if necessary, legal opinions, in customary form) as may be
required to remove the U.S. Securities Act legend set forth above (if a basis
for removal exists under the Securities Laws).

    

    
      	
              (e)

            	
              no
      person has made any written or oral representations: (i) that any person
      will resell or repurchase the Shares; (ii) that any person will refund the
      Purchase Price; or (iii) as to the future price or value of the Shares
      .

            

    

     

    10.         Conditions of Closing in Favour of
the Company.  The Purchaser acknowledges that the Company’s
obligation to sell the Shares to the Purchaser at the Closing Time shall be
conditional upon the fulfilment of the following conditions:

     

    
      	
              (a)

            	
              the
      Purchaser executing and returning to the Company all documents required by
      applicable Securities Laws for delivery on behalf of the Purchaser
      including, without limitation, Schedule A attached hereto, by no later
      than the Closing Time;

            

    

     

    
      	
              (b)

            	
              the
      Company having obtained all required regulatory approvals (including those
      that may be required under Securities Laws) to permit the completion of
      the transactions contemplated hereby, including the AMEX
      Approval;

            

    

     

    
      	
              (c)

            	
              the
      offer, issue, sale and delivery of the Shares being exempt from the
      requirements to file a prospectus or deliver an offering memorandum (as
      defined in applicable Securities Laws, including Ontario Securities
      Commission Rule 14-501 Definitions) or any
      similar document under applicable Securities Laws and other applicable
      securities laws relating to the sale of the Shares, or the Company having
      received such orders, consents or approvals as may be required to permit
      such sale without the requirement of filing a prospectus or delivering an
      offering memorandum or any similar
document;

            

    

    
      
         

      

      
        – 18 –

        
          

        

      

      
         

      

    

     

    
      	
              (d)

            	
              the
      representations and warranties set out herein, including in the Schedules
      attached hereto, of the Purchaser being true and correct as at the Closing
      Time; and

            

    

     

    
      	
              (e)

            	
              at
      the Closing Time, the Company shall have received a certificate, dated as
      of the Closing Date, signed by the Chief Executive Officer and the Chief
      Financial Officer of the Purchaser, or such other officers or directors of
      the Purchaser as the Company may agree, certifying for and on behalf of
      the Purchaser, to the best of the knowledge, information and belief of the
      persons so signing, that:

            

    

     

    
      	
               
      

            	
              (i)

            	
              the
      Purchaser has complied with all the covenants and satisfied all the terms
      and conditions of this Subscription Agreement on its part to be complied
      with and satisfied up to the Closing Time;
and

            

    

    

    
      	
               
      

            	
              (ii)

            	
              the
      representations and warranties of the Purchaser contained in this
      Subscription Agreement are true and correct as of the Closing Time, with
      the same force and effect as if made at and as of the Closing Time after
      giving effect to the transactions contemplated by this Subscription
      Agreement.

            

    

    

    11.        Conditions of Closing in Favour of
the Purchaser.  The Company acknowledges that the Purchaser’s
obligation to purchase the Shares at the Closing Time shall be conditional upon
the fulfilment of the following conditions:

    

    (a)         at
the Closing Time, the Purchaser shall have received a certificate, dated as of
the Closing Date, signed by the Chief Executive Officer and the Chief Financial
Officer of the Company, or such other officers or directors of the Company as
the Purchaser may agree, certifying for and on behalf of the Company, to the
best of the knowledge, information and belief of the persons so signing,
that:

    

    
      	
               
      

            	
              (i)

            	
              no
      order, ruling or determination having the effect of suspending the sale or
      ceasing the trading in any securities of the Company has been issued by
      any regulatory authority and is continuing in effect and no proceedings
      for that purpose have been instituted or are pending or, to the knowledge
      of such officers, contemplated or threatened by any regulatory
      authority;

            

    

    

    
      	
               
      

            	
              (ii)

            	
              since
      September 30, 2009, (A) there has been no material adverse change (actual,
      proposed or prospective, whether financial or otherwise) in the business,
      business prospects, affairs, operations, assets, liabilities (contingent
      or otherwise) or capital of the Company or any of its Subsidiaries as of
      the date of this Subscription Agreement that has not been generally
      disclosed, and (B) no material transactions have been entered into by the
      Company or any of the Subsidiaries other than in the ordinary course of
      business, except as has been disclosed in the Disclosure
      Documents;

            

    

    

    
      	
               
      

            	
              (iii)

            	
              the
      Company has complied with all the covenants and satisfied all the terms
      and conditions of this Subscription Agreement on its part to be complied
      with and satisfied up to the Closing Time;
and

            

    

    

    
      	
               
      

            	
              (iv)

            	
              the
      representations and warranties of the Company contained in this
      Subscription Agreement are true and correct as of the Closing Time, with
      the same force and effect as if made at and as of the Closing Time after
      giving effect to the transactions contemplated by this Subscription
      Agreement;

            

    

    

    (b)         at
or before the Closing Time, each of the Lenders shall have entered into a
support agreement, in form and substance satisfactory to the Purchaser ,
pursuant to which each Lender agrees, among other things,  to support
and vote in favour of the Arrangement (a “Support
Agreement”);

    

    (c)         at
or before the Closing Time, each of the Lenders shall have entered into a
lock-up agreement, in form and substance satisfactory to the Purchaser, 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 (a “Lock-Up
Agreement”);

    
      
         

      

      
        – 19 –

        
          

        

      

      
         

      

    

    (d)          the
Purchaser shall have received at the Execution Time a certificate dated the
Closing Date, signed by an appropriate officer or officers of the Company
addressed to the Purchaser and its counsel, with respect to the articles and
by-laws of the Company, all resolutions of the Company’s board of directors
relating to this Subscription Agreement and the transactions contemplated
hereby, the incumbency and specimen signatures of signing officers and such
other matters as the Purchaser may reasonably request;

    

    (e)          the
Purchaser shall have received evidence on or before the Execution Time that all
requisite regulatory approvals, including the approval of the TSX, have been
obtained by the Company in order to complete the Private Placement, other than
the AMEX Approval;

    

    (f)           the
Purchaser shall have received evidence on or before the Closing Time that the
AMEX Approval has been obtained;

    

    (g)          the
Shares shall have been conditionally approved for listing on the TSX and
AMEX;

    

    (h)          the
Purchaser shall have received a certificate from CIBC Mellon Trust Company as to
the number of Common Shares issued and outstanding as at a date no more than two
Business Days prior to the Closing Date;

    

    (i)           at
or before the Closing Time, the Purchaser shall have received favourable legal
opinions addressed to the Purchaser, in form and substance satisfactory to the
Purchaser, acting reasonably, dated as of the Closing Date, from Fogler,
Rubinoff LLP, counsel for the Company, and where appropriate, other local
counsel of the Company, which counsel in turn may rely, as to matters of fact,
on certificates of auditors, public officials and officers of the Company, as
appropriate, with respect to the following matters:

    

    
      	
               
      

            	
              (i)

            	
              as
      to the valid existence of the Company under the laws of the Yukon and as
      to the corporate power of the Company to carry out its obligations under
      this Subscription Agreement and to issue the
  Shares;

            

    

    

    
      	
               
      

            	
              (ii)

            	
              the
      Company is a reporting issuer not on the list of defaulting reporting
      issuers maintained pursuant to the applicable Securities Laws of the
      Qualifying Jurisdiction;

            

    

    

    
      	
               
      

            	
              (iii)

            	
              as
      to the authorized capital of the
Company;

            

    

    

    
      	
               
      

            	
              (iv)

            	
              the
      Company has all requisite corporate power and authority under the laws of
      Canada to carry on its business as presently carried on and to own, lease
      and operate its properties and
assets;

            

    

    

    
      	
               
      

            	
              (v)

            	
              none
      of the execution and delivery of this Subscription Agreement, the
      performance by the Company of its obligations hereunder, or the sale or
      issuance of the Shares, will conflict with or result in any breach of the
      constating documents or by-laws of the Company, the provisions of any law,
      statute, rule or regulation to which the Company is subject or any
      resolutions of the directors or shareholders of the
    Company;

            

    

    

    
      	
               
      

            	
              (vi)

            	
              this
      Subscription Agreement has been duly authorized and executed and delivered
      by the Company, and constitutes a valid and legally binding agreement of
      the Company enforceable against it in accordance with its terms, except as
      enforcement thereof may be limited by bankruptcy, insolvency, liquidation,
      reorganization, moratorium or similar laws affecting the rights of
      creditors generally and except as limited by the application of equitable
      principals when equitable remedies are sought, and the qualification that
      the enforceability of rights of indemnity, contribution and waiver and the
      ability to sever unenforceable terms may be limited by applicable
      law;

            

    

    

    
      	
               
      

            	
              (vii)

            	
              the
      Shares have been authorized and allotted for issuance and will be validly
      issued as fully paid and non-assessable securities of the
      Company;

            

    

    

    
      	
               
      

            	
              (viii)

            	
              the
      offering, issue, sale and delivery of the Shares to the Purchaser in the
      Qualifying Jurisdiction in accordance with this Subscription Agreement is
      exempt from the prospectus and registration requirements of applicable
      Securities Laws and no prospectus will be required to be filed, no other
      document will be required to be filed, no proceeding taken and no
      approval, permit, consent or authorization of the Securities Commission
      will be required to be obtained under applicable Securities Laws to permit
      the offering, issue, sale and delivery of the Shares to the Purchaser,
      subject to the completion of filings required to be made after the
      completion of the Private
Placement;

            

    

    
      
         

      

      
        – 20 –

        
          

        

      

      
         

      

    

    

    
      	
               
      

            	
              (ix)

            	
              other
      than a trade that is otherwise exempt from the prospectus and registration
      requirements of the Securities Laws, the first trade by the Purchaser in
      the Qualifying Jurisdiction of the Shares is a distribution unless at the
      time of such trade:

            

    

     

    
      	
               
      

            	
              (a)

            	
              the
      Company is and has been a reporting issuer in a jurisdiction of Canada for
      the four months immediately preceding the
trade;

            

    

     

    
      	
               
      

            	
              (b)

            	
              at
      least four months have elapsed from the “distribution date” (as defined
      under the National Instrument) of the
Shares;

            

    

     

    
      	
               
      

            	
              (c)

            	
              the
      certificate representing the Shares carries a legend stating “Unless
      permitted under securities legislation, the holder of this security must
      not trade the security before the date that is four months and a day after
      the Closing Date”;

            

    

     

    
      	
               
      

            	
              (d)

            	
              such
      trade is not a “control distribution” (as defined in the NI
      45-102);

            

    

     

    
      	
               
      

            	
              (e)

            	
              no
      unusual effort is made to prepare the market or to create a demand for the
      securities that are the subject of such
trade;

            

    

     

    
      	
               
      

            	
              (f)

            	
              no
      extraordinary commission or consideration is paid to a person or company
      in respect of such trade; and

            

    

     

    
      	
               
      

            	
              (g)

            	
              if
      the selling securityholder is an insider or officer of the Company, the
      selling securityholder has no reasonable grounds to believe that the
      Company is in default of “securities legislation” (as defined in National
      Instrument 14-101 – Definitions and
      Interpretation); and

            

    

    

    
      	
               
      

            	
              (x)

            	
              the
      TSX has conditionally accepted the listing of the Shares subject to
      compliance with its conditions outlined in such conditional
      acceptance.

            

    

    

    (j)           at
the Closing Time, the Purchaser shall have received a certificate of compliance
with respect to the Company and a reporting issuer certificate for the Company
from the Securities Commission;

    

    
      (k)         
at the
Closing Time, the Purchaser shall have received a favourable legal opinion
addressed to the Purchaser from counsel to the Company, in form and substance
satisfactory to the Purchaser, acting reasonably, dated as of the Closing Date,
with respect to title and other Mining Rights in regards to each of the
Properties (the “Title
Opinion”);

    

    

    (l)           at
the Closing Time, the Purchaser shall have received an undertaking of the
Company to deliver to the Purchaser with 10 business days following the Closing
Date an updated Title Opinion in form and substance satisfactory to the
Purchaser, acting reasonably, which Title Opinion shall include reference to the
results of customary off-title reviews, searches and enquiries in regards to
each of the Properties; and

    

    (m)         the
Purchaser shall have completed and be satisfied, in its sole discretion, with
the results of its due diligence investigations regarding the Company, the
Subsidiaries and their respective business.

    

    12.         Survival of Representations and
Warranties. All terms, warranties, representations, covenants,
indemnities and agreements herein contained or contained in any documents
delivered pursuant to this Subscription Agreement and in connection with the
transactions herein contemplated shall survive the purchase and sale of the
Shares and continue in full force and effect for the benefit of the Purchaser
and/or the Company, as the case may be, regardless of the Closing of the Private
Placement and regardless of any investigations which may be carried out by the
Purchaser or on its behalf and shall not be limited or prejudiced by any
investigation made by or on behalf of the Purchaser in connection with the
purchase and sale of the Shares or otherwise.

    
      
         

      

      
        – 21 –

        
          

        

      

      
         

      

    

     

    13.           Indemnity.  (a) The
Purchaser agrees to indemnify and hold harmless the Company and its directors,
officers, employees, agents, advisers and shareholders from and against any and
all loss, liability, claim, damage and expense whatsoever (including, but not
limited to, any and all fees, costs and expenses whatsoever reasonably incurred
in investigating, preparing or defending against any claim, lawsuit,
administrative proceeding or investigation whether commenced or threatened)
arising out of or based upon any representation or warranty of the Purchaser
contained herein or in any document furnished by the Purchaser to the Company in
connection herewith being untrue in any material respect or any breach or
failure by the Purchaser to comply with any covenant or agreement made by the
Purchaser herein or in any document furnished by the Purchaser to the Company in
connection herewith.

     

    (b)           The
Company agrees to indemnify and hold harmless the Purchaser and its directors,
officers, employees, agents, advisers and shareholders from and against any and
all loss, liability, claim, damage and expense whatsoever (including, but not
limited to, any and all fees, costs and expenses whatsoever reasonably incurred
in investigating, preparing or defending against any claim, lawsuit,
administrative proceeding or investigation whether commenced or threatened)
arising out of or based upon any representation or warranty of the Company
contained herein or in any document furnished by the Company to the Purchaser in
connection herewith being untrue in any material respect or any breach or
failure by the Company to comply with any covenant or agreement made by the
Company herein or in any document furnished by the Company to the Purchaser in
connection herewith.

     

    14.           Modification.  Subject
to the terms hereof, neither this Subscription Agreement nor any provision
hereof shall be modified, changed, discharged or terminated except by an
instrument in writing signed by the party against whom any waiver, change,
discharge or termination is sought.

     

    15.           Assignment.  The
terms and provisions of this Subscription Agreement shall be binding upon and
enure to the benefit of the Purchaser, the Company and their respective
successors and assigns; provided that this Subscription Agreement shall not be
assignable by any party without the prior written consent of the other
party.

     

    16.           Miscellaneous and
Counterparts.  This Subscription Agreement may be executed in
any number of counterparts, each of which when delivered, either in original or
facsimile form, shall be deemed to be an original and all of which together
shall constitute one and the same document.

     

    17.           Governing Law.  This
Subscription Agreement shall be governed by and construed in accordance with the
laws of the Province of Ontario and the federal laws of Canada applicable
therein. The Purchaser and the Company hereby irrevocably attorn to the
jurisdiction of the courts of the Province of Ontario with respect to any
matters arising out of this Subscription Agreement.

     

    18.           Facsimile
Subscriptions.  The Company and the Purchaser shall be entitled
to rely on delivery by facsimile machine or other electronic means of an
executed copy of this Subscription Agreement, including the completed Schedules
hereto, and acceptance by the Company and the Purchaser of such facsimile copy
shall be legally effective to create a valid and binding agreement between the
Purchaser and the Company in accordance with the terms hereof.

     

    19.           Entire
Agreement.  This Subscription Agreement (including the
Schedules hereto) contains the entire agreement of the parties hereto relating
to the subject matter hereof and there are no representations, covenants or
other agreements relating to the subject matter hereof except as stated or
referred to herein.  This Subscription Agreement may be amended or
modified in any respect by written instrument only.

     

    20.           Time of
Essence.  Time shall be of the essence of this Subscription
Agreement.

     

    21.           Currency.  Unless
otherwise specified herein, all dollar amounts referred to in this Subscription
Agreement are in Canadian dollars.

    
      
         

      

      
        – 22 –

        
          

        

      

      
         

      

    

     

    22.           Further
Assurances.  Each of the parties hereto shall do or cause to be
done all such acts and things and shall execute or cause to be executed all such
documents, agreements and other instruments as may reasonably be necessary or
desirable for the purpose of carrying out the provisions and intent of this
Subscription Agreement.

     

    23.           Singular and Plural,
etc.  Where the context so requires, words importing the
singular number include the plural and vice versa, and words importing gender
shall include the masculine, feminine and neuter genders.

     

    24.           Headings.  The
headings contained herein are for convenience only and shall not affect the
meaning or interpretation hereof.

     

    [REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]

    
      
         

      

      
        – 23 –

        
          

        

      

      
         

      

    

    SCHEDULE
A

    

    ACCREDITED
INVESTOR STATUS CERTIFICATE

    

    The
categories listed herein contain certain specifically defined
terms.  If you are unsure as to the meanings of those terms, or are
unsure as to the applicability of any category below, please contact your broker
and/or legal advisor before completing this certificate.

    

    In
connection with the purchase by the undersigned Purchaser of the Shares, the
Purchaser hereby represents, warrants, covenants and certifies to the Company
(and acknowledges that the Company and its counsel are relying thereon)
that:

    

    
      	
               
      

            	
              (a)

            	
              the
      Purchaser is purchasing the Shares as principal for its own account and
      not for the benefit of any other
person;

            

    

    

    
      	
               
      

            	
              (b)

            	
              the
      Purchaser is an “accredited investor” within the meaning of NI 45-106 on
      the basis that the undersigned fits within the category of an “accredited
      investor” reproduced below beside which the undersigned has indicated the
      undersigned belongs to such category;
and

            

    

    

    
      	
               
      

            	
              (c)

            	
              upon
      execution of this Schedule A by the Purchaser, this Schedule A shall be
      incorporated into and form a part of the Subscription
      Agreement.

            

    

    

    (PLEASE
CHECK THE BOX OF THE APPLICABLE CATEGORY OF ACCREDITED INVESTOR)

    
       

      
        
          	o	(a)	
                  a
      Canadian financial institution, or a Schedule III bank;

                
	 	 	 
	
                   ̈

                	
                  (b)

                	
                  the
      Business Development Bank of Canada incorporated under the Business Development Bank of
      Canada Act (Canada);

                

        

      

      

      
        	
                 ̈

              	
                (c)

              	
                a
      subsidiary of any person referred to in paragraphs (a) or (b), if the
      person owns all of the voting securities of the subsidiary, except the
      voting securities required by law to be owned by directors of that
      subsidiary;

              

      

      

      
        	
                 ̈

              	
                (d)

              	
                a
      person registered under the securities legislation of a jurisdiction of
      Canada as an adviser or dealer, other than a person registered solely as a
      limited market dealer under one or both of the Securities Act
      (Ontario) or the Securities Act
      (Newfoundland and Labrador);

              

      

      

      
        	
                 ̈

              	
                (e)

              	
                an
      individual registered or formerly registered under the securities
      legislation of a jurisdiction of Canada as a representative of a person
      referred to in paragraph (d);

              

      

      

      
        	
                 ̈

              	
                (f)

              	
                the
      Government of Canada or a jurisdiction of Canada, or any crown
      corporation, agency or wholly owned entity of the Government of Canada or
      a jurisdiction of Canada;

              

      

      

      
        	
                 ̈

              	
                (g)

              	
                a
      municipality, public board or commission in Canada and a metropolitan
      community, school board, the Comité de gestion de la taxe scolaire de
      l’île de Montréal or an intermunicipal management board in
      Québec;

              

      

      

      
        	
                 ̈

              	
                (h)

              	
                any
      national, federal, state, provincial, territorial or municipal government
      of or in any foreign jurisdiction, or any agency of that
      government;

              

      

      

      
        	
                 ̈

              	
                (i)

              	
                a
      pension fund that is regulated by either the Office of the Superintendent
      of Financial Institutions (Canada) or a pension commission or similar
      regulatory authority of a jurisdiction of
  Canada;

              

      

      
        
           

        

        
          A-1

          
            

          

        

        
           

        

      

    

    

      
        	
                 ̈

              	
                (j)

              	
                an
      individual who, either alone or with a spouse, beneficially owns financial
      assets having an aggregate realizable value that before taxes, but net of
      any related liabilities, exceeds
$1,000,000;

              

      

      

      
        	
                 ̈

              	
                (k)

              	
                an
      individual whose net income before taxes exceeded $200,000 in each of the
      two most recent calendar years or whose net income before taxes combined
      with that of a spouse exceeded $300,000 in each of the two most recent
      calendar years and who, in either case, reasonably expects to exceed that
      net income level in the current calendar
year;

              

      

      

      
        	
                 ̈

              	
                (l)

              	
                an
      individual who, either alone or with a spouse, has net assets of at least
      $5,000,000;

              

      

      

      
        	
                x

              	
                (m)

              	
                a
      person, other than an individual or investment fund, that has net assets
      of at least $5,000,000 as shown on its most recently prepared financial
      statements;

              

      

      

      
        	
                 ̈

              	
                (n)

              	
                an
      investment fund that distributes or has distributed its securities only to
      (i) a person that is or was an accredited investor at the time of the
      distribution, (ii) a person that acquires or acquired securities in the
      circumstances referred to in sections 2.10 [Minimum amount
      investment] and 2.19 [Additional investment in
      investment funds] of NI 45-106, or (iii) a person described in
      paragraph (i) or (ii) that acquires or acquired securities under section
      2.18 [Investment fund
      reinvestment] of NI 45-106;

              

      

      

      
        	
                 ̈

              	
                (o)

              	
                an
      investment fund that distributes or has distributed securities under a
      prospectus in a jurisdiction of Canada for which the regulator or, in
      Québec, the securities regulatory authority, has issued a
      receipt;

              

      

      

      
        	
                 ̈

              	
                (p)

              	
                a
      trust company or trust corporation registered or authorized to carry on
      business under the Trust
      and Loan Companies Act (Canada) or under comparable legislation in
      a jurisdiction of Canada or a foreign jurisdiction, acting on behalf of a
      fully managed account managed by the trust company or trust corporation,
      as the case may be;

              

      

      

      
        	
                 ̈

              	
                (q)

              	
                a
      person acting on behalf of a fully managed account managed by that person,
      if that person (i) is registered or authorized to carry on business as an
      adviser or the equivalent under the securities legislation of a
      jurisdiction of Canada or a foreign jurisdiction, and (ii) in Ontario, is
      purchasing a security that is not a security of an investment
      fund;

              

      

      

      
        	
                 ̈

              	
                (r)

              	
                a
      registered charity under the Income Tax Act (Canada)
      that, in regard to the trade, has obtained advice from an eligibility
      adviser or an adviser registered under the securities legislation of the
      jurisdiction of the registered charity to give advice on the securities
      being traded;

              

      

      

      
        	
                 ̈

              	
                (s)

              	
                an
      entity organized in a foreign jurisdiction that is analogous to any of the
      entities referred to in paragraphs (a) to (d) or paragraph (i) in form and
      function;

              

      

      

      
        	
                 ̈

              	
                (t)

              	
                a
      person in respect of which all of the owners of interests, direct,
      indirect or beneficial, except the voting securities required by law to be
      owned by directors, are persons that are accredited
    investors;

              

      

      

      
        	
                 ̈

              	
                (u)

              	
                an
      investment fund that is advised by a person registered as an adviser or a
      person that is exempt from registration as an adviser,
  or

              

      

      

      
        	
                 ̈

              	
                (v)

              	
                a
      person that is recognized or designated by the securities regulatory
      authority or, except in Ontario and Québec, the regulator as (i) an
      accredited investor, or (ii) an exempt purchaser in Alberta or British
      Columbia.

              

      

    

     

    
      
         

      

      
        A–2

        
          

        

      

      
         

      

    

     

    For the
purposes hereof, the following definitions are included for
convenience:

    
      	
               
      

            	
              (a)

            	
              “Canadian
      financial institution” means (i) an
      association governed by the Cooperative Credit
      Associations Act (Canada) or a central cooperative credit society
      for which an order has been made under section 473(1) of that Act, or (ii)
      a bank, loan corporation, trust company, trust corporation, insurance
      company, treasury branch, credit union, caisse populaire, financial
      services cooperative, or league that, in each case, is authorized by an
      enactment of Canada or a jurisdiction of Canada to carry on business in
      Canada or a jurisdiction of Canada;

            

    

    

    
      	
               
      

            	
              (b)

            	
              “control
      person” has
      the same meaning as in securities legislation except in Manitoba,
      Newfoundland and Labrador, Northwest Territories, Nova Scotia, Nunavut,
      Ontario, Prince Edward Island and Quebéc where control person means any
      person that holds or is one of a combination of persons that holds (i) a
      sufficient number of any of the securities of an issuer so as to affect
      materially the control of the issuer, or (ii) more than 20% of the
      outstanding voting securities of an issuer except where there is evidence
      showing that the holding of those securities does not affect materially
      the control of the issuer;

            

    

    

    
      	
               
      

            	
              (c)

            	
              “entity”
      means a company, syndicate, partnership, trust or unincorporated
      organization;

            

    

    

    
      	
               
      

            	
              (d)

            	
              “financial
      assets” means cash, securities, or a contract of insurance, a deposit or
      an evidence of a deposit that is not a security for the purposes of
      securities legislation;

            

    

    

    
      	
               
      

            	
              (e)

            	
              “founder” means, in respect
      of an issuer, a person who, (i) acting alone, in conjunction, or in
      concert with one or more persons, directly or indirectly, takes the
      initiative in founding, organizing or substantially reorganizing the
      business of the issuer, and (ii) at the time of the trade is actively
      involved in the business of the
issuer;

            

    

    

    
      	
               
      

            	
              (f)

            	
              “fully
      managed account” means an account of a client for which a person makes the
      investment decisions if that person has full discretion to trade in
      securities for the account without requiring the client’s express consent
      to a transaction;

            

    

    

    
      	
               
      

            	
              (g)

            	
              “investment
      fund” means a mutual fund or a non-redeemable investment fund, and, for
      greater certainty in British Columbia, includes an employee venture
      capital corporation that does not have a restricted constitution, and is
      registered under Part 2 of the Employee Investment Act
      (British Columbia), R.S.B.C. 1996 c. 112, and whose business objective is
      making multiple investments and a venture capital corporation registered
      under Part 1 of the Small Business Venture Capital
      Act (British Columbia), R.S.B.C. 1996 c. 429 whose business
      objective is making multiple
investments;

            

    

     

    
      	
               
      

            	
              (h)

            	
              “related
      liabilities” means liabilities incurred or assumed for the purpose of
      financing the acquisition or ownership of financial assets and liabilities
      that are secured by financial
assets;

            

    

     

    
      	
               
      

            	
              (i)

            	
              “Schedule
      III bank” means an
      authorized foreign bank named in Schedule III of the Bank Act
      (Canada);

            

    

    

    
      	
               
      

            	
              (j)

            	
              “spouse”
      means an individual who(i)is married to another individual and is not
      living separate and apart within the meaning of the Divorce Act (Canada),
      from the other individual, (ii) is living with another individual in a
      marriage-like relationship, including a marriage-like relationship between
      individuals of the same gender, or (iii) in Alberta, is an individual
      referred to in paragraph (i) or (ii), or is an adult interdependent
      partner within the meaning of the Adult Interdependent
      Relationships Act (Alberta);
and

            

    

    

    
      	
               
      

            	
              (k)

            	
              “subsidiary”
      means an issuer that is controlled directly or indirectly by another
      issuer and includes a subsidiary of that
  subsidiary.

            

    

     

    In NI
45-106 a person or company is considered to be an affiliated entity of another
person or company if one is a subsidiary entity of the other, or if both are
subsidiary entities of the same person or company, or if each of them is
controlled by the same person or company.

    
      
         

      

      
        A–3

        
          

        

      

      
         

      

    

     

    In NI
45-106 a person (first person) is considered to control another person (second
person) if (a) the first person,   directly or indirectly,
beneficially owns or exercises control or direction over securities of the
second person carrying votes which, if exercised, would entitle the first person
to elect a majority of the directors of the second person, unless that first
person holds the voting securities only to secure an obligation, (b) the second
person is a partnership, other than a limited partnership, and the first person
holds more than 50% of the interests of the partnership, or (c) the second
person is a limited partnership and the general partner of the limited
partnership is the first person.

    

    In NI
45-106 a trust company or trust corporation described in paragraph (p) above of
the definition of “accredited investor” (other than in respect of a trust
company or trust corporation registered under the laws of Prince Edward Island
that is not registered or authorized under the Trust and Loan Companies Act
(Canada) or under comparable legislation in another jurisdiction of
Canada) is deemed to be purchasing as principal.

    

    In NI
45-106 a person described in paragraph (q) above of the definition of
“accredited investor” is deemed to be purchasing as principal.

    

    The
foregoing representations contained in this certificate are true and accurate as
of the date of this certificate and will be true and accurate as of the Closing
Time.  If any such representations shall not be true and accurate
prior to the Closing Time, the undersigned shall give immediate written notice
of such fact to the Company prior to the Closing Time.

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          	 	
                                   Dated:

                                	March
      9, 2010	 
      	
                                  Signed:

                                	/s/
      Wade Dawe
	 	 	 	 	 	 
	 	 
      	 
      	
                                  Linear
      Gold Corp.

                                
	 	 
      	 
      	
                                  Print
      the name of Purchaser

                                
	 	 	 	 
	 	 
      	 
      	 
      
	 	 
      	 
      	
                                  Print
      name and title of Authorized Signing
Officer

                                

                        

                      

                    

                  

                

              

            

          

        

      

    

    
      
         

      

      
        A–4CONSENT
LETTER

     

    To:

     

    Apollo
Gold Corporation

    5655
South Yosemite Street

    Suite 200
Greenwood Village

    Colorado  80111-3220

    United
States of America

    Attention
R. David Russell

    By
Fax:  + 1 720 482 0957

    By Email:
auminer01@aol.com

    

    And
To:

    

    Linear
Gold Corp.

    Suite
502, 2000 Barrington Street

    Halifax,
Nova Scotia

    B3J
3K1

    Canada

    Attention  Wade
Dawe

    By Email:
wdawe@lineargoldcorp.com

    

    March 9,
2010

    

    Project
facility agreement dated as of February 20, 2009, (as amended, restated, renewed
or otherwise modified from time to time, including, without limitation, pursuant
to Deferral Consents dated 28 September 2009, 30 December 2009 and 25 February
2010) among Apollo Gold Corporation (“Borrower”), as borrower, 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 (the “PFA”)

     

    1.     
      Definitions

     

    We refer
to the PFA.  Terms and expressions defined in the PFA (or defined
therein by reference to another agreement) shall have the same meaning when used
in this letter unless otherwise defined.

     

    2.           Consents

     

    
      	
              2.1

            	
              The
      Agent consents to the Borrower entering into a transaction with Linear
      Gold Corp. (“Linear”) (“Transaction”) pursuant
      to which the Borrower will offer to acquire all the issued and outstanding
      common shares of Linear, the terms of which are set out in the Binding
      Letter of Intent between Linear and the Borrower dated 9 March 2010, a
      copy of which is attached hereto as Schedule “A” (“Binding Letter of
      Intent”), subject to the Agent being satisfied with the final terms
      and conditions of the “Definitive Agreements”, as that term is defined in
      the Binding Letter of Intent.

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    - 2 -

     

    3.           Additional
Event of Default

     

    Notwithstanding
any of the other terms of this letter, each of the Borrower and Linear hereby
agrees in favour of the Agent that a breach of any representation or warranty
provided by the Borrower or Linear in this letter or of any term or condition of
this letter, or any failure by any of them to comply with the terms of this
letter shall constitute an Event of Default for the purposes of the
PFA.

     

    4.           Non-Acceleration

     

    
      	
               
      

            	
              (a)

            	
              Subject
      to paragraph (b) below, prior to the earlier of: (i) the date on which the
      Agent determines, acting reasonably, that the Transaction has been
      terminated or will not be completed, (ii) March 31, 2010, if the
      Definitive Agreement (as that term is defined in the Binding Letter of
      Intent) and any other documents necessary to effect the Transaction
      (together “Definitive
      Agreements”) (in form and substance satisfactory to the Agent,
      acting reasonably) have not been executed by this date, and (iii)
      September 30, 2010 (the relevant date being the “Standstill End Date”), the Agent
      hereby agrees not to make demand, accelerate payment of the Secured
      Moneys, enforce any Security or enforce any other remedies set out in
      clause 13.2 or 13.5 of the PFA unless and until an Override Event has
      occurred and is continuing.   An “Override Event” means any
      event described in Schedule “B”
hereto.

            

    

     

    
      	
               
      

            	
              (c)

            	
              For
      the avoidance of doubt, on and from the Standstill End Date, the Agent is
      permitted to make demand, accelerate payment of the Secured Moneys,
      enforce any Security or enforce any other remedies set out in clause 13.2
      or 13.5 of the PFA as a result of any Event of Default or Review Event (in
      each case that has occurred and is continuing on the Standstill End Date),
      regardless of whether it initially occurred prior to the date hereof,
      between the date hereof and the Standstill End Date, or following the
      Standstill End Date.

            

    

     

    
      	
               
      

            	
              (d)

            	
              For
      the purposes of this letter of consent, the Transaction shall be
      “completed” upon the date (“Transaction Completion
      Date”) on which it is consummated in accordance with its
      terms.

            

    

     

    5.           Amendments
to the PFA

     

    Each of
the Agent, acting on the instructions of the Financiers, and the Borrower agree
that the PFA is amended as follows:

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    - 3 -

     

    
      	
               
      

            	
              (a)

            	
              Clause
      1.1 is amended by adding the following definitions in the appropriate
      order:

            

    

     

    Binding Letter of Intent means
the Binding Letter of Intent between Linear Gold Corp. and the Borrower dated 8
March 2010.

    

    Private Placement has the
meaning given to that term in the Binding Letter of Intent.

    

    Transaction means the
transaction between the Borrower and Linear Gold Corp. pursuant to which the
Borrower will offer to acquire all the issued and outstanding common shares of
Linear Gold Corp., the terms of which are set out in the Binding Letter of
Intent.

    

    Transaction Completion Date
means the date on which the Transaction is consummated in accordance with
its terms.

    

    
      	
               
      

            	
              (b)

            	
              The
      Repayment Schedule in Schedule 3 shall be deleted and the following new
      Repayment Schedule shall be
inserted:

            

    

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            	
                                    Repayment
      Date

                                  	 	
                                    Repayment Amount

                                  
	
                                    The
      earlier of 2 Business Days following completion of the Private Placement
      and 19 March 2010

                                  	 	US$ 	
                                    10,000,000

                                  
	
                                    The
      earlier of 2 July 2010 and the date that is 2 Business Days following the
      Transaction Completion Date

                                  	 	US$ 	
                                    10,000,000

                                  
	
                                    The
      earlier of 30 September 2010 and the date on which the proceeds from any
      one or more equity raisings following the Transaction Completion Date
      equals US$10,000,000

                                  	 	US$ 	
                                    10,000,000

                                  
	
                                    31
      December 2010

                                  	 	US$ 	
                                    5,000,000

                                  
	
                                    31
      March 2011 – 31 March 2013 with the Repayment Dates to be agreed between
      the Borrower and the Agent by no later than 30 September 2010 to reflect
      the Cashflow Model that is approved by the Agent.  In the
      absence of agreement between the Borrower and the Agent by 30 September
      2010, the Secured Moneys shall be due and payable on 31 December
      2010.

                                  	 	US$ 	
                                    35,000,000

                                  

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    - 4 -

     

    
      	
               
      

            	
              (c)

            	
              Clause
      8.2(e) (“Project
      Completion”) shall be amended by deleting the reference to “31 October 2009” and
      replacing it with “30
      September 2010”.

            

    

     

    
      	
               
      

            	
              (d)

            	
              Clause
      9.2(f) (“Project
      Completion Test”) shall be amended by deleting the reference to
      “31 March 2010”
      and replacing it with “30 September
      2010”;

            

    

     

    
      	
               
      

            	
              (e)

            	
              Clause
      12.2(a) (“Debt Service
      Reserve Account”) shall be amended by deleting the reference to
      “31 March 2010”
      and replacing it with “30 September
      2010”.

            

    

     

    
      	
               
      

            	
              (f)

            	
              Clause
      13.5(a)(3) (“Review
      Event”) shall be amended by deleting the reference to “31 October 2009” and
      replacing it with “30
      September 2010”.

            

    

     

    
      	
               
      

            	
              (g)

            	
              Schedule
      4 shall be amended by deleting the reference to “1 May 2009 until 31 October
      2009” and replacing it with “1 April 2010 to 30 September
      2010”, deleting the reference to “31 October 2009” and
      replacing it with “30
      September 2010” and deleting the reference to “31 March 2009” and
      replacing it with “1
      April 2010”.

            

    

    

    6.           Miscellaneous

     

    
      	
              6.1

            	
              The
      amendments to the PFA set out in sections 4 and 5 of this letter are
      subject to the execution and delivery by the Borrower and Linear of this
      letter.

            

    

     

    
      	
              6.2

            	
              Each
      of the consents and agreements given by the Agent in sections 2 and 4 of
      this letter are subject to:

            

    

     

    
      	
               
      

            	
              (a)

            	
              each
      of the other provisions of this
letter;

            

    

     

    
      	
               
      

            	
              (b)

            	
              the
      execution and delivery by the Borrower and Linear of this
      letter;

            

    

     

    
      	
               
      

            	
              (c)

            	
              the
      Apollo Support Agreement (as that term is defined in the Binding Letter of
      Intent) being delivered by the Borrower in a form and substance
      satisfactory to the Agent;

            

    

     

    
      	
               
      

            	
              (d)

            	
              any
      press releases or public statements made with respect to the Transaction
      that refer to the Financiers must be approved by the Financiers, acting
      reasonably, prior to them being issued or
  released;

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    - 5 -

     

    
      	
               
      

            	
              (e)

            	
              the
      Agent, acting reasonably, approving the form and substance of the
      Definitive Agreements and the Definitive Agreements being executed by no
      later than 31 March 2010;

            

    

     

    
      	
               
      

            	
              (f)

            	
              the
      Agent, acting reasonably, being satisfied that the Transaction will not
      cause a breach, default or event of default under the terms of any of the
      Project Documents;

            

    

     

    
      	
               
      

            	
              (g)

            	
              the
      Agent, acting reasonably, being satisfied that the completion of the
      Transaction will not have any material negative tax implications for
      Apollo, Linear and each of their direct and indirect
      subsidiaries;

            

    

     

    
      	
               
      

            	
              (h)

            	
              the
      Agent being satisfied, acting reasonably, that immediately following the
      Transaction Completion Date, and after making the payment of US$10,000,000
      contemplated by the second row of the amended Repayment Schedule, the
      Borrower has cash on hand of not less than
  CAD$10,000,000;

            

    

     

    
      	
               
      

            	
              (i)

            	
              no
      representation under the Definitive Agreements being incorrect when made
      in any material respect;

            

    

     

    
      	
               
      

            	
              (j)

            	
              there
      being no material amendment to the Definitive
  Agreements;

            

    

     

    
      	
               
      

            	
              (k)

            	
              there
      being no material breach of a covenant or waiver of a material condition
      precedent under the Definitive Agreements;
and

            

    

     

    
      	
               
      

            	
              (l)

            	
              at
      completion of the Transaction, the Agent, acting reasonably, being
      satisfied that:

            

    

     

    
      	
               
      

            	
              (1)

            	
              Linear
      and its direct and indirect subsidiaries have no material financial
      indebtedness and no material obligations other than (i) those disclosed in
      Linear’s interim financial statements for the period ending 31 December
      2009 as filed on SEDAR, or (ii) costs and expenses arising in connection
      with the Transaction; and

            

    

     

    
      	
               
      

            	
              (2)

            	
              Linear,
      its direct and indirect subsidiaries and each of their respective assets
      are free from encumbrances, liens and any other forms of security, other
      than those disclosed in Linear’s interim financial statements for the
      period ending 31 December 2009 as filed on SEDAR and other than those that
      are immaterial and incurred in the normal course of
    business.

            

    

     

    If any of
the terms or conditions set out in this paragraph 6.2 are breached or not
satisfied, the consents and agreements given by the Agent in sections 2 and 4 of
this Agreement shall be withdrawn and shall be have no further
effect.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    - 6 -

     

    
      	
              6.3

            	
              With
      respect to the payment of US$10,000,000 due under the Repayment Schedule
      on the earlier of 30 September 2010 and the date on which the proceeds
      from any one or more equity raisings following the Transaction Completion
      Date equals US$10,000,000, the Agent and the Financiers agree that, if the
      Agent is satisfied that the Borrower has diligently pursued marketing
      efforts and taken all other steps necessary to complete an equity raising
      on or before 30 September 2010, the Agent and the Financiers will not
      unreasonably withhold their consent to a request from the Borrower to
      extend the date for repayment of this amount to a date that is no later
      than December 31, 2010, provided that the Borrower can provide evidence
      satisfactory to the Financiers, acting reasonably, (including, without
      limitation, by the delivery of opinions from the relevant equity
      underwriter or agent) confirming that the equity raising is likely to be
      completed prior to 31 December
2010.

            

    

     

    
      	
              6.4

            	
              The
      Financiers acknowledge that a condition to the completion of the Private
      Placement will be that the Financiers enter into agreements acknowledging
      that they will support the Transaction (“Support Agreements”) and
      agreements restricting their ability to sell or transfer any common shares
      of the Borrower (“Apollo
      Common Shares”) and warrants with respect to the Apollo Common
      Shares (“Apollo
      Warrants”) that they may hold until December 31, 2010 (“Lock Up Agreements), on
      terms and conditions that are usual and customary for agreements of this
      type, including standard carve outs including, without limitation carve
      outs for acceptance of superior proposals, and in a form and substance
      satisfactory to the Financiers, acting reasonably.  It is noted
      that any support agreement entered into by Macquarie Bank Limited (“Macquarie”) will only
      apply to and impose restrictions on the Fixed Income, Currencies and
      Commodities Group (“FICC”) of
      Macquarie.

            

    

     

    
      	
              6.5

            	
              Macquarie
      represents and warrants that FICC
holds:

            

    

     

    
      	
               
      

            	
              (a)

            	
              4,000,000
      Apollo Common Shares;

            

    

     

    
      	
               
      

            	
              (b)

            	
              2,000,000
      Apollo Warrants with an exercise price of CAD$0.65 and an expiry date of
      24 July 2011;

            

    

     

    
      	
               
      

            	
              (c)

            	
              21,307,127
      Apollo Warrants with an exercise price of CAD$0.221 and an expiry date of
      December 10, 2012; and

            

    

     

    
      	
               
      

            	
              (d)

            	
              23,198,336
      Apollo Warrants with an exercise price of CAD$0.252 and an expiry date of
      February 20, 2013.

            

    

     

    
      	
              6.6

            	
              RMB
      Australia Holdings Limited (“RMB”) represents and
      warrants that RMB holds:

            

    

     

    
      	
               
      

            	
              (a)

            	
              4,716,800
      Apollo Common Shares; and

            

    

     

    
      	
               
      

            	
              (b)

            	
              1,000,000
      Apollo Warrants with an exercise price of
  CAD$0.65;

            

    

     

    
      	
               
      

            	
              (c)

            	
              21,307,127
      Apollo Warrants with an exercise price of CAD$0.221;
  and

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    - 7 -

     

    
      	
               
      

            	
              (d)

            	
              11,637,775
      Apollo Warrants with an exercise price of
  CAD$0.252.

            

    

     

    
      	
              6.7

            	
              Save
      as expressly set out in this letter, nothing in this letter shall be
      deemed to:

            

    

     

    
      	
               
      

            	
              (a)

            	
              be
      an amendment to the terms of any Transaction
  Document;

            

    

     

    
      	
               
      

            	
              (b)

            	
              be
      a waiver of or consent by the Agent or the Financiers to any breach or
      potential breach (present or future) of any provision of the Transaction
      Documents;

            

    

     

    
      	
               
      

            	
              (c)

            	
              be
      any waiver of an Event of Default, potential Event of Default or Review
      Event;

            

    

     

    
      	
               
      

            	
              (d)

            	
              prejudice
      or adversely affect any right, power, authority, discretion or remedy
      arising under any Transaction Document;
or

            

    

     

    
      	
               
      

            	
              (e)

            	
              discharge,
      release or otherwise affect any liability or obligation arising under any
      Transaction Document,

            

    

     

    and the
Agent and the Financiers otherwise reserve all of their rights under the
Transaction Documents.

     

    
      	
              6.8

            	
              Notwithstanding
      section 4 of this letter, a Finance Party is entitled at any time to take
      action which it considers to be necessary
to:

            

    

     

    
      	
               
      

            	
              (a)

            	
              defend
      any action or proceeding brought against it by the Borrower or Linear to
      preserve or clarify its contractual rights which are being disputed by the
      Borrower or Linear; or

            

    

     

    
      	
               
      

            	
              (b)

            	
              for
      the purposes of protecting or preserving any Security other than any
      actions prohibited by this
agreement.

            

    

     

    
      	
              6.9

            	
              The
      Borrower ratifies and confirms the PFA and each other Transaction
      Document, as amended herein.

            

    

     

    
      	
              6.10

            	
              The
      Borrower acknowledges and agrees with the Finance Parties
      that:

            

    

     

    
      	
               
      

            	
              (a)

            	
              the
      Agent and the Financiers have provided this letter at the request and for
      the benefit of the Borrower; and

            

    

     

    
      	
               
      

            	
              (b)

            	
              its
      obligations to the Agent and the Financiers under the PFA and the other
      Transaction Documents, or otherwise, are and continue to be secured by the
      Securities and, without limitation, all amounts owing by it to the Agent
      and the Financiers under the Facility Agreement and the other Transaction
      Documents or otherwise comprise part of the Secured
  Moneys.

            

    

     

    
      	
              6.11

            	
              The
      Borrower and Linear acknowledge and agree that upon the Transaction
      Completion Date, Linear and its direct and indirect subsidiaries shall be
      Transaction Parties under the PFA.

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    - 8 -

     

    
      	
              6.12

            	
              Pursuant
      to clause 16.4 (“Costs
      and Expenses”) of the PFA,
      the Borrower shall reimburse the Finance Parties for the amount of all
      reasonable costs and expenses (including legal fees) incurred by the
      Finance Parties in connection with this letter, the Lock Up Agreements and
      the Support Agreements.

            

    

     

    
      	
              6.13

            	
              This
      letter shall constitute a Transaction Document for the purpose of the
      PFA.

            

    

     

    
      	
              6.14

            	
              This
      letter constitutes the entire agreement and understanding of the parties
      with respect to the subject matter of this letter, and supersedes all oral
      communications and prior writings with respect
  thereto.

            

    

     

    
      	
              6.15

            	
              This
      letter may be signed in any number of counterparts, and this has the same
      effect as if the signatures on the counterparts were on a single copy of
      this letter.

            

    

     

    
      	
              6.16

            	
              This
      letter shall be governed by and construed in accordance with the laws of
      the Province of Ontario and the laws of Canada which are applicable in the
      Province of Ontario.

            

    

     

    Please
indicate your acceptance of the terms and conditions contained in this letter by
countersigning the copy of this letter where indicated below.

     

    [Signature
page to follow on next following page]

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    - 9 -

     

    
      	
              SIGNED FOR RMB
      RESOURCES INC. IN ITS CAPACITY AS AGENT by Rick
    Winters

            	
              )

              )

              )

              )

              )

              )

              )

              )

              )

              )

            	
               

               

               

              /s/
      Rick
      Winters                                                      
              

              Signature
      of Rick Winters

               

            

    

     

    
      	
              SIGNED FOR RMB
      AUSTRALIA HOLDINGS LIMITED, IN ITS CAPACITY AS FINANCIER by Greg
      Gay

            	
              )

              )

              )

              )

              )

              )

              )

              )

              )

              )

            	
               

               

               

              /s/
      Grey
      Gay                                                            
               

              Signature
      of Greg Gay

               

               

            

    

     

    
      	
              SIGNED FOR MACQUARIE BANK
      LIMITED, IN ITS CAPACITY AS FINANCIER by its duly appointed
      attorneys under power of attorney dated October 27, 2009

            	
              )

              )

              )

              )

              )

              )

              )

              )

              )

              )

            	
               

               

               

              /s/
      Richard
      Crookes                                             
                 

              Signature
      of Attorney

               

               

              /s/
      Margot
      Branson                                               
               

              Signature
      of Attorney

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    - 10 -

     

    In
consideration of the Agent, on behalf of and on the instructions of the
Financiers, entering into and delivering the foregoing consent letter, the
Borrower hereby accepts and agrees to the foregoing and undertakes to the Agent,
for and on behalf of the Financiers, as follows:

     

    
      	
               
      

            	
              (a)

            	
              to
      use its commercial best endeavours to complete the Private Placement to
      Linear of 62,500,000 Apollo Common Shares at a price of CAD$0.40 per
      Apollo Common Share to raise CAD$25,000,000 (“Private
      Placement”)  and to pay the
      proceeds from the Private Placement, less the amount referred to in
      paragraph (b) below, into the Proceeds Account by 19 March
      2010;

            

    

     

    
      	
               
      

            	
              (b)

            	
              on
      the earlier of 2 Business Days following completion of the Private
      Placement and 19 March 2010, to repay US$10,000,000 under the Facility as
      contemplated by the amended Repayment Schedule set out in the foregoing
      consent letter;

            

    

     

    
      	
               
      

            	
              (c)

            	
              upon
      request from the Agent in writing, to close out foreign exchange hedging
      contracts entered into by the Borrower to generate close out proceeds of
      US$5,000,000, and apply all of those proceeds as a prepayment of the
      Principal Outstanding under the Facility in accordance with clause 3.6 of
      the PFA.  The Agent agrees that it will not issue a notice
      requesting close out of any foreign exchange hedging contracts unless such
      a close out will generate proceeds of not less than US$5,000,000 and it
      will only request close out of the foreign exchange hedging contracts to
      the extent required to generate proceeds of US$5,000,000.  The
      Borrower agrees that the proceeds generated from the close out of these
      contracts will be applied to the repayments due under the Repayment
      Schedule in reverse order of
maturity;

            

    

     

    
      	
               
      

            	
              (d)

            	
              by
      30 April 2010, to deliver to the Agent a detailed combined corporate and
      project budget for the period to 31 December 2010, that is consistent
      with, but in more detailed form than, the cashflow budget delivered to the
      Agent dated 28 February 2010 (“Interim
      Budget”).  The Borrower agrees that for the period from
      the date of receipt of the Interim Budget to 30 September 2010, all
      references to the “Cashflow Model” and the “Corporate Budget” in the PFA
      shall be read as references to the Interim Budget and that the Borrower
      will not amend the Interim Budget without the prior written consent of the
      Agent;

            

    

     

    
      	
               
      

            	
              (e)

            	
              throughout
      the period from the date of receipt of the Interim Budget to 30 September
      2010, to demonstrate to the reasonable satisfaction of the Agent that
      there are sufficient funds available to the Borrower, from cashflows from
      the Project, from the Borrower’s project cash reserves, and from other
      sources that are approved by the Agent, to fund the development,
      maintenance and operation of the Project and other corporate working
      capital requirements as contemplated in the Interim
  Budget;

            

    

     

    
      	
               
      

            	
              (f)

            	
              on
      the earlier of 2 July 2010 and the date that is 2 Business Days after the
      date on which the Transaction is completed, to repay US$10,000,000 under
      the Facility as contemplated by the amended Repayment Schedule set out in
      the foregoing consent letter;

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    - 11 -

     

    
      	
               
      

            	
              (g)

            	
              to
      complete the Technical Review of the Project, in a form and substance
      satisfactory to the Financiers, including (i) finalization of a new
      resource model; (ii) determination of appropriate cut off grades for the
      open pit and underground resources; and (iii) optimisation of the open pit
      and underground mine planning, by no later than 31 May
    2010;

            

    

     

    
      	
               
      

            	
              (h)

            	
              to
      deliver a revised Cashflow Model to the Agent, for review and approval by
      the Agent (acting on the instructions of the Financiers), that otherwise
      satisfies the requirements of the PFA, by no later than 31 May 2010 and to
      work with the Agent to ensure that the Cashflow Model is in a form and
      substance acceptable to and approved by the Agent (acting on the
      instructions of the Financiers) for the purposes of the PFA by 30
      September 2010;

            

    

     

    
      	
               
      

            	
              (i)

            	
              within
      2 Business Days following the Transaction Completion Date, pay the balance
      of any cash held by Linear and its directly or indirectly held
      subsidiaries, less that amount referred to in paragraph (f) above, into
      the Proceeds Account other than amounts held in working capital accounts
      in the jurisdictions outside Canada in which Linear does business, such
      amount not to exceed CAD $500,000;

            

    

     

    
      	
               
      

            	
              (j)

            	
              to
      comply with all directions of the Agent so that within 60 days following
      completion of the Transaction:

            

    

     

    
      	
               
      

            	
              (1)

            	
              the
      Finance Parties have registered first ranking security over all of the
      assets of the Borrower (including any successor entity by way of the
      Transaction) to secure the Secured Moneys and the Obligations (as that
      term is defined in the General Security Agreement dated 10 December 2008
      between the Security Agent and the Borrower) (“Obligations”) which
      shall include a first ranking share pledge over all of the issued share
      capital of Linear; and

            

    

     

    
      	
               
      

            	
              (2)

            	
              Linear
      and each of Linear’s direct and indirect subsidiaries become Guarantors
      and Transaction Parties under the terms of the Transaction Documents;
      and

            

    

     

    
      	
               
      

            	
              (3)

            	
              the
      Finance Parties have registered first ranking security over all of the
      assets of Linear and Linear’s direct and indirect subsidiaries to secure
      the Secured Moneys and the
Obligations;

            

    

     

    
      	
               
      

            	
              (k)

            	
              on
      the earlier of 30 September 2010 and the date on which the proceeds from
      any one or more equity raisings post completion of the Transaction equals
      US$10,000,000, to repay US$10,000,000 under the Facility as contemplated
      by the amended Repayment Schedule set out in the foregoing consent letter,
      which is subject to s. 6.3 of such
letter;

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    - 12 -

     

    
      	
               
      

            	
              (l)

            	
              by
      30 September 2010, to agree with the Agent appropriate amendments to the
      Repayment Schedule to reflect the Cashflow Model that is approved by the
      Agent in accordance with paragraph (g) above.  In the absence of
      agreement between the Borrower and the Agent by 30 September 2010, the
      Secured Moneys shall be due and payable on 31 December
    2010;

            

    

     

    
      	
               
      

            	
              (m)

            	
              to
      demonstrate to the Agent that the Cashflow Model that is approved by the
      Agent in accordance with paragraph (h) above reflects that there are
      sufficient funds available to the Borrower, from cashflows from the
      Project, from the Borrower’s project cash reserves, and from other sources
      that are approved by the Agent, to fund the development, maintenance and
      operation of the Project and other corporate working capital
      requirements;

            

    

     

    
      	
               
      

            	
              (n)

            	
              on
      31 December 2010 and on each subsequent Repayment Date, to repay the
      Repayment Amounts contemplated by the amended Repayment Schedule set out
      in the foregoing consent letter;

            

    

     

    
      	
               
      

            	
              (o)

            	
              to
      continue to deliver the required ounces of Product into the Price
      Protection Program; and

            

    

     

    
      	
               
      

            	
              (p)

            	
              to
      deliver the monthly reports contemplated by clause 9.6(c) of the PFA no
      later than 30 days after the end of each calendar
  month;

            

    

     

    
      	
               
      

            	
              (q)

            	
              subject
      to applicable laws, to notify the Lenders of the receipt of any
      Acquisition Proposal (as that term is defined in the Binding Letter of
      Intent) by Apollo, and provide details of each Acquisition Proposal, by no
      later than the Business Day following receipt of any Acquisition Proposal
      by Apollo;

            

    

     

    
      	
               
      

            	
              (r)

            	
              to
      comply with all provisions under the PFA and the Transaction
      Documents.

            

    

     

    ACCEPTED
AND AGREED THIS 9TH DAY OF
MARCH, 2010

     

    
      
        	
                APOLLO
      GOLD CORPORATION

                 

              
	
                By:

              	
                 
      

                
                  /s/
      R. David Russell

                

              
	 
      	
                Per:

              	 
      

      

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    - 13 -

     

    In
consideration of the Agent, on behalf of and on the instructions of the
Financiers, entering into and delivering the foregoing consent letter, Linear
hereby accepts and agrees to the foregoing and:

     

    1)           undertakes
to the Agent, for and on behalf of the Financiers, as follows:

     

    
      	
               
      

            	
              (a)

            	
              to
      use its commercial best endeavours to accept and complete the Private
      Placement of 62,500,000 Apollo Common Shares at a price of CAD$0.40 per
      Apollo Common Share by 19 March
2010;

            

    

     

    
      	
               
      

            	
              (b)

            	
              to
      use its best endeavours to complete the Transaction by 30 June
      2010;

            

    

     

    
      	
               
      

            	
              (c)

            	
              to
      comply with all reasonable directions of the Agent so that within 60 days
      following completion of the
Transaction:

            

    

     

    
      	
               
      

            	
              (1)

            	
              the
      Finance Parties have registered, first ranking security over all of the
      assets of the Borrower (including any successor entity by way of the
      Transaction) to secure the Secured Moneys and the Obligations (as that
      term is defined in the General Security Agreement dated 10 December 2008
      between the Security Agent and the Borrower) (“Obligations”) which
      shall include a first ranking share pledge over all of the issued share
      capital of Linear; and

            

    

     

    
      	
               
      

            	
              (2)

            	
              Linear
      and each of Linear’s direct and indirect subsidiaries become Guarantors
      and Transaction Parties under the terms of the Transaction Documents;
      and

            

    

     

    
      	
               
      

            	
              (3)

            	
              the
      Finance Parties have registered, first ranking security over all of the
      assets of Linear and Linear’s direct and indirect subsidiaries to secure
      the Secured Moneys and the
Obligations;

            

    

     

    
      	
               
      

            	
              (d)

            	
              within
      2 Business Days following the Transaction Completion Date, pay the balance
      of any cash held by Linear and its directly or indirectly held
      subsidiaries, less that amount referred to in paragraph (f) of Apollo’s
      undertakings, into the Proceeds Account, other than amounts held in
      working capital accounts in the jurisdictions outside Canada in which
      Linear does business, such amount not to exceed CAD
    $500,000;

            

    

     

    
      	
              2)

            	
              represents
      and warrants to the Agent, for and on behalf of the Financiers, as
      follows:

            

    

     

    
      	
               
      

            	
              (a)

            	
              as
      at Friday, 5 March 2010, Linear had a balance of cash on hand of
      CAD$39,750,000;

            

    

     

    
      	
               
      

            	
              (b)

            	
              Linear
      and its direct and indirect subsidiaries have no material financial
      indebtedness and no material obligations other than those (i) disclosed in
      Linear’s interim financial statements for the period ending 31 December
      2009 as filed on SEDAR, or (ii) costs and expenses arising in connection
      with the Transaction;

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    - 14 -

     

    
      	
               
      

            	
              (c)

            	
              Linear,
      its direct and indirect subsidiaries and each of their respective assets
      are free from encumbrances, liens and any other forms of security other
      than those disclosed in Linear’s interim financial statements for the
      period ending 31 December 2009 as filed on SEDAR and other than those that
      are immaterial and incurred in the normal course of
    business;

            

    

     

    
      	
               
      

            	
              (d)

            	
              there
      has been no material change to the financial position, including the
      current and long term liabilities, of Linear and its direct and indirect
      subsidiaries from that set out in the financial statements of Linear for
      the period to 31 December 2009 that have been filed with
      SEDAR.

            

    

     

    ACCEPTED
AND AGREED THIS 9TH DAY OF MARCH,
2010

     

    
      
        	
                LINEAR
      GOLD CORP.

                 

              
	
                By:

              	
                 

                
                  /s/
      Wade Dawe

                

              
	 
      	
                Per:

              	 
      

      

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    - 15 -

     

    SCHEDULE
“A”

     

    LETTER
OF INTENT

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    - 16 -

     

    SCHEDULE
“B”

     

    OVERRIDE
EVENTS

     

    
      	
               
      

            	
              (a)

            	
              letter
      misrepresentation:  any representation or warranty
      provided by the Borrower or Linear in the letter to which this schedule is
      Schedule “B” shall prove to have been incorrect when
  made;

            

    

     

    
      	
               
      

            	
              (b)

            	
              breach of letter
      covenant:  the Borrower or Linear fail to perform any
      undertaking or obligation set out in the letter to which this schedule is
      Schedule “B”;

            

    

     

    
      	
               
      

            	
              (c)

            	
              breach of
      covenant:  a Transaction Party fails to perform any
      undertaking or obligation of it (other than an obligation under paragraph
      (d) below):

            

    

     

    
      	
               
      

            	
              (1)

            	
              under
      any of the Transactions Documents other than the PFA;
  or

            

    

     

    
      	
               
      

            	
              (2)

            	
              sections
      3, 4, 5, 6, 7.3, 7.4, 9.1, 9.2(a), 9.2(c), 9.2(d), 9.2(i), 9.3, 9.4(a),
      9.4(c), 9.4(d), 9.8, 9.9, 9.12(a), 9.12(b), 9.12(c), 9.13, 9.14(a),
      9.16(a), 9.16(c), 9.16(d), 9.16(e), 9.17(b), 9.18(a), 9.18(b), 9.18(c),
      9.19, 9.22, 9.23, 9.26, 9.29, 10, 12.1(a), 12.1(c), 12.1(d), 12.3 and
      12.4;

            

    

     

    and that
failure:

     

    
      	
               
      

            	
              (3)

            	
              is
      not in the opinion of the Agent (acting on the instruction of all
      Financiers) remediable; or

            

    

     

    
      	
               
      

            	
              (4)

            	
              is
      in the opinion of the Agent remediable, and the Transaction Party does not
      remedy the failure within 10 Business Days after the Transaction Party
      becomes aware of that failure or receives a notice from the Agent
      specifying the failure (whichever occurs
first);

            

    

     

    
      	
               
      

            	
              (d)

            	
              failure to pay: a
      Transaction Party fails to pay or repay any part of the Secured Moneys
      when due and payable by it, including as the payment or repayment schedule
      for such Secured Moneys has been amended by the letter to which this
      schedule is Schedule “B”;

            

    

     

    
      	
               
      

            	
              (e)

            	
              Mining
      Rights:

            

    

     

    
      	
               
      

            	
              (1)

            	
              a
      Mining Right is terminated or otherwise ceases to be in full force and
      effect; or

            

    

     

    
      	
               
      

            	
              (2)

            	
              a
      Mining Right is abandoned, terminated or otherwise determined in the
      opinion of the Agent (acting on the instructions of all Financiers) to be
      invalid or owned by a person other than the
  Borrower;

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    - 17 -

     

    
      	
               
      

            	
              (f)

            	
              Current
      Ratio:  the Current Ratio is less than 1.2:1 at any time
      after the Transaction Completion Date and without taking into account any
      amounts owing under the PFA;

            

    

     

    
      	
               
      

            	
              (g)

            	
              Minimum Proceeds Account
      Balance: the balance in the Proceeds Account at any time is less
      than US$5,000,000;

            

    

     

    
      	
               
      

            	
              (h)

            	
              Authorisations: the
      Borrower fails to maintain and comply in all material respects with all
      applicable Authorisations that relate to the development, construction and
      operation of the Project;

            

    

     

    
      	
               
      

            	
              (i)

            	
              abandonment: all or any
      material part of the Project is abandoned or placed on a ‘care and
      maintenance’ basis for more than 5 consecutive
  days;

            

    

     

    
      	
               
      

            	
              (j)

            	
              destruction of Secured
      Property: all or a material part of its Secured Property is
      destroyed, lost or damaged beyond repair or proves to be materially
      defective in circumstances not covered fully by any insurance in favour of
      a Transaction Party;

            

    

     

    
      	
               
      

            	
              (k)

            	
              expropriation: all or a
      material part of the Secured Property is seized, nationalised,
      compulsorily acquired or expropriated by, or by order of, a Government
      Agency or under any law or a Government Agency orders the sale, vesting or
      divesting of all or a material part of the Secured Property, or a
      restraint, restriction, prohibition, intervention, law, decree or other
      order of a Government Agency or any other matter or thing occurs which
      wholly or partially prevents or hinders, in a material
  way:

            

    

     

    
      	
               
      

            	
              (1)

            	
              the
      performance by a Transaction Party of any of its obligations under a
      Document; or

            

    

     

    
      	
               
      

            	
              (2)

            	
              the
      construction, development or operation of the Project or the Project
      Assets;

            

    

     

    
      	
               
      

            	
              (l)

            	
              misrepresentation: any
      representation or warranty or statement made, or taken to have been made,
      of a Transaction Party under or in connection with a Transaction Document
      is found to have been incorrect or misleading when made or repeated, or
      taken to have been made or repeated, unless rectified within 20 Business
      Days of that representation or warranty or statement having been made or
      taken to have been made;

            

    

     

    
      	
               
      

            	
              (m)

            	
              acceleration of
      payments: a Transaction Party does anything which constitutes an
      event, whatever called, which causes or enables the acceleration of a
      payment to be made under a Document, or the enforcement or termination or
      rescission of a Document;

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    - 18 -

     

    
      	
               
      

            	
              (n)

            	
              cross default: any
      Financial Indebtedness of a Transaction Party in an amount in excess of
      US$500,000:

            

    

     

    
      	
               
      

            	
              (1)

            	
              becomes
      due and payable, or becomes capable of being declared due and payable,
      before the scheduled date for payment;
or

            

    

     

    
      	
               
      

            	
              (2)

            	
              is
      not paid when due (after taking into account any applicable grace
      period);

            

    

     

    
      	
               
      

            	
              (o)

            	
              Encumbrance: any
      Encumbrance is enforced, or becomes capable of being enforced, against a
      material asset of a Transaction
Party;

            

    

     

    
      	
               
      

            	
              (p)

            	
              judgment: a judgment in
      an amount exceeding US$500,000 is obtained against a Transaction Party and
      that judgement has not been paid and satisfied, vacated, discharged,
      stayed or bonded pending appeal within 10 Business Days from
      the entry of that judgment;

            

    

     

    
      	
               
      

            	
              (q)

            	
              execution: a distress,
      attachment, execution or other process of a Government Agency is issued
      against, levied or entered upon an asset of a Transaction Party in an
      amount exceeding US$500,000 and is not set aside or satisfied within
      10 Business Days;

            

    

     

    
      	
               
      

            	
              (r)

            	
              winding up: any of the
      following occur:

            

    

     

    
      	
               
      

            	
              (1)

            	
              an
      application is made by a Person other than a Transaction Party, and is not
      withdrawn, dismissed, discontinued or set aside within 10 Business
      Days;

            

    

     

    
      	
               
      

            	
              (2)

            	
              an
      application is made by a Transaction
Party;

            

    

     

    
      	
               
      

            	
              (3)

            	
              an
      order is made; or

            

    

     

    
      	
               
      

            	
              (4)

            	
              a
      resolution is passed or any steps are taken to pass a
      resolution,

            

    

     

    for the winding up of any Transaction
Party;

     

    
      	
               
      

            	
              (s)

            	
              administration, liquidation,
      receivership etc: any of the following
  occur:

            

    

     

    
      	
               
      

            	
              (1)

            	
              an
      administrator, liquidator, provisional liquidator, receiver, receiver and
      manager, official manager, trustee, monitor, controller or similar
      official is appointed, or any steps are taken to that appointment, except
      an application made to a court by a Person other than a Transaction Party
      for the purposes of appointing such a person which is disputed by a
      Transaction Party acting diligently and in good faith and dismissed within
      10 Business Days; or

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    - 19 -

     

    
      	
               
      

            	
              (2)

            	
              a
      resolution to appoint an administrator, liquidator, provisional
      liquidator, receiver, receiver and manager, official manager, trustee,
      monitor, controller or similar official is passed, or any steps are taken
      to pass a resolution to that appointment, except an application made to a
      court by a Person other than a Transaction Party for the purposes of
      appointing such a person which is disputed by a Transaction Party acting
      diligently and in good faith and dismissed within 10 Business
      Days,

            

    

     

    to a Transaction Party or over the
assets of a Transaction Party;

     

    
      	
               
      

            	
              (t)

            	
              deregistration: a
      Transaction Party is deregistered, or any steps are taken to deregister a
      Transaction Party under any applicable law and such deregistration is
      reasonably likely to have a Material Adverse Effect.  For the
      avoidance of doubt, if any of the Borrower, Linear or 7153945 Canada Inc.
      is deregistered, or any steps are taken to deregister any of them, it
      shall be deemed to have a Material Adverse
  Effect;

            

    

     

    
      	
               
      

            	
              (u)

            	
              suspends payment: a
      Transaction Party suspends payment of its debts
  generally;

            

    

     

    
      	
               
      

            	
              (v)

            	
              insolvency: a
      Transaction Party:

            

    

     

    
      	
               
      

            	
              (1)

            	
              commits
      an act of bankruptcy under the Bankruptcy and Insolvency Act
      (Canada), or makes an assignment of its property for the general
      benefit of its creditor under the Bankruptcy and Insolvency Act
      (Canada), or makes a proposal (or files a notice of its intention
      to do so), under the Bankruptcy and Insolvency Act
      (Canada);

            

    

     

    
      	
               
      

            	
              (2)

            	
              is
      unable to pay its debts when they are
due;

            

    

     

    
      	
               
      

            	
              (3)

            	
              states
      that it is insolvent or unable to pay its debts when they are due;
      or

            

    

     

    
      	
               
      

            	
              (4)

            	
              is
      presumed to be insolvent or becomes insolvent under administration as
      defined or recognised under any applicable law, or action is taken which
      could result in those events;

            

    

     

    
      	
               
      

            	
              (w)

            	
              arrangements: a
      Transaction Party enters into or resolves to enter into any arrangement,
      composition or compromise with, or assignment for the benefit of, any of
      its creditors, other than the
Transaction;

            

    

     

    
      	
               
      

            	
              (x)

            	
              reorganisation: a Transaction
      Party implements a merger, demerger or scheme of arrangement with any
      person where the Transaction Party would not be the surviving
      party;

            

    

     

    
      	
               
      

            	
              (y)

            	
              amendment of constituent
      documents: the memorandum and articles of association, constitution
      or other constating documents (including a by-law) of a Transaction Party
      are amended in a manner that has, or is reasonably likely to have, a
      Material Adverse Effect;

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    - 20
- 

     

    
      	
               
      

            	
              (z)

            	
              ceasing business: a
      Transaction Party ceases to carry on business and such cessation is
      reasonably likely to have a Material Adverse Effect.  For the
      avoidance of doubt, if any of the Borrower, Linear or 7153945 Canada Inc.
      ceases to carry on business it shall be deemed to have a Material Adverse
      Effect;

            

    

     

    
      	
               
      

            	
              (aa)

            	
              de-listing on TSX / reporting
      issuer status: except with the prior written consent of the Agent
      (acting on the instructions of all Financiers), the Borrower ceases to
      have its ordinary shares listed for trading on the TSX or ceases to be a
      reporting issuer under the Securities Laws of any province of Canada
      (other than Quebec);

            

    

     

    
      	
               
      

            	
              (bb)

            	
              de-listing on the AMEX:
      except with the prior written consent of the Agent (acting on the
      instructions of all Financiers), the Borrower ceases to have its ordinary
      shares listed for trading on the
AMEX;

            

    

     

    
      	
               
      

            	
              (cc)

            	
              unenforceability:

            

    

     

    
      	
               
      

            	
              (1)

            	
              a
      material provision of a Document is illegal, void, voidable or
      unenforceable;

            

    

     

    
      	
               
      

            	
              (2)

            	
              any
      person becomes entitled to terminate, rescind or avoid any material
      provision of any Document; or

            

    

     

    
      	
               
      

            	
              (3)

            	
              the
      execution, delivery or performance of a Document by a Transaction Party
      breaches or results in a contravention of any
  law;

            

    

     

    
      	
               
      

            	
              (dd)

            	
              Material Adverse
      Effect:, following, the Transaction Completion Date, any event
      occurs which has or is reasonably likely to have a Material Adverse
      Effect; or

            

    

     

    
      	
               
      

            	
              (ee)

            	
              jurisdictional
      equivalent: anything analogous
      or having a substantially similar effect to any of the events specified in
      clauses (r), (s), (t), (u), (v), (w) or (x)happens under the law of any
      applicable jurisdiction, as
amended.

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