creditfacilityagr.htm

Amendment and restatement agreement

relating to a credit agreement originally dated 30 March 2007 as amended and restated on 31 May 2007 and as further amended on 29 June 2007, 16 July 2007, 14 August 2007, 14 August 2008, 18 December 2008, 9 January 2009, 9 July 2009 and 4 August 2009

Dated 7 October 2009

Western Mesquite Mines, Inc.

(as Borrower)

Western Goldfields Inc.

(WGI)

Western Goldfields (USA) Inc.

(WGI (USA))

Investec Bank plc

(as Mandated Lead Arranger)

Commonwealth Bank of Australia

(as Lead Arranger)

Investec Bank plc

(as Agent)

Investec Bank plc

(as Security Trustee)

The Banks

The Hedging Banks

Denton Wilde Sapte LLP

One Fleet Place

London EC4M 7WS

United Kingdom

T +44 (0)20 7242 1212

F +44 (0)20 7246 7777

Telex 887793

DX 242

info@dentonwildescapte.com

www.dentonwildesapte.com

International Lawyers

Contents

1	Definitions and construction	1
2	Amendment and restatement	2
3	Consents	2
4	Cancellation confirmation and waiver	3
5	Prepayment confirmation and waiver	3
6	Confirmations	3
7	WGI Undertaking	3
8	Representations and warranties	4
9	Further action	4
10	Fees and expenses	4
11	Counterparts	4
12	Governing law and jurisdiction	4
13	Financing Documents	4
	Schedule 1 - Conditions precedent	5
	Schedule 2 - Amended and Restated Credit Agreement	6

Content (i)

Amendment and restatement agreement

Dated 7 October 2009

Between

(1)	Western Mesquite Mines, Inc., a Nevada corporation, with its principal executive office at 6502 E. Highway 78, Brawley, California 92227 (the Borrower);

(2)	Western Goldfields Inc., a corporation governed by the laws of the Province of Ontario with its principal executive office at Suite 2102, 2 Bloor Street West, Toronto, Ontario, Canada M4W 3E2 (WGI);

(3)	Western Goldfields (USA) Inc. (formerly Western Goldfields, Inc.), a Nevada corporation with its principal executive office at Suite 2102, 2 Bloor Street West, Toronto, Ontario, Canada M4W 3E2 (WGI (USA));

(4)	Investec Bank plc of 2 Gresham Street, London EC2V 7QP, United Kingdom (the Mandated Lead Arranger);

(5)	Commonwealth Bank of Australia of 599 Lexington Avenue, 17th Floor, New York, NY 10022 USA (the Lead Arranger);

(6)	Investec Bank plc of 2 Gresham Street, London EC2V 7QP, United Kingdom (the Agent);

(7)	Investec Bank plc of 2 Gresham Street, London EC2V 7QP, United Kingdom (the Security Trustee);

(8)	Investec Bank plc, Commonwealth Bank of Australia, The Bank of Nova Scotia, Nedbank Limited, London Branch and Natixis, as Banks; and

(9)	Investec Bank plc, Commonwealth Bank of Australia, The Bank of Nova Scotia and Natixis, as Hedging Banks.

Recitals

This Agreement is supplemental to and amends and restates a US$105,000,000 term loan facility agreement dated 30 March 2007 (as subsequently amended and restated from time to time) (the Credit Agreement) between the Borrower, Western Goldfields Inc., Western Goldfields (USA) Inc., Investec Bank plc as the Mandated Lead Arranger, the Agent and the Security Trustee, Commonwealth Bank of Australia as Lead Arranger and the Banks and Hedging Banks (as defined therein).

B	The Parties have agreed to amend and restate the Credit Agreement on the terms of this Agreement.

It is agreed:

1	Definitions and construction

1.1	Definitions

Words and expressions defined in the Credit Agreement shall have the same meanings in this Agreement. In addition, in this Agreement:

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Amended and Restated Credit Agreement means the Credit Agreement as amended and restated in accordance with this Agreement and in the form attached as Schedule 2 (Amended and Restated Credit Agreement).

Effective Date means the day on which the Agent notifies the Borrower that it has received, in form and substance satisfactory to it, all of the documents and other evidence listed in Schedule 1 (Conditions precedent).

Scotia Spot Purchase Transactions has the meaning given in the Amended and Restated Credit Agreement.

1.2	Construction

The principles of interpretation set out in clause 1.3 (Interpretation) of the Credit Agreement shall apply to this Agreement, insofar as they are relevant to it, as they apply to the Credit Agreement.

1.3	Third party rights

The provisions of clause 1.4 (Third party rights) of the Credit Agreement shall apply to this Agreement as they apply to the Credit Agreement.

2	Amendment and restatement

With effect on and from the Effective Date the Credit Agreement shall be amended and restated in the form set out in the Schedule 2 (Amended and restated Credit Agreement).

Consents

With effect on and from the Effective Date:

(a)	the Agent (acting on the instructions of the Banks and the Hedging Banks) hereby approves the alterations to the Development Plan proposed by the Borrower and delivered to the Agent by the Borrower, prior to the date of this Agreement with reference number "2009_10_05 Bank Model.xls";

(b)	the Security Trustee (acting on the instructions of the Banks and the Hedging Banks) hereby releases WGI from all of its liabilities under the Guarantee and the Credit Agreement;

(c)	the Agent (acting on the instructions of the Banks and the Hedging Banks) hereby confirms that Completion has been achieved without the requirement to satisfy the Completion Test; and

(d)	the Agent (acting on the instructions of the Majority Banks) hereby:

(i)	consents to the Borrower entering into Scotia Spot Purchase Transactions;

(ii)	agrees that any industry standard confirmation evidencing a Scotia Spot Purchase Transaction shall be a Financing Document; and

(iii)

agrees with the Security Companies that the obligations of the Borrower in respect of the marked-to-market exposure of Scotia under the Scotia Spot Purchase Transactions up to a maximum aggregate amount at any time of no more than US$1,000,000 shall be Secured Obligations (as that term is defined in the Intercreditor Agreement).

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4	Cancellation confirmation and waiver

4.1 Cancellation

The Borrower hereby notifies the Agent of its requirement to cancel all of the Available Facility as at the date of this Agreement and the Agent confirms to the Banks and the Borrower that all of the Available Facility as at the date of this Agreement has been cancelled.

4.2 Waiver

In order to give effect to Clause 4.1 (Cancellation) above, the Agent (acting on the instructions of the Banks and the Hedging Banks) waives the requirements for cancellation of any part of the Available Facility under clause 7 (Cancellation) of the Credit Agreement.

5	Prepayment confirmation and waiver

With effect on and from the Effective Date, and in order to give effect to the consents provided in Clause 3 (Consents), the Agent (acting on the instructions of the Banks and the Hedging Banks) hereby waives the provisions of clause 6.2.1 (Optional prepayment) of the Credit Agreement relating to the requirement that the Borrower provide 10 Business Days' prior notice of prepayment.

6	Confirmations

6.1	Without prejudice to the rights of any Secured Party which have arisen on or before the Effective Date, each of the Borrower and WGI (USA) confirms that, on and after the Effective Date:

(a)	the Amended and Restated Credit Agreement, and the other Financing Documents, will remain in full force and effect; and

(b)	the Security Documents to which it is a party will continue to secure all liabilities which are expressed to be secured by them.

6.2

For the avoidance of doubt, the parties to this Agreement agree and confirm that references to clauses or schedules of the Credit Agreement used in any other Financing Document shall be construed as references to such clauses or schedules as modified, deleted or amended pursuant to any amendment, supplement or amendment and restatement from time to time of the Credit Agreement.

7	WGI Undertaking

WGI undertakes to each Financing Party and each Hedging Bank that from the date of this Agreement and until expiry of the Security Period, it shall, unless the Agent (acting on the instructions of the Majority Banks) otherwise agrees own, directly or indirectly, at least 50.1% of the voting rights in the Borrower and provide to the Borrower such non-monetary support and assistance using its reasonable commercial efforts as is necessary for the Mining Operations to be conducted in a manner that would be expected of a professional, prudent operator of a mine of the size, location and characteristics comparable to the Project and in the manner and with the skill and care of a reasonable business man, provided that such support and assistance does not constitute a payment or performance guarantee and provided further that WGI shall not be liable for any losses, costs, expenses, damages or other amounts arising from the failure of the Mining Operations to be so conducted.

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8	Representations and warranties

The representations set out in clause 7 (Representations and warranties) of the Amended and Restated Credit Agreement are deemed to be repeated by each of the Borrower and WGI (USA) on:

(a)	the date of this Agreement by reference to the facts and circumstances then existing on the date of this Agreement; and

(b)	the Effective Date by reference to the facts and circumstances then existing on the Effective Date.

9	Further action

Each of the Borrower, WGI and WGI (USA) shall, at its own expense, promptly take any action and sign or execute any further documents which the Security Trustee may require in order to give effect to the requirements of this Agreement.

10	Fees and expenses

10.1	Approval Fee

[This information has been redacted as a result of third party confidentiality obligations.]

10.2	Amendment costs

The Borrower shall, within three Business Days of demand, reimburse the Agent for the amount of all costs and expenses (including legal fees) reasonably incurred by the Agent in connection with this Agreement.

11	Counterparts

This Agreement may be executed 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 Agreement.

12	Governing law and jurisdiction

12.1	Governing Law

This Agreement is governed by English law.

12.2	Enforcement

The provisions of clause 25.2 (Jurisdiction) and 25.3 (Service of process) of the Credit Agreement shall apply to this Agreement as it applies to the Credit Agreement.

13	Financing Documents

This Agreement is designated by the Agent as a Financing Document.

This Agreement has been entered into on the date stated at the beginning of this Agreement.

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Schedule 1 - Conditions precedent

The documents and other evidence referred to in the definition of Effective Date are as follows:

1.	Certified Copies of each of the following board minutes of the Borrower, WGI (USA) and WGI approving and authorising:

(a)	the proposed alterations to the Development Plan; and

(b)	the proposed amendments to the Credit Agreement,

and authorising a person or persons to sign or otherwise attest the due execution of any documents related or pursuant thereto;

2.	Evidence that an amount equal to US$15,000,000 has been received by the Agent as prepayment by the Borrower of the Loan;

3.	Evidence that the fees referred to in Clause 10.1 (Approval fees) have been paid in full;

4.	Evidence that the Debt Service Reserve Account is funded to the Required Level (as defined in the Amended and Restated Credit Agreement); and

5.	Evidence that all fees, costs and expenses then due from the Borrower pursuant to Clause 10.2 (Fees and expenses) have been paid in full.

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Schedule 2 - Amended and Restated Credit Agreement

Page 6

CONFORMED COPY

Mesquite Gold Mine Project

Amended and Restated Credit Agreement relating to a US$45,799,206.92 Term Loan Facility

Western Mesquite Mines, Inc.

(as Borrower)

Western Goldfields (USA) Inc.

(WGI (USA))

Investec Bank plc

(as Mandated Lead Arranger)

Commonwealth Bank of Australia

(as Lead Arranger)

Investec Bank plc

(as Agent)

Investec Bank plc

(as Security Trustee)

The Banks

The Hedging Banks

DentonWildeSapte...
One Fleet Place	T +44(0)20 7242 1212
London EC4M 7WS	F +44(0)20 7246 7777
United Kingdom	info@dentonwildesapte.com
	www.dentonwildesapte.com

Contents

1	Definitions and interpretation	1
2	Facility	22
3	Interest	22
4	Repayment of Loan	23
5	Changes in circumstances	25
6	Payments and deliveries	28
7	Representations and warranties	30
8	Undertakings	32
9	Facility Accounts and Permitted Investments	40
10	Triggers	43
11	Default	47
12	Fees and expenses	49
13	Amendments and waivers	51
14	Set-off	52
15	Pro rata sharing	52
16	The Agent	54
17	Miscellaneous	58
18	Notices	59
19	Assignments and transfers	61
20	Indemnities	63
21	Confidentiality	65
22	Law and jurisdiction	66

Contents (ii)

	Schedule 1 – The Banks	67
	Schedule 2 – Mining Claims	69
	Schedule 3 – Compliance Certificate	88
	Schedule 4 – Repayment Schedule	89
	Schedule 5 – Form of Transfer Certificate	90
	Schedule 6 – Insurances	93
	Schedule 7 – Mandatory Cost formulae	108
	Schedule 8 – Permits	110
	Schedule 9 – Reclamation Bonds	112
	Schedule 10 – Form of Consent to Assignment	113
	Schedule 11 – Approved Hedging Programme	114

Contents (iii)

Amended and Restated Credit Agreement

Originally dated 30 March 2007 and amended and restated pursuant to an amendment and restated agreement dated 31 May 2007 and as further amended on 29 June 2007, 16 July 2007, 14 August 2007, 14 August 2008, 18 December 2008, 9 January 2009, 9 July 2009 and 4 August 2009 and as further amended and restated on the Effective Date

Between:

(1)	Western Mesquite Mines, Inc., a Nevada corporation, with its principal executive office at 6502 E. Highway 78, Brawley, California 92227 (the Borrower);

(2)	Western Goldfields (USA) Inc. (formerly Western Goldfields, Inc.), a Nevada corporation with its principal executive office at Suite 2102, 2 Bloor Street West, Toronto, Ontario, Canada M4W 3E2 (WGI (USA));

(3)	Investec Bank plc of 2 Gresham Street, London EC2V 7QP, United Kingdom (the Mandated Lead Arranger);

(4)	Commonwealth Bank of Australia of 599 Lexington Avenue, 17th Floor, New York, NY 10022 USA (the Lead Arranger);

(5)	Investec Bank plc of 2 Gresham Street, London EC2V 7QP, United Kingdom (the Agent);

(6)	Investec Bank plc of 2 Gresham Street, London EC2V 7QP, United Kingdom (the Security Trustee);

(7)	The financial institutions listed in Schedule 1 Part A, as Banks; and

(8)	The financial institutions listed in Schedule 1 Part B, as Hedging Banks.

It is agreed:

1	Definitions and interpretation

1.1	Definitions

In this Agreement:

Account Bank means Bank of America Corporation and its successors in title and each successor Account Bank from time to time appointed by the Borrower with the consent of the Agent (not to be unreasonably withheld or delayed).

Account Control Agreement means the agreement dated 31 May 2007 between the Borrower, the Security Trustee and the Account Bank.

Accounts means, in respect of:

(a)	the Borrower, its unaudited accounts;

(b)	WGI, its unaudited consolidated accounts; and

(c)	New Gold, its audited consolidated accounts,

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in each case including all additional information and notes (if any) to the accounts, together with any relevant directors' report and auditors' report.

Additional Commodity Hedging Counterparty means any Qualifying Bank (other than a Bank or a Hedging Bank) that has been approved in writing by the Agent (acting on the instructions of the Majority Banks, such approval not to be unreasonably withheld or delayed).

Additional Commodity Transaction means any Derivative Transaction entered into by the Borrower in accordance with paragraph (a)(viii) of the Approved Hedging Programme.

Additional Commodity Hedging Document means any document relating to an Additional Commodity Transaction entered into by the Borrower with an Additional Commodity Hedging Counterparty.

Additional Commodity Hedging Expenses means in respect of a period, all amounts payable during that period in respect of the Borrower's liabilities under any Additional Commodity Hedging Document.

Additional Cost Rate has the meaning given in Schedule 7.

Advance means the outstanding principal amount of any advance made to the Borrower under the Facility.

Affiliate means, in relation to a person or entity, a Subsidiary or a Holding Company of that person or entity and any other Subsidiary of that Holding Company.

Agency Fees Letter means the letter dated 30 March 2007 from the Agent to the Borrower relating to certain fees payable to the Agent by the Borrower in relation to the Financing Documents, being described on its face as the "Agency Fees Letter".

Agent means Investec Bank plc in its capacity as agent for the Banks, its successors in title and each successor appointed in accordance with Clause 16.

AIG Commutation Account has the meaning given in Clause 9.2.2(c).

Amendment and Restatement Agreement means the amendment and restatement agreement dated the Effective Date relating to the amendment and restatement of this Agreement.

Approved Deposit Amount means an amount equal to US$2,090,094 to be paid by the Borrower into the AIG Commutation Account as a condition to the issue of the Reclamation Bonds pursuant to arrangements acceptable to the Agent (acting reasonably).

Approved Fuel Hedging Counterparty means any Qualifying Bank other than a Bank or a Hedging Bank that has been approved in writing by the Agent (acting on the instructions of the Majority Banks, such approval not to be unreasonably withheld or delayed).

Approved Fuel Hedging Derivative Transaction means any Derivative Transaction for the forward purchase of fuel or other options strategies relating to the purchase of fuel by the Borrower that has been approved in writing by the Agent (acting on the instructions of the Majority Banks, such approval not to be unreasonably withheld or delayed).

Approved Fuel Hedging Document means any document relating to an Approved Fuel Hedging Derivative Transaction entered into by the Borrower with an Approved Fuel Hedging Counterparty.

Approved Fuel Hedging Expenses means in respect of a period, all amounts payable during that period in respect of the Borrower's liabilities under any Approved Fuel Hedging Document.

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Approved Hedging Programme means the approved hedging programme set out in Schedule 11, as the same may be amended from time to time with the consent of the Borrower, the Agent and the Hedging Banks.

Arranger means the Mandated Lead Arranger and the Lead Arranger.

Assets means all such assets and rights to enable the Borrower (or a prudent mining developer and operator) to design, construct, own, operate, manage, maintain and repair a project such as the Project, in accordance with the Transaction Documents, including:

(a)	land and buildings;

(b)	any equipment or other property (whether acquired, leased or held and used or intended for use in connection with the Project);

(c)	books and records (including operating and maintenance manuals, health and safety manuals, design and other technical information);

(d)	spare parts, tools and other assets;

(e)	any contractual rights;

(f)	intellectual property rights,

and including all works and operations in connection with the construction, development, expansion, maintenance and operation of the Mesquite Mine.

Auditors means Deloitte & Touche LLP in respect of New Gold and its Subsidiaries or any other firm of chartered accountants of internationally recognised standing that has been appointed as auditors of New Gold or any of its Subsidiaries.

Bank Liabilities means all obligations and liabilities (whether present or future, actual or contingent, as principal or surety and whether severally or jointly) of the Security Companies to the Financing Parties under or arising out of or in connection with the Financing Documents.

Banks means the banks and other financial institutions listed as such in Schedule 1, Part A and any Bank transferee pursuant to a Transfer Certificate, together with their respective successors in title, and Bank means any of them, provided that any bank or financial institution which transfers all of its Participation (as applicable) in accordance with Clause 19 shall cease to be a Bank.

Banks' Advisers means the Banks' Insurance Adviser, the Independent Technical Consultant, the Banks' Model Auditor, the Banks' Legal Advisers and such other advisers or consultants as the Agent may appoint in connection with the Project or any Transaction Document with the prior approval of the Majority Banks (but to avoid doubt, excluding any such advisers or consultants individually appointed by any Bank (other than the Agent)) and Bank's Adviser means any of them.

Banks' Insurance Adviser means Willis or such other person or entity as the Agent may appoint to perform such role with the prior approval of the Majority Banks.

Banks' Legal Advisers means Denton Wilde Sapte LLP in respect of matters of English law, Holland & Hart LLP in respect of matters of US law or such other person(s) or entity(ies) as the Agent may appoint to perform any such role with the prior approval of the Majority Banks.

Banks' Model Auditor means Duff & Phelps LLC or such other person or entity as the Agent may appoint to perform such role with the prior approval of the Majority Banks.

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Base Case Model means the projected production, income and expenditure of the Borrower in respect of each six Month period based on the Development Plan, Reserve Statement and on prudent assumptions and agreed by the Borrower and the Agent as the base case model for the purposes of this Agreement including the methodology used for computing such projections as amended from time to time pursuant to and in accordance with Clause 8.1(c).

Break Costs means the amount (if any) by which:

(a)

the interest which a Bank should have received for the period from the date of receipt of all or any part of its participation in an Advance or Unpaid Sum to the last day of the current Interest Period in respect of that Advance or Unpaid Sum, had the principal amount or Unpaid Sum received been paid on the last day of that Interest Period

exceeds:

(b)

the amount which that Bank would be able to obtain by placing an amount equal to the principal amount or Unpaid Sum received by it on deposit with a leading bank in the London Interbank Market for a period starting on the Business Day following receipt or recovery and ending on the last day of the current Interest Period.

Business Day means a day (other than a Saturday or Sunday) on which banks are open for general business in London and New York.

Canadian GAAP means general accounting principles in Canada and concepts, bases and policies consistently applied and adopted and accepted in Canada.

Capital Expenditure means any expenditure which will be treated as capital expenditure in accordance with Canadian GAAP.

Capital Lease means any lease or hire purchase contract which would, in accordance with Canadian GAAP, be treated as a finance or capital lease.

CBA means the Commonwealth Bank of Australia.

CBA Amendment Agreement means the amendment agreement dated 30 December 2008 relating to the ISDA Master Agreement between the Borrower and CBA dated as of 31 May 2007.

Certified Copy means, in relation to a document, a copy of that document bearing the endorsement "Certified a true, complete and accurate copy of the original", which has been signed and dated by a duly authorised officer of the relevant company and which complies with that endorsement.

CFADS means, in respect of a period, the cash flow available for Debt Service in respect of that period, and shall be equal to Operating Revenues for that period less Operating Costs for that period.

Compliance Certificate means a certificate executed by an authorised officer of the Borrower, in the form set out in Schedule 3.

Consent to Assignment means, for any Material Contract, a written consent to the collateral assignment of such Material Contract to the Secured Parties under the Security Agreement substantially in the form of Schedule 10, together with such amendments or supplements as are reasonably required by the Agent having regard to such Material Contract and the rights and obligations arising thereunder.

Dangerous Materials means any element or substance, whether consisting of gas, liquid, solid or vapour, identified by any applicable Environmental Law to be, to have been, or to be capable of being or becoming, harmful to mankind, human senses or any living organism or ecological system or damaging to the Environment.

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Debt Service means, in respect of a period, the amount of Financing Costs and Financing Principal payable during that period.

Debt Service Reserve Account means the account with account number ■■■■■■■■ previously designated as the "Cost Overrun Account" and as at the Effective Date designated as the "Debt Service Reserve Account" with the consent of the Agent and the Security Trustee (in each case, acting on the instructions of the Banks and the Hedging Banks), held and maintained by the Borrower pursuant to Clause 9.6.

[This information has been redacted to protect certain personal information of the Borrower and the Secured Parties.]

Deed of Trust means the deed of trust dated 11 May 2007 between the Borrower and the Security Trustee.

Default means an Event of Default or any event or circumstance specified in Clause 11 which would (with the expiry of a grace period, the giving of notice, the making of any determination or the satisfaction of any condition under the Financing Documents or any combination of any of the foregoing) be an Event of Default.

Derivative Transaction means any transaction which is (a) a rate swap transaction, basis swap, forward rate transaction, commodity swap, commodity option, equity or equity index swap, equity or equity index option, bond option, interest rate option, foreign exchange transaction, forward commodity transaction, credit derivative transaction, repurchase or reverse repurchase transaction, securities lending transaction, cap transaction, floor transaction, collar transaction, currency swap transaction, cross-currency rate swap transaction, currency option or any other similar transaction (including any option with respect to any of these transactions) or (b) any combination of these transactions.

Development Plan means the Development Plan delivered to the Agent in accordance with clause 3(a) of the Second Amendment and Restatement Agreement or the latest Development Plan (if any) delivered to and approved by, the Agent in accordance with Clause 8.1(c).

Disposal means a sale, assignment, transfer or other disposition or disposal (including by way of lease or loan) by a person or entity of all or part of its assets, whether by one transaction or a series of transactions and whether at the same time or over a period of time.

Distribution means any payment, repayment, dividend, redemption, discharge by way of setoff, counterclaim or otherwise or other distribution, whether in cash or in kind, made by or on behalf of the Borrower to WGI (USA) or WGI or any other Affiliate howsoever the same may arise and whether pursuant to the terms of an agreement or otherwise, provided that the following payments shall not constitute Distributions:

(a)

payments by the Borrower to WGI in accordance with the Management Agreement; and

(b)

payments by the Borrower to WGI as reimbursement for costs incurred by it in accordance with the Development Plan and the Base Case Model.

Distributions Account means the account held and maintained by the Borrower pursuant to Clause 9.

Drawdown Date means the date on which an Advance was made.

Effective Date has the meaning given to it in the Amendment and Restatement Agreement.

Encumbrance means any mortgage, charge, pledge, lien, assignment by way of security, retention of title provision, or other security interest securing any obligation of any person or entity or any other agreement or arrangement in any jurisdiction having a similar effect.

Environment means all or any of the following media: air (including air within buildings or other structures and whether above or below ground); land (including buildings and any other

Page 5

structures or erections in, on or under it and any soil and anything below the surface of land); land covered with water; and water (including sea, ground and surface water).

Environmental Authorisations means all permits, consents, consent decrees, licences and authorisations required pursuant to applicable Environmental Law for any of the development of the Project and operation of the Mining Operations.

Environmental Law means any Law concerning:

(a)	pollution or contamination of the Environment or the removal, abatement, remediation or reclamation thereof or other response thereto;

(b)	harm, whether actual or potential, to mankind and human senses, living organisms and ecological systems;

(c)	the generation, manufacture, processing, management, distribution, use (including abuse), treatment, storage, disposal, transport or handling of Dangerous Materials; or

(d)

the emission, leak, release or discharge into the Environment of any noise, vibration, dust, fumes, gas, odours, smoke, steam, effluvia, heat, light, radiation (of any kind), infection, electricity or any Dangerous Material and any matter or thing capable of constituting a nuisance or an actionable tort of any kind in respect of such matters;

provided that where the Equator Principles would impose a greater obligation or standard than any applicable Environmental Law, those Equator Principles shall be deemed to be an Environmental Law for the purposes of this definition to the extent such Equator Principles are by their terms applicable to the Borrower or the Project and provided further that the Equator Principles will not apply to the Borrower or the Project at any time if such application of, or the Borrower's or the Project's compliance with, the Equator Principles will breach or otherwise result in a non-compliance with any Law applying to the Borrower or the Project at that time.

Equator Principles mean the framework principles entitled the Equator Principles adopted by the World Bank/International Finance Corporation and various other financial institutions in determining, assessing and managing environmental and social risk in project financing as updated by such institutions from time to time.

Event of Default any event or circumstance specified as such in Clause 11.

Excess Cashflow means, on any Repayment Date, the amount by which A exceeds B

where:

is the amount (as estimated by the Borrower on the Business Day falling 2 Business Days before the relevant Repayment Date) that will be standing to the credit of the Proceeds Account on that Repayment Date following the payments or transfers referred to in Clauses 9.5.2(a) to 9.5.2(e) less the amount, if any, actually standing to the credit of the Proceeds Account on the previous Repayment Date following the payments or transfers made on that previous Repayment Date in accordance with Clauses 9.5.2(a) to 9.5.2(e), that was retained in the Proceeds Account (excluding, for the avoidance of doubt, the minimum retained working capital amounts); and

B is the minimum retained working capital amount of US$4,000,000.

Excluded Taxes means:

(a)

Tax assessed on a Financing Party under the Law of the jurisdiction in which that Financing Party is incorporated or, if different, the jurisdiction (or jurisdictions) in which that Financing Party is treated as resident for tax purposes or under the Law of the jurisdiction in which that Financing Party's Facility Office is located, in respect of amounts received or receivable in that jurisdiction if, in either case, that Tax is imposed or calculated by reference to the net income received or receivable by that Financing Party;

Page 6

(b)	for any period with respect to which a Financing Party has failed to provide the Borrower with the forms required by Clause 6.7.4, any United States withholding tax imposed by reason of such failure; and

(c)	any Taxes imposed as a direct result of a Financing Party voluntarily effecting a change after 30 March 2007 in its jurisdiction of principal operations (but excluding any change as a result of, or in response to, any Law or change in Law after 30 March 2007).

Facility means the US Dollar term loan facility granted to the Borrower under this Agreement.

Facility Accounts means each account listed in Clause 9.2.1.

Facility Office means the office or offices notified by a Bank to the Agent in writing on or before the date it becomes a Bank (or, following that date, by not less than five Business Days' written notice) as the office or offices through which it will perform its obligations under this Agreement.

Feasibility Study means the study titled "Feasibility Study on the Mesquite Mine Expansion, Imperial County, California", prepared by Micon International Limited and dated 15 August 2006 delivered to the Agent prior to the date of this Agreement, and including any further studies conducted by the Borrower or pursuant to the Bank's due diligence process prior to the Effective Date.

Final Hedging Maturity Date means 31 December 2014.

Final Repayment Date means 30 June 2012, or such earlier date as the Loan is repaid in full.

Financial Year means the calendar year ending 31 December of that year.

Financing Costs means, in respect of a period, the aggregate of:

(a)	interest paid or payable in that period under this Agreement (including default interest paid or payable pursuant to Clause 3.4) and any sums paid or payable in respect of Clauses 5.1, 5.2, 5.6 and 6.7; and

(b)	all fees paid or payable pursuant to Clause 12.4 and the Agency Fees Letter,

plus net payments, if any, by the Borrower under any Hedging Document in that period or less net payments, if any, to the Borrower under any Hedging Document in that period (as the case may be).

Financing Documents means all or any of:

(a)	this Agreement;

(b)	the Amendment and Restatement Agreement;

(c)	the Intercreditor Agreement;

(d)	the Hedging Documents;

(e)	the Security Documents;

(f)	the Agency Fees Letter;

(g)	the Fuel Price Hedging letter dated 9 January 2009;

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(h)	any industry standard confirmation evidencing a Scotia Spot Purchase Transaction; and

(i)

such other agreements and documents in respect of the Facility and the Project entered into from time to time pursuant to any of the foregoing to which any of the Security Companies or Key Contractual Counterparties are a counterparty with any Financing Party or Hedging Bank and which (i) are in form and substance satisfactory to the Borrower and (ii) the Agent determines shall be a Financing Document.

Financing Parties means the Agent, each Arranger, the Security Trustee and the Banks and Financing Party means any of them.

Financing Principal means, in respect of a period, principal repaid or repayable under this Agreement in that period.

Fuel Hedging Agreements means the CBA Amendment Agreement and the Scotia Agreements.

Hedging Banks means the banks and financial institutions listed as such in Schedule 1, Part B and their respective assignees, transferees or successors in title under the Hedging Documents with respect to transfers or assignments made in accordance with Clause 19.6 and Hedging Bank means any of them, provided that any bank or financial institution which transfers all its rights and obligations under the Hedging Documents shall cease to be a Hedging Bank.

Hedging Documents means:

(a)	the ISDA Master Agreements and schedules thereto between the Borrower and any Hedging Bank;

(b)	each other document entered into by the Borrower and any Hedging Bank from time to time confirming each transaction entered into pursuant to any such ISDA Master Agreement and the schedule thereto;

(c)	the Fuel Hedging Agreements; and

(d)	any other agreement entered into by the Borrower with any Hedging Bank pursuant to the Approved Hedging Programme or in respect of Hedging Liabilities.

Hedging Expenses means in respect of a period, all amounts payable during that period in respect of the Borrower's Hedging Liabilities.

Hedging Liabilities means all Indebtedness of the Borrower to the Hedging Banks under any Permitted Hedging Transaction.

Historic DSCR means, as at a Repayment Date in respect of the 6 Month period immediately preceding that Repayment Date, the ratio of:

(a)	the CFADS of the Borrower for that 6 Month period; to

(b)	the Debt Service of the Borrower for that 6 Month period.

Holding Company means (i) in respect of any corporation, any person or entity which directly or indirectly, owns or controls more than 50% of the issued and outstanding equity securities having ordinary voting power to elect a majority of the board of directors or such corporation (irrespective of whether at the time capital stock of any other class or classes of such corporation shall or might have voting power upon the occurrence of any contingency) at the time (ii) in respect of any partnership, joint venture, limited liability company or other entity, any person or entity which directly or indirectly, owns or controls more than 50% of the equity interest having the power to vote, direct or control the management of such partnership, limited liability company, joint venture or other entity at the time.

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Indebtedness means, any indebtedness for or in respect of:

(a)	moneys borrowed;

(b)	any amount raised by acceptance under any form of acceptance credit facility;

(c)	any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument;

(d)	the amount of any liability in respect of any Capital Lease;

(e)	receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis);

(f)	any amount raised under any other transaction having the commercial effect of a borrowing;

(g)	any Derivative Transaction;

(h)

the supply of any goods or services on payment terms in excess of 180 days (excluding any terms agreed in the ordinary course of business for scheduled payments against supplies being made over a period in excess of 180 days) or the supply of any goods or services which is more than 180 days past the original due date for payment;

(i)	any counter-indemnity obligation in respect of the guarantee, indemnity, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution;

(j)	any shares which are expressed to be redeemable;

(k)

trade creditors in the ordinary course of business but only if in a total aggregate amount at any time greater than US$5,000,000 (or its equivalent in any other currency); and

(l)

the amount of any liability in respect of any guarantee or indemnity for any of the items referred to in paragraphs (a) to (k) above.

When calculating the value of any such Derivative Transaction for the purpose of the definition of Indebtedness such value shall be as determined by the Agent (acting reasonably) to be the gross marked to market value and shall only be taken into account if such value results in a gross exposure to such person or entity.

Independent Technical Consultant means Chlumsky Armbrust & Meyer LLC or such other independent technical consultant as may be appointed by the Agent (acting on the instructions of the Majority Banks) and agreed by the Borrower (acting reasonably) from time to time.

Insurances means, at any time, the insurances effected and maintained at such time pursuant to Clause 8.3(b) and Schedule 6.

Insurers means, at any time, the insurers and underwriters of all or any of the risks insured under the Insurances at that time, or any of them as approved by the Agent pursuant to Schedule 6.

Intercreditor Agreement means the intercreditor agreement between the Borrower, WGI (USA), WGI , the Agent, the Security Trustee, the Banks and the Hedging Banks dated 31 May 2007.

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Interest Date means the last day of an Interest Period.

Interest Margin means in respect of each Advance:

(a)	2.20 per cent per annum until the Effective Date; and

(b)	4.25 per cent per annum from and after the Effective Date.

Interest Period means, in relation to an Advance, each period determined in accordance with Clause 3.2 and, in relation to an Unpaid Sum, each period determined in accordance with Clause 3.3.

ISDA Master Agreement means the ISDA Master Agreement (Multicurrency-Cross Border) as published in 2002 by the International Swap and Derivatives Association Inc..

ITC Report means the report (including an environmental appraisal) by the Independent Technical Consultant in the agreed form to be prepared from the Effective Date on an annual basis or as may be otherwise requested by the Agent (acting on the instructions of the Majority Banks) from time to time.

Key Contractual Counterparty means:

(a)	the Refiner;

(b)	any other person or entity (other than a Security Company) who, after 30 March 2007, enters into a Material Contract of the type listed in paragraph (d) of the definition of Material Contract and who the Agent reasonably determines should be a "Key Contractual Counterparty".

Law means any applicable legislation, any common or customary law, constitution, decree, judgment, order, ordinance, treaty, regulation or other legislative measure in any jurisdiction having legal or judicial effect whether of a civil or criminal nature.

LIBOR means, in relation to any Advance:

(a)	the applicable Screen Rate; or

(b)	(if no Screen Rate is available for US Dollars for the Interest Period of that Advance) the arithmetic mean (rounded upwards to four decimal places) of the rates as supplied to the Agent at its request quoted by the Reference Banks to leading banks in the London interbank market,

as of 11.00 am on the Quotation Day for the offering of deposits in US Dollars and for a period comparable to the Interest Period for that Advance.

Loan means, from time to time, the aggregate of all Advances outstanding at such time.

Majority Banks means:

(a)

whilst no Event of Default is continuing:

(i) a Bank or Banks whose Participations; and

(ii) Hedging Bank or Hedging Banks whose Hedging Liabilities,

together exceed (x) at any time there are only three Banks and/or Hedging Banks, 75% or (y) at all other times, 662/3 per cent. of the aggregate of the Loan and the Hedging Liabilities,

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PROVIDED THAT at any time whilst the Bank Liabilities are outstanding, for purposes of making the required calculations of the aggregate of the Loan and the Hedging Liabilities in order to determine whether "Majority Banks" exist, the Hedging Liabilities shall not at any time exceed 75% of the Loan; and

(b)

whilst an Event of Default is continuing:

(i) a Bank or Banks whose Participations; and

(ii) Hedging Bank or Hedging Banks whose Hedging Liabilities,

together exceed 662/3 per cent. of the aggregate of the Loan and the Hedging Liabilities.

For the purposes of these calculations:

(A)

the Hedging Liabilities shall be determined by the Agent based on information received from the relevant Hedging Bank (acting in a commercially reasonable manner) on such date as the Agent shall reasonably specify on a marked to market valuation and, for the avoidance of doubt, in the event that a particular Hedging Transaction shall be out of the money from the relevant Hedging Bank's perspective, for the purpose of determining the Majority Banks the corresponding Hedging Liability shall be treated as zero;

(B)

if, in accordance with paragraph (a) above, the Hedging Liabilities for the purposes of determining whether "Majority Banks" exist are reduced to 75% of the Loan, the Hedging Liability for each of the Hedging Banks shall be reduced on a pro rata basis to the extent necessary so that the aggregate of the Hedging Liabilities following such reduction is equal to 75% of the Loan;

(C)

for the purposes of determining whether "Majority Banks" exist, the Hedging Liabilities in respect of Commodity Transactions, Interest Rate Transactions and Fuel Price Transactions (each as described in the Approved Hedging Programme) entered into with Hedging Banks shall be included in such a vote. Hedging Liabilities in respect of Additional Commodity Transactions entered into with Hedging Banks shall not be included in such a vote; and

(D)

for the purposes of determining whether "Majority Banks" exists, provided that there are four or more Banks and/or Hedging Banks the 662/3 majority referred to in paragraphs (a) and (b) must be constituted by no less than three different Banks and/or Hedging Banks.

Management Agreement means the agreement dated 8 May 2007 entered into between the Borrower and WGI .

Mandatory Cost means the percentage rate per annum calculated by the Agent in accordance with Schedule 7.

Material Adverse Effect means a material adverse effect on:

(a)	the ability of any Security Company to comply with its obligations under the Transaction Documents to which it is a party;

(b)	the business, financial condition or assets of any Project Party to the extent that the same affects its ability to comply with its obligations under the Transaction Documents to which it is a party;

(c)	the validity or enforceability of any Transaction Document; or

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(d)	the Project (as a whole) or any material part thereof, or its implementation or operation.

Material Contract means:

(a)	the Refining Contract;

(b)	the Mineral Lease and Landfill Facilities Lease Agreement;

(c)	the Management Agreement; and

(d)	any contract or agreement entered into by the Borrower that requires the consent of the Agent in accordance with Clause 8.4(m)(ii)(aa) and (bb).

Mesquite Mine means the deposit, the mine, processing plant and land relating thereto required to exploit the Mining Claims, Mining Rights, complete and conduct the Mining Operations and otherwise develop the Project; such plant, mine, deposit and land being more particularly described in the Feasibility Study and the Development Plan.

Mineral Lease and Landfill Facilities Lease Agreement means the agreement dated 11 June 1993 between Hanson Natural Resources Company, Hospah Coal Company and Santa Fe Pacific Minerals Corporation.

Mining Claims means all fee property, all patented mining and millsite claims, all unpatented mining, millsite and lode claims, all leaseholds relating to real property, all easements and rights-of-way owned or held, all water rights, and all other rights, titles and interests in and to real property, all as described in Schedule 2 and Mining Claim shall mean any of them.

Mining Operations means the plant and Mining Rights and land relating thereto acquired or to be acquired by the Borrower for the purposes of the Project, at the Mesquite Mine and such other plant and Mining Rights and land as is agreed by the Agent (acting on the instructions of the Majority Banks) to be acquired and/or developed in accordance with the Development Plan.

Mining Right means any right to investigate the presence of, explore for, develop, extract, process or sell any metal or mineral (and any by-product thereof), including the carrying out of any geological survey or scientific experiment by the Borrower and Mining Rights means all of them.

Moody's means Moody's Investors Service, Inc..

Month means a period starting on one day in a calendar month and ending on the numerically corresponding day in the next calendar month, except that:

(a)	(subject to paragraph (c) below) if the numerically corresponding day is not a Business Day, that period shall end on the next Business Day in that calendar month in which that period is to end if there is one or, if there is not, on the immediately preceding Business Day;

(b)	if there is no numerically corresponding day in the calendar month in which that period is to end, that period shall end on the last Business Day in that calendar month; and

(c)	if an Interest Period begins on the last Business Day of a calendar month, that Interest Period shall end on the last Business Day in the calendar month in which that Interest Period is to end.

The above rules (a) to (c) will only apply to the last Month of any period.

Monthly Report means, in relation to the Borrower, a report showing, in respect of the previous Month:

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(a)	Capital Expenditure incurred by it or on its behalf compared against budgeted forecast;

(b)	production, costs and revenue details and environmental performance compared against budgeted forecast;

(c)	a summary of trade creditors as of the date of the report;

(d)	full details of any new claim under the Insurance where such claim exceeds US$25,000 or its equivalent or the aggregate amount of claims during such period exceeds US$250,000;

(e)	Monthly management accounts of the Borrower; and

(f)	copies of all statements produced by the Account Bank of all transactions (whether debits or credits) and showing opening and closing balances in respect of each of the Facility Accounts.

New Bank has the meaning given to it in Clause 19.2.1.

New Gold means New Gold Inc., a corporation governed by the laws of the Province of British Columbia with its principal executive office at 3110 - 666 Burrard Street, Vancouver, British Columbia, V6C 2X8.

Operating Budget means, in relation to the Borrower, a report in the agreed form and consistent with the Development Plan, reflecting forecast production, Operating Revenue, Financing Principal, Financing Costs and Operating Costs for each Month during the twelve Month period to which the Operating Budget relates and which has been delivered and approved by the Agent pursuant to Clause 8.1(c).

Operating Costs means, in respect of a period, the aggregate amounts paid or to be paid by the Borrower during that period in connection with the Project, including:

(a)

Taxes;

(b)	sums payable pursuant to the Transaction Documents (other than Financing Costs and Financing Principal);

(c)	Royalty Expenses;

(d)	premiums on Insurances;

(e)	Permitted Capital Expenditure;

(f)	Hedging Expenses and Approved Fuel Hedging Expenses;

(g)	general corporate and administrative expenses provided for in the Operating Budget including those covered in the Management Agreement;

(h)	scheduled amounts payable under the Reclamation Bonds and any other surety bonds contemplated in the Development Plan;

(i)	amounts payable under Permitted Capital Leases;

(j)	trade payables in the ordinary course of business provided for in the Operating Budget; and

(k)	all other costs and expenses set out in the most recent Operating Budget,

calculated in accordance with Canadian GAAP.

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Operating Revenues means, in respect of a period, all moneys received by the Borrower during that period of a revenue or income nature (in each case determined on a receipts basis, actual or, as the case may be, forecast and only to the extent that the same are not potentially refundable or repayable) including (but without double counting between any such moneys):

(a)	revenue derived from the sale of gold;

(b)	pursuant to the terms of any Transaction Document;

(c)	interest accrued on the Facility Accounts;

(d)	refunds of Tax; and

(e)	proceeds of business interruption insurance.

Participation means, in relation to a Bank and an Advance, the part of that Advance made available or to be made available by that Bank and thereafter the part of that Advance owing to that Bank from time to time.

Party means a party to this Agreement.

Permit means each permit listed in Schedule 8.

Permitted Capital Expenditure means any Capital Expenditure but only to the extent such Capital Expenditure is included in the Development Plan or the Operating Budget and is incorporated in the Base Case Model.

Permitted Capital Lease means any Capital Lease or Capital Leases entered into by the Borrower in relation to the Project where the total aggregate amount of the Indebtedness under such Capital Lease or Capital Leases does not, at any time, exceed US$5,000,000.

Permitted Encumbrance means:

(a)	any Encumbrance created, subsisting or permitted under or in connection with any Financing Document;

(b)	any right of set-off or lien, in each case arising or imposed by operation of Law , including, any Encumbrance such as materialmen's, mechanic's, carrier's, workmen's and repairmen's Encumbrances and any other Encumbrance arising in the ordinary course of business;

(c)

any Encumbrance arising out of title retention provisions in a contractor's, sub-contractor's or other supplier's standard conditions of supply of goods, property or equipment or any purchase money security interest, in respect of goods, property or equipment acquired or held by the Borrower for the purposes of the Project and in the ordinary course of its business;

(d)	any Encumbrance created, subsisting or permitted under or in connection with any Permitted Capital Lease provided that the asset secured by such Encumbrance is the asset that is the subject of the Permitted Capital Lease and no other asset of the Borrower;

(e)	any Encumbrance created, subsisting or permitted under or in connection with any Reclamation Bond provided that the asset secured by such Encumbrance is the AIG Commutation Account and the related insurance policy and no other asset of the Borrower;

(f)	any Encumbrance created, subsisting or permitted over the Distributions Account;

(g)	Encumbrances reflected in the Accounts of WGI ;

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(h)

any Encumbrance created, subsisting or permitted in the ordinary course of business and on standard terms and conditions as a result of the Borrower making deposits or similar arrangements with utility providers pursuant to Clause 8.4(d)(iii) provided that the asset secured by such Encumbrance is a cash deposit and no other asset of the Borrower and provided further that such Encumbrances shall only constitute Permitted Encumbrances if the total value of the Borrower's liabilities at any time relating to or arising under or in respect of all such Encumbrances is less than US$500,000 in aggregate at that time;

(i)	any Encumbrance arising or imposed by operation of Law in respect of an unpaid or undischarged Taxes, assessments and governmental charges or levies that are being contested by the Borrower in accordance with, and subject to, Clause 8.3(a);

(j)

any Encumbrance arising or imposed in the ordinary course of business and by operation of Law to secure obligations under workers' compensation Laws or similar legislation or to secure public or statutory obligations applicable to the Borrower and the Mining Operations provided that the liabilities giving rise to such Encumbrances are at all times insured by the Borrower on standard commercial terms for such liabilities;

(k)

any Encumbrance arising or imposed to secure the performance of bids, trade contracts and leases, surety bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of business and consistent with the Development Plan provided that the asset secured by such Encumbrance is a cash deposit and no other asset of the Borrower;

(l)

Encumbrances securing judgments (or the payment of money not constituting a Trigger Event under Section 10.1(e)) or securing appeal or other surety bonds related to such judgments provided that such Encumbrances shall only constitute Permitted Encumbrances if the total value of the Borrower's liabilities at any time relating to or arising under or in respect of such Encumbrances is less than US$750,000 in aggregate at that time; and

(m)	any replacement, extension or renewal of the Encumbrances listed in paragraphs (a) to (l) upon, over or in the same asset that is subject to such Encumbrance and on the same terms.

Permitted Hedging Transaction means:

(a)	each and any Derivative Transaction entered into or to be entered into between the Borrower and the Hedging Banks in relation to the Project pursuant to the Hedging Documents and in accordance with the Approved Hedging Programme;

(b)	each and any Approved Fuel Hedging Derivative Transaction; and

(c)	each and any Additional Commodity Transaction.

Permitted Indebtedness means:

(a)	Indebtedness outstanding under any Financing Document;

(b)	Subordinated Debt;

(c)	Indebtedness outstanding under any Permitted Capital Lease;

(d)	Indebtedness outstanding under any Approved Fuel Hedging Document;

(e)	Indebtedness outstanding under any Additional Commodity Transaction; or

(f)	Indebtedness outstanding in respect of the Reclamation Bonds.

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Permitted Investments means:

(a)

U.S. Government Obligations, in each case having a final maturity of 90 days or less from the date of purchase thereof;

(b)

direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the Government of Canada or of any Canadian province (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the Government of Canada or of such Canadian province), in each case maturing within one year from the date of acquisition thereof;

(c)

certificates of deposit issued by, or bankers' acceptances of, or time deposits with, any bank, trust company or national banking association incorporated or doing business under the Laws of the United States of America or one of the states thereof having combined capital and surplus and retained earnings as of its last report of condition of at least $500,000,000 and having a short-term deposit debt rating of A1 by S&P or P1 by Moody's (or, if neither such organisation shall rate such short-term deposits at any time, a rating equal to the highest ratings the highest ratings assigned by any nationally recognized rating organisation in the United States of America) and having a final maturity of one year or less from date of purchase thereof;

(d)

commercial paper of any holding company of a bank, trust company or national banking association described in sub-clause (c) above and commercial paper of any corporation or finance company incorporated or doing business under the Laws of the United States of America or any state thereof having a rating assigned to such commercial paper of A1 by S&P or P1 by Moody's (or, if neither such organisation shall rate such commercial paper at any time, a rating equal to the highest ratings assigned by any nationally recognised rating organisation in the United States of America) and having a final maturity of 180 days or less from the date of purchase thereof; and

(e)

investments in certificates of deposit, banker's acceptances, commercial paper and time deposits maturing within 180 days from the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, any domestic office or any commercial bank organised under the Laws of Canada or of any Canadian province having, at such date of acquisition, a credit rating on its long-term unsecured debt of at least "A-" by S&P.

If none of the above investments is available, the entire amount to be invested may be used to purchase U.S. federal funds overnight from an entity described in sub-clause (c) above;

provided that in all cases, the same remain subject to the Security and transferable to the Security Trustee on an enforcement of the Security.

Pledge Agreement means the pledge agreement dated 31 May 2007 between WGI (USA) (as successor to Western Goldfields, Inc. an Idaho corporation, pursuant to an acknowledgement and affirmation dated 16 July 2007 signed by WGI (USA) and accepted by the Agent) and the Security Trustee.

Proceeds Account means the account held and maintained by the Borrower pursuant to Clause 9.5.

Project means the design, development, expansion, engineering, construction, equipment, testing, commissioning, management, operation, maintenance and repair of the Mesquite Mine and the extraction, production, recovery, sale, transportation, storage, processing and delivery of gold doré in all respects in accordance with the Transaction Documents and the Development Plan.

Page 16

Project Parties means:

(a)	each Security Company; and

(b)	each Key Contractual Counterparty,

and Project Party means any of them.

Qualifying Bank means a bank or financial institution, or a trust, fund or other entity which is regularly engaged in or established for the purpose of making, purchasing or investing in loans, securities or other financial assets, the long-term senior unsecured credit of which is rated at least BB+ by Fitch or the equivalent rating from any other internationally recognised rating agency.

Quotation Day means, in relation to any period for which an interest rate is to be determined, two Business Days before the first day of that period unless market practice differs in the London interbank market in which case the Quotation Day will be determined by the Agent in accordance with market practice in the London interbank market (and if quotations would normally be given by leading banks in the London interbank market on more than one day, the Quotation Day will be the last of those days).

Reclamation Bonds means:

(a)

the reclamation and reimbursement bonds listed in Schedule 9;

(b)

the reclamation and reimbursement bonds referred to in paragraph 1 of part B of Schedule 8; and

(c)

such other reclamation and reimbursement bonds as approved by the Agent from time to time.

Reference Banks means the principal London offices of The Royal Bank of Scotland plc, Barclays PLC and HSBC Bank plc or such other banks as may be selected by the Agent with the consent of the Borrower.

Refiner means Johnson Matthey, Inc. and any replacement thereof approved by the Agent (acting on the instructions of the Majority Banks).

Refining Contract means the agreement dated 28 March 2007 between the Borrower and the Refiner for the refining of the gold dore mined at the Mesquite Mine.

Repayment Date means 30 June and 31 December in each year until the Final Repayment Date.

Repayment Schedule means the Schedule of dates and amounts as set out in Schedule 4.

Replacement Key Contractual Counterparty means a person or entity who fulfils the criteria set out in paragraphs (a) to (d) below and is approved by the Agent (such approval not to be unreasonably withheld or delayed):

(a)	the legal capacity, power and authority of such proposed Replacement Key Contractual Counterparty to become a party to and perform obligations equivalent to those of the original Key Contractual Counterparty under the relevant Material Contracts, including all relevant consents;

(b)	the financial standing of such proposed Replacement Key Contractual Counterparty, whether by way of initial capitalisation cash collateral or by a letter of credit or guarantee or other credit support acceptable to the Banks, is sufficient;

Page 17

(c)

the technical competence or the technical resources available to such proposed Replacement Key Contractual Counterparty (whether directly or by way of contractual arrangements) to perform obligations equivalent to those of the original Key Contractual Counterparty under the relevant Material Contracts; and

(d)

where required by the Agent, such proposed Replacement Key Contractual Counterparty has irrevocably undertaken to the Agent to enter into a direct agreement or other contractual arrangement with the Secured Parties or Security Trustee on terms similar to the direct agreement or other contractual arrangements executed by the original Key Contractual Counterparty.

Reserve Statement means a statement prepared by the Borrower and confirmed by the Independent Technical Consultant relating to the Mining Operations in form and substance satisfactory to the Agent (acting reasonably), showing a number of ounces of proven and probable reserves as defined under National Instrument 43-101, as updated by the Borrower in accordance with Clause 8.1(g) from time to time.

Royalty Expenses means any royalties or overriding royalties, production payments, net profit interests, net smelter return interests, other rights or interests in ore bodies or production or revenues therefrom or rental payments, in each case payable by the Borrower under the Mining Claims, any Material Contract or otherwise in connection with the Mesquite Mine.

Scotia means the Bank of Nova Scotia.

Scotia Agreements means:

(a)	the ISDA Master Agreement between the Borrower and Scotia dated as of 8 January 2009; and

(b)	an amendment agreement between the Borrower and Scotia dated 8 January 2009 relating to the ISDA Master Agreement between the Borrower and Scotia dated as of 15 August 2007.

Scotia Spot Purchase Transaction means any transaction between the Borrower, as seller, and Scotia, as buyer, for spot sales of gold, as approved by the Agent pursuant to the Amendment and Restatement Agreement.

Screen Rate means the British Bankers' Association Interest Settlement Rate for dollars for the relevant period for the relevant period, displayed on the appropriate page of the Reuters screen. If the agreed page is replaced or service ceases to be available, the Agent may specify another page or service displaying the appropriate rate after consultation with the Borrower and the Banks.

Secured Collateral means all rights, properties (real and personal), interests and other assets (of every form, kind and nature) of each Security Company that are subject to the Security.

Secured Parties means the Financing Parties and the Hedging Banks from time to time and Secured Party means any of them.

Security means the Encumbrances created by the Security Documents.

Security Agreement means the security agreement dated 31 May 2007 entered into between the Borrower and the Security Trustee.

Security Companies means:

(a)	the Borrower;

(b)	if applicable, any Subsidiary of the Borrower from time to time; and

Page 18

(c)	WGI (USA).

Security Documents means:

(a)	the Pledge Agreement;

(b)	the Security Agreement;

(c)	the Deed of Trust;

(d)	the Account Control Agreement;

(e)	any Consent to Assignment; and

(f)	any other guarantee or document creating, evidencing or acknowledging security in respect of any of the obligations and liabilities of the Security Companies under any Financing Document.

Security Period means the period starting on 30 March 2007 and ending on the date on which the liabilities of the Security Companies under each Financing Document are irrevocably discharged in full and no Financing Party has any commitment or liability, whether present or future, actual or contingent, in relation to the Facility and no Hedging Bank has any commitment or liability, whether present or future, actual or contingent, in relation to any Permitted Hedging Transaction.

Security Trustee means Investec Bank plc in its capacity as trustee for the Secured Parties, its successors in title and each successor appointed from time to time under and in accordance with the provisions of the Intercreditor Agreement.

Standard & Poor's or S&P means Standard & Poor's Rating Services, currently a division of The McGraw-Hill Companies, Inc..

Subordinated Debt means Indebtedness incurred by the Borrower to WGI (USA) pursuant to the Subordinated Loan Agreement or any other Affiliate of the Borrower or WGI (USA) and which is subordinated to the Facility under the terms of the Intercreditor Agreement.

Subordinated Loan Agreement means the loan agreement dated or about 30 March 2007 between the Borrower and WGI (USA).

Subsidiary means in respect of any corporation or limited liability company or other entity:

(a)

any corporation of which more than 50% of the issued and outstanding equity securities having ordinary voting power to elect a majority of the board of directors of such corporation (irrespective of whether at the time capital stock of any other class or classes of such corporation shall or might have voting power upon the occurrence of any contingency) is at the time directly or indirectly owned or controlled by such corporation, limited liability company or entity and one or more of its other Subsidiaries or by one or more of the Subsidiaries of such corporation, limited liability company or entity; or

(b)

any partnership, joint venture, limited liability company or other entity of which more than 50% of the equity interest having the power to vote, direct or control the management of such partnership, limited liability company, joint venture or other entity is at the time directly or indirectly owned and controlled by such corporation, limited liability company or entity and one or more to the other Subsidiaries or by one or more of the other Subsidiaries of such corporation, limited liability company or entity.

Taxes includes all present and future taxes, charges, imposts, duties, levies, deductions or withholdings of any kind whatsoever, or any amount payable on account of or as security for any of the foregoing, by whomsoever on whomsoever and wherever imposed, levied, collected, withheld or assessed, together with any penalties, additions, fines, surcharges or interest relating thereto and Tax and Taxation shall be construed accordingly.

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Transaction Documents means the Financing Documents, the Mining Claims, the Permits and the Material Contracts.

Transfer Certificate means a certificate in the form set out in Schedule 5.

Treasury Obligations means U.S. Treasury securities (including STRIPS) maintained in the commercial book entry system entitled Treasury/Reserve Automated Debt Entry System ("Trades") pursuant to the Treasury Regulations or any successor commercial book entry system for U.S. Treasury securities maintained by Federal Reserve Banks.

Treasury Regulations means 31 CFR Part 357, as amended from time to time.

Trigger means a Trigger Event or any event or omission which with the expiry of a grace period, the giving of notice, the making of any determination or the satisfaction of any condition under the Financing Documents or any combination of any of the foregoing, would be a Trigger Event.

Trigger Event means any event or circumstance specified as such in Clause 10.

Unpaid Sum means any sum due and payable but unpaid by the Borrower under the Financing Documents.

US Dollars and US$ means the lawful currency for the time being of the United States of America.

US Government Obligations means (a) Treasury Obligations, (b) direct obligations of the United States of America and (c) obligations guaranteed by, or otherwise carrying the full faith and credit of, the United States of America.

Variation means any Capital Expenditure which was not, as at 30 March 2007, included within the Base Case Model or the Development Plan, provided such additional Capital Expenditure is included within a change to the Development Plan agreed in accordance with Clause 8.1(c) and the Base Case Model, and the Independent Technical Consultant confirms that the same has been or is to be properly and reasonably incurred in connection with the Project.

VAT means value added tax as provided for in the Value Added Tax Act 1994 and any other tax of a similar nature.

WGI means Western Goldfields Inc., a corporation governed by the laws of the Province of Ontario with its principal executive office at Suite 2102, 2 Bloor Street West, Toronto, Ontario, Canada M4W 3E2.

Waste means, as to any person or entity, any act(s) or circumstance (other than a Disposal) that result(s), individually or collectively, in the abandonment, conversion, seizure, waste, depletion, removal or loss of identity of any asset of such person or entity, or results in any such asset being characterized as a fixture or accession to goods of another person or entity.

1.2

Headings

The headings in this Agreement are for convenience only and shall be ignored in construing this Agreement.

1.3	Interpretation

1.3.1

In this Agreement (unless otherwise provided):

(a)	words importing the singular shall include the plural and vice versa;

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(b)	references to Clauses and Schedules are to be construed as references to the clauses of, and schedules to, this Agreement;

(c)	references to any Transaction Document or any other document shall be construed as references to that Transaction Document or that other document, as amended, varied, novated or supplemented in accordance with the terms thereof and, if applicable, in accordance with this Agreement;

(d)

references to any statute or statutory provision include any statute or statutory provision which amends, extends, consolidates or replaces the same, or which has been amended, extended, consolidated or replaced by the same, and shall include any orders, regulations, instruments or other subordinate legislation made under the relevant statute;

(e)	references to a document being in the agreed form means that document the form and content of which has been approved by the Agent and the Borrower and which has been initialled by or on behalf of the Agent and the Borrower;

(f)	references to assets shall include revenues and property and the right to revenues and property and rights of every kind, present, future and contingent and whether tangible or intangible (including uncalled share capital);

(g)	indebtedness includes any obligation, whether incurred as principal or as surety, for the payment or repayment of money, whether present or future, actual or contingent and whether owed jointly or severally or in any other capacity;

(h)	liabilities includes any obligation whether incurred as principal or as surety, whether or not in respect of indebtedness, whether present or future, actual or contingent and whether owed jointly or severally or in any other capacity

(i)	the words including and in particular shall be construed as being by way of illustration or emphasis only and shall not be construed as, nor shall they take effect as, limiting the generality of any foregoing words;

(j)	the words other and otherwise shall not be construed to restrict the interpretation of any foregoing words to those of the same nature or category where a wider construction is possible;

(k)

references to a person or entity shall be construed so as to include that person's or entity's assigns, transferees or successors in title and shall be construed as including references to an individual, firm, partnership, joint venture, company, corporation, body corporate, unincorporated body of persons or any state or any agency of a state;

(l)	material shall be construed as a reference to material to, or in the context of, the interests of the Financing Parties (or any of them) under the Financing Documents (or any of them);

(m)

where there is a reference in this Agreement to any amount, limit or threshold specified in US Dollars, in ascertaining whether or not that amount, limit or threshold has been attained, broken or achieved, as the case may be, a non-US Dollar amount shall be calculated on the basis of the equivalent in US Dollars of that amount using the Agent's relevant spot rate of exchange;

(n)	accounting terms shall be construed so as to be consistent with Canadian GAAP; and

(o)	references to time are to London time.

1.3.2

A Default or Trigger (other than an Event of Default or Trigger Event) is continuing if it has not been remedied or waived in writing and an Event of Default or Trigger Event is continuing if it has not been waived in writing.

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1.4	Third party rights

1.4.1

Unless expressly provided to the contrary in this Agreement a person or entity who is not a Party has no right under the Contracts (Rights of Third Parties) Act 1999 (the Third Parties Act) to enforce or to enjoy the benefit of any term of this Agreement.

1.4.2

Notwithstanding any term of any Financing Document, the Parties may rescind, vary, waive, release, assign, novate or otherwise dispose of all or any of their respective rights or obligations under this Agreement without the consent of any person or entity who is not a Party.

Facility

2.1

Facility

On the Effective Date of this Agreement, the outstanding principal amount of the Loan shall be US$60,799.206.92 and immediately following prepayment of the Loan as provided for under the Amendment and Restatement Agreement, the outstanding principal amount of the Loan shall be US$45,799,206.92.

2.2	Obligations several

The obligations of each Financing Party under the Financing Documents are several. Failure by a Financing Party to perform its obligations under the Financing Documents does not affect the obligations of any other Financing Party under the Financing Documents. No Financing Party is responsible for the obligations of any other Financing Party under the Financing Documents.

2.3	Rights separate

2.3.1

The rights of each Financing Party under or in connection with the Financing Documents are separate and independent rights and any debt arising under the Financing Documents to a Financing Party from a Security Company shall be a separate and independent debt.

2.3.2

A Financing Party may, except as otherwise stated in the Financing Documents, separately enforce its rights under the Financing Documents.

Interest

3.1	Interest rate for Advances

Interest shall accrue on each Advance from and including the relevant Drawdown Date to, but excluding, the date the Advance is repaid at the rate per annum which is the aggregate of:

(a)	the applicable Interest Margin for such Advance;

(b)

LIBOR;

(c)	Mandatory Costs, if any; and

(d)	any additional amounts incurred pursuant to Clause 10.2.1(c).

3.2	Interest Periods for Advances

3.2.1

Interest payable on each Advance shall be calculated by reference to successive Interest Periods of 1, 2, 3 or 6 Months duration (or, in each case, such other interest periods as the Agent may allow) subject to the remaining provisions of this Clause 3.2.

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3.2.2

The first Interest Period for each Advance shall begin on the Drawdown Date of that Advance. Each succeeding Interest Period for that Advance shall begin on the Interest Date of the previous Interest Period. In relation to subsequent Interest Periods for each Advance, the Borrower shall notify the Agent in writing 2 Business Days before the end of the then current Interest Period of the duration of the next Interest Period. If the Borrower fails to provide such notice within the required time, the duration for the next Interest Period shall be one Month.

3.2.3

If an Interest Period would otherwise end on a day which is not a Business Day, that Interest Period shall instead end on the next Business Day in the same calendar Month (if there is one) or the preceding Business Day (if there is not).

3.2.4

If an Interest Period begins on the last Business Day in a calendar Month or a Business Day for which there is no numerically corresponding day in the calendar Month in which that Interest Period is to end, such Interest Period shall end on the last Business Day of such later calendar Month.

3.2.5

If an Interest Period for an Advance would otherwise extend beyond a Repayment Date, it shall be shortened so that it ends on such Repayment Date.

3.3	Calculation and payment of interest

3.3.1

At the beginning of each Interest Period, the Agent shall notify to the Borrower and the Banks the rate and the amount of interest payable for such Interest Period.

3.3.2

Interest due from the Borrower under this Agreement shall:

(a)	accrue from day to day at the rate calculated under this Clause 3;

(b)	except as otherwise provided in this Agreement, be paid by the Borrower to the Agent in arrears on the last date of the relevant Interest Period, as well as on the relevant Final Repayment Date;

(c)	be calculated on the basis of the actual number of days elapsed and a 360 day year; and

(d)	be payable both before and after judgement.

3.4	Default interest

3.4.1

If the Borrower fails to pay any amount payable under any Financing Document on the due date, it shall pay default interest on the overdue amount from the due date to the date of actual payment calculated by reference to successive Interest Periods of one Month at the rate per annum being the aggregate of (a) 1 per cent. per annum, (b) the applicable Interest Margin (if any) and (c) LIBOR.

3.4.2

So long as the overdue amount remains unpaid, the default interest rate shall be recalculated in accordance with the provisions of this Clause 3.4 on the last day of each such Interest Period of one Month and any unpaid interest shall be compounded at the end of each Interest Period.

4	Repayment of Loan

4.1

Repayment

4.1.1

The Borrower shall repay the Loan by payment to the Agent (for the account of the Banks) in consecutive semi-annual instalments (each a Repayment Instalment) on each of the Repayment Dates. The final Repayment Instalment shall be paid on the Final Repayment Date.

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4.1.2

The amount of the Repayment Instalment due on each Repayment Date set out in Column 1 of Schedule 4 shall be the amount which is set opposite that Repayment Date in Column 2 of Schedule 4.

4.1.3

In the event of any prepayment of the Loan in accordance with Clauses 4.2, 4.3, 4.4 or 4.5 below, the Agent shall amend Schedule 4 accordingly.

4.2	Optional prepayment

4.2.1

The Borrower may, by giving the Agent not less than 10 Business Days' prior notice, prepay the whole or part of the Facility at any time during an Interest Period.

4.2.2

Any amounts prepaid pursuant to Clause 4.2.1 shall be applied in prepayment of Repayment Instalments of the Loan in inverse order of maturity and pro rata between the Banks in respect of their Participations in the Loan.

4.3	Mandatory prepayment

Notwithstanding the other provisions of this Agreement, on each Repayment Date the Borrower shall apply an amount equal to 50% of Excess Cashflow in prepayment of Repayment Instalments of the Loan in inverse order of maturity and pro rata between the Banks in respect of their Participations in the Loan.

4.4	Right of repayment and cancellation in relation to a single Bank

4.4.1

If:

(a)	any sum payable to any Bank is required to be increased under Clause 6.7;

(b)	any Bank claims indemnification from the Borrower under Clause 6.7 or Clause 5.2; or

(c)	any Bank claims its Mandatory Costs from the Borrower,

the Borrower may, whilst the circumstance giving rise to the requirement, indemnification or claim continues, give the Agent not less than seven Business Days' (or such shorter period as the Majority Banks may agree) prior notice of its intention to either (a) procure the repayment of that Bank's Participation in the Loan or (b) procure a Qualifying Bank to purchase such Bank's Participation in the Loan for an amount equal to the outstanding principal amount of all Advances made by it and all accrued and unpaid interest thereon as of the date of such purchase and otherwise on terms satisfactory to the Bank (acting reasonably).

4.4.2

On the last day of each Interest Period which ends after the Borrower has given notice under Clause 4.4.1 (or, if earlier, the date specified by the Borrower in that notice), the Borrower shall prepay that Bank's Participation in the Loan.

4.4.3

Any prepayment pursuant to Clause 4.4.2 shall be applied in prepayment of Repayment Instalments of the Loan in inverse order of maturity.

4.5	Prepayment and Hedging

4.5.1

In the event of a prepayment of the whole of the Loan by the Borrower:

(a)

the Borrower shall be entitled to terminate the Permitted Hedging Transactions in whole or in part at any time on or after the date of such prepayment of the whole of the Loan, and to the extent that there is any inconsistency between this Clause 4.5.1 (a) and any term of the Hedging Documents which could restrict such termination, the terms of this Clause 4.5.1 (a) shall prevail;

(b)	in the event that a termination of all of the Permitted Hedging Transactions on the date of such repayment of the whole of the Loan would result in the Hedging Banks incurring a liability to the Borrower, the Hedging Banks shall be entitled to terminate the Permitted Hedging Transactions; and

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(c)

in the event that a termination of all of the Permitted Hedging Transactions on the date of such repayment of the whole of the Loan would result in the Borrower incurring an aggregate liability to the Hedging Banks not exceeding US$1,000,000, the Hedging Banks shall be entitled to terminate the Permitted Hedging Transactions.

4.5.2

The Borrower shall be entitled at any time to terminate in whole or in part any Permitted Hedging Transactions in respect of those payments or deliveries scheduled to be made (under the terms of the relevant Permitted Hedging Transaction) after the date on which the final payment of principal in respect of the Loan is forecast to occur (as shown in Schedule 4, as such schedule is required to be revised from time to time pursuant to Clause 4.1.3); the termination amounts payable in respect of any such termination shall be determined consistently with the methodology employed under the Hedging Documents for the relevant Permitted Hedging Transaction for terminations by the Borrower in connection with a prepayment of the Loan; and to the extent that there is any inconsistency between this Clause 4.5.2 and any term of the Hedging Documents which could restrict such termination, the terms of this Clause 4.5.2 shall prevail.

4.6	Restrictions

4.6.1

Any notice of prepayment given by the Borrower under this Clause 4 shall be irrevocable and, unless a contrary indication appears in this Agreement, shall specify the date or dates upon which the relevant prepayment is to be made and the amount of that prepayment.

4.6.2

Any prepayment under this Agreement:

(a)	if in part, shall be in a minimum amount of US$1,000,000 and the Agent acting reasonably must be satisfied that the Borrower will have sufficient funds available from time to time to enable it to implement the Development Plan; and

(b)	shall be made together with accrued interest on the amount prepaid and any Break Costs but otherwise without premium or penalty.

4.6.3

The Borrower may not repay or prepay all or any part of the Advances except as expressly provided in this Agreement.

4.7	No re-borrowing

Any amount of the Loan repaid or prepaid may not be re-borrowed.

5	Changes in circumstances

5.1	Illegality

If it becomes unlawful in any applicable jurisdiction for a Bank to perform any of its obligations as contemplated by this Agreement or to fund or maintain its Participation in any Advance:

(a)	that Bank shall promptly notify the Agent upon becoming aware of that event;

(b)

the Borrower shall repay that Bank's Participation in the Loan on the last day of the Interest Period for each Advance occurring after the Agent has notified the Borrower or, if earlier, the date specified by the Bank in the notice delivered to the Agent (being no earlier than the last day of any applicable grace period permitted by Law).

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5.2	Increased Costs

5.2.1

Subject to Clause 5.4, the Borrower shall, within 10 Business Days of a demand by the Agent, pay for the account of a Financing Party the amount of any Increased Costs incurred by that Financing Party or any of its Affiliates as a result of (i) the introduction of or any change after 30 March 2007 in (or in the interpretation, administration or application of) any Law or regulation, (ii) compliance with any Law or regulation made after 30 March 2007 or (iii) compliance with any Law or regulation relating to capital adequacy, made after 30 March 2007.

5.2.2

In this Agreement Increased Costs means:

(a)	a reduction in the rate of return from the Facility or on a Financing Party's (or its Affiliate's) overall capital;

(b)	an additional or increased cost; or

(c)	a reduction of any amount due and payable under any Financing Document,

which is incurred or suffered by a Financing Party or any of its Affiliates to the extent that it is attributable to that Financing Party having made its Participation in any Advance available or performing its obligations under any Financing Document.

5.3	Increased cost claims

5.3.1

A Financing Party intending to make a claim pursuant to Clause 5.2 shall notify the Agent of the event giving rise to the claim, following which the Agent shall promptly notify the Borrower.

5.3.2

Each Financing Party shall, as soon as practicable after a demand by the Agent, provide a certificate confirming the amount of its Increased Costs.

5.4	Exceptions

Clause 5.2 does not apply to the extent any Increased Cost is:

(a)	attributable to a Tax deduction required by Law to be made by the Borrower;

(b)	compensated for by Clause 6.7 (or would have been compensated for under Clause 6.7 but was not so compensated solely because any of the exclusions in sub-clause 6.7.2 of Clause 6.7 applied);

(c)	compensated for by the payment of the Mandatory Cost;

(d)	attributable to the wilful breach by the relevant Financing Party or its Affiliates of any Law or regulation; or

(e)	not notified in writing to the Borrower within 90 days of the Financing Party becoming aware of such Increased Cost.

5.5	Absence of quotations

Subject to Clause 5.6, if LIBOR is to be determined by reference to the Reference Banks but a Reference Bank does not supply a quotation by 11.00am on the Quotation Day, the applicable LIBOR shall be determined on the basis of the quotations of the remaining Reference Banks.

5.6	Market disruption

5.6.1

If a Market Disruption Event occurs in relation to an Advance for any Interest Period, then the rate of interest on each Bank's Participation in that Advance for the Interest Period shall be the percentage rate per annum which is the sum of:

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(a)	the Interest Margin;

(b)

the rate notified to the Agent by that Bank as soon as practicable and in any event before interest is due to be paid in respect of that Interest Period, to be that which expresses as a percentage rate per annum the cost to that Bank of funding its participation in that Loan from whatever source it may reasonably select; and

(c)	the Mandatory Cost, if any, applicable to that Bank's Participation in the Advance.

5.6.2

In this Agreement Market Disruption Event means:

(a)	at or about noon on the Quotation Day for the relevant Interest Period the Screen Rate is not available and none or only one of the Reference Banks supplies a rate to the Agent to determine LIBOR for the relevant Interest Period; or

(b)

before close of business in London on the Quotation Day for the relevant Interest Period, the Agent receives notifications from a Bank or Banks (whose participations in a Loan exceed 33 per cent of that Loan) that the cost to it or them of obtaining matching deposits in the London Interbank Market would be in excess of LIBOR.

5.7	Alternative basis of interest or funding

5.7.1

If a Market Disruption Event occurs and the Agent or the Borrower so requires, the Agent and the Borrower shall enter into negotiations (for a period of not more than 30 days) with a view to agreeing a substitute basis for determining the rate of interest.

5.7.2

Any alternative basis agreed pursuant to Clause 5.7.1 shall, with the prior consent of all the Banks and the Borrower, be binding on all Parties.

5.8	Break Costs

5.8.1

The Borrower shall, within three Business Days of demand by a Financing Party, pay to that Financing Party its Break Costs attributable to all or any part of an Advance or Unpaid Sum being paid by the Borrower on a day other than the last day of an Interest Period for that Advance or Unpaid Sum.

5.8.2

Each Bank shall, as soon as reasonably practicable after a demand by the Agent, provide a certificate confirming the amount of its Break Costs for any Interest Period in which they accrue.

5.9	Mitigation

5.9.1

Each Financing Party shall, in consultation with the Borrower, take all reasonable steps to mitigate any circumstances which arise and which would result in any amount becoming payable under or pursuant to, or cancelled pursuant to, any of Clauses 5.1, 5.2, 6.7 or Schedule 7 including (but not limited to) transferring its rights and obligations under the Financing Documents to another Affiliate or Facility Office.

5.9.2

Sub-clause 5.9.1 above does not in any way limit the obligations of any Security Company under the Financing Documents.

5.10	Limitation of liability

5.10.1

The Borrower shall indemnify each Financing Party for all costs and expenses reasonably incurred by that Financing Party as a result of steps taken by it under Clause 5.9.

5.10.2

A Financing Party is not obliged to take any steps under Clause 5.9 if, in the opinion of that Financing Party (acting reasonably), to do so might be prejudicial to it.

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6	Payments and deliveries

6.1

Payments

6.1.1

Each payment by the Borrower or a Bank shall be made to the Agent to such account as the Agent shall have notified to the Borrower or the Banks for such purpose. If the Agent receives a payment insufficient to discharge all the amounts then due and payable by the Borrower under this Agreement, the Agent shall apply that payment towards the obligations of the Borrower under this Agreement in the following order (which order shall override any appropriation made by the Borrower):

(a)	first, in or towards payment of any unpaid fees, costs and expenses of the Agent, the Arrangers, the Security Trustee and the Account Bank under any Financing Document;

(b)	second, in or towards payment pro rata of any accrued interest due but unpaid under this Agreement in respect of the Loan;

(c)	third, in or towards payment pro rata of any principal due but unpaid under this Agreement in respect of the Loan; and

(d)	fourth, in or towards payment pro rata of any other sum due but unpaid under this Agreement.

6.1.2

The Agent shall, if so directed by all the Banks, vary the order set out in Clauses 6.1.1(a) to 6.1.1(d).

6.2	Change of account

The Agent may change its receiving account by not less than 5 Business Days' notice to the Borrower.

6.3

Currency

6.3.1

All payments under this Agreement relating to costs, losses, expenses or Taxes shall be made in the currency in which the relative costs, losses, expenses or taxes were incurred to the extent permitted by Law. Any other amount payable under this Agreement shall, except as otherwise specified in this Agreement, be made in US Dollars.

6.3.2

All payments to the Agent under this Agreement shall be made for value on the due date in freely transferable and readily available funds. Payments in US Dollars shall be made in funds for same day settlement in the New York Clearing House Interbank Payments System (or such other funds as the Agent may specify as being customary for the settlement in New York City of international banking transactions in US Dollars).

6.4	Distribution

6.4.1

The Agent may apply any amount received by it for the Borrower in or towards payment (on the date and in the currency and funds of receipt) of any amount due from the Borrower under this Agreement or in or towards the purchase of any amount of any currency to be so applied.

6.4.2

Where a sum is to be paid to the Agent under this Agreement for another Party, the Agent is not obliged to pay that sum to that Party until it has established that it has actually received that sum. The Agent may, however, assume that the sum has been paid to it in accordance with this Agreement, and, in reliance on that assumption, make available to that Party a corresponding amount. If the sum has not been made available but the Agent has paid a corresponding amount to another Party, that Party shall immediately on demand by the Agent refund the corresponding amount together with interest on that amount from the date of payment to the date of receipt, calculated at a rate determined by the Agent to reflect its cost of funds.

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6.5	No set-off by Borrower

All payments to be made by the Borrower under the Financing Documents shall be calculated and be made without (and free and clear of any deduction for) set-off or counterclaim, save to the extent that the Borrower and the Hedging Banks are expressly permitted to exercise set off and netting rights in any Hedging Document.

6.6	Business Days

6.6.1

Any payment which is due to be made on a day that is not a Business Day shall be made on the next Business Day in the same calendar Month (if there is one) or the preceding Business Day (if there is not).

6.6.2

During any extension of the due date for payment of any principal or Unpaid Sum under this Agreement, interest is payable on the principal or Unpaid Sum at the rate payable on the original due date.

6.7	Grossing-up

6.7.1

Subject to Clause 6.7.2, all sums payable to any Financing Party pursuant to or in connection with any Financing Document shall be paid in full free and clear of all deductions or withholdings whatsoever (excluding Excluded Taxes) and except only as may be required by Law.

6.7.2

If any deduction or withholding is required by Law in respect of any payment due from the Borrower to any Financing Party pursuant to or in connection with any Financing Document, the Borrower shall:

(a)	ensure or procure that the deduction or withholding is made and that it does not exceed the minimum legal requirement therefor;

(b)	pay, or procure the payment of, the full amount deducted or withheld to the relevant Taxation or other authority in accordance with the applicable Law;

(c)

except with respect to Excluded Taxes, increase the payment in respect of which the deduction or withholding is required so that the net amount received by that Financing Party after the deduction or withholding (and after taking account of any further deduction or withholding which is required to be made as a consequence of the increase) shall be equal to the amount which the payee would have been entitled to receive in the absence of any requirement to make any deduction or withholding; and

(d)	promptly deliver or procure the delivery to the relative payee of receipts evidencing each deduction or withholding which has been made.

6.7.3

If the Agent is obliged to make any deduction or withholding from any payment to any Bank (an Agency Payment) which represents an amount or amounts received by the Agent from the Borrower under any Financing Document, then, except with respect to Excluded Taxes, the Borrower shall pay directly to that Bank such sum (an Agency Compensating Sum) as shall, after taking into account any deduction or withholding which the Borrower is obliged to make from the Agency Compensating Sum, enable that Bank to receive, on the due date for payment of the Agency Payment, an amount equal to the Agency Payment which that Bank would have received in the absence of any obligation to make any deduction or withholding.

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6.7.4

Each Financing Party organized under the Laws of a jurisdiction outside the United States shall, on or prior to the date of its execution and delivery of this Agreement in the case of each Existing Bank or on or prior to the date of the assignment pursuant to which a New Bank becomes a Financing Party, provide each of the Agent and the Borrower with two original Internal Revenue Service Forms W-8BEN or W-8ECI, or any successor or other form prescribed by the Internal Revenue Service, certifying that such Financing Party is exempt from or entitled to a reduced rate of United States withholding tax on payments pursuant to this Agreement or any other Financing Document. In addition, each such Financing Party agrees to update such forms upon their expiration date or upon the reasonable written request of the Borrower where such forms require updating or amending pursuant to Law, unless such Financing Party is unable to do so due to a change in the applicable Law, or in the interpretation or application thereof, occurring after the date on which the Financing Party was originally required to provide such form, certificate or other document.

6.7.5

If the Borrower is required to make an increased payment for the account of a Bank under Clause 6.7.2, then, without prejudice to that obligation and so long as such requirement exists the Borrower may prepay all, but not part, of that Bank's Participation in accordance with Clause 4.4.

6.7.6

If any Bank determines that it has received, realised, utilised and retained a Tax benefit by reason of any deduction or withholding in respect of which the Borrower has made an increased payment under this Clause 6.7, that Bank shall, provided that it has received all amounts which are then due and payable by the Borrower under any Financing Document, pay to the Borrower (to the extent that the Bank can do so without prejudicing the amount of the benefit or repayment and the right of that Bank to obtain any other benefit, relief or allowance which may be available to it) such amount, if any, as that Bank, in its absolute discretion shall determine, will leave that Bank in no worse position than it would have been in if the deduction or withholding had not been required, provided that:

(a)

each Bank shall have an absolute discretion as to the time at which and the order and manner in which it realises or utilises any Tax benefit and shall not be obliged to arrange its business or its Tax affairs in any particular way in order to be eligible for any credit or refund or similar benefit;

(b)	no Bank shall be obliged to disclose any information regarding its business, Tax affairs or Tax computations;

(c)

if any Bank has made a payment to the Borrower pursuant to this Clause 6.7.6 on account of any Tax benefit and it subsequently transpires that that Bank did not receive that Tax benefit, or received a lesser Tax benefit, the Borrower shall, on demand, pay to that Bank such sum as that Bank may determine as being necessary to restore its after-tax position to that which it would have been had no adjustment under this Clause 6.7.6 been made.

6.7.7

If a Financing Party, in its sole discretion, determines that it has received a refund of any taxes or with respect to which the Borrower has paid additional amounts pursuant to this Clause 6.7, it shall pay to the Borrower an amount equal to such refund (but only to the extent of the taxes or additional amounts paid by the Borrower under this Clause 6.7 with respect to the taxes giving rise to such refund); provided that the Borrower, upon the request of the Financing Party, agrees to repay the amount paid over to the Borrower to the Financing Party if the Financing Party is required to repay such refund to such taxing authority.

6.7.8

No Bank shall be obliged to make any payment under Clause 6.7 if, by doing so, it would contravene the terms of any applicable Law or any notice, direction or requirement of any governmental or regulatory authority (whether or not having the force of Law).

7	Representations and warranties

7.1	Borrower representations and warranties

Each Financing Party and Hedging Bank has entered into this Agreement in reliance on the representations of the Borrower and WGI (USA) set out in this Clause 7, and each of the Borrower and WGI (USA) warrants to each Financing Party and each Hedging Bank on the date of this Agreement as set out in this Clause 7.

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(a)	Status: Each Security Company and WGI is a company duly incorporated and existing under the Laws of the jurisdiction of its incorporation, and it possesses the capacity to sue and be sued in its own name and has the power to carry on its business and to own its property and other assets.

(b)

Powers and authority: Each Security Company and WGI has power to execute, deliver and perform its obligations under the Transaction Documents to which it is a party and to carry out the transactions contemplated by those documents and to grant and create the Security and all necessary corporate, shareholder and other action has been or will be taken to authorise the execution, delivery and performance of the same and no limitation on the powers of the Borrower to borrow will be exceeded as a result of borrowings under this Agreement.

(c)	Binding obligations, security and Secured Collateral:

(i)

Each of the Security Companies' and WGI's obligations under the Transaction Documents to which it is a party constitute its legal, valid, binding and enforceable obligations (subject to the reservations and qualifications in respect of such matters in the opinions of Denton Wilde Sapte LLP, DLA Piper Rudnick Gray Carey US LLP, Givens Pursley LLP, Lionel Sawyer & Collins and Cassels, Brock & Blackwell LLP delivered pursuant to this Agreement).

(ii)

Each Encumbrance expressed to be created under each Security Document (when entered into) is and will remain a first priority legal, valid and binding and (subject to the reservations and qualifications in respect of such matters in the opinions of Denton Wilde Sapte LLP, DLA Piper Rudnick Gray Carey US LLP, Givens Pursley LLP, Lionel Sawyer & Collins and Cassels, Brock & Blackwell LLP delivered pursuant this Agreement) enforceable and perfected Encumbrance over the Secured Collateral, subject only to Permitted Encumbrances (including with respect to priority).

(iii)

All surface and mining leases constituting Secured Collateral are valid and subsisting in all material respects, and to the best knowledge of the Borrower, all mining leases are superior and paramount to all other leases or other Mining Rights respecting the Mesquite Mine.

(iv)	Except as expressly described in the Base Case Model, the Borrower has not assigned, sold or created in any other person or entity any right or interest which would give rise to a Royalty Expense.

(d)	Contraventions: The execution, delivery and performance by each Security Company and WGI of the Financing Documents and Material Contracts to which it is a party does not:

(i)	contravene any applicable Law or regulation or any order of any governmental or other official authority, body or agency or any judgment, order or decree of any court having jurisdiction over it;

(ii)	conflict with, or result in any breach of any of the terms of, or constitute a default under, any of the Permits or Mining Claims;

(iii)

conflict with, or result in any material breach of any of the terms of, or constitute a material default under, any agreement or other instrument to which it is a party or any licence or other authorisation to which it is subject or by which it or any of its property is bound; or

(iv)	contravene or conflict with its constitutional documents or by-laws or any resolution of its board of directors.

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(e)

Insolvency: Each Security Company and WGI is able to pay its debts (including trade debts) as the same become due. None of the Security Companies and WGI has taken any action nor have any steps been taken, petition presented or resolution passed or legal proceedings been started or threatened against it in respect of any bankruptcy proceeding or for the winding-up, dissolution, liquidation or re-organisation of it or any of its assets, the enforcement of any Encumbrance over its assets or for the appointment of a receiver, administrative receiver, or administrator, trustee or similar officer of it or of any of its assets.

(f)	No default or trigger:

(i)	no Default or Trigger has occurred or will occur as a result of making any Advance; and

(ii)	no Security Company and WGI is (nor would be with any of the giving of notice, the lapse of time, the determination of materiality, or the satisfaction of any other condition) in breach of or in default under:

(aa)	any Material Contract to which it is a party or any Permit or Mining Claim;

(bb)	any other agreement to which it is a party or which is binding on it or any of its assets which could reasonably be expected to have a Material Adverse Effect.

7.2	Repetition

The representations set out in this Clause 7 shall survive the execution of this Agreement and are deemed to be repeated by the Borrower and WGI (USA) by reference to the facts and circumstances then existing on the first date of each Interest Period and, for the benefit of the Hedging Banks only, on the date each ISDA Master Agreement is entered into and the date on which each Transaction (as defined in the relevant ISDA Master Agreement) is entered into.

8	Undertakings

8.1	Information undertakings

The undertakings in this Clause 8.1 are made by the Borrower to each Financing Party and each Hedging Bank and shall remain in force during the Security Period, unless the Agent (acting on the instructions of the Majority Banks) otherwise agrees.

(a)

Annual Accounts: As soon as the same become available (and in any event within 120 days after the end of each of its Financial Years), the Borrower shall deliver to the Agent one electronic copy for distribution to all the Banks (but if so requested by the Agent, the Borrower shall deliver sufficient copies for all the Banks), of its Accounts and the Accounts of WGI and New Gold for each Financial Year which shall, only in the case of New Gold's Accounts, have been audited by New Gold's Auditors.

(b)

Interim Accounts: As soon as the same become available (and in any event within 45 days after the end of each of the first three quarter periods of each of its Financial Years), the Borrower shall deliver to the Agent one electronic copy for distribution to all the Banks (but if so requested by the Agent, the Borrower shall deliver sufficient copies for all the Banks) of:

(i)	its management accounts;

(ii)	the unaudited interim consolidated accounts of WGI; and

(iii)

unaudited financial reports of New Gold,

for each such quarter period.

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(c)	Development Plan and Operating Budgets:

The Borrower shall:

(i)

provide to the Agent (with sufficient copies for the Banks and the Independent Technical Consultant) for the Agent's approval any proposed material alterations to the Development Plan to reflect any change to the Project or any Variation. The Agent may commission the undertaking of an independent study to evaluate such proposed alteration, such independent study to be at the Borrower's expense. Until the Agent has approved such alterations (acting on the instructions of the Majority Banks) the previously approved Development Plan will continue in effect;

(ii)	provide to the Agent for the Agent's approval (such approval to be given in accordance with the instructions of the Majority Banks):

(aa)	no later than 30 days prior to the end of each Financial Year; and

(bb)	at the same time as any alteration to the Development Plan is proposed in accordance with sub-clause (i) above,

an Operating Budget for the twelve Month period following the end of the relevant Financial Year or alteration to the Development Plan. Each such Operating Budget shall be consistent with the Development Plan, (except where any alteration to the Development Plan is being proposed, in which case it shall be consistent with the proposed Development Plan) or in the event that it is not so consistent, the Borrower shall simultaneously propose an alteration to the Development Plan (in accordance with sub-clause (i) above) and explain the reason for any such alteration thereto. Until the Agent has approved such Operating Budget (acting on the instructions of the Majority Banks) the Borrower shall be obliged to comply with the most recently approved Operating Budget which will continue in effect; and

(iii)

on a request of the Agent or, if the Borrower shall determine that any of the estimates, forecasts, assumptions (whether technical or economic) or other projections contained within the Development Plan and/or the Operating Budget are materially incorrect and/or should be materially different from those set out in the then current Development Plan or Operating Budget (as the case may be), then immediately following such request or determination, provide to the Agent revised estimates forecasts, assumptions or other projections and revise the Development Plan and the Operating Budget accordingly provided that in the event of any dispute as to whether such estimates, forecasts, assumptions or projections are materially incorrect, the Agent (acting reasonably) shall determine the applicable estimates, forecasts assumptions and projections which shall apply on the basis of that which it considers to be prudent at the time (but in the case of technical issues, after consultation with the Independent Technical Consultant).

(d)	Monthly Reports: The Borrower shall deliver to the Agent (in sufficient copies for all the Banks and the Independent Technical Consultant) a Monthly Report, not more than 30 days after the end of each calendar Month.

(e)

Information on request: The Borrower shall promptly following the Agent's request, and at the Borrower's expense, provide or procure the provision to the Agent of such other information, estimates, forecasts or projections in relation to any Security Company and any of the businesses, assets, financial condition, ownership or prospects of any Security Company as the Agent may reasonably require.

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(f)	Compliance certificates: On each Repayment Date, the Borrower shall provide to the Agent a Compliance Certificate.

(g)	Reserve Statements: The Borrower shall provide the Agent with all revised Reserve Statements which have been prepared pursuant to changes to the Development Plan or as required by Law.

(h)

ITC Report: The Borrower shall co-operate with, and provide all reasonable assistance to, the Independent Technical Consultant including access during normal working hours to financial and technical information and data and relevant directors and other personnel to enable the ITC Report being made available (at the expense of the Borrower) no later than 30 days after the relevant date, which shall be each anniversary of the Effective Date, if required by the Agent (acting on the instructions of the Majority Banks, acting reasonably).

(i)	Accounting Principles: The Borrower shall ensure that all Accounts and other financial statements submitted to the Agent and the Banks under this Agreement are prepared in accordance with Canadian GAAP.

(j)	Default, litigation, etc.: The Borrower shall, promptly upon becoming aware of the same and, in any event, within 5 Business Days of becoming aware of the same, notify the Agent and provide details of:

(i)	the occurrence of a Default or Trigger;

(ii)

any litigation, arbitration or administrative proceeding (including any notification from any governmental or administrative authority in respect of any alleged breach of Environmental Law) commenced against any Security Company or the Secured Collateral (or any part thereof) either involving a potential liability in excess of US$250,000 or which could reasonably be expected to have a Material Adverse Effect;

(iii)

any notice, order, direction, requisition, permission or other like matter whatsoever issued by any competent person or entity or government authority or department to the any Security Company relating to such company, or any of its respective undertaking, rights or assets the effect of which could reasonably be expected to have a Material Adverse Effect;

(iv)	any occurrence (including the occurrence of any event beyond the reasonable control of the Borrower (other than general political or economic events of occurrence) or any third party claim or liability) which could reasonably be expected to have a Material Adverse Effect;

(v)	any occurrence which causes the unscheduled cessation or disruption to construction or operation of the Mining Operations or refining operations for a period of three or more days; and

(vi)

any proposal (whether formal or informal) for the material amendment, cancellation, waiver, surrender, abandonment, termination or other similar action in relation to any Mining Claim, Permit, Mining Right or Material Contract other than any such proposal in relation to any Mining Claim, Permit, Mining Right or Material Contract that is not, at the time of such proposal required in the Development Plan.

(k)

Insurances: The Borrower shall notify the Agent promptly on the happening of any event which could reasonably be expected to affect, render void, voidable, unenforceable, suspend, impair or defeat any of the Insurances in a material manner; or of any fact, event or circumstance which has caused or may cause the Borrower to be in breach of any material requirement in relation to the Insurances.

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(l)	Contracts: The Borrower shall provide to the Agent Certified Copies of any contract, or agreement entered into by the Borrower after 30 March 2007 in accordance with Clause 8.4(m)(ii).

8.2	WGI (USA) undertakings

WGI (USA) undertakes to each Financing Party and each Hedging Bank that from 30 March 2007 and until expiry of the Security Period, it shall, unless the Agent (acting on the instructions of the Majority Banks) otherwise agrees own directly at least 50.1% of the voting rights in the Borrower and provide to the Borrower such non-monetary support and assistance using its reasonable commercial efforts as is necessary for the Mining Operations to be conducted in a manner that would be expected of a professional, prudent operator of a mine of the size, location and characteristics comparable to the Project and in the manner and with the skill and care of a reasonable business man, provided that such support and assistance does not constitute a payment or performance guarantee and provided further that WGI (USA) shall not be liable for any losses, costs, expenses, damages or other amounts arising from the failure of the Mining Operations to be so conducted.

8.3	Positive undertakings

The undertakings in this Clause 8.3 are made by the Borrower to each Financing Party and each Hedging Bank and shall remain in force during the Security Period, unless the Agent (acting on the instructions of the Majority Banks) otherwise agrees.

(a)

Pay Taxes: The Borrower shall pay and discharge all Taxes and governmental charges payable by or assessed upon it prior to the date on which the same become overdue unless, and only to the extent that, such Taxes and charges shall be contested in good faith by appropriate proceedings, pending determination of which payment may lawfully be withheld, and there shall (if the Auditors so advise) be set aside adequate reserves with respect to any such Taxes or charges so contested in accordance with Canadian GAAP.

(b)	Insurances: The Borrower shall comply with all its obligations under Schedule 6.

(c)	Authorisations: The Borrower shall obtain, maintain and comply with the terms of any:

(i)	Permit; and

(ii)	any other permit, authorisation, approval, licence, consent, exemption, clearance, filing or registration necessary:

(aa)	for the conduct of its business in accordance with the Development Plan; and

(bb)	to enable it to perform its obligations under, or for the validity, enforceability or admissibility in evidence of, any Transaction Document,

other than where the absence of such permit, authorisation, approval, licence, consent, exemption, clearance, filing or registration could not reasonably be expected to have a Material Adverse Effect.

(d)

Access: For the purpose of monitoring the performance of the Borrower's obligations under the Transaction Documents the Borrower shall permit the Agent or the Banks and any person or entity (being an accountant, auditor, solicitor, valuer or other professional adviser of the Agent or the Banks and including the Independent Technical Consultant) authorised by the Agent, at all reasonable times during normal business hours and on reasonable notice, to have access to its property, premises and accounting books and records and to its officers, but in no event more than once in any 12 Month period other than when a Trigger Event or an Event of Default has occurred and is continuing and then as often as the Agent deems necessary or advisable.

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(e)

Mining Operations: The Borrower shall develop, maintain and operate the Mining Operations in accordance with the Development Plan in all material respects and procure that the same and other assets of the Borrower are maintained and diligently operated for the extraction, production, transportation, storage, processing and delivery of gold in a good and workmanlike manner and in accordance with (a) prudent industry practices, (b) the Transaction Documents and (c) in all material respects, all applicable Laws, rules and regulations, and procure that appropriate action is taken according to practices of prudent operators in the industry to maintain and manage the Mining Operations and all operations on such sites and procure that all machinery, equipment and facilities of any kind now or hereafter forming part of the same or on such sites as necessary for the extraction, production, transportation, storage, processing, delivery or marketing of gold are provided and are kept in all material respects in good and efficient operating condition (taking into account reasonable wear and tear).

(f)	Maintenance of Secured Collateral:

The Borrower shall:

(i)

maintain all tangible Secured Collateral in good condition and repair (ordinary wear and tear accepted);

(ii)

defend the Secured Collateral against all claims by persons or entities other than the Agent; and

(iii)

take all commercially reasonable steps necessary to release or discharge any Encumbrance (other than a Permitted Encumbrance) on the Secured Collateral in favour of any third party, including by paying any amounts owed in respect thereof in compliance with the Financing Documents, unless the Borrower is contesting such Encumbrance in good faith by proper legal proceedings; provided that in the event the Borrower fails to release, discharge or contest any such Encumbrance promptly, the Agent may (but shall not be obligated to) satisfy or contest such Encumbrance, and the Borrower shall reimburse the Agent for all sums expended to so satisfy or contest on demand.

(g)	Mining Rights and Material Contracts:

The Borrower shall:

(i)	carry out its business including the operations which are the subject of the Mining Rights in a manner consistent with prudent industry practice;

(ii)	pay when due all claims, maintenance fees, rents, Royalty Expenses and other royalties and other sums and make all filings with government agencies as are required to maintain the Mining Rights and the Mining Claims in good standing; and

(iii)

comply with the terms of each of the Material Contracts except to the extent that non-compliance could not reasonably be expected to have a Material Adverse Effect.

(h)

Ranking of obligations: The Borrower shall ensure that its obligations under the Financing Documents to which it is a party insofar as the same are not secured under any of the Security Documents, shall at all times rank at least pari passu with all its other present and future Indebtedness except for any obligations which are mandatorily preferred by Law and not by contract.

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(i)

Priority of Security: The Borrower shall ensure that its payment obligations to the Banks and the Hedging Banks under the Financing Documents to the extent that they are secured under the Security Documents, shall at all times rank in all respect in priority to all its other Indebtedness other than such Indebtedness as would be preferred by applicable Law.

(j)

Further documents: The Borrower shall at the request of the Agent, do or procure the doing of all such things and execute or procure the execution of all such documents as are, in the opinion of the Agent acting reasonably, required to ensure that the Secured Parties obtain all the rights and benefits intended to be conferred on them under the Security Documents.

(k)

Compliance with Laws (other than Environmental Laws): The Borrower shall maintain all Secured Collateral in compliance with and otherwise comply in all respects with the Law, excluding Environmental Laws, except to the extent any non-compliance could not reasonably be expected to have a Material Adverse Effect.

(l)	Compliance with Environmental Laws: The Borrower shall comply in all respects with Environmental Law.

(m)

Dangerous Materials: The Borrower shall ensure that all Dangerous Materials treated, kept and stored, produced, manufactured, generated, refined or used from, in, upon, or under any of the property owned or occupied by it are held and kept upon such property in compliance with applicable Law and in such a manner consistent with prudent industry practice.

(n)	Consent to Assignment: At the request of the Agent, the Borrower shall deliver to the Agent a Consent to Assignment in respect of any Material Contract described under Clause 8.4(m)(ii)(bb).

(o)	Maintenance of Existence: The Borrower shall do all things necessary to preserve and keep in full force and effect its existence, franchises, rights and privileges under the Laws of the State of Nevada.

8.4	Negative undertakings

The undertakings in this Clause 8.4 are made by the Borrower to each Financing Party and each Hedging Bank and shall remain in force during the Security Period, unless the Agent (acting on the instructions of the Majority Banks) otherwise agrees.

(a)	Negative Pledge: The Borrower shall not create or permit to subsist any Encumbrance over any of its assets other than Permitted Encumbrances;

(b)	Disposal of assets: The Borrower shall not make a Disposal other than:

(i)	Disposals of mineral production in the ordinary course of its operating or trading activities at arm's length and on commercial terms and not inconsistent with the Development Plan;

(ii)

Disposals in respect of which the book value of any single asset disposed of by the Borrower does not exceed US$250,000 (or the equivalent thereof) or in respect of which all assets disposed of by the Borrower in any 12 Month period does not exceed US$500,000 (or the equivalent thereof), provided that such Disposal:

(aa)	is not inconsistent with the Development Plan; or

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(bb)	does not adversely affect the Borrower's ability to implement the Development Plan;

(iii)

a Disposal at arm's length and on commercial terms of obsolete assets or of assets which are promptly replaced by other assets of equivalent or greater utility;

(iv)	a Disposal of any Permitted Investment held in an account subject to the Account Control Agreement;

(v)	the grant of any option or other right to purchase any asset in a transaction that would be permitted under this Clause 8.4 (b); or

(vi)	Disposals of any assets, including without limitation any Permitted Investment, held in the Distribution Account.

For the purposes of this paragraph, the value of any asset shall be the greater of its book value and the consideration received for it.

(c)	Mergers: The Borrower shall not enter into any amalgamation, demerger, merger or reconstruction.

(d)	Loans: The Borrower shall not make any loans or grant any credit to or for the benefit of any person or entity, other than:

(i)	amounts of credit allowed in the ordinary course of its trading activities;

(ii)	loans and advances to employees in the ordinary course of the business of the Borrower as presently conducted in an aggregate principal amount not to exceed $500,000 at any time outstanding; and

(iii)

deposits or similar arrangements with utility providers made in the usual course of dealings with such utility providers provided that reasonable details of any such deposits or similar arrangements made after 30 March 2007 have been provided in writing to the Agent.

(e)	Issue of shares: The Borrower shall not issue any further shares (other than to WGI (USA) and provided that such shares are subject to the Pledge Agreement) or alter any rights attaching to its issued shares in existence as at 30 March 2007.

(f)	Indebtedness: The Borrower shall not incur or permit to subsist any Indebtedness other than Permitted Indebtedness.

(g)	Restriction on expenditure: The Borrower shall not incur:

(i)	Capital Expenditure during any period other than the Permitted Capital Expenditure for the relevant period; and

(ii)	Operating Costs during any period other than in accordance with the Operating Budget for the relevant period or otherwise as required by Law,

provided that the Borrower may incur emergency expenditures during any period that are not included in the Operating Budget for the relevant period provided that the Borrower (acting reasonably) has certified to the Agent and the Independent Technical Consultant within 5 Business Days of incurring such emergency expenditures that (i) such emergency expenditures were necessary in order to avoid, remedy or mitigate any breach or default or any potential breach or default of or in connection with any Transaction Document or any Law (including any Environmental Law) and (ii) the circumstances giving rise to such emergency expenditures were not reasonably foreseeable.

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(h)	Hedging: The Borrower shall not enter into any Derivative Transaction other than a Permitted Hedging Transaction in accordance with the Approved Hedging Programme.

(i)	Distributions: The Borrower shall not make any transfer into the Distribution Account, except in accordance with Clause 9.5.2(g), and only subject to the following conditions being satisfied:

(i)	no Default or Trigger has occurred and is continuing;

(ii)	the Historic DSCR is greater than 1.25:1;

(iii)

the mandatory prepayment obligations set out in Clause 4.3 have been complied with in full and an amount not less than US$4,000,000 is standing to the credit of the Proceeds Account;

(iv)	the transfer is made within 30 days following a Repayment Date; and

(v)	no Default or Trigger would occur, and the ratio in Clause 8.4 (i)(ii) would not fail to be achieved at the level referred to herein, as a result of such transfer.

(j)	Change of business, deviation from Development Plan: The Borrower shall not make any material change to the nature or scope of its business from that agreed in the Development Plan.

(k)	Development Plan: The Borrower shall not make any material change, variation, amendment or supplement to the Development Plan other than as permitted under the Financing Documents.

(l)

Mining Claims, Permits, Mining Rights: The Borrower shall not amend, vary, release, terminate, cancel, surrender, abandon or concur in the same, or do or omit to do or suffer anything which renders terminable or cause to be frustrated or waive any rights available to it under (or agree to any of the same) any of the Mining Claims, Permits or Mining Rights:

(i)	that are required in the implementation of the Development Plan; or

(ii)	where such amendment, variation, release, termination, cancellation, surrender, abandonment, frustration or waiver could reasonably be expected to have a Material Adverse Effect.

(m)	Material Contracts: The Borrower shall not:

(i)	amend, vary or terminate any Material Contract where such amendment, variation or termination could reasonably be expected to have a Material Adverse Effect ; or

(ii)	enter into any other contract or agreement in respect of the Project other than:

(aa)	a replacement or substitute contract for a Material Contract that has expired or been terminated provided that the Agent has approved in writing that replacement or substitute contract prior to the Borrower entering into the same (such approval not to be unreasonably withheld or delayed);

(bb)

any contract or agreement in respect of the Project (other than those referred to in (aa) above) provided that the Agent has approved in writing that contract or agreement prior to the Borrower entering into the same (such approval not to be unreasonably withheld or delayed) if, in respect of that contract or agreement:

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(AA)

the term is greater than 12 Months;

(BB)

the annual value is greater than US$1,000,000; or

(CC)

is inconsistent with the Development Plan.

(n)	Abandonment of mine: The Borrower shall not abandon, or give notice of its intention to, or do anything, or suffer anything, which evidences its intention to abandon conduct of all or a substantial part of the Mining Operations other than in accordance with the Development Plan.

(o)	Waste: The Borrower shall not cause, permit or suffer, directly or indirectly, any Waste in respect of the Secured Collateral other than any portion thereof with respect to which Waste thereof could not reasonably be expected to have a Material Adverse Effect.

8.5	The Base Case Model

8.5.1

The Borrower shall not make any revision to the Base Case Model except in accordance with this Clause 8.5,

8.5.2

By notice to the Borrower, the Agent may at any time make, or require the Borrower in the manner directed by the Agent to make, in each case, with the consent of the Borrower (acting reasonably), such revisions to the Base Case Model as may be required for the purpose of:

(a)	correcting any deficiency in the form or structure of the Base Case Model; or

(b)	incorporating any additional or revised assumptions required to reflect any changes to the Development Plan made in accordance with this Agreement.

8.5.3

If the Agent and the Borrower are unable to agree such revisions to the Base Case Model as may be required within 10 Business Days of the Agent giving notice to the Borrower pursuant to Clause 8.5.2, the Independent Technical Consultant shall determine such revisions. In this case, the Independent Technical Consultant's determination of the revisions that are required shall (in the absence of fraud or manifest error) be final and conclusive. During the period in which any determination is being made by Independent Technical Consultant in accordance with this Clause, the Base Case Model shall remain in its form prior to the Agent giving notice to the Borrower pursuant to Clause 8.5.2.

8.5.4

If the Base Case Model is revised, the Agent shall promptly notify each Bank and Hedging Bank of the revision.

9	Facility Accounts and Permitted Investments

9.1	Account Bank

9.1.1

The Borrower represents and warrants that it has appointed the Account Bank to open, maintain and operate the Facility Accounts in accordance with the provisions of the Financing Documents.

9.1.2

The Agent and the Borrower may agree to change the branch at which the Facility Accounts are maintained from time to time, such agreement to be in writing.

9.2	Facility Accounts

9.2.1

During the Security Period the Borrower shall maintain the following bank accounts denominated in US$ in its name at the relevant branch of the Account Bank (unless otherwise specified):

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(a)	a Proceeds Account; and

(b)	a Debt Service Reserve Account.

9.2.2

The Borrower shall not open or maintain any bank, deposit, savings or other account except for the Facility Accounts other than:

(a)	the Distributions Account;

(b)	a physical gold account with the Refiner; and

(c)	an account in the name of the Borrower and held with AIG in respect of the Reclamation Bonds (the AIG Commutation Account).

9.2.3

Each Facility Account shall be a separate account at the Account Bank. The Proceeds Account and the Debt Service Reserve Account shall be subject to the Account Control Agreement.

9.2.4

If the Borrower receives any moneys for crediting to a Facility Account in a currency other than US Dollars it shall within a commercially reasonable period of time (unless otherwise agreed with the Agent) convert or, as the case may be, request the Account Bank promptly to convert these moneys into US Dollars and transfer the same to the Proceeds Account.

9.2.5

None of the restrictions on the withdrawal of funds from Facility Accounts contained in this Clause 9 shall affect the obligations of the Borrower to make all payments of any amount required to be made by it to the Agent, or the Banks, on the due date for payment thereof in accordance with the Financing Documents.

9.2.6

The Facility Accounts shall be subject to, and pledged by the Borrower on, the terms and conditions of the Security Agreement and the Account Control Agreement. The Agent agrees that it will send a Notice (as defined the Account Control Agreement) only upon the occurrence and during the continuance of an Event of Default or a Trigger Event. Upon the cessation of an Event of Default or a Trigger Event, the Agent shall send a notice to the Bank under the Account Control Agreement stating that the Activation Period (as defined therein) has ceased.

9.3	Withdrawals

9.3.1

No payments to, or withdrawals from, any Facility Account shall be made except as expressly permitted by this Clause 9 and in accordance with the Account Control Agreement.

9.3.2

The Borrower may not make any withdrawal from any Facility Account:

(a)	if an Event of Default or a Trigger Event has occurred and is continuing or would result from that withdrawal; and

(b)	the Security Trustee has given notice to the Account Bank pursuant to the Account Control Agreement on the occurrence of that Event of Default or Trigger Event.

9.4	Access to books and records

9.4.1

The Borrower irrevocably grants the Agent or any of its appointed representatives access to review the books and records of its Facility Accounts and agrees to deliver to the Agent copies of statements and other information relevant to the Facility Accounts as may be requested by the Agent from time to time. Subject to Clause 21, the Borrower irrevocably waives any right of confidentiality that may exist in respect of such books, records, statements and other information. The Borrower irrevocably authorises the Account Bank to give the Agent, Security Trustee and each Bank unrestricted access on reasonable prior notice to review such books, records, statements and other information held by the Account Bank, and to provide by fax, mail or telephone such additional information or records as the Banks or the Agent shall request and the Borrower shall take all such further steps or actions necessary to confirm or continue such authorisation.

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9.4.2

Nothing in this Clause 9.4 shall require the Account Bank to disclose to any person or entity any books, records or other information which the Account Bank would not be required to disclose to the Borrower.

9.5	Proceeds Account

9.5.1

The Borrower shall pay into the Proceeds Account:

(a)	any net proceeds received pursuant to the Hedging Documents, any Approved Fuel Hedging Document, any Additional Commodity Hedging Document or any Scotia Spot Purchase Transaction;

(b)	all other receipts of the Borrower (including, without limitation, pursuant to any Disposals); and

shall procure that all its Operating Revenues and other sums owing to it are paid directly into the Proceeds Account.

9.5.2

The Borrower may only withdraw sums from the Proceeds Account for the following purposes and in the following order of priority:

(a)	first, for paying Operating Costs including transfers to the AIG Commutation Account in accordance with 9.8 and, Permitted Capital Expenditure, in each case consistent with those costs and expenditures projected in the most recent Development Plan and Operating Budget;

(b)	second, to meet unpaid fees, costs and expenses of the Agent, the Security Trustee, the Arrangers and the Account Bank incurred under the Financing Documents;

(c)	third, to meet its Debt Service liabilities under this Agreement and any Hedging Liabilities pursuant to any Permitted Hedging Transaction, other than pursuant to any Additional Commodity Hedging Transaction;

(d)	fourth, for paying Additional Commodity Hedging Expenses due and payable;

(e)	fifth, on any Repayment Date, to transfer amounts to its Debt Service Reserve Account in accordance with Clause 9.6;

(f)	sixth, on any Repayment Date, to make any mandatory prepayments in accordance with Clause 4.3; and

(g)	seventh, to make transfers into the Distributions Account provided that the conditions in Clause 8.4(i) have been satisfied in full.

9.5.3

Amounts standing to the credit of the Proceeds Account may be invested by the Borrower in Permitted Investments in accordance with the Account Control Agreement.

9.6	Debt Service Reserve Account

9.6.1

Having satisfied its obligations under Clause 9.5.2(a) to 9.5.2(d), the Borrower shall ensure at all times that the amount standing to the credit of the Debt Service Reserve Account at the Effective Date is at least equal to the Required Level for the Debt Service Reserve Account and shall thereafter maintain the Required Level pursuant to this Clause by transferring out of the Proceeds Account monies available for transfer under Clause 9.5.2(e).

9.6.2

The Required Level for the Debt Service Reserve Account is, at any time, the Debt Service which will become payable on or prior to the next Repayment Date.

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9.6.3

The Borrower may only withdraw sums from the Debt Service Reserve Account with the prior written approval of the Agent which shall be produced to the Account Bank by the Borrower, prior to any such withdrawal and for the following purposes:

(a)	to pay Debt Service payable to the Banks, to the Agent as and when it falls due to the extent (but only to the extent) that the amount standing to the credit of the Proceeds Account when the relevant Debt Service falls due is insufficient to pay it in full; or

(b)

to the extent that the amount standing to the credit of the Debt Service Reserve Account at any time exceeds the Required Level for the Debt Service Reserve Account at that time and the amount withdrawn is transferred directly to the Proceeds Account, with respect to which the approval of the Agent shall only be required if an Event of Default or Trigger Event shall have occurred and is continuing.

9.6.4

The Borrower may satisfy its obligations to maintain at all times the Required Level for the Debt Service Reserve Account pursuant to this Clause by procuring the issue in favour of the Agent of a letter of credit in an amount no less than the Required Level for the Debt Service Reserve Account provided that such letter of credit is at all times:

(a)	in a form, and on terms, acceptable to the Agent (acting reasonably); and

(b)

issued by a bank or other financial institution acceptable to the Agent and who has, to the satisfaction of the Agent (acting reasonably), no recourse whatsoever to the Borrower, the Assets or the Project in respect of any liability or indebtedness arising as a result of the issue of, or payment under, such letter of credit.

9.6.5

Amounts standing to the credit of the Debt Service Reserve Account may be invested by the Borrower in Permitted Investments in accordance with the Account Control Agreement.

9.7	Distributions Account

9.7.1

Having satisfied its obligations under Clause 9.5.2(a) to (f), the Borrower may, subject to Clause 8.4(i), transfer amounts (if any) standing to the credit of the Proceeds Account directly to the Distribution Account.

9.7.2

The Borrower shall be entitled to withdraw, at any time, all and any amounts transferred pursuant to this Agreement into the Distribution Account.

9.8	AIG Commutation Account

9.8.1

The Borrower shall ensure that at all times there is standing to the credit of the AIG Commutation Account an amount equal to the Approved Deposit Amount.

9.8.2

For so long as the Borrower has liabilities in respect of the Reclamation Bonds, the Borrower agrees that it will not make any withdrawals from the AIG Commutation Account other than to pay for costs and expenses incurred as permitted pursuant to the policies in connection with the Reclamation Bonds.

9.8.3

Other than as set out in this Clause, the Borrower shall not make any transfers or payments from the Facility Accounts to the AIG Commutation Account.

Triggers

10.1	Trigger Event

Each of the following events shall be a Trigger Event:

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(a)

Breach of Undertakings: Any Security Company or WGI breaches any one or more of its obligations (other than: (i) a payment obligation (which shall be an Event of Default under and in accordance with Clause 11.1(a) and (ii) in the case of WGI (USA) only, its obligations in respect of its ownership in the voting shares of the Borrower under Clause 8.2 (which shall be an Event of Default under and in accordance with Clause 11.1(j)(i)) under any Financing Document, or any condition attached to any waiver or consent given under any Financing Document is not fulfilled on the due date provided that a Trigger Event shall not occur under this Clause 10.1 (a) in respect of a breach by the Borrower of any one or more of its obligations under Clause 8.3(l) or Clause 8.3(m) if, in either case,:

(i)

such breach is capable of being remedied by the Borrower;

(ii)

the amounts spent or to be spent by the Borrower to remedy such breach are equal to or less than US$50,000; and

(iii)

such breach is remedied by the Borrower within 10 days after the earlier of (i) notice of that breach being given by the Agent to the Borrower and (ii) the Borrower becoming aware of such breach.

(b)

Other defaults: Any Security Company or WGI breaches any of its obligations under any Transaction Document to which it is a party (other than obligations or conditions referred to in Clause 10.1(a) or 11.1(a)) and such breach could reasonably be expected to have a Material Adverse Effect and if it is capable of remedy, it is not remedied within 10 Business Days after the earlier of (i) notice of that breach being given by the Agent to the Borrower and (ii) the relevant Security Company becoming aware of such breach.

(c)

Breach of representation or warranty: Any representation, warranty or written statement made or deemed to be repeated by any Security Company under any Financing Document or in any document delivered by or on behalf of the Borrower under or in connection with any Financing Document is incorrect or inaccurate when made or deemed to have been made unless the circumstances giving rise to the representation, warranty or statement being incorrect or inaccurate:

(i)	are capable of cure or remedy; and

(ii)	are remedied within 15 Business Days such that if the representation, warranty or statement were repeated it would not be incorrect or misleading.

(d)	Cross-default: Any Indebtedness of the Borrower in excess of, in aggregate, US$250,000 or its equivalent, or any Indebtedness of WGI (USA) in excess of, in aggregate, US$500,000 or its equivalent:

(i)	is not paid on its due date for payment (taking into account any relevant grace period);

(ii)	is declared to be or otherwise becomes due and payable prior to its specified maturity, or

(iii)

any creditor of any of the same becomes entitled to declare any such Indebtedness due and payable prior to its specified maturity.

(e)

Attachment or distress: A creditor or encumbrancer attaches or takes possession of, or a distress, execution, sequestration, foreclosure, action or notice to reduce a claim to judgement or other process is instituted, levied or enforced upon or sued out against, any of the assets of any Security Company (in respect of an amount of at least US$250,000 in aggregate or its equivalent); or

(f)	Project production: In any consecutive three Month period commencing on 30 September 2009:

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(i)	the ore-grade into the Mesquite Mine;

(ii)	the amount of ore placed on the leach pads;

(iii)

the processing recovery; or

(iv)	the aggregate actual production of gold recovered from the Mining Operations,

is less than 90 per cent of that projected for such period in the most recent Operating Budget provided however that no Trigger Event shall occur under this Clause if any of the items in (i) to (iii) above are less than 90% of that projected for such period, but item (iv) is equal to or more than 90% of that projected for such period.

(g)

Mining Claims, Permits and Mining Rights: any steps are taken or proposals made for the amendment, cancellation or termination in relation to any of the terms and conditions of the Mining Claims, Permits, Mining Rights or any condition thereto is not met in full by the date specified for the meeting of the same in each case to the extent required in the Development Plan.

(h)

Reserves: at any time, and as stated in the latest Reserve Statement at that time, the proven and probable reserves of gold that are forecast to remain at the Mesquite Mine beyond the later of the Final Repayment Date and the Final Hedging Maturity Date are less than 30% of the proven and probable reserves of gold that are forecast to remain at the Mesquite Mine in the Reserve Statement as at 30 March 2007.

(i)	Material Contracts:

(i)

Any Key Contractual Counterparty breaches any of its material obligations under any Material Contract to which it is a party and if that breach or failure is capable of remedy, it is not remedied within a period of 20 Business Days following the date of such breach, provided that such a breach will not constitute a Trigger Event if a Replacement Key Contractual Counterparty has been found to assume the obligation of such Key Contractual Counterparty under the relevant Transaction Documents within 20 Business Days of the date of occurrence of such event, and such Replacement Key Contractual Counterparty enters into such agreement within 30 Business Days of the date of occurrence of such event.

(ii)

Any Material Contract is not renewed, replaced or substituted with a counterparty and on terms substantially similar to the Material Contract being replaced or substituted for within 30 Business Days of the termination or expiry of any such Material Contract where the renewal of such Material Contract was contemplated in the Development Plan.

(j)

Key Contractual Counterparty: There occurs, in relation to any Key Contractual Counterparty, in any country or territory in which any of them carries on business or to the jurisdiction of whose courts any part of their assets is subject, any event which in that country or territory corresponds with, or has an effect equivalent or similar to any of those events referred to in Clause 10.1 (d), Clause 11.1(c), Clause 11.1(d), Clause 11.1(e), 11.1(f), 11.1(g), 11.1(h), 11.1(i) (Provided that in the case of Clause 10.1(d) or Clause 11.1(e) the relevant amounts referred to therein shall be deemed to be US$1,000,000 (or its equivalent)); and in these circumstances a Replacement Key Contractual Counterparty has not been found to assume the obligation of such Key Contractual Counterparty under the relevant Transaction Documents within 20 Business Days of the date of occurrence of such event, and such Replacement Key Contractual Counterparty has not entered into such agreement within 30 Business Days of the date of occurrence of such event.

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(k)	Security: There occurs (in the opinion of the Agent, acting reasonably) any event or circumstance which adversely affects the Security or the Security Documents.

(l)

Permitted Encumbrance: A beneficiary of a Permitted Encumbrance (other than of the type referred to in paragraph (a) of the definition for Permitted Encumbrance) commences any formal action or exercises any rights in connection with that Permitted Encumbrance against the Borrower, the Mesquite Mine or any of the other assets of the Borrower and, in each case:

(i)

the amount of the Indebtedness secured by that Permitted Encumbrance is greater than US$250,000 (unless the Agent is satisfied that such formal action or exercise of rights is frivolous or vexatious following submission to the Agent of all relevant documentation relating to the same by the Borrower within 5 Business Days of it becoming aware of the same); or

(ii)

the commencement of such formal action or the exercise of such rights could reasonably be expected to have a Material Adverse Effect.

10.2	Exercise of rights

10.2.1

If a Trigger Event occurs and remains unremedied and unwaived, the Agent may if instructed by the Majority Banks, and shall if so instructed by the Majority Banks, by notice to the Borrower and subject to Clause 10.2.2 in the case of a Trigger Event under Clauses 10.1(a), 10.1(d), 10.1(e) or 10.1(g) only:

(a)	enforce its rights to exercise WGI (USA)'s voting rights attached to the shares in the Borrower in accordance with the Pledge Agreement;

(b)	exercise any or all of its rights under Clause 11.3.1;

(c)	charge an additional one per cent on the Interest Margin applicable to the Loan; and/or

(d)	require that all technical information relating to Mining Operations be audited and certified by the Independent Technical Consultant.

10.2.2

The Agent may exercise the rights set out in Clause 10.2.1 if instructed by the Majority Banks if a Trigger Event has occurred under:

(a)

Clause 10.1(a), after a period of 10 Business Days from the earlier of (i) notice of such non performance or non compliance being given by the Agent to the Borrower and (ii) the relevant Security Party becoming aware of such non performance or non compliance;

(b)

Clause 10.1(d), after a period of 10 Business Days from the earlier of (i) notice of such cross default event being given by the Agent to the Borrower and (ii) the Borrower or WGI (USA) becoming aware of such cross default event;

(c)

Clause 10.1(e), after a period of 30 Business Days from the earlier of (i) notice of such action being given by the Agent to the Borrower and (ii) the relevant Security Company becoming aware of such action; or

(d)

Clause 10.1(g), after a period of 10 Business Days from the earlier of (i) notice of such steps or proposals being given by the Agent to the Borrower and (ii) the Borrower becoming aware of such steps or proposals.

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Default

11.1

Default

Each of the following events shall be an Event of Default:

(a)	Non-payment: Any Security Company or WGI does not pay on or within 2 Business Days following the due date any amount payable by it under the Financing Documents at the place at and in the currency and funds in which it is expressed to be payable.

(b)	Unlawfulness or repudiation: It is unlawful for any Security Company or WGI to perform or comply with, or any Security Company repudiates:

(i)	any of its obligations under any Financing Document or any such obligation is not legally binding and enforceable; or

(ii)	any of its material obligations under any Transaction Documents (other than the Financing Documents) or any such obligation is not legally binding and enforceable.

(c)	Cross-default: Any Indebtedness of the Borrower in excess of, in aggregate, US$1,000,000 or its equivalent, or any Indebtedness of WGI (USA) in excess of, in aggregate, US$2,500,000 or its equivalent:

(i)	is not paid on its due date for payment (taking into account any relevant grace period);

(ii)	is declared to be or otherwise becomes due and payable prior to its specified maturity, or

(iii)

any creditor of any of the same becomes entitled to declare any such Indebtedness due and payable prior to its specified maturity.

(d)

Enforcement of security: A beneficiary of an Encumbrance (other than a Permitted Encumbrance) over any of the assets of any Security Company commences any formal action or exercises any rights in connection with that Encumbrance against that Security Company, the Mesquite Mine or any of the other assets of that Security Company (unless the Agent is satisfied that such formal action or exercise of rights is frivolous or vexatious following submission to the Agent of all relevant documentation relating to the same by the relevant Security Company within 5 Business Days of it becoming aware of the same).

(e)	Inability to pay debts: Any Security Company:

(i)	suspends payment of its debts or is unable or admits its inability to pay its debts as they fall due; or

(ii)	begins negotiations with its creditors as a whole with a view to the readjustment, rescheduling or forgiveness of all or a substantial part of its Indebtedness which it may otherwise be unable to pay; or

(iii)

proposes or enters into any composition or other arrangement for the benefit of its creditors generally or any class of creditors in respect of Indebtedness which it may otherwise be unable to pay.

(f)

Insolvency proceedings: Any person or entity takes any action or any legal proceedings are started or other steps taken (including the presentation of a petition unless the Agent is satisfied that the same is frivolous or vexatious following submission to the Agent of all relevant documentation relating to the same by the relevant Security Company within 5 Business Days of it becoming aware of the same) for:

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(i)	any Security Company to be adjudicated a bankrupt or found insolvent;

(ii)	the winding up, dissolution or liquidation of any Security Company;

(iii)

the reorganisation, readjustment, arrangement, winding up, dissolution or liquidation of any Security Company other than in connection with a solvent reconstruction, the terms of which in respect of a Security Company have been previously approved in writing by the Agent (acting on the instructions of the Majority Banks); or

(iv)	the appointment of a trustee, receiver, administrator, administrative receiver, trustee in bankruptcy, examiner or similar officer in respect of any Security Company, liquidator or any of their respective assets.

(g)	Adjudication or appointment: Any adjudication, order or appointment is made under or in relation to any of the proceedings referred to in Clause 11.1(f).

(h)

Analogous proceedings: Any event occurs or proceeding is taken with respect to any Security Company as applicable in any jurisdiction to which it is subject which has an effect equivalent or similar to any of the events mentioned in Clause 10.1(e), 11.1(e), 11.1(f) or 11.1(g) taking into account any qualifications thereto or grace periods.

(i)	Cessation of business: Any Security Company suspends, ceases or threatens to suspend or cease to carry on all or a substantial part of its business.

(j)	Change of control: At any time:

(i)	WGI or WGI (USA) transfers any direct or indirect interest in the shares of the Borrower (other than as permitted pursuant to Clause 8.2); or

(ii)	the ultimate parent company of the Borrower ceases to have its ordinary shares listed on a recognised investment exchange.

(k)	Material adverse change: Any event or series of events occur which could reasonably be expected to have a Material Adverse Effect.

(l)	Trigger Event: A Trigger Event (other than a Trigger Event under Clause 10.1(b) relating to WGI as a result of any breach of its obligations under clause 7 of the Amendment and Restatement Agreement) is occurring on the date falling four Months after the occurrence of the same.

(m)

Three-Month Average Operating Margin: in the period commencing on 30 September 2009 and ending on 31 December 2009 and thereafter in any consecutive three Month period, the operating margin (being the weighted average revenue per ounce of production sold during such period less Capital Expenditure and Operating Costs per ounce of production sold during such period) is less than US$ 100 per ounce of gold.

(n)

Six-Month Average Operating Margin: in the period commencing on 30 September 2009 and ending on 31 December 2009 and thereafter in any six Month period ending on a Repayment Date, the operating margin (being the weighted average revenue per ounce of production sold during such period less Capital Expenditure and Operating Costs per ounce of production sold during such period) is less than US$100 per ounce of gold.

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11.2	Acceleration

11.2.1

If an Event of Default occurs and remains unremedied and unwaived, the Agent may, acting upon the instructions of the Majority Banks, and shall if so instructed by the Majority Banks, by notice to the Borrower:

(a)	cancel the Facility (to the extent there are outstandings under such Facility);

(b)	declare the Facility (to the extent there are outstandings under such Facility) due and payable; and

(c)	require the Borrower immediately to repay all or any of the Loan together with accrued interest and all other sums payable under each such Facility.

11.2.2

Upon the service of any such notice the Banks' obligations under this Agreement shall be terminated.

11.3	Facility Accounts

11.3.1

The Agent shall, if so instructed by the Majority Banks, at any time and without the consent of the Borrower (a) whilst an Event of Default or Trigger Event is continuing and for the purpose of curing such Event of Default or Trigger Event (b) following service of a notice by the Agent under Clause 11.2.1:

(a)	give notice to the Account Bank that it is to be the sole signatory on any or all of the Facility Accounts; and/or

(b)	give notice to the Account Bank that no withdrawal may be made from any or all of the Facility Accounts except with the prior consent of the Agent; and/or

(c)	apply all amounts in the Facility Accounts in or towards payment of Financing Principal, Financing Costs, Hedging Expenses and such other amounts as the Majority Banks may agree; and

(d)	appropriate the amounts to be applied under Clause 11.3.1(c) against the obligations against which they are to be applied in such order as the Agent thinks fit (but subject, as between the Financing Parties and without conferring any rights on the Borrower, to Clause 9.1).

11.3.2

No amount shall be payable to the Borrower, or may be withdrawn by the Borrower, from or in respect of any Facility Account at any time after the Agent gives a notice of the kind described in Clause 11.3.1.

12	Fees and expenses

12.1	Transaction expenses

12.1.1

The Borrower shall promptly on demand pay the Arrangers, the Agent, the Security Trustee and the Account Bank:

(a)	the amount of all costs and expenses (including legal fees and the fees of the Banks' Advisers) reasonably incurred by any of them in connection with the negotiation, preparation, printing and execution of the Financing Documents (including the ITC Report);

(b)

the amount of all costs and expenses in making any site visits and in meeting the fees and expenses of the Independent Technical Consultants in respect of the ITC reports and site visits or otherwise or any legal, insurance or other consultants' fees to the extent that the same are reasonably and properly incurred; and

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(c)	the cost and expenses incurred by them in respect of the services of the Banks' Advisers to be performed after 30 March 2007.

12.1.2

The Borrower shall be provided with reasonably detailed accounts and invoices for such costs and expenses as described in Clause 12.1.1.

12.2	Amendment costs

If a Security Company requests an amendment, waiver or consent the Borrower shall, within three Business Days of demand, reimburse the Agent for the amount of all costs and expenses (including legal fees) reasonably incurred by the Agent in responding to, evaluating, negotiating or complying with that request or requirement.

12.3	Enforcement costs

The Borrower shall, within 10 Business Days of demand, pay to each Financing Party the amount of all costs and expenses (including legal fees) incurred by that Financing Party in connection with the enforcement of, or the preservation of any rights under, any Financing Document.

12.4	Agency fee

The Borrower shall pay to the Agent (for its own account) an agency fee in the amount and at the times agreed in the Agency Fees Letter.

12.5	Stamp taxes

The Borrower shall pay and, within three Business Days of demand, indemnify each Financing Party against any cost, loss or liability that Financing Party incurs in relation to all stamp duty, registration and other similar Taxes payable in respect of any Financing Document.

12.6

VAT

12.6.1

All amounts set out, or expressed to be payable under a Financing Document by any Party to a Financing Party which (in whole or in part) constitute the consideration for VAT purposes shall be deemed to be exclusive of any VAT which is chargeable on such supply, and accordingly, subject to paragraph 12.6.2 below, if VAT is chargeable on any supply made by any Financing Party to any Party under a Financing Document, that Party shall pay to the Financing Party (in addition to and at the same time as paying the consideration) an amount equal to the amount of the VAT (and such Financing Party shall promptly provide an appropriate VAT invoice to such Party).

12.6.2

If VAT is chargeable on any supply made by any Financing Party (the "Supplier") to any other Financing Party (the "Recipient") under a Financing Document, and any Party (the "Relevant Party") is required by the terms of any Financing Document to pay an amount equal to the consideration for such supply to the Supplier (rather than being required to reimburse the Recipient in respect of that consideration), such Party shall also pay to the Supplier (in addition to and at the same time as paying such amount) an amount equal to the amount of such VAT. The Recipient will promptly pay to the Relevant Party an amount equal to any credit or repayment from the relevant tax authority which it reasonably determines relates to the VAT chargeable on that supply.

12.6.3

Where a Financing Document requires any Party to reimburse a Financing Party for any costs or expenses, that Party shall also at the same time pay and indemnify the Financing Party against all VAT incurred by the Financing Party in respect of the costs or expenses to the extent that the Financing Party reasonably determines that neither it nor any other member of the group of which it is a member for VAT purposes is entitled to credit or repayment from the relevant tax authority in respect of the VAT.

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12.7	Indemnity payments

Where in any Financing Document the Borrower has an obligation to indemnify or reimburse any Financing Party in respect of any loss or payment, the calculation of the amount payable by way of indemnity or reimbursement shall take account of the likely Tax treatment in the hands of that Financing Party (as conclusively determined by that Financing Party acting in good faith and in the absence of any manifest error) of the amount payable by way of indemnity or reimbursement and of the loss or payment in respect of which that amount is payable.

13	Amendments and waivers

13.1	Required consents

13.1.1

Subject to Clause 13.2 any term of the Financing Documents may be amended or waived only with the consent of the Majority Banks and the Security Companies and any such amendment or waiver will be binding on all Parties.

13.1.2

The Agent may effect, on behalf of any Financing Party, any amendment or waiver permitted by this Clause.

13.2	Exceptions

13.2.1

An amendment or waiver that has the effect of changing or which relates to:

(a)	the definition of Majority Banks in Clause 1.1;

(b)	an extension to the date of payment of any amount under the Financing Documents;

(c)	a reduction in the Interest Margin or a reduction in the amount of any payment of principal, interest, fees or commission payable;

(d)	a change to the Security Companies;

(e)	any provision which expressly requires the consent of all the Banks;

(f)	Clauses 2.2, 19 or this Clause 13;

(g)	a change in the currency of any payment under any Financing Document;

(h)	any change to Clauses 3, 4, or 15; or

(i)	a release or partial release of any Encumbrance created, evidenced or granted under the Financing Documents,

shall not be made without the prior consent of all the Banks and in the case of (a), (d), (h) and (i) all the Banks and the Hedging Banks.

13.2.2

An amendment or waiver which relates to the rights or obligations of the Agent, the Security Trustee or the Arrangers may not be effected without the consent of the Agent, the Security Trustee or the Arrangers.

13.3

Consents

Any consent or approval by the Agent, Security Trustee, any Bank or Hedging Bank, the Majority Banks, the Account Bank or the Borrower under any provision of the Financing Documents must be in writing. Any waiver or consent may be given subject to any conditions thought fit by the person or entity giving it and will be effective only in the instance and for the purpose for which it is given.

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13.4	Majority Banks procedure

13.4.1

Where any consent, approval, determination, waiver or other decision is required to be given, made or taken by the Majority Banks under this Agreement, the Agent shall by notice to the Banks specify the period of time (not being less than 5 Business Days (except in the case of an emergency) nor more than 15 Business Days) within which replies are required and whether the procedure in Clause 13.4.2 shall apply.

13.4.2

Each Bank or Hedging Bank shall be entitled to one vote per US Dollar (in the case of a Bank) of its relative Participation or (in the case of a Hedging Bank) its Hedging Liabilities (in accordance with the definition of Majority Banks herein) provided that each Bank or Hedging Bank shall be entitled to exercise its votes in its absolute discretion and need not exercise its votes consistently.

13.4.3

Unless as otherwise provided for in any Financing Document, if any Bank or Hedging Bank does not vote within the period specified by the Agent, the amount of its Participation or the Hedging Liability outstanding to it (as the case may require) shall, if the Agent has in the notice specified that this Clause 13.4.3 shall apply, be disregarded in the denominator for the purpose of determining whether or not the requisite percentage vote has been achieved.

13.5	Remedies and waivers

No failure to exercise, nor any delay in exercising, on the part of any Financing Party, any right or remedy under the Financing Documents shall operate as a waiver, nor shall any single or partial exercise of any right or remedy prevent any further or other exercise or the exercise of any other right or remedy. The rights and remedies provided in this Agreement are cumulative and not exclusive of any rights or remedies provided by Law.

Set-off

Subject to the provisions of the Intercreditor Agreement, a Financing Party may set off any matured obligation due from the Borrower under the Financing Documents (to the extent beneficially owned by that Financing Party) against any matured obligation owed by that Financing Party to the Borrower, regardless of the place of payment, booking branch or currency of either obligation. If the obligations are in different currencies, the Financing Party may convert either obligation at a market rate of exchange in its usual course of business for the purpose of the set-off.

15	Pro rata sharing

15.1	Payments to Financing Parties

If a Financing Party (a Recovering Financing Party) receives or recovers any amount from the Borrower or any other person or entity other than in accordance with Clause 6 and applies that amount to a payment due under the Financing Documents then:

(a)	the Recovering Financing Party shall, within three Business Days, notify details of the receipt or recovery to the Agent;

(b)

the Agent shall determine whether the receipt or recovery is in excess of the amount the Recovering Financing Party would have been paid had the receipt or recovery been received or made by the Agent and distributed in accordance with Clause 6, without taking account of any Tax which would be imposed on the Agent in relation to the receipt, recovery or distribution; and

(c)

the Recovering Financing Party shall, within three Business Days of demand by the Agent, pay to the Agent an amount (the Sharing Payment) equal to such receipt or recovery less any amount which the Agent determines may be retained by the Recovering Financing Party as its share of any payment to be made, in accordance with Clause 6.

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15.2	Redistribution of payments

The Agent shall treat the Sharing Payment as if it had been paid by the Borrower and distribute it between the Financing Parties (other than the Recovering Finance Party) in accordance with Clause 6.1.

15.3	Recovering Financing Party's rights

15.3.1

On a distribution by the Agent under Clause 15.2, the Recovering Financing Party will be subrogated to the rights of the Financing Parties which have shared in the redistribution.

15.3.2

If and to the extent that the Recovering Financing Party is not able to rely on its rights under Clause 15.3.1, the Borrower shall be liable to the Recovering Financing Party for a debt equal to the Sharing Payment which is immediately due and payable.

15.4	Reversal of redistribution

If any part of the Sharing Payment received or recovered by a Recovering Finance Party becomes repayable and is repaid by that Recovering Finance Party, then:

(a)

each Financing Party which has received a share of the relevant Sharing Payment pursuant to Clause 15.2 shall, upon request of the Agent, pay to the Agent for account of that Recovering Financing Party an amount equal to the appropriate part of its share of the Sharing Payment (together with an amount as is necessary to reimburse that Recovering Financing Party for its proportion of any interest on the Sharing Payment which that Recovering Financing Party is required to pay); and

(b)	that Recovering Financing Party's rights of subrogation in respect of any reimbursement shall be cancelled and the Borrower will be liable to the reimbursing Financing Party for the amount so reimbursed.

15.5	Exceptions

15.5.1

This Clause 15 shall not apply to the extent that the Recovering Financing Party would not, after making any payment pursuant to this Clause, have a valid and enforceable claim against the Borrower.

15.5.2

A Recovering Financing Party is not obliged to share with any other Financing Party any amount which the Recovering Financing Party has received or recovered as a result of taking legal or arbitration proceedings, if:

(a)	it notified that other Financing Party of the legal or arbitration proceedings; and

(b)	that other Financing Party had an opportunity to participate in those legal or arbitration proceedings but did not do so as soon as reasonably practicable having received notice and did not take separate legal or arbitration proceedings.

15.5.3

no Hedging Bank shall be obliged to share any amount set off pursuant to any provision of any Hedging Document provided that this Clause 15.5.3 shall not apply to any such amount set off pursuant to section 6(f) of a document which is a Hedging Document within sub-paragraph (a) of the definition thereof.

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The Agent

16.1	Appointment of Agent

Each Bank and Hedging Bank hereby appoints the Agent to act as its agent in connection with each of the Financing Documents and authorises the Agent to exercise such rights, powers, authorities and discretions as are specifically delegated to the Agent by the Financing Documents together with all such rights, powers, authorities and discretions as are reasonably incidental thereto.

16.2	Agent's rights

The Agent may:

(a)	assume that:

(i)	any representation made by any Project Party in connection with any Transaction Document is true;

(ii)	no Default has occurred;

(iii)

no Project Party is in breach of or default under its obligations under any Transaction Document; and

(iv)	any right, power, authority or discretion vested herein upon the Majority Banks, the Banks or any other person or entity or group of persons or entities has not been exercised,

unless it has, in its capacity as Agent, received notice to the contrary from any other party to a Transaction Document;

(b)

assume that the Facility Office of each Bank and Hedging Bank is that identified in Schedule 1, the relevant Transfer Certificate or other such document that evidences the transfer of a Bank or Hedging Bank's rights and interests until it has received from such Bank or Hedging Bank a notice designating some other office to replace its Facility Office and act upon any such notice until the same is superseded by a further such notice;

(c)	engage and pay for the advice or services of any lawyers, accountants, surveyors or other professional or technical experts whose advice or services may to it seem necessary, expedient or desirable and rely upon any advice so obtained;

(d)

appoint any agent or delegate to any person or entity reasonably determined by the Agent to be suitable qualified and experienced all or any of the rights, powers and authorisations vested in it by the Financing Documents and the Agent shall not be bound to supervise or be in any way liable for any loss incurred by any such person or entity by reason of any misconduct or default on the part of any such agent or delegate;

(e)	rely as to any matters of fact which might reasonably be expected to be within the knowledge of a Project Party upon a certificate signed by or on behalf of that Project Party;

(f)	rely upon any communication or document believed by it to be genuine;

(g)

refrain from exercising any right, power or discretion vested in it as Agent under this Agreement unless and until instructed by the Majority Banks as to whether or not such right, power or discretion is to be exercised and, if it is to be exercised, as to the manner in which it should be exercised; and

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(h)

refrain from acting in accordance with any instructions of the Majority Banks to begin any legal action or proceeding arising out of or in connection with this Agreement until it shall have received such security as it may require (whether by way of payment in advance or otherwise) for all costs, claims, losses, expenses (including, without limitation, legal fees) and liabilities together with any VAT or any other similar tax thereon which it may incur in complying with those instructions.

16.3	Agent's obligations

The Agent shall:

(a)	promptly inform each Bank and Hedging Bank of the contents of any notice or document received by it in its capacity as Agent from the Borrower under any Financing Document;

(b)	promptly notify each Bank and Hedging Bank of the occurrence of any Default or any default by the Borrower in the due performance of or compliance with its obligations under any Financing Document of which the Agent has notice from any other Party;

(c)	except as otherwise provided in this Agreement, act as agent under the Financing Documents in accordance with any instructions given to it by the Majority Banks, which instructions shall be binding on all the Banks and Hedging Banks; and

(d)	if so instructed by the Majority Banks, refrain from exercising any right, power or discretion vested in it as Agent under any Financing Document.

16.4	Agent's protections

Notwithstanding anything to the contrary in this Agreement, the Agent shall not:

(a)	be bound to enquire as to:

(i)	whether or not any representation made by any Project Party in connection with any Transaction Document is true;

(ii)	the occurrence or otherwise of any Default;

(iii)

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

(iv)	any breach of or default by any Project Party of its obligations under any Transaction Document;

(b)	be bound to account to any Bank or Hedging Bank for any sum or the profit element of any sum received by it for its own account;

(c)	be bound to disclose to any other person or entity any information relating to any Project Party if such disclosure would or might in its opinion constitute a breach of any Law or regulation or be otherwise actionable at the suit of any person or entity;

(d)	be liable to any Bank or Hedging Bank or any other party in respect of any waiver or confirmation or agreement given under this Agreement at the request of the Borrower and in accordance with the instructions of the Majority Banks; or

(e)	be under any obligations other than those for which express provision is made in this Agreement.

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16.5

Indemnity

Each Bank and Hedging Bank shall indemnify the Agent on demand (to the extent not reimbursed by the Borrower) rateably according to that Bank's Participation in the Facility (or, if no Advance shall then be outstanding, its Participation in respect of the Facility) or that Hedging Bank's Hedging Liabilities from and against all liabilities, losses and expenses of any kind or nature whatsoever (except in respect of any fee due to the Agent) which may be incurred by the Agent in relation to the Financing Documents or any action taken or omitted in enforcing or preserving the rights of the Banks and Hedging Banks under the Financing Documents, provided that no Bank or Hedging Bank shall be liable for any such liabilities, losses or expenses resulting from the gross negligence or wilful misconduct of the Agent.

16.6	Responsibility

No Financing Party or Hedging Bank accepts any responsibility for the accuracy or completeness of any information supplied by the Borrower in connection with the Project or for the legality, validity, effectiveness, adequacy or enforceability of any Transaction Document and the Agent shall not be under any liability as a result of taking or omitting to take any action in relation to any Transaction Document, except in the case of gross negligence or wilful misconduct.

16.7	Agent's directors, officers and employees

Each Bank and Hedging Bank agrees that it will not assert or seek to assert against any director, officer or employee of the Agent from time to time any claim it might have against any of them in respect of the matters referred to in Clause 16.6.

16.8	Agent's business

The Agent may accept deposits from, lend money to and generally engage in any kind of banking or other business with any Project Party.

16.9	Resignation and removal of Agent

16.9.1

The Agent may resign or transfer to a related company within the same group its appointment under this Agreement at any time without assigning any reason therefor by giving not less than 30 days' prior written notice to that effect to each of the other Parties, and the Majority Banks may remove the Agent from its appointment under this Agreement without assigning any reason therefor by giving not less than 30 days' prior notice to that effect to the Agent and each of the other Parties, provided that no such resignation, transfer or removal shall be effective until:

(a)

a successor Agent has accepted its appointment as such for the purposes of the Financing Documents in accordance with Clause 16.10 and has agreed to be bound by and comply with the obligations and to enjoy the rights of the retiring Agent thereunder as if the successor Agent had been a party thereto in place of the retiring Agent; and

(b)	without prejudice to paragraph (a), the successor Agent has executed and delivered all deeds and documents required under the terms of any Financing Document in relation to its appointment,

whereupon:

(i)

the retiring Agent shall cease to be a party to the Financing Documents in its capacity as such and shall have no further rights and be discharged from any further obligation thereunder (but without prejudice to any liabilities accrued thereunder but unperformed by the retiring Agent) but shall remain entitled to the benefit of this Clause 16; and

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(ii)	the successor Agent and each other party to the Financing Documents shall have the same rights and obligations amongst themselves as they would have had if the successor Agent had been a party thereto in place of the retiring Agent,

and the Borrower shall execute and deliver all deeds and documents and do all acts and things as the retiring Agent or the successor Agent may reasonably require in relation to the appointment of the successor Agent. The retiring Agent shall make available to the successor Agent all records and documents held by it as Agent, and shall co-operate with the successor Agent in order to ensure an orderly transition.

16.9.2

In the event that the successor Agent is not a Bank or an Affiliate of a Bank, the Banks shall, other than where an Event of Default has occurred and is continuing, obtain the consent of the Borrower (not to be unreasonably delayed or withheld) prior to the appointment of a successor Agent.

16.9.3

The successor Agent shall promptly notify the other Parties of its appointment.

16.9.4

Subject to the express provisions of this Agreement to the contrary, each party shall bear its own costs or expenses incurred in connection with the resignation or removal of the Agent.

16.10

Successor Agent

If the Agent gives notice of its resignation or if the Majority Banks give the Agent notice of removal pursuant to Clause 16.9, then the Majority Banks may, with the consent of the Borrower (not to be unreasonably delayed or withheld) and other than where an Event of Default has occurred and is continuing, appoint as a successor to the Agent (after consultation with the Borrower) any reputable and experienced bank or other financial institution but, if no such successor is so appointed before the fifth Business Day prior to the expiry of the period of such notice, the Agent may, with the consent of the Borrower (not to be unreasonably delayed or withheld) and other than where an Event of Default has occurred and is continuing, appoint such a successor itself.

16.11

Credit decisions

Each Bank and Hedging Bank agrees that it has itself been, and will continue to be, solely responsible for making its own independent appraisal of and investigations into the financial condition, creditworthiness, condition, affairs, status and nature of each Project Party and of the Project and, accordingly, each Bank and Hedging Bank represents and warrants to each Financing Party, the Agent and to the Arrangers that it has not relied on and will not hereafter rely on it:

(a)

to check or enquire on its behalf into the adequacy, accuracy or completeness of any information provided by any Project Party or any other person or entity in connection with any Transaction Document or the transactions contemplated in the Transaction Documents (whether or not such information has been or is after 30 March 2007 circulated to such Bank by the Agent); or

(b)	to assess or keep under review on its behalf the financial condition, creditworthiness, condition, affairs, status or nature of any Project Party or of the Project.

16.12

Agent's agency division

Each division or department of the Agent (including, for so long as Investec Bank plc is the Agent, the Commodities and Resource Financing Department) of Investec Bank plc shall be treated as a separate entity from any other division or department of the Agent. If any of the Agent's divisions or departments should act for any Project Party in any capacity (whether as bankers or otherwise) in relation to any other matter, any information given by that Project Party to any such division or department may be treated as confidential and the Agent shall, as between itself and the Banks and the Hedging Banks, not be obliged to disclose the same to any Bank or Hedging Bank or any other person or entity.

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16.13

Banks' Advisers

The Agent shall take such steps as are reasonable and appropriate in the circumstances to procure so far as it is able so to do that the Banks' Advisers punctually perform such functions as are expressed to be performed by them as contemplated in this Agreement or in the terms of their appointment, provided that the Agent shall not be held responsible for any failure by a Banks' Adviser to perform any such function. If a Banks' Adviser shall cease to be such, whether by reason of removal, replacement, resignation or otherwise, the Agent shall appoint another Banks' Adviser as soon as reasonably practicable in order to ensure that those functions to be performed by the Banks' Adviser, as contemplated by this Agreement or in the terms of the appointment of the Banks' Adviser, are performed punctually.

16.14

Arrangers

Other than as specifically provided in the Financing Documents, the Arrangers shall have no obligations or responsibilities under, or in respect of, the Transaction Documents or the Project.

16.15

Information and fees

16.15.1

The Agent shall provide the Banks and Hedging Banks with all information and copies of all notices which are given to it and which by the terms of this Agreement are to be provided or given to the Banks and Hedging Banks. The Agent may retain for its own use and benefit (and shall not be liable to account to any Bank for all or any part of) any sums received by it by way of agency or management or arrangement fees or by way of reimbursement of expenses incurred by it.

16.15.2

Each Bank and Hedging Bank confirms in favour of the Agent that, unless it notifies the Agent to the contrary, it will be the beneficial owner of any interest paid to it under this Agreement and it will be within the charge to United Kingdom corporation tax as respects that interest.

16.16

Change of office

The Agent may at any time in its sole discretion by notice to the Borrower and each Bank and Hedging Bank designate a different office from which its duties under this Agreement will be performed.

16.17

Execution of Financing Documents

Each Bank and Hedging Bank irrevocably authorises the Agent to sign or execute and deliver, as the case may be, the following Financing Documents:

(a)	the Intercreditor Agreement; and

(b)	the Security Documents (except where entered into by the Security Trustee on behalf of the Secured Parties),

on its behalf.

17	Miscellaneous

17.1	Partial invalidity

If, at any time, any provision of the Financing Documents is or becomes illegal, invalid or unenforceable in any respect under any Law of any jurisdiction, neither the legality, validity or enforceability of the remaining provisions nor the legality, validity or enforceability of such provision under the Law of any other jurisdiction will in any way be affected or impaired.

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17.2	Counterparts

Each Financing Document may be executed in any number of counterparts, and this has the same effect as if the signatures on the counterparts were on a single copy of the Financing Document.

Notices

18.1	Communications in writing

Any communication to be made under or in connection with the Financing Documents shall be made in writing and, unless otherwise stated, may be made by fax or letter.

18.2

Delivery

18.2.1

Any communication or document made or delivered by one person or entity to another under or in connection with the Financing Documents will only be effective:

(a)	if by way of fax, when received in legible form; or

(b)	if by way of letter, when it has been left at the relevant address or five Business Days after being deposited in the post postage prepaid in an envelope addressed to it at that address;

and, if a particular department or officer is specified as part of its address details provided under Clause 18.3, if addressed to that department or officer.

18.2.2

Any communication or document to be made or delivered to the Agent will be effective only when actually received by the Agent and then only if it is expressly marked for the attention of the department or officer identified with the Agent's signature below (or any substitute department or officer as the Agent shall specify for this purpose).

18.2.3

All notices from or to the Borrower shall be sent through the Agent.

18.2.4

Any communication or document made or delivered to the Borrower in accordance with this Clause will be deemed to have been made or delivered to each of the Security Companies.

18.3

Addresses

18.3.1

The address and fax number (and the department or officer, if any, for whose attention the communication is to be made) of each Party for any communication or document to be made or delivered under or in connection with the Financing Documents is as identified below or any substitute address or fax number or department or officer as the Party may notify to the Agent (or the Agent may notify to the other Parties, if a change is made by the Agent) by not less than five Business Days' notice:

	(a)	the Borrower:

		Royal Bank Plaza, South Tower
		200 Bay Street, Suite 3210
		Toronto, Ontario
		Canada
		M5J 2J4

		Attention: Treasurer
		Fax: (416) 324-9494

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		With a copy to:

		Western Goldfields Inc.
		Park Place, 3110-666 Burrard Street
		Vancouver, British Columbia
		Canada
		V6C 2X8

		Attention: Corporate Secretary
		Fax: (604) 696-4110

	(b)	WGI (USA)

		Royal Bank Plaza, South Tower
		200 Bay Street, Suite 3210
		Toronto, Ontario
		Canada
		M5J 2J4

		Attention: Chief Financial Officer
		Fax: (416) 324-9494

	(c)	the Agent:

		2 Gresham Street
		London
		EC2V 7QP
		United Kingdom

		Attention: Loans Administration
		Fax: +44 20 7597 4913

		With copies of legal notices to:

		Attention: Documentation and Counterparty Management
		Fax: +44 20 7597 4975

	(d)	the Security Trustee:

		2 Gresham Street
		London
		EC2V 7QP
		United Kingdom

		Attention: Loans Administration
		Fax: +44 20 7597 4913

		With copies of legal notices to:

		Attention: Documentation and Counterparty Management
		Fax: +44 20 7597 4975

18.4	Notification of address and fax number

Promptly upon receipt of notification of an address or fax number or change of address or fax number pursuant to Clause 18.3 or changing its own address or fax number, the Agent shall notify the other Parties.

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18.5	Electronic communication

18.5.1

Any communication to be made between the Agent and a Bank under or in connection with the Financing Documents may be made by electronic mail or other electronic means, if the Agent and the relevant Bank:

(a)	agree that, unless and until notified to the contrary, this is to be an accepted form of communication;

(b)	notify each other in writing of their electronic mail address and/or any other information required to enable the sending and receipt of information by that means; and

(c)	notify each other of any change to their address or any other such information supplied by them.

18.5.2

Any electronic communication made between the Agent and a Bank will be effective only when actually received in readable form and in the case of any electronic communication made by a Bank to the Agent only if it is addressed in such a manner as the Agent shall specify for this purpose.

19	Assignments and transfers

19.1	Assignments and transfers by the Borrower

The Borrower may not assign any of its rights or transfer any of its rights or obligations under the Financing Documents.

19.2	Assignments and transfers by Banks

19.2.1

Subject to this Clause 19, a Bank (the Existing Bank) may transfer by novation any of its rights and obligations under the Financing Documents listed in Schedule 5 to a Qualifying Bank, an Affiliate or another Bank (the New Bank) provided that if an Event of Default has occurred and is continuing the Existing Bank may transfer to any bank or financial institution, or a trust, fund or other entity which is regularly engaged in or established for the purpose of making, purchasing or investing in loans, securities or other financial assets.

19.2.2

A transfer will only be effective if the procedure set out in Clause 19.4 is complied with.

19.2.3

If:

(a)	a Bank transfers any of its rights or obligations under the Finance Documents in accordance with Clause 19.2.1 or changes its Facility Office; and

(b)	as a result of circumstances existing at the date transfer or change occurs, the Borrower would be obliged to make a payment or an increased payment to the New Bank or Bank acting through its new Facility Office under Clause 6, or Clause 5.2,

then the New Bank or Bank acting through its new Facility Office is only entitled to receive payment under those Clauses to the same extent as the Existing Lender or Lender acting through its previous Facility Office would have been if the transfer or change had not occurred.

19.2.4

The New Bank shall, on the date upon which a transfer takes effect, pay to the Agent (for its own account) a fee of $1,000.

19.3	Limitation of responsibility of Existing Banks

19.3.1

Unless expressly agreed to the contrary, an Existing Bank makes no representation or warranty and assumes no responsibility to a New Bank for:

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(a)	the legality, validity, effectiveness, adequacy or enforceability of the Financing Documents or any other documents;

(b)	the financial condition of the Borrower;

(c)	the performance and observance by the Borrower of its obligations under the Financing Documents or any other documents; or

(d)	the accuracy of any statements (whether written or oral) made in or in connection with any Financing Document or any other document,

and any representations or warranties implied by Law are excluded.

19.3.2

Each New Bank confirms to the Existing Bank and the other Financing Parties that it:

(a)

has made (and shall continue to make) its own independent investigation and assessment of the financial condition and affairs of the Borrower and its related entities in connection with its participation in this Agreement and has not relied exclusively on any information provided to it by the Existing Bank in connection with any Financing Document; and

(b)	will continue to make its own independent appraisal of the creditworthiness of each Borrower and its related entities whilst any amount is or may be outstanding under the Financing Documents.

19.3.3

Nothing in any Financing Document obliges an Existing Bank to:

(a)	accept a re-transfer from a New Bank of any of the rights and obligations assigned or transferred under this Clause 19; or

(b)	support any losses directly or indirectly incurred by the New Bank by reason of the non-performance by the Borrower of its obligations under the Financing Documents or otherwise.

19.4	Procedure for transfer

19.4.1

Subject to the conditions set out in Clauses 19.1 and 19.2 a transfer is effected in accordance with sub-clause 19.4.3 below when the Agent executes an otherwise duly completed Transfer Certificate delivered to it by the Existing Bank and the New Bank. The Agent shall, subject to paragraph (b) below, as soon as reasonably practicable after receipt by it of a duly completed Transfer Certificate appearing on its face to comply with the terms of this Agreement and delivered in accordance with the terms of this Agreement, execute that Transfer Certificate.

19.4.2

The Agent shall only be obliged to execute a Transfer Certificate delivered to it by the Existing Bank and the New Bank once it is satisfied it has complied with all necessary "know your customer" or other similar checks under all applicable Laws and regulations in relation to the transfer to such New Bank.

19.4.3

On the Transfer Date:

(a)

to the extent that in the Transfer Certificate the Existing Bank seeks to transfer by novation its rights and obligations under the Financing Documents the Borrower and the Existing Bank shall be released from further obligations towards one another under the Financing Documents and their respective rights against one another under the Financing Documents shall be cancelled (being the Discharged Rights and Obligations);

(b)

the Borrower and the New Bank shall assume obligations towards one another and/or acquire rights against one another which differ from the Discharged Rights and Obligations only insofar as the Borrower and the New Bank have assumed and/or acquired the same in place of the Borrower and the Existing Bank;

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(c)

the Agent, the Arrangers, the New Bank and other Banks shall acquire the same rights and assume the same obligations between themselves as they would have acquired and assumed had the New Bank been an original Bank with the rights and/or obligations acquired or assumed by it as a result of the transfer and to that extent the Agent, the Arrangers and the Existing Bank shall each be released from further obligations to each other under the Financing Documents; and

the New Bank shall become a Party as a "Bank".

19.5	Copy of Transfer Certificate to Borrower

The Agent shall, as soon as reasonably practicable after it has executed a Transfer Certificate, send to the Borrower a copy of that Transfer Certificate.

19.6	Assignments and transfers by Hedging Banks

19.6.1

Each Hedging Bank may transfer at its own cost any of its rights and obligations under any Financing Document and hereby undertakes to each Financing Party that it will not assign, novate, transfer or dispose of any of its rights or obligations under any Financing Document, other than by way of novation, transfer or disposal to a Bank of all or part of its rights and obligations under the Hedging Document to which it is a party where such Bank is a Hedging Bank or agrees to execute the necessary documentation to become a party to this Agreement as a Hedging Bank.

19.6.2

Each Party agrees that upon the execution of a transfer pursuant to Clause 19.6.1, the transferee Bank and each of the other Parties shall have the same rights and obligations amongst themselves as if that transferee Bank had been an original Party to this Agreement as a Hedging Bank. Each Party hereby irrevocably authorises the Agent to execute and deliver the required documentation on its behalf.

19.7	Disclosure of information

Any Bank or Hedging Bank may disclose to any of its Affiliates and any other person or entity:

(a)	to (or through) whom that Bank assigns or transfers (or may potentially assign or transfer) all or any of its rights and obligations under this Agreement;

(b)	with (or through) whom that Bank enters into (or may potentially enter into) any sub-participation in relation to, or any other transaction under which payments are to be made by reference to, this Agreement or the Borrower; or

(c)	to whom, and to the extent that, information is required to be disclosed by any applicable Law or regulation,

any information about the Borrower and the Financing Documents as that Bank shall consider appropriate.

20	Indemnities

20.1	Indemnities

The Borrower shall, within three Business Days of demand, indemnify each Financing Party against any cost, loss or liability incurred by that Financing Party as a result of:

(a)	the occurrence of any Event of Default;

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(b)	a failure by a Security Company to pay any amount due under a Financing Document on its due date, including any cost, loss or liability arising as a result of Clause 15; or

(c)	the Loan (or part of the Loan) not being prepaid in accordance with a notice of prepayment given by the Borrower.

20.2	Indemnity to the Agent

The Borrower shall promptly indemnify the Agent against any cost, loss or liability incurred by the Agent (acting reasonably) as a result of:

(a)	investigating any event which it reasonably believes is a Default;

(b)	entering into or performing any foreign exchange contract for the purposes of Clause 16; or

(c)	acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorised.

20.3	Currency indemnity

20.3.1

If any sum due from the Borrower under the Financing Documents (a Sum), or any order, judgment or award given or made in relation to a Sum, has to be converted from the currency (the First Currency) in which that Sum is payable into another currency (the Second Currency) for the purpose of:

(a)	making or filing a claim or proof against the Borrower; or

(b)	obtaining or enforcing an order, judgment or award in relation to any litigation or arbitration proceedings,

the Borrower shall, as an independent obligation, within three Business Days of demand, indemnify each Financing Party to whom that Sum is due against any cost, loss or liability arising out of or as a result of the conversion including any discrepancy between (i) the rate of exchange used to convert that Sum from the First Currency into the Second Currency and (ii) the rate or rates of exchange available to that person or entity at the time of its receipt of that Sum.

20.3.2

The Borrower waives any right it may have in any jurisdiction to pay any amount under the Financing Documents in a currency or currency unit other than that in which it is expressed to be payable.

20.4	Project indemnities

The Borrower shall, within 10 Business Days of demand, indemnify each Financing Party and each Hedging Bank on demand against any loss or expense sustained or incurred by it as a result of:

(a)	it incurring any liability under or pursuant to any Environmental Law or Environmental Authorisation which would not have been incurred by it if it was not party to the arrangements established under or pursuant to the Financing Documents; or

(b)	any failure on the part of the Borrower to comply with any Environmental Authorisation or Environmental Law; or

(c)	any acts or omissions of any Project Party arising out of or in connection with the obligations to be performed by or on behalf of that Project Party pursuant to the Transaction Documents,

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except, in each case, where any such liability is due to the gross misconduct or wilful negligence of any Financing Party.

21	Confidentiality

21.1	Borrower confidentiality

21.1.1

The Borrower undertakes not to disclose to any third party any of the material financial terms and conditions of this Agreement or any other Financing Document other than:

(a)	to its auditors or professional advisers;

(b)	to its Affiliates and potential Affiliates;

(c)	in any proceedings arising out of or in connection with the Financing Documents or if required by an order of any court of competent jurisdiction or in pursuance of any procedure for disclosure of documents in any proceedings before such court;

(d)	pursuant to any request or requirement of an agency or any state or if required under any applicable Law or directive as if required by any securities exchange on which the securities of any Security Company or any Affiliate of any Security Company are listed;

(e)	to the Insurers in fulfilment of any obligation arising under the Insurances; or

(f)	with the prior consent of the Agent (acting on the instructions of the Majority Banks).

21.1.2

Nothing in this Clause 21.1 shall apply to any information, reports or documents which shall have come into the public domain (otherwise than in consequence of a breach of Clause 21.1). Nor shall Clause 21.1 apply to any information, report or document received in good faith by the Borrower otherwise than from a Financing Party or a person or entity acting on a Financing Party’s behalf.

21.2	Financing Party and Hedging Bank confidentiality

21.2.1

Subject to Clause 21.2.4, each Financing Party and each Hedging Bank shall, at all times during and after the continuance of this Agreement, hold confidential and not disclose to any third party and (except in the context of an accretion to its general experience, knowledge and expertise or with the consent of the Borrower) use only for the purposes of the Project, the Transaction Documents all confidential information, reports or documents relating to the Project received by it pursuant to, or in the course of the negotiations leading to, the Financing Documents (Confidential Information).

21.2.2

A Financing Party and a Hedging Bank shall be permitted to disclose Confidential Information:

(a)	to its auditors or professional advisers;

(b)	to any of the Banks' Advisers (subject to Clause 21.2.4);

(c)	to any actual or potential assignee, novatee or sub-participant (in each case subject to Clause 21.2.4);

(d)	in any proceedings arising out of or in connection with the Transaction Documents or if required by an order by any court of competent jurisdiction or in pursuance of any procedure for disclosure of documents in any proceedings before such court;

(e)	pursuant to any request or requirement of an agency or any state or if required under any applicable Law or directive;

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(f)	to the Insurers in fulfilment of any obligation arising under the Insurances; or

(g)	at any time after any Security created under or pursuant to the Security Documents has become exercisable, in connection with the enforcement of that Security.

21.2.3

Nothing in this Clause 21.2 shall apply to any information, reports or documents which shall have come into the public domain (otherwise than in consequence of a breach of Clause 21.2). Nor shall Clause 21.2 apply to any information, report or document received in good faith by a Financing Party or a Hedging Bank otherwise than from the Borrower or a person or entity acting on the Borrower's behalf.

21.2.4

A disclosure of Confidential Information may only be made under Clause 21.2.2(b) and Clause 21.2.2(c) subject to the relevant Financing Party or Hedging Bank obtaining from the recipient of such Confidential Information an undertaking substantially in the terms of this Clause 21.2.

22	Law and jurisdiction

22.1

Law

This Agreement is governed by English Law.

22.2	Jurisdiction

22.2.1

The courts of England have exclusive jurisdiction to settle any dispute arising out of or in connection with this Agreement (including a dispute regarding the existence, validity or termination of this Agreement) (a Dispute).

22.2.2

The Parties agree that the courts of England are the most appropriate and convenient courts to settle Disputes and accordingly no Party will argue to the contrary.

22.2.3

This Clause 22.2 is for the benefit of the Financing Parties only. As a result, no Financing Party shall be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction. To the extent allowed by law, the Financing Parties may take concurrent proceedings in any number of jurisdictions.

22.3	Service of process

Without prejudice to any other mode of service allowed under any relevant Law, each of the Borrower, and WGI (USA):

(a)	irrevocably appoints Law Debenture Corporate Services of Fifth Floor, 100 Wood Street, London, EC2V 7EX as its agent for service of process in relation to any proceedings before the English courts in connection with any Financing Document; and

(b)	agrees that failure by a process agent to notify the Borrower and WGI (USA) (as applicable) of the process will not invalidate the proceedings concerned.

In witness whereof the Parties have caused this Agreement to be duly executed on the date set out above.

Page 66

Schedule 1 – The Banks

Part A: Term Facility Banks

Bank and Facility Office	Address for Notices	Participation
Investec Bank plc	2 Gresham Street London EC2V 7QP United Kingdom	US$10,904,573.09
Commonwealth Bank of Australia	599 Lexington Avenue 17th Floor New York NY 10022 USA	US$10,904,573.09
The Bank of Nova Scotia	The Bank of Nova Scotia 40 King Street West, Scotia Plaza, 62nd Floor PO Box 4085, Station A Toronto, Ontario M5W 2X6	US$8,723,658.46
Nedbank Limited, London Branch	1st Floor, Old Mutual Place 2 Lambeth Hill London EC4V 4GG United Kingdom	US$8,723,658.46
Natixis	30 avenue Pierre Mendès-France 75013 Paris France	US$6,542,743.84

Part B: Hedging Banks

Bank and Office	Address for Notices
Investec Bank plc	2 Gresham Street London EC2V 7QP United Kingdom
Commonwealth Bank of Australia	599 Lexington Avenue 17th Floor New York NY 10022 USA
The Bank of Nova Scotia	The Bank of Nova Scotia 40 King Street West, Scotia Plaza, 62nd Floor PO Box 4085, Station A Toronto, Ontario M5W 2X6

Page 67

Natixis

30 avenue Pierre Mendès-France

75013

Paris

France

Page 68

Schedule 2 – Mining Claims

Unpatented Mining and Millsite Claims Owned by Western Mesquite Mines, Inc.

The following-described mining and millsite claims located within Section 12, Township 13 South, Range 18 East, and Sections 2-11 and 15, Township 13 South, Range 19 East, SBB&M, Imperial County, California:

Notice of Location and Last Amended Notice of Location Recorded in Official Records of Imperial County, California

			Original			Amended
Name of Claim	BLM Serial No. (CAMC)	Book		Pages	Book		Pages

MESQ 7	94380	1473		177	1590		628-29
MESQ 8	94381	1473		178	1506		572-74
MESQ 9	94382	1473		179	1590		630-31
MESQ 31	108987	1483		1092	1506		578-79
MESQ 42	108998	1483		1094
MESQ 43	108999	1483		1095
MESQ 44	109000	1483		1096
MESQ 46	115872	1491		197	1495		1311-13
MESQ 50	121208	1495		32	1506		607-08
MESQ 51	121209	1495		33	1506		609-10
MESQ 52	121210	1495		34	1506		611-12
MESQ 53	121211	1495		35	1506		613-14
SEA 9	121212	1495		36	1506		629-30
SEA 18	105163	1479		1260	1506		637-38
SEA 19	105164	1479		1261	1506		639-40
SEA 20	105165	1479		1262	1506		641-42
SEA 29	105166	1479		1263	1506		643-44
SEA 30	105167	479		1264	1506		645-46
SEA 31	105168	1479		1265	1506		647-48
SEA 32	105169	1479		1266	1506		649-50
SEA 33	105170	1479		1267	1506		651-52
SEA 34	105171	1479		1268	1506		653-54
SEA 35	105172	1479		1269	1506		655-56
SEA 36	105173	1479		1270	1506		657-58
SEA 37	105174	1479		1271	1506		659-60
SEA 38	105175	1479		1272	1506		661-62
SEA 40	105177	1479		1274	1506		663-64
SEA 43	105180	1479		1277	1506		665-66
SEA 44	105181	1479		1278	1506		667-68
SEA 45	105182	1479		1279	1506		669-70
SEA 46	105183	1479		1280	1506		671-72
SEA 47	105184	1479		1281	1506		673-74
SEA 48	105185	1479		1282	1506		675-76
SEA 49	105186	1479		1283	1506		677-78
SEA 56	105187	1479		1284	1506		679-80

Page 69

Notice of Location and Last Amended Notice of Location Recorded in Official Records of Imperial County, California

			Original			Amended
Name of Claim	BLM Serial No. (CAMC)	Book		Pages	Book		Pages

SEA 58	105189	1479		1286	1506		681-82
SEA 60	105191	1479		1288	1506		683-84
SEA 61	105192	1479		1289	1506		685-86
SEA 89	105220	1479		1317
SEA 98	105229	1479		1326
SEA 107	105238	1479		1335
SEA 121	105247	1479		1344
SEA 123	105249	1479		1346
SEA 125	105251	1479		1348
SEA 127	105253	1479		1350
SEA 129		105255		1479	1352
SEA 131	105257	1479		1354
SEA 133	105259	1479		1356
SEA 135	105261	1479		1358
SEA 137	105263	1479		1360
SEA 139	105265	1479		1362
SEA 141	105267	1479		1364
SEA 327	109895	1482		1160	1506		703-04
SEA 328	109896	1482		1161	1506		705-06
SEA 330	109898	1482		1163	1506		707-08
SEA 332	109900	1482		1165	1506		709-10
SEA 336	109904	1482		1169	1506		711-12
SEA 339	109907	1482		1172	1506		715-16
SEA 340	109908	1482		1173	1506		717-18
SEA 746	121213	1495		37	1506		721-22
SEA 747	121214	1495		38	1506		723-24
SEA 748	121215	1495		39	1506		725-26
SEA 759	121217	1495		41	1506		727-28
SEA 760	121218	1495		42	1506		729-30
SEA 761	121219	1495		43	1506		731-32
SEA 762	121220	1495		44	1506		733-34
SEA 763	121221	1495		45	1506		735-36
SEA 764	121222	1495		46	1506		737-38
SEA 765	121223	1495		47	1506		739-40
SEA 766	121224	1495		48	1506		741-42
SEA 767	121225	1495		49	1506		743-44
SEA 768	121226	1495		50	1506		745-46
SEA 769	121227	1495		51	1506		747-48
SEA 770	121228	1495		52	1506		1467-68
SEA 773	121229	1495		53	1506		749-50
SEA 774	121230	1495		54	1506		751-52
DTL 1	238260	1655		797
LUCKY STRIKE 1	94401	1473		198	1492		1294-95
LUCKY STRIKE 2	109012	1483		1079	1492		1296-97
BIG BROTHER 2	24626	1178		546	1590		624-25

Page 70

Notice of Location and Last Amended Notice of Location Recorded in Official Records of Imperial County, California

			Original			Amended
Name of Claim	BLM Serial No. (CAMC)	Book		Pages	Book		Pages

BUDDY 5	24633	1278		788	1492		1265-66
BUDDY 6	24634	1373		739	1492		1267-68
BUDDY 7	24635	1373		740	1492		1269-71
BUDDY 11	24639	1373		744	1492		1279-81
GOLD BUG 1	32398	1100		22	1492		1474-75
GOLD BUG 2	32399	1100		24	1492		1476-77
GOLD BUG 3	32400	1100		321	1492		1478-79
GOLD BUG 6	32403	1195		384	1492		1486-88
GOLD BUG 8	32405	1101		296	1492		1489-91
GOLD BUG 9	32406	1100		321	1492		1492-93
GOLD BUG 10	32407	1208		768	1492		1494-95
GOLD BUG 11	32408	1208		768	1492		1496-98
GOLD BUG 12	32409	1101		296	1493		352-53
GOLD BUG 13	32410	1101		296	1493		350-51
GOLD BUG 14	32411	1208		768	1492		1499-1500
GOLD BUG 15	32412	1208		768	1492		1501-03
GOLD BUG 16	32413	1215		211	1492		1504-05
GOLD BUG 17	32414	1219		416	1493		348-49
GOLD BUG 18	32415	1208		769	1492		1506-07
GOLD BUG 19	32416	1215		211	1492		1508-10
GOLD BUG 20	32417	1219		803	1492		1511-12
GOLD BUG 21	32418	1221		69	1492		1513-15
GOLD BUG 22	32419	1221		69	1492		1516-18
GOLD BUG 23	32420	1257		327	1492		1519-21
GOLD BUG 25	32422	1368		1736	1493		404-05
GOLD BUG 26	32423	1368		1737	1492		1524-26
GOLD BUG 27	109176	1483		1445	1492		1527-29
GOLD BUG 28	109005	1483		1085	1492		1530-32
KEYSTONE 1	28623	1265		741	1492		1468-71
KEYSTONE 2	109009	1483		1088	1492		1472-73
GCB	17811	1423		1311	1590		620-21
GCC	17812	1423		1312	1492		1228-30
BEARCAT	42165	1216		926	1495		89-91
BU BU 1	42164	1101		550	1492		1400-01
BU BU 3	109003	1483		1083	1492		1411-13
BLACK IRON 1	32876	1273		827	1493		1103-05
ZACKERY 2	32887	1344		261	1506		555-56
CINDY LYNN	52728	1364		278	1506		793-94
		1446		260
RIBBIT	111065	1484		871	1506		791-92
BLACK CAT 1	63547	1364		285	1506		763-64
		1446		256
BLACK CAT 2	63548	1364		286	1506		765-66
		1446		258

Page 71

Notice of Location and Last Amended Notice of Location Recorded in Official Records of Imperial County, California

			Original			Amended
Name of Claim	BLM Serial No. (CAMC)	Book		Pages	Book		Pages

BLACK CAT 3	64791	1364		287	1506		767-68
		1448		180
BLACK CAT 4	64792	1364		288	1506		769-70
		1448		181
BLACK CAT 5	64793	1364		289	1506		771-72
		1448		182
LITTLE JOHN 1	52720	1364		279	1506		773-74
LITTLE JOHN 2	111060	1484		881	1506		775-76
LITTLE JOHN 3	111061	1484		879	1506		777-78
LITTLE JOHN 4	52724	1364		712	1506		779-80
LITTLE JOHN 5	111062	1484		877	1506		781-82
LITTLE JOHN 6	64794	1448		913	1506		783-84
LITTLE JOHN 7	64795	1448		914	1506		785-86
LITTLE JOHN 8	64796	1448		915	1506		787-88
LITTLE JOHN 9	111063	1484		875	1506		789-90
LITTLE JOHN 10	135917	1510		1128
HIDDEN GOLD 1	65546	1448		1344	1506		843-45
HIDDEN GOLD 2	65547	1448		1345	1506		846-48
LADY BE GOOD	43085	522		399	1577		1791-92
AUTOMATIC	52736	1362		1096	1506		833-34
PI	108134	1481		88	1521		332-33
DONNIES HOPE 2	92559	1471		1719	1506		755-58
CHEROKEE 2	26094	1325		390	1492		1418-19
CHEROKEE 3	29102	1436		388	1492		1420-21
CHEROKEE 4	45364	1438		1207	1492		1422-24
CHEROKEE 5	58590	1442		1106	1492		1425-27
PAY DIRT 11	15536	1419		21	1492		1431-34
PAY DIRT 13	15538	1419		23	1492		1435-37
PAY DIRT 15	15540	1419		25	1492		1438-40
PAY DIRT 16	15541	1419		26	1492		1441-43
PAY DIRT 17	109013	1483		1081	1492		1444-46
THELMA L. 1	37971	1438		1208	1492		1447-48
THELMA L. 4	37974	1438		1211	1492		1453-55
THELMA L. 5	37975	1438		1212	1492		1456-57
STREAK OF SILVER 1	59548	1442		1350	1492		1581-83
STREAK OF SILVER 2	59549	1442		1349	1492		1584-86
STREAK OF SILVER 3	59550	1442		1348	1492		1587-89
PRINCE 1	29836	624		495	1590		615-16
GOLDEN DREAM 8	29861	1368		1650	1492		1607-08
GOLDEN DREAM 9	29862	1368		1651	1492		1609-11
GOLDEN DREAM 10	29863	1368		1652	1492		1612-13
GOLDEN DREAM 11	29864	1368		1653	1492		1614-15
GOLDEN DREAM 12	29865	1368		1654	1492		1616-17
GOLDEN DREAM 13	29866	1368		1655	1492		1618-20
GOLDEN DREAM 14	29867	1368		1656	1492		1621-22

Page 72

Notice of Location and Last Amended Notice of Location Recorded in Official Records of Imperial County, California

			Original			Amended
Name of Claim	BLM Serial No. (CAMC)	Book		Pages	Book		Pages

GOLDEN DREAM 15	29868	1368		1657	1492		1623-24
GOLDEN DREAM 16	29869	1368		1658	1492		1625-26
GOLDEN ANNEX 1	29842	1207		751	1590		626-27
GOLDEN ANNEX C	107693	1482		1585	1492		1344-46
GOLDEN ANNEX F	107696	1482		1588	1590		617-19
THEDFORD	53972	1253		56	1590		613-14
JILDA 1	1787	1258		86	1590		622-23
PROVIDENCE 1	62094	1446		789	1492		1386-87
PROVIDENCE 2	62095	1446		790	1492		1388-89
PROVIDENCE 3	62096	1446		791	1492		1390-92
PROVIDENCE 4	62097	1446		792	1492		1393-94
PROVIDENCE 6	62099	1446		794	1492		1395-96
JACMAC 1	23747	1431		987	1492		1362-64
JACMAC 2	23748	1431		989	1492		1365-66
JACMAC 4	23750	1431		993	1492		1367-68
JACMAC 5	23751	1431		995	1492		1369-70
JACMAC 6	23752	1431		997	1492		1371-72
JACMAC 7	23753	1431		999	1492		1373-74
JACMAC 8	23754	1431		1001	1492		1375-76
JACMAC 9	23755	1431		1003	1492		1377-78
JACMAC 10	23756	1431		1005	1492		1379-81
JACMAC 11	23757	1431		1007	1492		1382-83
JACMAC 12	109008	1483		1084	1492		1384-85
NEW GOLD 1	16221	1298		592	1492		1234-36
NEW GOLD 2	16222	1298		593	1492		1237-39
NEW GOLD 3	16223	1298		594	1492		1240-41
NEW GOLD 4	16224	1298		595	1492		1242-44
GOLD HILL 2	30202	317		195	1497		320-21
LOLA 4	52404	1172		140	1506		884-85
LOLA 9	52409	1172		145	1578		7
MILS 104	171114	1549		963
MILS 171	171176	1549		1025
MILS 172	171177	1549		1026
MILS 174	171179	1549		1028
MILS 176	171181	1549		1030
MILS 178	171183	1549		1032
MILS 180	171185	1549		1034
MILS 182	171187	1549		1036
MILS 183	171188	1549		1037
MILS 184	171189	1549		1038
MILS 185	171190	1549		1039
MILS 186	171191	1549		1040
MILS 187	171192	1549		1041
MILS 188	171193	1549		1042
MILS 189	171194	1549		1043

Page 73

Notice of Location and Last Amended Notice of Location Recorded in Official Records of Imperial County, California

			Original			Amended
Name of Claim	BLM Serial No. (CAMC)	Book		Pages	Book		Pages

MILS 190	171195	1549		1044
MILS 191	171196	1549		1045
MILS 192	171197	1549		1046
MILS 196	171201	1549		1050
MILS 197	171202	1549		1051
MILS 198	171203	1549		1052
MILS 199	171204	1549		1053
MILS 204	171208	1549		1057
MILS 205	171209	1549		1058
MILS 206	171210	1549		1059
MILS 207	171211	1549		1060
MILS 208	171212	1549		1061
MILS 209	171213	1549		1062
MILS 210	171214	1549		1063
MILS 211	171215	1549		1064
MILS 212	171216	1549		1065
MILS 213	171217	1549		1066
MILS 214	171218	1549		1067
MILS 215	171219	1549		1068
MILS 216	171220	1549		1069
MILS 217	171221	1549		1070
MILS 218	171222	1549		1071
MILS 219	171223	1549		1072
MILS 220	171224	1549		1073
MILS 221	171225	1549		1074
MILS 222	171226	1549		1075
MILS 223	171227	1549		1076
MILS 224	171228	1549		1077
MILS 225	171229	1549		1078
MILS 226	171230	1549		1079
MILS 227	171231	1549		1080
MILS 228	171232	1549		1081
MILS 229	171233	1549		1082
MILS 230	171234	1549		1083
MILS 231	171235	1549		1084
MILS 232	171236	1549		1085
MILS 234	171238	1549		1087
MILS 236	171240	1549		1089
MILS 237	171241	1549		1090
MILS 250	171254	1549		1103
MILS 253	171257	1549		1106
MILS 254	171258	1549		1107
MILS 255	171259	1549		1108
MILS 256	171260	1549		1109

Page 74

Notice of Location and Last Amended Notice of Location Recorded in Official Records of Imperial County, California

			Original			Amended
Name of Claim	BLM Serial No. (CAMC)	Book		Pages	Book		Pages

MILS 257	171261	1549		1110
MILS 258	171262	1549		1111
MILS 259	171263	1549		1112
MILS 260	171264	1549		1113
MILS 263	171267	1549		1116
MILS 264	171268	1549		1117
MILS 266	171270	1549		1119
MILS 268	171272	1549		1121
MILS 270	171274	1549		1123
MILS 272	171275	1549		1124
MILS 273	171276	1549		1125
MILS 274	171277	1549		1126

Page 75

Patented (Fee) Tracts Owned by Western Mesquite Mines, Inc.

1. (Patent No. 04-88-0044 dated July 18, 1988, Survey No. 6921) The following patented millsite claims located within Section 33, Township 13 South, Range 19 East, and Section 4, Township 14 South, Range 19 East, SBB&M, Imperial County, California:

	MILS 261
	MILS 262
	MILS 265
	MILS 267
	MILS 269

2. (Patent No. 04-90-0066 dated August 17, 1990, Survey Nos. 6923 and 6924) The following patented millsite claims located within Section 8, Township 13 South, Range 19 East, SBB&M, Imperial County, California:

	MILS 2
	MILS 3
	MILS 4
	MILS 5
	MILS 6
	MILS 7
	MILS 8
	MILS 9
	MILS 10
	MILS 11
	MILS 12
	MILS 13
	MILS 14
	MILS 51
	MILS 52
	MILS 54
	MILS 105
	MILS 106
	MILS 107
	MILS 108

3. (Patent No. 04-88-0045 dated August 5, 1988, Survey No. 6901) The following patented mining claims located within Sections 5-8, Township 13 South, Range 19 East, SBB&M, Imperial County, California:

	Big Brother 1
	Buddy 8
	Buddy 9
	Buddy 10
	Little Sister 1
	Little Sister 2

4. (Patent No. 04-89-0035 dated March 8, 1989, Survey No. 6930) The following patented mining claims located within Sections 3 and 4, Township 13 South, Range 19 East, SBB&M, Imperial County, California:

	Cherokee 1
	Cherokee 6
	Bu Bu 2
	Biscuit Shooter 1
	Biscuit Shooter 2
	Biscuit Shooter 3

Page 76

5. (Patent No. 04-95-0019 dated March 29, 1995, Survey No. 6933) The following patented mining claim located within Sections 5 and 8, Township 13 South, Range 19 East, SBB&M, Imperial County, California:

Gold Hill 1

6. (Patent No. 04-95-0020 dated March 29, 1995, Survey No. 6937) The following patented mining claims located within Sections 4 and 9, Township 13 South, Range 19 East, SBB&M, Imperial County, California:

	Don Juan 1
	Don Juan 2
	Lady June ½
	Lady June 1
	Lady June 2
	Highway Fraction 1
	Highway Fraction 2
	SEA 775

7. (Patent No. 04-95-0021 dated March 29, 1995, Survey No. 6935) The following patented mining claims located within Section 3, Township 13 South, Range 19 East, SBB&M, Imperial County, California:

	Rainbow
	Panorama
	Copenhagen 1
	Copenhagen 2
	SEA 342

8. (Patent No. 04-2002-0004 dated November 1, 2001, Survey No. 6938) The following patented mining claims located within Section 5, Township 13 South, Range 19 East, SBB&M, Imperial County, California:

	MESQ 29
	MESQ 30
	Lena 1
	Lena 2
	Lena 3
	Lena 4

9. (Patent No. 04-91-0026 dated March 28, 1991, Survey No. 6932) The following patented millsite claims located within Sections 5, 8 and 9, Township 13 South, Range 19 East, SBB&M, Imperial County, California:

	MILS 125
	MILS 126

Page 77

	MILS 127
	MILS 128
	MILS 129
	MILS 130
	MILS 131
	MILS 132

10. (Patent No. 04-90-0022 dated February 2, 1990, Survey No. 6900) The following patented mining claims located within Sections 5 and 8, Township 13 South, Range 19 East, SBB&M, Imperial County, California:

	Big Chief 1
	Big Chief 2
	Big Chief 3
	Big Chief 4
	Calcite 3
	Cholla
	Desert View 1
	Desert View 2
	Golden Annex A
	Golden Annex D
	Golden Annex E
	Golden Annex 4
	Golden Annex 5
	Golden Annex 6

11. (Patent No. 04-95-0018 dated March 29, 1995, Survey No. 6922) The following patented mining claims located within Sections 3, 4, 9 and 10, Township 13 South, Range 19 East, SBB&M, Imperial County, California:

	Lola 1
	Lola 2
	Lola 3
	Lola 5
	Lola 6
	Lola 10
	Lola Extension

Page 78

Unpatented Mining and Millsite Claims Owned by County Sanitation District No. 2

of Los Angeles County, and Leased by Western Mesquite Mines, Inc.

Western Mesquite Mines, Inc. leases the following-described mining and millsite claims located within Sections 6-10 and 15, Township 13 South, Range 19 East, SBB&M, Imperial County, California, from County Sanitation District No. 2 of Los Angeles pursuant to a Mineral Lease and Landfill Facilities Lease Agreement dated June 25, 1993, as amended:

Notice of Location and Last Amended Notice of Location Recorded in Official Records of Imperial County, California

			Original			Amended
Name of Claim	BLM Serial No. (CAMC)	Book		Pages	Book		Pages

SEA 1	105150	1479		1247	1506		615-16
SEA 2	105151	1479		1248	1506		617-18
SEA 3	105152	1479		1249	1506		619-20
SEA 4	105153	1479		1250	1506		621-22
SEA 5	105154	1479		1251	1506		623-24
SEA 6	105155	1479		1252	1506		625-26
SEA 7	105156	1479		1253	1506		627-28
SEA 15	105160	1479		1257	1506		631-32
SEA 16	105161	1479		1258	1506		633-34
SEA 17	105162	1479		1259	1506		635-36
SEA 80	105211	1479		1308	1851		478-79
LOLA 7	52407	1172		143	1578		6
LOLA 8	52408	1172		144	1506		892-93
GOLDEN ANNEX 8	29849	1215		336	1492		1330-31
MILS 101	171111	1549		960
MILS 102	171112	1549		961
MILS 103	171113	1549		962
MILS 133	171139	1549		988
MILS 134	171140	1549		989
MILS 135	171141	1549		990
MILS 136	171142	1549		991
MILS 160	173035	1551		397
MILS 162	173037	1551		399
MILS 164	173039	1551		401
MILS 166	171171	1549		1020
MILS 167	171172	1549		1021
MILS 168	171173	1549		1022
MILS 169	171174	1549		1023
MILS 170	171175	1549		1024
MILS 173	173040	1551		402
MILS 175	171180	1549		1029
MILS 177	171182	1549		1031
MILS 179	171184	1549		1033
MILS 181	171186	1549		1035
MILS 193	171198	1549		1047
MILS 194	171199	1549		1048
MILS 195	171200	1549		1049

Page 79

Notice of Location and Last Amended Notice of Location Recorded in Official Records of Imperial County, California

			Original			Amended
Name of Claim	BLM Serial No. (CAMC)	Book		Pages	Book		Pages

MILS 200	171205	1549		1054
MILS 202	171206	1549		1055
MILS 203	171207	1549		1056

Page 80

Patented (Fee) Tracts Owned by County Sanitation District No. 2 of Los Angeles

County, and Leased by Western Mesquite Mines, Inc.

Western Mesquite Mines, Inc. leases the following-described patented (fee) properties from County Sanitation District No. 2 of Los Angeles pursuant to a Mineral Lease and Landfill Facilities Lease Agreement dated June 25, 1993, as amended:

1. (Patent No. 04-90-0066 dated August 17, 1990, Survey Nos. 6923 and 6924) The following patented millsite claims located within Sections 7-9 and 17, Township 13 South, Range 19 East, SBB&M, Imperial County, California:

	MILS 1
	MILS 15
	MILS 16
	MILS 17
	MILS 18
	MILS 19
	MILS 20
	MILS 21
	MILS 22
	MILS 23
	MILS 24
	MILS 25
	MILS 26
	MILS 27
	MILS 28
	MILS 29
	MILS 53
	MILS 55
	MILS 62
	MILS 64
	MILS 65
	MILS 66
	MILS 67
	MILS 68
	MILS 69
	MILS 70
	MILS 71
	MILS 72
	MILS 73
	MILS 74
	MILS 75
	MILS 76
	MILS 77
	MILS 78
	MILS 79
	MILS 80
	MILS 138
	MILS 139
	MILS 140
	MILS 141

Page 81

	MILS 142
	MILS 143
	MILS 144
	MILS 145
	MILS 146
	MILS 147
	MILS 148
	MILS 149
	MILS 150
	MILS 151
	MILS 152
	MILS 153
	MILS 154
	MILS 155
	MILS 156
	MILS 157
	MILS 158
	MILS 159
	MILS 161
	MILS 162
	MILS 163
	MILS 164
	MILS 165
	MILS 166
	MILS 299

2. (Patent No. 04-90-0012 dated January 9, 1990) The following patented millsite claims located within the E½SW¼SW¼NE¼, SE¼SW¼NE¼, S½SE¼NE¼, NE¼SE¼, E½NW¼SE¼, E½W½NW¼SE¼, NE¼SW¼SE¼, E½NW¼SW¼SE¼, NE¼SW¼SW¼SE¼, N½SE¼SW¼SE¼, NW¼NE¼SE¼SE¼ and NW¼SE¼SE¼ of Section 17, Township 13 South, Range 19 East, SBB&M, Imperial County, California:

	AP 1
	AP 2
	AP 3
	AP 4
	AP 5
	AP 6
	AP 7
	AP 8
	AP 9
	AP 10
	AP 11
	AP 12
	AP 13
	AP 14
	AP 15
	AP 16
	AP 17
	AP 18
	AP 19
	AP 20

Page 82

	AP 21
	AP 22
	AP 26
	AP 27
	AP 28
	AP 29
	AP 30
	AP 31
	AP 32

3. (Patent No. 04-87-0023 dated January 30, 1987) Certain portions of the following tracts located in Township 13 South, Range 19 East, SBB&M, Imperial County, California:

	Section 7:	N½SE¼ (220 Dump)
	Section 8:	NW¼SW¼ (220 Extension Dump)
	Section 17:	W½ (leach pad)
	Section 18:	S½SE¼ (solution ponds)
	Section 19:	N½NE¼ (solution ponds)

4. (Patent No. 04-97-0039 dated January 30, 1997) The following tracts located in Township 13 South, Range 19 East, SBB&M, Imperial County, California:

	Section 8:	Lots 8 and 9
	Section 17:	Lots 1, 2 and 3, SE¼SW¼SW¼SE¼, S½SE¼SW¼SE¼, E½NE¼SE¼SE¼, SW¼NE¼SE¼SE¼, S½SE¼SE¼

5. The following tract located in Township 13 South, Range 19 East, SBB&M, Imperial County, California:

Section 16:

All (but excluding reserved mineral rights within the N½NE¼NW¼)

Page 83

Unpatented Mining Claims Owned by Bonnie Kovac, James Harbison and

Stephen Galambos Jr., and Leased by Western Mesquite Mines, Inc.

Western Mesquite Mines, Inc. leases the following-described mining claims located within Section 6, Township 13 South, Range 19 East, SBB&M, Imperial County, California, from Bonnie Kovac, James Harbison and Stephen Galambos Jr. pursuant to a Mineral Lease and Purchase Option Agreement dated October 20, 1982, as amended:

Notice of Location and Last Amended Notice of Location Recorded in Official Records of Imperial County, California

			Original			Amended
Name of Claim	BLM Serial No. (CAMC)	Book		Pages	Book		Pages

SINGER 1	86399	1465		1638	1492		1544-46
SINGER 2	86400	1465		1639	1492		1547-48
SINGER 3	86401	1465		1640	1492		1549-50
SINGER 4	86402	1465		1641	1492		1551-52
MESQ 45	109001	1483		1097

Page 84

Patented (Fee) Tracts Owned by California State Lands Commission, and Leased

by Western Mesquite Mines, Inc.

Western Mesquite Mines, Inc. leases the following-described tracts located within Township 13 South, Range 19 East, SBB&M, Imperial County, California, from the California State Lands Commission pursuant to a Mineral Extraction Lease (No. PRC 8039.2) issued October 1, 2002:

	Section 5:	Lots 1-10
	Section 6:	Lots 1-10

Page 85

Easements and Rights-of-Way Held by Western Mesquite Mines, Inc.

Western Mesquite Mines, Inc. holds the following easements and rights-of-way:

1. Right-of-Way No. CACA-019129 issued by the United States of America on September 12, 1986 for a water pipeline and related power line and access road to access, transport and use water from three water wells. The right-of-way crosses over the following-described federal land in Township 13 South, Range 19 East, SBB&M, Imperial County, California:

	Section 17:	S½SE¼
	Section 20:	NE¼
	Section 21:	Lots 5 and 7, E½SW¼
	Section 28:	W½
	Section 33:	Lots 2 and 6, E½NW¼

Page 86

Water Rights Held by Western Mesquite Mines, Inc.

Western Mesquite Mines, Inc. holds the following water rights:

1. Groundwater Rights. Under California law, ordinary groundwater usage is not regulated by the State Water Resources Control Board the way surface water rights are. Rather, percolating groundwater is unregulated by the state and is available to any overlying land user who can recover it. Landowners overlying percolating groundwater may use it on an equal and correlative basis. All property owners above a common aquifer possess a shared right to reasonable use of the groundwater aquifer. Western Mesquite Mines, Inc. (WMMI) has constructed three groundwater wells (two of which are currently in operation) located on the following millsite claims which are owned by WMMI:

Patented Millsite Claims

(Patent No. 04-88-0044 dated July 18, 1988, Survey No. 6921) The following patented millsite claims located within Section 33, Township 13 South, Range 19 East, and Section 4, Township 14 South, Range 19 East, SBB&M, Imperial County, California:

	MILS 261
	MILS 262
	MILS 265
	MILS 267
	MILS 269

Unpatented Millsite Claims

The following unpatented millsite claims located within Section 33, Township 13 South, Range 19 East, and Section 4, Township 14 South, Range 19 East, SBB&M, Imperial County, California:

Notice of Location and Last Amended Notice of Location Recorded in Official Records of Imperial County, California

			Original			Amended
Name of Claim	BLM Serial No. (CAMC)	Book		Pages	Book		Pages

MILS 260	171264	1549		1113
MILS 263	171267	1549		1116
MILS 264	171268	1549		1117
MILS 266	171270	1549		1119
MILS 268	171272	1549		1121
MILS 270	171274	1549		1123

These wells (known as the Vista Wellfield) provide the water used for WMMI’s mining and mineral processing operations. Drinking water for mine personnel is brought to the site by a commercial vendor. A water transmission pipeline and a related power line and access road which cross over federal land from the Vista Wellfield approximately 3 miles north to the mine property are authorized under the federal right-of-way (CACA-019129) listed above. WMMI has obtained authorization from Imperial County to operate the subject water wells pursuant to a Conditional Use Permit (No. 98-0022(B)) dated December 5, 2003 (CUP). The CUP is recorded in Imperial County as Entry No. 2003-039727. The CUP authorizes the use of one or more water wells for a period of 20 years to provide water for operation of the mine property and for operation of the adjacent sanitary landfill.

Condition S-81 of the CUP limits the total aggregate extraction and consumption of water from the wells for operation of the mine and landfill to 4,033 acre-feet per year. WMMI must file with Imperial County an annual report to identify the amount of water used from the wells. The most recent such annual report shows the total amount of water use as 490 acre-feet, well below the allowable limit.

Page 87

Schedule 3 – Compliance Certificate

To: the Agent

Date:

Dear Sirs

Mesquite Gold Mine Project

We refer to a credit agreement (the Credit Agreement) dated 30 March 2007 (as amended and restated from time to time) between (amongst others) ourselves as borrower, Investec Bank plc as Mandated Lead Arranger, Commonwealth Bank of Australia as Lead Arranger, Investec Bank plc as Agent and Security Trustee, and the Banks and the Hedging Banks (each as defined therein).

Terms used herein and not otherwise defined shall have the meaning given them in the Credit Agreement.

We certify that as at [specify last date being the last day of the financial year]:

(a)	the representations and warranties required to be repeated pursuant to the terms of Clause 7 were true and correct; and

(b) no Default had occurred and was continuing as at such date.1

Signed

For and on behalf of

Western Mesquite Mines, Inc.

1 If a certificate in this form can not be given, details must be given of any representations or warranties which are not true or correct or (where a Default or Potential Default has occurred and is continuing) details of such Default or Potential Default.

Page 88

Schedule 4 – Repayment Schedule

Repayment Date	Repayment Instalment
31 December 2009	US$8,633,958.36
30 June 2010	US$7,770,562.53
31 December 2010	US$4,316,979.18
30 June 2011	US$8,633,958.36
31 December 2011	US$7,770,562.53
30 June 2012	US$8,673,185.96

Page 89

Schedule 5 – Form of Transfer Certificate

Transfer Certificate

** [date]

To the Agent

This transfer certificate (Transfer Certificate) relates to a credit agreement relating to a US$105,000,000 Term Loan Facility dated 30 March 2007 (as amended and restated from time to time) between Western Mesquite Mines, Inc. as Borrower, Western Goldfields (USA) Inc., Western Goldfields Inc., the Banks and Hedging Banks, the Arrangers, the Security Trustee and yourselves (the Credit Agreement, which term shall include any amendments or supplements to it).

Terms defined and references construed in the Credit Agreement shall have the same meaning and construction in this Transfer Certificate.

1	** [insert full name of Existing Bank] (the Existing Bank):

(a)	confirms that to the extent that details appear in the schedule to this Transfer Certificate under the heading "Existing Bank's Participation in the Loan", those details accurately summarise its Participation in the Loan all or part of which is to be transferred; and

(b)

requests ** [insert full name of Bank Transferee] (the Bank Transferee) to accept and procure, in accordance with Clause 19 of the Credit Agreement, the substitution of the Existing Bank by the Bank Transferee in respect of the amount of its Participation in the Loan to be transferred as specified in the schedule to this Transfer Certificate and of a corresponding part of its rights and obligations under the Intercreditor Deed [and ** ] by signing this Transfer Certificate.

The Bank Transferee requests each of the other parties to the Credit Agreement and to the Intercreditor Deed [and ** ] to accept this executed Transfer Certificate as being delivered under and for the purposes of Clause 19 of the Credit Agreement and clause [18.3] of the Intercreditor Deed so as to take effect in accordance with such Clause 19 on ** [insert date of transfer].

3	The Bank Transferee:

(a)	confirms that it has received a copy of each of the Financing Documents together with such other documents and information as it has requested in connection with this transaction;

(b)	confirms that it has not relied and will not rely on the Existing Bank or any other Financing Party to check or enquire on its behalf into the legality, validity, effectiveness, adequacy, accuracy or completeness of any such documents or information; and

(c)	agrees that it has not relied and will not rely on the Existing Bank or any other Financing Party to assess or keep under review on its behalf the financial condition, creditworthiness, condition, affairs, status or nature of the Borrower or any other party to the Financing Documents.

The Bank Transferee undertakes with the Existing Bank and each of the other parties to the Credit Agreement and to the Intercreditor Deed [and ** ] that it will perform, in accordance with its terms, all those obligations which, by the terms of the Credit Agreement and the Intercreditor Deed respectively, will be assumed by it upon delivery of the executed copy of this Transfer Certificate to the Agent.

Page 90

On execution of this Transfer Certificate by the Agent on their behalf, the other parties to the Credit Agreement and to the Intercreditor Deed [and ** ] accept the Bank Transferee as a party to the Credit Agreement and to the Intercreditor Deed respectively in substitution for the Existing Bank with respect to all those rights and/or obligations which, by the terms of the Credit Agreement, will be assumed by the Bank Transferee after delivery of the executed copy of this Transfer Certificate to the Agent.

6	None of the Existing Bank or any other party to the Credit Agreement or the Intercreditor Deed [and ** ]:

(a)	makes any representation or warranty or assumes any responsibility with respect to the legality, validity, effectiveness, adequacy or enforceability of any of the Relevant Documents; or

(b)

assumes any responsibility for the financial condition of the Borrower or any other party to any Relevant Document or any other document or for the performance and observance by the Borrower or any other party to any Relevant Document or any other document of its or their obligations and any and all conditions and warranties, whether express or implied by Law or otherwise, are excluded.

7	The Bank Transferee confirms that its Facility Office and address for notices for the purposes of the Financing Documents are as set out in the schedule to this Transfer Certificate.

The Existing Bank gives notice to the Bank Transferee (and the Bank Transferee acknowledges and agrees with the Existing Bank) that the Existing Bank is under no obligation to re-purchase (or in any other manner to assume, undertake or discharge any obligation or liability in relation to) the transferred Participation at any time after this Transfer Certificate shall have taken effect.

Following the date upon which this Transfer Certificate shall have taken effect, without limiting the terms of this Transfer Certificate, each of the Bank Transferee and the Existing Bank acknowledges and confirms to the other that, in relation to the transferred Participation, variations, amendments or alterations to any term of any Financing Document arising in connection with any renegotiation or rescheduling of the obligations under the Credit Agreement shall apply to and be binding on the Bank Transferee alone.

10	This Transfer Certificate is governed by and shall be construed in accordance with English law.

Page 91

The Schedule

Existing Bank's Participation in the Loan	Amount of Participation Transferred

** [insert full name of Bank Transferee]

Facility Office	Address for notices
**	** [address]
	Attention: **
	Fax: **

** [Bank Transferee]

By: ...........................................................

(Duly authorised)

** [Existing Bank]

By: ...........................................................

(Duly authorised)

The Agent on behalf of itself and all other parties to the Credit Agreement and the Intercreditor Deed [and ** ]

By: ...........................................................

(Duly authorised)

Dated:

Page 92

Schedule 6 – Insurances

References in this Schedule to paragraphs and Appendices shall be construed as references to the paragraphs of and appendices to this Schedule, unless the context otherwise requires. References in this Schedule to Clauses shall be construed as references to clauses of this Agreement.

1	Insurances to be effected

1.1	Positive Undertakings

The Borrower shall:

(a)	procure that the insurances specified in Appendix 1, are effected and maintained in full force and effect from the respective commencement dates until the respective expiry dates specified in Appendix 1 in accordance with the provisions set out therein;

(b)	procure that the insurances referred to in paragraph (a) above shall, subject to any variation thereof from time to time agreed or determined:

(i)	include only such provisions for self-insurance, whether by deductible or otherwise, as are specified in Appendix 1;

(ii)	insure only the persons specified in Appendix 1; and

(iii)

include only the exclusions specified in Appendix 1 or such other exclusions acceptable to the Banks’ Insurance Adviser (acting reasonably);

(c)

effect and maintain such other insurance cover in respect of the Project and the Assets (including in respect of third party legal liability insurances) in accordance with the recommendations of the Banks’ Insurance Adviser (acting reasonably) from time to time as would be taken out by a prudent developer and operator in the context of the Project or in accordance with any requirements as to the amount of cover and risks specified by the Agent from time to time (to include business interruption and third party legal liability cover) and promptly pay all premiums in respect thereof when due. If the Borrower fails to comply with any of the provisions of this paragraph, the Agent shall be entitled but not bound to effect the insurance cover concerned at the expense of the Borrower;

(d)	ensure that each of the Borrower and the Secured Parties are named in such insurance cover as insured parties and shall provide:

(i)	that such policy shall protect each insured in the same manner as though a separate policy had been issued to each, but the inclusion therein of more than one insured shall not serve to increase the limit of the Insurers' liability;

(ii)

the liability of the insurers under such policy to any one insured shall not be conditional upon the due observance and fulfilment by any other insured party of the terms and conditions of such policy or of any duties imposed upon that insured party relating thereto, and shall not be affected by any failure in such observance or fulfilment by any such other insured party; and

(iii)

that such policy shall not be invalidated as regards the rights and interests of any insured and that the Insurers will not seek directly or indirectly to avoid any liability to such insured under such policy, in each case, because of any act, neglect, error or omission made by any other insured (whether the same occurs before or after the inception of the policy) including any failure by any other insured to disclose any material fact which could, if known at any time, have affected any decision of the Insurers to grant the policy, to agree to any particular term or refrain from acting in any way whatsoever in relation to such policy or to any liability which might arise thereunder;

Page 93

(e)

in respect of the insurance cover which the Borrower is required to effect and maintain hereunder, ensure that such insurance cover is (at all times) provided by insurers with a long term credit rating of least A- from Standard & Poor's or A2 from Moody's), and, unless specified in Appendix 1, is for such amounts in US Dollars or other currencies as may be approved in writing by the Agent, and shall otherwise be in such form and contain such cancellation clauses as may be reasonable and prudent having regard to the interests of the Secured Parties or as may have been agreed between the Borrower and the Agent;

(f)	ensure that all moneys payable by the Insurers shall be paid without deduction or set-off, (whether in respect of unpaid premium or otherwise), as follows:

(i)

proceeds in respect of any first party insurance claim or related claims for physical loss or damage in respect of the Project or the Assets shall be paid to the Proceeds Account or to such other account as the Agent (acting on the instructions of the Majority Banks) shall direct and all such proceeds shall be applied in accordance with the instructions of the Agent (acting on the instructions of the Majority Banks) provided always that in respect of the proceeds of a claim (or series of related claims) which do not exceed (either alone or in aggregate) US$100,000 (or its equivalent), if at the time of payment of such proceeds, no Default has occurred which is subsisting and has not been waived, the Borrower shall apply such proceeds in the repair, reinstatement or replacement of the Assets to which the claim or claims relate(s) or as otherwise agreed by the Agent;

(ii)

moneys payable under worker’s compensation and/or third party legal liability insurances shall (without prejudice to any of the Encumbrances constituted by the Security Documents) be paid to the person(s) whose claim(s) constitute(s) the risk or liability insured against provided that such person has executed a discharge of all claims against the relevant insured in respect of the risk or liability in relation to which the claim was made unless the relevant insured has properly discharged its liability in which case such moneys shall be paid in accordance with paragraph (iii) below;

(iii)

all other such moneys shall be paid by Insurers to the Proceeds Account; and

(g)	effect and maintain in full force those insurances which the Borrower is from time to time required to effect and maintain by any applicable Law and by the terms of any Transaction Document.

1.2	Negative Undertakings

The Borrower shall not:

(a)	do or allow to be done any act or thing which will vitiate, or fail to do any act or thing the failure to do which will vitiate: (a) any of such insurances specified in Appendix 1; or (b) the validity or enforceability of any claim under the insurances specified in Appendix 1;

(b)

settle any claim with the Insurers without the prior written consent of the Agent (acting on the instructions of the Majority Banks after consultation with the Banks' Insurance Adviser) provided always that such consent shall not be required if at the time of such claim, and at the time of any proposed settlement, no Default has occurred which has not been waived or remedied, the Borrower may settle any claim where the value of such claim does not exceed US$100,000 (or its equivalent);

(c)

permit any reductions in limits or coverage or increases in deductibles, exclusions or exceptions to, and no other person included as a loss payee under, any Insurances from the relevant amounts required in accordance with this Agreement without the prior written consent of the Agent (after consultation with the Banks' Insurance Adviser; or

Page 94

(d)

notwithstanding any other provision of this Agreement, permit any other person other than the Secured Parties to be included as an additional assured under the Business Interruption section of the insurance policy without the prior written consent of the Agent.

1.3

Policies

1.3.1

The Borrower shall procure that each policy required to be effected pursuant to this Agreement shall:

(a)	be placed and maintained through the Insurance Broker;

(b)	have attached to it endorsements in the form set out in Appendix 2;

(c)	be primary with no right of contribution from any other insurance available to any of the insured parties;

(d)	name the Borrower as additional insured except for the worker's compensation and automobile liability policies;

(e)	not require any of the insured parties to disclose any information to the insurers at any time after the inception of the policy;

(f)

provide that State of California shall be the applicable Law of such insurances and irrevocably confer exclusive jurisdiction upon the State of California courts in relation to any and all disputes and differences between the parties to the insurances relating to the interpretation, validity or performance of the insurances; and

(g)	in respect of the insurances specified in Appendix 1, Section 1, not entitle the insurers or underwriters thereunder at their own option to repair, replace or reinstate the property insured.

1.3.2

The Borrower shall at all times comply and procure compliance with all terms, conditions, warranties, stipulations and all other provisions of the policies required to be effected pursuant to this Agreement.

1.4

Premiums

The Borrower shall procure the due and punctual payment of all premiums payable under each policy required to be taken out pursuant to this Agreement in accordance with its terms and shall, upon request of the Agent, promptly produce to the Agent evidence of such payment. Upon the renewal or time extension of any such policy, which renewal or time extension shall be effected in accordance with this Schedule 6, the Borrower shall produce to the Agent and the Banks' Insurance Adviser, at least five Business Days before its expiry date, evidence of such renewal or time extension.

2	Failure to insure

If at any time any insurance required to be maintained by this Agreement shall not be in full force and effect for any reason, then, without prejudice to the rights of the Agent and the Banks under this Schedule 6 the Agent shall thereupon, or at any time whilst the same is continuing, be entitled on behalf of itself and the other Secured Parties to procure such insurance at the expense of the Borrower and, without prejudice to any other obligations of the Borrower under the Financing Documents, require the Borrower to take all such reasonable steps to minimise hazard as the Agent (after consultation with the Banks' Insurance Adviser) may consider expedient or necessary.

Page 95

3	Market availability

Notwithstanding any other provision of this Agreement, the Borrower shall not be in breach of its obligations under this Agreement to the extent that insurances are required to be effected or maintained pursuant to this Agreement if and to the extent that:

(a)	the Banks' Insurance Adviser certifies that such insurance is not available in the insurance market; or

(b)

the premiums in respect of such insurance are unreasonable in the opinion of the Agent (acting on the instructions of the Majority Banks after consultation with the Banks' Insurance Adviser) in relation to the risks to be insured and the interests of the Secured Parties and the Agent waives in writing the requirement that such insurances be so effected or maintained, which waiver may be subject to such terms and conditions as the Agent thinks fit,

provided always that the Borrower shall be obliged to provide to the Agent and to the Banks' Insurance Adviser, as a condition precedent to any such certification or waiver, its proposals as to the manner and extent to which the requirements of this Schedule in relation to such insurance should be modified. If the Agent (acting on the instructions of the Majority Banks after consultation with the Banks' Insurance Adviser) agrees such proposals, the Borrower shall, promptly thereafter, insure against the risks, in the amounts and with the deductibles so agreed. If such proposals are not agreed, the Insurance Broker and the Banks' Insurance Adviser shall negotiate in good faith for a period not exceeding five Business Days with a view to resolving the matter in a manner acceptable to the Agent (acting on the instructions of the Majority Banks after consultation with the Banks' Insurance Adviser) and the Borrower. If after such five Business Days the matter has not been so resolved, the Agent shall (in consultation with the Banks' Insurance Adviser) determine the matter. The Borrower shall, notwithstanding the foregoing provisions of this paragraph 3, notify the Agent and the Banks' Insurance Adviser at intervals of not less than three Months whether any of the insurances subject to modification under this paragraph 3 are at that time available in the insurance market at premiums which are not unreasonable for the purposes of paragraph (b) above and of the cover then available in the insurance market, and shall, if so required by the Agent, effect such insurances as soon as practicable following notification to that effect by the Agent and in any event within 10 Business Days thereafter.

Page 96

Appendix 1

Page 97 - 103

[This information has been redacted to protect certain personal information of the Borrower and the Secured Parties.]

Page 97

Appendix 2

Endorsements

"Notwithstanding any other provision of this policy, the following endorsement shall take effect immediately:

1	Definitions

In this endorsement:

Agent means Investec Bank plc in its capacity as agent for the Financing Parties under the Credit Agreement (and includes its successors in that capacity).

Borrower means Western Mesquite Mines, Inc.

Credit Agreement means the credit agreement dated 30 March 2007 as amended and restated by an agreement dated 31 May 2007 between (among others) the Borrower, Western Goldfields, Inc., the Agent, the Security Trustee, the Banks (as defined therein), and the Hedging Banks (as defined therein).

Insurance Broker means Marsh USA Inc..

Secured Parties has the meaning given to it in the Credit Agreement.

Security Trustee means Investec Bank plc in its capacity as security trustee for the Secured Parties (and includes its successors in that capacity).

2	Non vitiation

The insurers undertake to each insured that the policy shall not be invalidated as regards the rights and interests of such insured and that the insurers will not seek directly or indirectly to avoid any liability to such insured under this policy, in each case, because of any act, neglect, error or omission made by any other insured (whether occurring before or after the inception of the policy), including any failure by any other insured to disclose any material fact, circumstance or occurrence, any misrepresentation by any other insured or any breach or non-fulfilment by any other insured of any condition, warranty or provision contained in the policy, whether or not any such act, neglect, error or omission could, if known at any time, have affected any decision of the insurers to grant the policy, to agree to any particular term or terms of the policy (including this endorsement and the amount of any premium) or to act or refrain from acting in any way whatsoever in relation to this policy or to any liability which might arise hereunder.

3	Duty of disclosure

No Secured Party shall have any duty to disclose or not to misrepresent material facts in relation to the policy and the insurers waive any rights or remedies to rescind or recover damages under the policy for any non-disclosure, misrepresentation (whether negligent or otherwise) made by the Secured Parties. Insurers acknowledge and agree that neither the Borrower nor its agents has authority to provide any warranty or make any disclosure or representation on behalf of the Secured Parties.

4	Subrogation rights

The insurers agree to waive all rights:

Page 104

(a)	to be subrogated to the rights and claims of the Secured Parties or any of them against any person in respect of or arising out of any occurrence in respect of which any claim is admitted under the policy; and

(b)	to be subrogated to the rights of any insured against the Borrower or any Secured Party or their respective officers, directors or employees arising out of any occurrence in respect of which any claim is admitted under the policy.

5	Separate Policy

It is agreed that the inclusion of one or more insured in this policy shall not affect the rights of any insured as respects any claim, demand, suit or judgment made or brought by or for any other insured or by or for any employee of any insured. This policy shall protect each insured in the same manner as though a separate policy had been issued to each, but the inclusion herein of more than one insured shall not serve to increase the limit of the insurers' liability. The liability of the insurers under this policy to any one insured shall not be conditional upon the due observance and fulfilment by any other insured party of the terms and conditions of this policy or of any duties imposed upon that insured party relating thereto, and shall not be affected by any failure in such observance or fulfilment by any such other insured party.

6	Primary cover

The insurers agree that this insurance shall be primary to and not excess of (except in respect of any layers of third party cover effected specifically for the Project) or contributing with any other insurance maintained by any insured.

7	Premiums and obligations

The insurers acknowledge that in no circumstances shall any Secured Party be liable for the payment of premiums or owe any other obligation to the insurers.

8	Changes to cover

No reductions in limits or coverage or increases in deductibles, exclusions or exceptions shall be made under the policy without the prior written consent of the Agent.

9	Acknowledgement of security interest

The insurers acknowledge that the Borrower has granted a security interest to the Security Trustee pursuant to a Security Agreement dated 31 May 2007 over all its right, title and interest in and to all rights and claims to which it is at any time entitled in relation to the policy, including all rights to submit, negotiate and settle any and all claims hereunder and all moneys paid or payable hereunder (including the proceeds of any claims, awards and judgments and any returns of premium).

10	Loss payee

All moneys payable by the insurers to the Borrower under the policy shall be paid without deduction or set-off, whether in respect of unpaid premium or otherwise, as follows:

(a)

moneys payable under insurances other than third party liability insurances shall be paid by the insurers to the account of the Borrower with Bank of America N.A. account number ■■■■■■■■(designated Proceeds Account) unless and until insurers receive written notice from the Security Trustee to the contrary, in which event all such moneys shall be paid as directed by the Security Trustee;

[This information has been redacted to protect certain personal information of the Borrower and the Secured Parties.]

(b)

moneys payable under third party liability insurances shall, notwithstanding the charge referred to in paragraph 9 above, be paid by the insurers to the person(s) whose claim(s) constitute(s) the risk or liability insured against provided that such person has executed a discharge of all claims against the Borrower in respect of the risk or liability in relation to which the claim was made, except where the Borrower has properly discharged its liability to such person(s) in which event all such moneys shall be paid in accordance with paragraph 10(a) above,

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and no such moneys may otherwise be paid without the prior written consent of the Security Trustee.

11	Settlement of claims

No claim under the policy for an amount in excess of US$100,000 (or its equivalent) or such other amount notified by the Agent, may be settled without the prior written consent of the Agent.

12	Cancellation and non-renewal

12.1	The Agent shall be advised:

(a)

at least 30 days (or such lesser period, if any, as may be specified from time to time by the insurers in the case of war risks and kindred perils) before (i) any cancellation is to take effect if any insurer cancels or gives notice of such cancellation of the policy in whole or in part and (ii) any alteration to, termination or expiry of the policy in whole or in part is to take effect;

(b)	of any default in the payment of any premium payable under the policy;

(c)	at least 30 days prior to the expiry of the policy if the insurers have not received renewal instructions from the Borrower and/or any jointly insured parties or the agents of any such party, and if the insurers receive instructions to renew, to advise the Agent promptly of the details thereof; and

(d)	of any act or omission or of any event of which any insurer has knowledge and which might invalidate or render unenforceable the policy in whole or in part.

12.2

The cover under this policy shall (notwithstanding any intervening expiry or renewal date or the non-payment of any premium by the Borrower, any party jointly insured with the Borrower or the agents of any such person and notwithstanding any cancellation of any cover by operation of law (unless such insurer is thereby prevented from maintaining such coverage) or by any insurer pursuant to the terms of the policy) continue in full force and effect for the benefit of each Secured Party for such period of 30 days (or such lesser period (if any) as may be specified from time to time by the insurers in the case of war risks and kindred perils) or as may be agreed between the insurers and the Security Trustee after written notice of such expiry, non-payment or cancellation has been given to the Security Trustee.

Notices

All notices or other communications under or in connection with the policy will be given in writing and may be made by fax or letter. Any such notice will be deemed to be given as follows:

(a)	if by letter, when actually received; and

(b)	if by fax, when received in legible form.

The address and fax number of the Agent and the Security Trustee for all notices under or in connection with the policy are those notified from time to time by the Agent and the Security Trustee for this purpose to the Insurance Broker at the relevant time. The initial address and fax of the Agent and the Security Trustee are as follows:

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The Agent
Address:	2 Gresham Street
	London
	EC2V 7QP
	United Kingdom

	Attention: Loans Administration
	Fax: +44 20 7597 4913
With copies of legal notices to:
Attention:	Documentation and Counterparty Management
Fax:	+44 20 7597 4975

The Security Trustee
Address:	2 Gresham Street
	London
	EC2V 7QP
	United Kingdom

	Attention: Loans Administration
	Fax: +44 20 7597 4913

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Schedule 7 – Mandatory Cost formulae

The Mandatory Cost is an addition to the interest rate to compensate the Banks for the cost of compliance with (a) the requirements of the Bank of England and/or the Financial Services Authority (or, in either case, any other authority which replaces all or any of its functions) or (b) the requirements of the European Central Bank.

On the first day of each Interest Period (or as soon as possible thereafter) the Agent shall calculate, as a percentage rate, a rate (the Additional Cost Rate) for each Bank, in accordance with the paragraphs set out below. The Mandatory Cost will be calculated by the Agent as a weighted average of the Banks' Additional Cost Rates (weighted in proportion to the percentage participation of each Bank in the relevant Loan) and will be expressed as a percentage rate per annum.

The Additional Cost Rate for any Bank lending from a Facility Office in a Participating Member State will be the percentage notified by that Bank to the Agent. This percentage will be certified by that Bank in its notice to the Agent to be its reasonable determination of the cost (expressed as a percentage of that Bank's participation in all Loans made from that Facility Office) of complying with the minimum reserve requirements of the European Central Bank in respect of loans made from that Facility Office.

4	The Additional Cost Rate for any Bank lending from a Facility Office in the United Kingdom will be calculated by the Agent as follows:

	E x 0.01	per cent per annum
	300

Where E is designed to compensate Lenders for amounts payable under the Fees Rules and is calculated by the Agent as being the average of the most recent rates of charge supplied by the Reference Banks to the Agent pursuant to paragraph 6 below and expressed in pounds per £1,000,000.

5	For the purposes of this Schedule:

(a)	Special Deposits has the meaning given to it from time to time under or pursuant to the Bank of England Act 1998 or (as may be appropriate) by the Bank of England;

(b)	Fees Rules means the rules on periodic fees contained in the FSA Supervision Manual or such other Law or regulation as may be in force from time to time in respect of the payment of fees for the acceptance of deposits;

(c)	Fee Tariffs means the fee tariffs specified in the Fees Rules under the activity group A.1 Deposit acceptors (ignoring any minimum fee or zero rated fee required pursuant to the Fees Rules but taking into account any applicable discount rate); and

(d)	Tariff Base has the meaning given to it in, and will be calculated in accordance with, the Fees Rules.

If requested by the Agent, each Reference Bank shall, as soon as practicable after publication by the Financial Services Authority, supply to the Agent, the rate of charge payable by that Reference Bank to the Financial Services Authority pursuant to the Fees Rules in respect of the relevant financial year of the Financial Services Authority (calculated for this purpose by that Reference Bank as being the average of the Fee Tariffs applicable to that Reference Bank for that financial year) and expressed in pounds per £1,000,000 of the Tariff Base of that Reference Bank.

7	Each Bank shall supply any information required by the Agent for the purpose of calculating its Additional Cost Rate. In particular, each Bank shall supply the following information on or before the date on which it becomes a Bank:

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(a)	the jurisdiction of its Facility Office; and

(b)	any other information that the Agent may reasonably require for such purpose.

Each Bank shall promptly notify the Agent of any change to the information provided by it pursuant to this paragraph.

The rates of charge of each Reference Bank for the purpose of E above shall be determined by the Agent based upon the information supplied to it pursuant to paragraphs 6 and 7 above and on the assumption that, unless a Bank notifies the Agent to the contrary, each Bank's obligations in relation to cash ratio deposits and Special Deposits are the same as those of a typical bank from its jurisdiction of incorporation with a Facility Office in the same jurisdiction as its Facility Office.

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Schedule 8 – Permits

Part A

1.	Conditional Use Permit #98-0022. Issued by: Imperial County Planning and Building Development Services March 27, 2002.

2. Reclamation Plans. Issued by: State of California, Office of Mine Reclamation.

The Mesquite Mine currently has three approved Reclamation Plans:

- Reclamation Plan 23-84 for the Mesquite Project (Mine I.D. #91-13-0019);

- Reclamation Plan 28-88 for the VCR Project (Mine I.D. #91-13-0020);

- Reclamation Plan 98-0004 for the Mesquite Expansion Project.

3.	Waste Discharge Order 95-016 - Cyanide management. Issued by: California Regional Water Quality Control Board – Colorado River Basin Region.

4. Air Quality Permit No. 1920-C. Issued by: Imperial County Air Pollution Control District

5.	Storm Water General Permit No. CAS00001 – MINE ID #713I018532. Issued by: California Regional Water Quality Control Board – Colorado River Basin Region.

6.	Streambed Alteration Agreement 6-097-00 (“1603 Permit”). Issued by: California Department of Fish and Game.

7.	Incidental Take Permit 2081-2003-011-06. Issued by: California Department of Fish and Game.(with Mitigation, Monitoring and Reporting Plan (MMRP)).

8. Biological Opinion 1-6-92-F-22R3 Issued by: US Fish & Wildlife Service

9.	Bureau of Land Management Decision Document dated January 30, 1985 approving Mesquite Project Issued by: Bureau of Land Management.

10.	Bureau of Land Management Decision Document dated November 4, 1987 approving VCR Project. Issued by: Bureau of Land Management.

11.	Bureau of Land Management Decision Document dated July 16, 2002 approving Mesquite Expansion Project. Issued by: Bureau of Land Management.

12. Hazardous Material Business Plans. Issued by: Imperial County CUPA Program

13. State Mineral Extraction Lease. Issued by: State Lands Commission.

14.	Right-of Way Issued by: Bureau of Land Management. For the utility corridor between the Vista Well Field and the site.

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Part B

1. Bonding/ Reclamation Plans.

Updated bonding will be put in place prior to the commencement of mining.

2. RE: Air Quality Permit No. 1920-C.

While this air quality permit approves all current construction and mining activities, modifications to this permit will be required when an emergency generator is installed.

3. Explosives License. To be issued by the Bureau of Alcohol, Tobacco, and Firearms.

4. Water System Permit. To be issued by the Imperial Co. Dept of Health.

Currently, all drinking water is brought to the site by a vendor.

5.	Renewal/ Update of Waste Discharge Order 95-016 - Cyanide management - for purposes of the Pad 6 expansion.

6. Renewal/Update of Waste Discharge Order 93-043 - Inert Landfill.

7.	Right-of Way. To be issued by Bureau of Land Management to replace the existing surface water line.

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Schedule 9 – Reclamation Bonds

Agency	Reference	Bond Number	Current Bond Amount
1. Imperial County, OMR, BLM	Reclamation Plan No. 23-84 (Mesquite)	ESD7315361	$1,317,800
2. Imperial County, OMR, BLM	Reclamation Plan No. 2888 (VCR)	ESD7315360	$1,067,000
3. Imperial County, OMR, BLM	Plan No. 23-84 (Tension Cracks)	ESD7315362	$61,783
4. Bureau of Land Management	Surface Management	ESD7315358	$5,637,800
5. Calif. State Lands Commission	Mineral Extraction Lease PRC 8039.2	ESD7315359	$50,000
6.Calif. Regional Water Quality Control Board	Closure Performance Bond	ESD7315363	$550,000
		TOTAL	$8,684,383

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Schedule 10 – Form of Consent to Assignment

FORM OF CONSENT AND AGREEMENT

The undersigned hereby (a) acknowledges notice of, and consents in all respects to, the pledge and assignment from Western Mesquite Mines, Inc (the “Grantor”) to Investec Bank plc, as Security Trustee (the “Security Trustee”), of all of the Grantor’s right, title and interest in, to and under the Assigned Agreement (as defined below), (b) acknowledges that the Grantor has provided it with notice of the right of the Security Trustee in the exercise of its rights and remedies to make all demands, give all notices, take all actions and exercise all rights of the Grantor under the Assigned Agreement as provided below, and (c) agrees with the Security Trustee that:

A true copy of the agreement between the undersigned and the Grantor dated [·] (the “Assigned Agreement”), including, without limitation, all amendments, modifications, restatements and supplements is attached hereto as Schedule 1. The Assigned Agreement is in full force and effect, and the undersigned is not aware of any default under the Assigned Agreement or any event that would give any party the right to terminate or rescind the Assigned Agreement. No prepayments have been made of any amounts to become due under the Assigned Agreement.

The undersigned agrees that upon receipt from the Security Trustee of notice that an “event of default” has occurred and is continuing, it will make all payments to be made by it under or in connection with the Assigned Agreement as directed by Security Trustee.

The undersigned will not, without the prior written consent of the Security Trustee, amend, amend and restate, supplement or otherwise modify the Assigned Agreement, except, in each case, to the extent otherwise permitted under the credit agreement entered into between Grantor and the Security Trustee (the relevant portions of which will be provided to the undersigned by the Grantor in the event of any proposed amendment, amendment and restatement, supplement or other modification to be entered into by the undersigned and the Grantor).

In the event of a default by the Grantor in the performance of any of its obligations under the Assigned Agreement, or upon the occurrence or non-occurrence of any event or condition under the Assigned Agreement which would immediately or with the passage of any applicable grace period or the giving of notice, or both, enable the undersigned to terminate or suspend its obligations under the Assigned Agreement, the undersigned shall not terminate the Assigned Agreement until it first gives the Security Trustee written notice of the default and permits the Security Trustee to cure the default within a period of 30 days after the later of (i) notice of default having been given to the Security Trustee by the undersigned and (ii) the expiration of the applicable cure period provided in the Assigned Agreement for the Grantor to cure the default.

Except as specifically provided in this Consent and Agreement, the Security Trustee shall have no liability or obligation under the Assigned Agreement as a result of this Consent and Agreement.

This Consent and Agreement shall be binding upon the undersigned and its successors and assigns, and shall inure to the benefit of the Security Trustee and it successors, transferees and assigns. This Consent and Agreement shall be governed by and construed in accordance with the laws of the State of [].IN WITNESS WHEREOF, the undersigned has duly executed this Consent and Agreement as of the date set opposite its name below.

Dated: [·] [NAME OF OBLIGOR]

By:______________________

Name:

Title:

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Schedule 11 – Approved Hedging Programme

This Schedule constitutes the Approved Hedging Programme.

(a)	Commodity Hedging

(i)

any Derivative Transactions to be entered into by the Borrower at any time during the Security Period relating to gold price hedging (Commodity Transactions) shall, subject to paragraph (a)(viii) below, be entered into only with the Hedging Banks pursuant to the Hedging Documents;

(ii)

Commodity Transactions shall be transacted pursuant to the Hedging Documents only by way of forward sales or agreed option strategies, including purchased puts, sold call or collar strategies for gold;

(iii)

any Commodity Transaction which requires the Borrower to deliver metal or financially settle a delivery obligation shall be a Committed Commodity Transaction and shall form part of the Commodity Transactions for the purposes of this Approved Hedging Programme;

(iv)

at any time during the Security Period, no more than 75% of the lesser of the forecast annual production at the Mesquite Mine (as set out in the Development Plan) and the proven and probable reserves of the Mesquite Mine (as determined by the Reserve Statement) shall be subject to Committed Commodity Transactions;

(v)

the term of all Commodity Transactions (other than Additional Commodity Transactions (as defined below)) shall expire no later than the Final Repayment Date;

(vi)

there shall be no margin calls or other collateral delivery obligations under any Commodity Transaction;

(vii)

the Borrower and the Hedging Banks shall have entered into Commodity Transactions on or prior to the Effective Date in respect of 40% of the forecast production over the Security Period (as set out in the Development Plan); any future Commodity Transactions shall, subject to paragraph (a)(viii) below, be entered into between the Borrower and the Hedging Banks on terms and at times agreed to by the Borrower, the Agent and the Hedging Banks entering into such Commodity Transactions, subject to the terms of this Approved Hedging Programme or as required to satisfy the Additional Drawing Conditions;

(viii)

the Borrower shall enter into Commodity Transactions only with the Hedging Banks pursuant to the Hedging Documents in relation to the original total commitments of US$105,000,000 under this Agreement. If the Borrower requires to enter into Commodity Transactions other than those referred to in the preceding sentence (for the purposes of this Approved Hedging Programme, Additional Commodity Transactions), the following provisions of this paragraph (a)(viii) shall apply: Provided that the Hedging Banks are able to offer to the Borrower pricing for Additional Commodity Transactions that is equal to or lower than the pricing offered to the Borrower by any other potential counterparty, Additional Commodity Transactions shall be entered into only with those Hedging Banks pursuant to the Hedging Documents. Accordingly, the Borrower agrees that the Hedging Banks shall have the right to offer pricing for Additional Commodity Transactions prior to the Borrower seeking pricing quotes from any other potential counterparty. If, on receiving a pricing offer for a Additional Commodity Transaction from the Hedging Banks, the Borrower is able to obtain lower pricing quote(s) for the Additional Commodity Transaction based on comparable terms (other than as to pricing and any credit support provisions) as those offered by the Hedging Banks from another potential counterparty within 30 Business Days of the date of the Hedging Banks' offer, and is able to provide to the Hedging Banks reasonable evidence of such lower pricing quote(s), the Borrower shall be entitled to enter into the Additional Commodity Transaction with that counterparty PROVIDED that:

Page 114

(aa)

the counterparty is an Additional Commodity Hedging Counterparty;

(bb)

the Additional Commodity Transaction has been approved in writing by the Agent (acting on the instructions of the Majority Banks, such approval not to be unreasonably withheld or delayed); and

(cc)

in relation to the Additional Commodity Transaction:

(AA) the obligations of the Borrower shall be unsecured;

(BB)

all payments made or to be made by the Borrower thereunder shall be subordinated to the Borrower's payments in respect of its Debt Service liabilities and Hedging Liabilities pursuant to any Permitted Hedging Transaction in accordance with Clause 9.5.2 of this Agreement; and

(CC)

it shall be otherwise on terms reasonably acceptable to the Agent (acting on the instructions of the Majority Banks);

(ix)

any failure by the Borrower to comply with paragraph (a)(iv) above shall not constitute a breach of the Approved Hedging Programme if such failure results from the failure by the Agent to give timely consent required for the Borrower to terminate those transaction(s) that are required to be terminated in accordance with the terms of the relevant Hedging Documents in order that the Borrower can comply with paragraph (a)(iv);

(b)	Interest Rate Hedging

(i)

any Derivative Transactions to be entered into by the Borrower at any time during the Security Period relating to interest rate hedging (Interest Rate Transactions) shall be entered into only with the Hedging Banks pursuant to the Hedging Documents;

(ii)

Interest Rate Transactions shall be transacted pursuant to the Hedging Documents only by way of rate swaps, caps, floors, collars or other agreed instruments of a similar nature to mitigate interest rate risk;

(iii)

at any time during the Security Period, the aggregate notional principal amount of the Interest Rate Transactions shall be no more than 80% of the Loan;

(iv)

no speculative interest rate hedging is intended to be undertaken pursuant to Interest Rate Transactions;

(v)

there shall be no margin calls or other collateral delivery obligations under any Interest Rate Transactions;

(vi)

the Borrower shall not be required to enter into Interest Rate Transactions prior to the Effective Date; any Interest Rate Transactions entered into after the Effective Date shall be on terms and at times agreed to by the Borrower, the Agent and the Hedging Banks entering into such Interest Rate Transactions, subject to the terms of this Approved Hedging Programme; and

(vii)

any failure by the Borrower to comply with paragraph (b)(iii) above shall not constitute a breach of the Approved Hedging Programme if such failure results from the failure by the Agent to give timely consent required for the Borrower to terminate those transaction(s) that are required to be terminated in accordance with the terms of the relevant Hedging Documents in order that the Borrower can comply with paragraph (b)(iii);

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(c)	Fuel Hedging

(i)

any Derivative Transactions to be entered into by the Borrower at any time during the Security Period relating to the purchase price for diesel or any other fuel required for the Project (Fuel Price Transactions) shall, subject to paragraph (c)(ii) below, be entered into only with:

(aa) the Hedging Banks pursuant to the Hedging Documents; or

(bb)

Approved Fuel Hedging Counterparties pursuant to Approved Fuel Hedging Derivative Transactions under Approved Fuel Hedging Documents;

(ii)

Provided that the Hedging Banks are able to offer to the Borrower pricing for Fuel Price Transactions that is equal to or lower than the pricing offered to the Borrower by any other potential counterparty, Fuel Price Transactions shall be entered into only with those Hedging Banks pursuant to the Hedging Documents. Accordingly, the Borrower agrees that the Hedging Banks shall have the right to offer pricing for Fuel Price Transactions prior to the Borrower seeking pricing quotes from any other potential counterparty. If, on receiving a pricing offer for a Fuel Price Transaction from the Hedging Banks, the Borrower is able to obtain lower pricing quote(s) for the Fuel Price Transaction based on comparable terms (other than as to pricing and any credit support provisions) as those offered by the Hedging Banks from another potential counterparty within 30 Business Days of the date of the Hedging Banks' offer, and is able to provide to the Hedging Banks reasonable evidence of such lower pricing quote(s), the Borrower shall be entitled to enter into the Fuel Price Transaction with that counterparty PROVIDED that that counterparty is an Approved Fuel Hedging Counterparties and the Fuel Price Transaction is an Approved Fuel Hedging Derivative Transaction;

(iii)

Fuel Price Transactions shall be transacted pursuant to the Hedging Documents or Approved Fuel Hedging Documents only by way of agreed forward purchase strategies to mitigate fuel/diesel price. Fuel Price Transactions relating to forward purchase strategies for non-diesel products will be permitted provided that the Agent and the Hedging Banks are reasonably satisfied that such transactions are an acceptable proxy for diesel price risk mitigation;

(iv)

there shall be no margin calls or other collateral delivery obligations under any Fuel Price Transactions;

(v)

the Borrower shall not be required to enter into Fuel Price Transactions prior to the Effective Date; any Fuel Price Transactions entered into after that date with the Hedging Banks shall be on terms and at times agreed to by the Borrower, the Agent and the Hedging Banks entering into such Fuel Price Transactions, subject to the terms of this Approved Hedging Programme;

(vi) in relation to any Approved Fuel Hedging Derivative Transaction:

(AA)

the obligations of the Borrower shall be unsecured, other than its obligations under the Approved Fuel Hedging Derivative Transactions entered or to be entered into by the Borrower with Commonwealth Bank of Australia and The Bank of Nova Scotia (a) pursuant to an ISDA Master Agreement and schedule thereto between the Borrower and CBA dated as of 31 May 2007, as amended by an amendment agreement dated 30 December 2008, in the case of Commonwealth Bank of Australia and (b) pursuant to a new ISDA Master Agreement and schedule thereto between the Borrower and The Bank of Nova Scotia dated as of 8 January 2009 and in accordance with an amendment agreement dated 8 January 2009 between the Borrower and The Bank of Nova Scotia relating to the existing ISDA Master Agreement and schedule thereto between the Borrower and The Bank of Nova Scotia dated as of 15 August 2007, in the case of The Bank of Nova Scotia (in each case, as approved by the Agent (acting on the instructions of the Majority Banks)) pursuant to that certain letter agreement from the Agent to the Security Companies dated on or about 8 January 2009; and

Page 116

(BB)

it shall be otherwise on terms reasonably acceptable to the Agent (acting on the instructions of the Majority Banks); and

(d)	Voting Rights

When calculating a Majority Bank vote pursuant to the Financing Documents, the Hedging Liabilities in respect of Commodity Transactions, Interest Rate Transactions and Fuel Price Transactions entered into with Hedging Banks shall be included in such a vote. Hedging Liabilities in respect of Additional Commodity Transactions entered into with Hedging Banks shall not be included in such a vote.

Page 117

The Borrower

Signed by

for and on behalf of

Western Mesquite Mines, Inc.

)

Susan Toews

WGI

Signed by

for and on behalf of

Western Goldfields Inc.

)

Susan Toews

WGI (USA)

Signed by

for and on behalf of

Western Goldfields (USA) Inc.

)

Susan Toews

The Agent

Signed by

as duly authorised attorney

for and on behalf of

Investec Bank plc

)

Chas Stott

George Rogers

The Mandated Lead Arranger

Signed by

as duly authorised attorney

for and on behalf of

Investec Bank plc

)

Chas Stott

George Rogers

The Lead Arranger

Signed by

as duly authorised attorney

for and on behalf of

Commonwealth Bank of Australia

)

Greg Caione

Page 7

The Security Trustee

Signed by

as duly authorised attorney

for and on behalf of

Investec Bank plc

)

Chas Stott

George Rogers

The Banks

Signed by

as duly authorised attorney

for and on behalf of

Investec Bank plc

)

Chas Stott

George Rogers

Signed by

as duly authorised attorney

for and on behalf of

Commonwealth Bank of Australia

)

Greg Caione

Signed by

as duly authorised attorney

for and on behalf of

Bank of Nova Scotia

)

Michael Eddy

Evan Ivanov

Signed by

as duly authorised attorney

for and on behalf of

Nedbank Limited, London Branch

)

Mark Tyler

Mark Weston

Signed by

as duly authorised attorney

for and on behalf of

Natixis

)

Anne de Tricornot Aubouin

William de Landtsheer

The Hedging Banks

Signed by

as duly authorised attorney

for and on behalf of

Investec Bank plc

)

Chas Stott

George Rogers

Page 8

Signed by

as duly authorised attorney

for and on behalf of

Commonwealth Bank of Australia

)

Greg Caione

Signed by

as duly authorised attorney

for and on behalf of

Bank of Nova Scotia

)

Michael Eddy

Evan Ivanov

Signed by

as duly authorised attorney

for and on behalf of

Natixis

)

Anne de Tricornot Aubouin

William de Landtsheer

Page 9