NOTE AND WARRANT PURCHASE

EXHIBIT 10.27

This NOTE AND WARRANT PURCHASE AGREEMENT, dated as of August 7, 2008 (this “ Agreement ”), is by and between Firstgold Corp., a Delaware corporation (the “ Company ”), Platinum Long Term Growth, LLC, a Delaware limited liability company (“ Platinum ”), and Lakewood Group LLC, a Delaware limited liability company (“ Lakewood ,” and each of Platinum and Lakewood, individually sometimes referred to as a “ Lender ,” and collectively referred to as the “ Lenders ”).

The parties hereto agree as follows:

Section 1.1       Purchase and Sale of Note and Warrant.

(a)      Upon the following terms and conditions, the Company shall issue and sell to Platinum and Lakewood, and Platinum and Lakewood shall purchase from the Company, (i) senior secured promissory notes in an aggregate principal amount of up to $15,750,000 (in the amounts set forth in this Section 1.1) and (ii) common stock purchase warrants, in substantially the form attached hereto as Exhibit A (individually, a “ Warrant ,” and collectively, the “ Warrants ”), to purchase shares of Common Stock, par value $0.001 per share, of the Company (the “ Common Stock ”) at the exercise price and upon the terms and conditions set forth therein.  The Notes shall be original issue discount Notes, each reflecting an original issue discount of 15%. Each Lender shall purchase its Pro Rata Share of Notes and Warrants at each Closing. For purposes of this Agreement, “ Pro Rata Share ” shall mean (i) with respect to Platinum, 80% and (ii) with respect to Lakewood, 20%.

(b)      At the First Closing (as hereafter defined), upon satisfaction of the terms and conditions set forth herein, the Company shall issue to Platinum and Lakewood promissory notes, substantially in the form of Exhibit A-1 hereto (the “ Initial Notes ”), in the principal amounts of Five Million Three Hundred Ninety-Four Thousand One Hundred Dollars ($5,394,100) and One Million Three Hundred Forty-Eight Thousand Five Hundred Twenty-Five Dollars ($1,348,525), respectively, and Platinum and Lakewood shall advance, as payment in full for the Initial Notes, the sums of Four Million Three Hundred Sixty-Nine Thousand Two Hundred Twenty-One Dollars ($4,369,221) and One Million Ninety-Two Thousand Three Hundred Five Dollars ($1,092,305), respectively, less (i) the original issue discounts of Eight Hundred Nine Thousand One Hundred Fifteen Dollars ($809,115) and Two Hundred Two Thousand Two Hundred Seventy-Nine Dollars ($202,279), respectively, and (ii) origination fees of Two Hundred Fifteen Thousand Seven Hundred Sixty-Four Dollars ($215,764) and Fifty-Three Thousand Nine Hundred Forty-One Dollars ($53,941), respectively.  Each Lender is further permitted to deduct from the advance made on the Closing Date the fees and expenses of such Lender as permitted by Section 7.1 hereto.  The issuance and sale of the Initial Notes is referred to herein as the “ First Closing ”.  At the First Closing, the Company shall deliver to each of Platinum and Lakewood the Warrant to purchase 12,000,000 shares and 3,000,000 shares of Common Stock, respectively, at the exercise price and upon the terms and conditions as set forth therein.

(c)      At the Second Closing (as hereafter defined), upon satisfaction of the terms and conditions set forth herein, the Company shall issue to Platinum and Lakewood promissory notes, substantially in the form of Exhibit A-2 hereto (the “ Second Notes ”), in the principal amounts of Four Million Two Hundred Five Thousand Nine Hundred Dollars ($4,205,900) and One Million Fifty-One Thousand Four Hundred Seventy-Five Dollars ($1,051,475), respectively, and Platinum and Lakewood shall advance, as payment in full for the Second Notes, the sums of Three Million Four Hundred Six Thousand Seven Hundred Seventy-Nine Dollars ($3,406,779) and Eight Hundred Fifty-One Thousand Six Hundred Ninety-Five Dollars ($851,695), respectively, less (i) the original issue discounts of Six Hundred Thirty Thousand Eight Hundred Eighty-Five Dollars ($630,885) and One Hundred Fifty-Seven Thousand Seven Hundred Twenty-One Dollars ($157,721), respectively, and (ii) origination fees of One Hundred Sixty-Eight Thousand Two Hundred Thirty-Seven Dollars ($168,237) and Forty-Two Thousand Fifty-Nine Dollars ($42,059), respectively (the “ Second Closing Origination Fees ”).  The issuance and sale of the Second Notes is referred to herein as the “ Second Closing ”.

(d)      If the Company has achieved and maintained a production level in excess of 3,000 ounces of gold per calendar month, upon at least ten (10) business days’ prior written notice from the Company to Platinum and Lakewood given any time between November 1, 2008 and November 30, 2008, the Company shall issue to Platinum and Lakewood promissory notes, substantially in the form of Exhibit A-3 hereto (the “ Third Notes ”), in the aggregate principal amount of One Million Dollars ($1,000,000) and Two Hundred Fifty Thousand Dollars ($250,000), respectively, and Platinum and Lakewood shall advance, as payment in full for the Third Notes, the sums of Eight Hundred Ten Thousand Dollars ($810,000) and Two Hundred and Two Thousand Five Hundred Dollars ($202,500), respectively, representing the principal amounts of each Third Note, less (i) the original issue discounts of One Hundred Fifty Thousand Dollars ($150,000) and Thirty-Seven Thousand Five Hundred Dollars ($37,500), respectively, and (ii) origination fees of Forty Thousand Dollars ($40,000) and Ten Thousand Dollars ($10,000), respectively (the “ Third Closing Origination Fees ”).  The issuance and sale of the Third Notes is referred to herein as the “ Third Closing ”.

(e)      If the Company has achieved and maintained a production level in excess of 3,000 ounces of gold per calendar month, upon at least ten (10) business days’ prior written notice from the Company to Platinum and Lakewood given any time between December 1, 2008 and December 30, 2008, the Company shall issue to Platinum and Lakewood promissory notes, substantially in the form of Exhibit A-4 hereto (the “ Fourth Notes ”), in the aggregate principal amount of One Million Dollars ($1,000,000) and Two Hundred Fifty Thousand Dollars ($250,000), respectively, and Platinum and Lakewood shall advance, as payment in full for the Fourth Notes, the sums of Eight Hundred Ten Thousand Dollars ($810,000) and Two Hundred and Two Thousand Five Hundred Dollars ($202,500), respectively, representing the principal amounts of each Fourth Note, less (i) the original issue discounts of One Hundred Fifty Thousand Dollars ($150,000) and Thirty-Seven Thousand Five Hundred Dollars ($37,500), respectively, and (ii) origination fees of Forty Thousand Dollars ($40,000) and Ten Thousand Dollars ($10,000), respectively (the “ Fourth Closing Origination Fees ”).  The issuance and sale of the Fourth Notes is referred to herein as the “ Fourth Closing ”.

(f)      If the Company has achieved and maintained a production level in excess of 3,000 ounces of gold per calendar month, upon at least ten (10) business days’ prior written notice from the Company to Platinum and Lakewood given any time between January 1, 2009 and January 30, 2009, the Company shall issue to Platinum and Lakewood promissory notes, substantially in the form of Exhibit A-5 hereto (the “ Fifth Notes ” and together with the Initial Notes, the Second Notes, the Third Notes and the Fourth Notes, the “ Notes ”), in the aggregate principal amount of One Million Dollars ($1,000,000) and Two Hundred Fifty Thousand Dollars ($250,000), respectively, and Platinum and Lakewood shall advance, as payment in full for the Fifth Notes, the sums of Eight Hundred Ten Thousand Dollars ($810,000) and Two Hundred and Two Thousand Five Hundred Dollars ($202,500), respectively, representing the principal amounts of each Fifth Note, less (i) the original issue discounts of One Hundred Fifty Thousand Dollars ($150,000) and Thirty-Seven Thousand Five Hundred Dollars ($37,500), respectively, and (ii) origination fees of Forty Thousand Dollars ($40,000) and Ten Thousand Dollars ($10,000), respectively (the “ Fifth Closing Origination Fees ” and, together with the Second Closing Origination Fees, the Third Closing Origination Fees and the Fourth Closing Origination Fees, the “ Subsequent Closing Origination Fees ”).  The issuance and sale of the Fifth Notes is referred to herein as the “ Fifth Closing ”.  The Second Closing, the Third Closing, the Fourth Closing and the Fifth Closing are each referred to herein as a “ Subsequent Closing ” and are collectively referred to herein as the “ Subsequent Closings ”.  The First Closing, the Second Closing, the Third Closing, the Fourth Closing and the Fifth Closing are each referred to herein as a “ Closing ” and are collectively referred to herein as the “ Closings ”.

(g)      In the event any Subsequent Closing does not occur (whether as a result of the failure of the Company to provide notice as set forth herein or the failure of the Company to satisfy any condition with respect to such Subsequent Closing), the Company shall pay to the Lenders, within 10 days following the latest date the Company could otherwise request that the Lenders advance funds pursuant to Section 1.1(c), (d) or (e), as the case may be, the Subsequent Closing Origination Fees that would have otherwise been payable to the Lenders in their respective Pro Rata Share (or as may be deducted by the Lenders from funds advanced in such Subsequent Closing pursuant to the terms hereof) in connection with such Subsequent Closing.  The obligation of the Company set forth in this Section 1.1(f) shall be deemed evidenced by this Agreement and secured by the collateral as contemplated by the other Transaction Documents (as defined below).

Section 1.2       Closing .

The First Closing under this Agreement shall take place on or before August 7, 2008 (the “ Initial Closing Date ”).  Each Closing hereunder shall take place at the offices of the Platinum, 152 West 57 ^th Street, 4 ^th Floor, New York, NY 10:00 a.m. New York time; provided , that all of the conditions set forth in Article IV hereof and applicable to such Closing shall have been fulfilled or waived in accordance herewith.  At each Closing, each Lender shall make its applicable advances described in Section 1.1 above by wire transfer of immediately available funds to an account designated by the Company.

Section 1.3       Warrant Shares .

The Company has authorized and has initially reserved and covenants to continue to reserve, free of preemptive rights and other similar contractual rights of stockholders, a number of its authorized but unissued shares of Common Stock at least equal to the aggregate number of shares of Common Stock to effect the exercise of each Warrant in full.  Any shares of Common Stock issuable upon exercise of each Warrant (and such shares when issued) are herein referred to as the “ Warrant Shares ”.  The Warrants and the Warrant Shares are sometimes collectively referred to herein as the “ Securities ”.

Section 2.1       Representations and Warranties of the Company .

The Company hereby represents and warrants to the Lenders, as of the date hereof and the date of each Closing hereunder (except as set forth on the Schedule of Exceptions attached hereto with each numbered Schedule corresponding to the section number herein), as follows:

(a)       Organization, Good Standing and Power .  The Company is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware and has the requisite corporate power to own, lease and operate its properties and assets and to conduct its business as it is now being conducted.  The Company does not have any direct or indirect Subsidiaries (as defined in Section 2.1(g)) or own securities of any kind in any other entity except as set forth on Schedule 2.1(g) hereto.  The Company and each such Subsidiary (as defined in Section 2.1(g)) is duly qualified as a foreign corporation, limited liability company or limited partnership to do business and is in good standing in Nevada and in every other jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary except for any jurisdiction(s) (alone or in the aggregate) in which the failure to be so qualified will not have a Material Adverse Effect.  For the purposes of this Agreement, “ Material Adverse Effect ” means any material adverse effect on the business, operations, properties, prospects, or financial condition of the Company or any Subsidiary and/or any condition, circumstance, or situation that would prohibit or otherwise materially interfere with the ability of the Company to perform any of its obligations under this Agreement or any of the Transaction Documents in any material respect.

(b)       Authorization; Enforcement .  The Company and the Subsidiaries (as applicable) have the requisite corporate power and authority to enter into and perform this Agreement, the Notes, the Warrants, the Security Agreement by and among the Company and the Subsidiaries, on the one hand, and Platinum (as collateral agent), on the other hand, dated as of the date hereof, substantially in the form of Exhibit B attached hereto (the “ Security Agreement ”) the Officer’s Certificate to be delivered by the Company, dated as of each Closing Date, substantially in the form of Exhibit C attached hereto (the “ Officer’s Certificate ”), the Deeds of Trust, Security Agreement and Fixture Filings, dated as of the Closing Date, from the Company, as Grantor, substantially in the form attached hereto as Exhibit D (the “ Mortgage ”), the Environmental Indemnity Agreement, dated as of the Closing Date, among the Company and the Lenders, substantially in the form of Exhibit E (the “ Environmental Indemnity Agreement ”), the guarantee (“ Guarantee ”) to be delivered by each of the Subsidiaries, dated as of the date hereof, substantially in the form of Exhibit F , the Irrevocable Transfer Agent Instructions (as defined in Section 3.16 hereof) and the Off-Take Agreement (as defined in Section 3.28 hereof) (collectively, together with this Agreement, the Notes and the Warrants the “ Transaction Documents ”), and to issue and sell the Securities in accordance with the terms hereof.  

The execution, delivery and performance of the Transaction Documents by the Company and the consummation by it of the transactions contemplated thereby have been duly and validly authorized by all necessary corporate action, and, except as set forth on Schedule 2.1(b) , no further consent or authorization of the Company, its Board of Directors, stockholders or any other third party is required.  When executed and delivered by the Company and the Subsidiaries, each of the Transaction Documents shall constitute a valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, reorganization, moratorium, liquidation, conservatorship, receivership or similar laws relating to, or affecting generally the enforcement of, creditor’s rights and remedies or by other equitable principles of general application.

(c)       Capitalization .  The authorized capital stock and the issued and outstanding shares of capital stock of the Company as of the Initial Closing Date is set forth on Schedule 2.1(c)(i) hereto.  All of the outstanding shares of the Common Stock and any other outstanding security of the Company have been duly and validly authorized.  Except as set forth in this Agreement, or as set forth on Schedule 2.1(c)(ii) hereto, no shares of Common Stock or any other security of the Company are entitled to preemptive rights or registration rights and there are no outstanding options, warrants, scrip, rights to subscribe to, call or commitments of any character whatsoever relating to, or securities or rights convertible into, any shares of capital stock of the Company.  Furthermore, except as set forth in this Agreement and as set forth on Schedule 2.1(c)(iii) hereto, there are no contracts, commitments, understandings, or arrangements by which the Company is or may become bound to issue additional shares of the capital stock of the Company or options, securities or rights convertible into shares of capital stock of the Company.  Except as provided on Schedule 2.1(c)(iv) hereto, the Company is not a party to or bound by any agreement or understanding granting registration or anti-dilution rights to any person with respect to any of its equity or debt securities.  Except as set forth on Schedule 2.1(c)(v) , the Company is not a party to, and it has no knowledge of, any agreement or understanding restricting the voting or transfer of any shares of the capital stock of the Company.

(d)       Issuance of Securities .  The Notes and the Warrants have been duly authorized by all necessary corporate action and, when paid for or issued in accordance with the terms hereof, the Notes shall be validly issued and outstanding, free and clear of all liens, encumbrances and rights of refusal of any kind.  When the Warrant Shares are issued and paid for in accordance with the terms of this Agreement and as set forth in each Warrant, such shares will be duly authorized by all necessary corporate action and validly issued and outstanding, fully paid and nonassessable, free and clear of all liens, encumbrances and rights of refusal of any kind and the holders shall be entitled to all rights accorded to a holder of Common Stock.

(e)       No Conflicts .  The execution, delivery and performance of the Transaction Documents by the Company, the performance by the Company of its obligations under the Notes and the consummation by the Company and the Subsidiaries of the transactions contemplated hereby and thereby, and the issuance of the Securities as contemplated hereby, do not and will not (i) violate or conflict with any provision of the Company’s Certificate of Incorporation (the “ Certificate of Incorporation ”) or Bylaws (the “ Bylaws ”), each as amended to date, or any Subsidiary’s comparable charter documents, (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, mortgage, deed of trust, indenture, note, bond, license, lease agreement, instrument or obligation to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries’ respective properties or assets are bound, (iii) result in a violation of any federal, state, local or foreign statute, rule, regulation, order, judgment or decree (including federal and state securities laws and regulations) applicable to the Company or any of its Subsidiaries or by which any property or asset of the Company or any of its Subsidiaries are bound or affected, or (iv) create or impose a lien, mortgage, security interest, charge or encumbrance of any nature on any property or asset of the Company or its Subsidiaries under any agreement or under any commitment to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound or by which any of their respective properties or assets are bound, except, in all cases, for such conflicts, defaults, terminations, amendments, acceleration, cancellations and violations as would not, individually or in the aggregate, have a Material Adverse Effect (other than violations pursuant to clauses (i) or (iii) (with respect to federal and state securities laws)).  Neither the Company nor any of its Subsidiaries is required under federal, state, foreign or local law, rule or regulation to obtain any consent, authorization or order of, or make any filing or registration with, any court or governmental agency in order for it to execute, deliver or perform any of its obligations under the Transaction Documents or issue and sell the Securities in accordance with the terms hereof (other than any filings, consents and approvals which may be required to be made by the Company under applicable state and federal securities laws, rules or regulations).  The business of the Company and its Subsidiaries is not being conducted in violation of any laws, ordinances or regulations of any governmental entity.

(f)       Commission Documents, Financial Statements .  The Common Stock of the Company is registered pursuant to Section 12(b) or 12(g) of the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), and the Company has timely filed all reports, schedules, forms, statements and other documents required to be filed by it with the Securities and Exchange Commission (the “ Commission ”) pursuant to the reporting requirements of the Exchange Act (all of the foregoing including filings incorporated by reference therein being referred to herein as the “ Commission Documents ”).  Each Commission Document complied in all material respects with the requirements of the Exchange Act and the rules and regulations of the Commission promulgated thereunder and other federal, state and local laws, rules and regulations applicable to such documents, and the Commission Documents do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.  As of their respective dates, the financial statements of the Company included in the Commission Documents complied as to form in all material respects with applicable accounting requirements and the published rules and regulations of the Commission or other applicable rules and regulations with respect thereto.  Such financial statements have been prepared in accordance with generally accepted accounting principles (“ GAAP ”) applied on a consistent basis during the periods involved (except (i) as may be otherwise indicated in such financial statements or the notes thereto or (ii) in the case of unaudited interim statements, to the extent they may not include footnotes or may be condensed or summary statements), and fairly present in all material respects the financial position of the Company and its Subsidiaries as of the dates thereof and the results of operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments).

(g)       Subsidiaries .   Schedule 2.1(g) hereto sets forth each Subsidiary of the Company, showing the jurisdiction of its incorporation or organization and showing the percentage of each person’s ownership of the outstanding stock or other interests of such Subsidiary.  For the purposes of this Agreement, “ Subsidiary ” shall mean any corporation or other entity of which at least 50% of the securities or other ownership interest having ordinary voting power (absolutely or contingently) for the election of directors or other persons performing similar functions are at the time owned directly or indirectly by the Company and/or any of its other Subsidiaries.  All of the outstanding shares of capital stock of each Subsidiary have been duly authorized and validly issued, and are fully paid and nonassessable.  Except as set forth on Schedule 2.1(g) hereto, there are no outstanding preemptive, conversion or other rights, options, warrants or agreements granted or issued by or binding upon any Subsidiary for the purchase or acquisition of any shares of capital stock of any Subsidiary or any other securities convertible into, exchangeable for or evidencing the rights to subscribe for any shares of such capital stock.  Neither the Company nor any Subsidiary is subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of the capital stock of any Subsidiary or any convertible securities, rights, warrants or options of the type described in the preceding sentence except as set forth on Schedule 2.1(g) hereto.  Neither the Company nor any Subsidiary is party to, nor has any knowledge of, any agreement restricting the voting or transfer of any shares of the capital stock of any Subsidiary.  Each Subsidiary is duly organized, validly existing and in good standing under the laws of the jurisdictions set forth on Schedule 2.1(g) and has the requisite corporate or other power to own, lease and operate its properties and assets and to conduct its business as it is now being conducted.

(h)       No Material Adverse Change .  Since January 31, 2008, the Company has not experienced or suffered any Material Adverse Effect.

(i)       No Undisclosed Liabilities .  Except as disclosed on Schedule 2.1(i) hereto, since January 31, 2008, neither the Company nor any of its Subsidiaries has incurred any liabilities, obligations, claims or losses (whether liquidated or unliquidated, secured or unsecured, absolute, accrued, contingent or otherwise) other than those incurred in the ordinary course of the Company’s or its Subsidiaries respective businesses or which, individually or in the aggregate, are not reasonably likely to have a Material Adverse Effect.

(j)       No Undisclosed Events or Circumstances .  Since January 31, 2008, except as disclosed on Schedule 2.1(j) hereto, no event or circumstance has occurred or exists with respect to the Company or its Subsidiaries or their respective businesses, properties, prospects, operations or financial condition, which, under applicable law, rule or regulation, requires public disclosure or announcement by the Company but which has not been so publicly announced or disclosed.

(k)       Indebtedness .   Schedule 2.1(k) hereto sets forth as of the date hereof all outstanding secured and unsecured Indebtedness of the Company or any Subsidiary, or for which the Company or any Subsidiary has, or after the date hereof expects to have, commitments.  For the purposes of this Agreement, “ Indebtedness ” shall mean  (a) all obligations for borrowed money, (b) all obligations evidenced by bonds, debentures, notes, or other similar instruments and all reimbursement or other obligations in respect of letters of credit, bankers acceptances, current swap agreements, interest rate hedging agreements, interest rate swaps, or other financial products, (c) all capital lease obligations that exceed $10,000 in the aggregate in any fiscal year, (d) all obligations or liabilities secured by a lien or encumbrance on any asset of the Company, irrespective of whether such obligation or liability is assumed, (e) all obligations for the deferred purchase price of assets, together with trade debt and other accounts payable that exceed $10,000 in the aggregate in any fiscal year, (f) all synthetic leases, and (g) any obligation guaranteeing or intended to guarantee (whether directly or indirectly guaranteed, endorsed, co-made, discounted or sold with recourse) any of the foregoing obligations of any other person; provided, however, Indebtedness shall not include (I) usual and customary trade debt incurred in the ordinary course of business and (II) endorsements for collection or deposit in the ordinary course of business.  Neither the Company nor any Subsidiary is in default with respect to any Indebtedness.

(l)       Title to Assets .  Each of the Company  and the Subsidiaries has good and valid title to all of its real and personal property reflected in the Commission Documents, free and clear of any mortgages, pledges, charges, liens, security interests or other encumbrances, except for those indicated on Schedule 2.1(l) hereto.  Any leases of the Company and each of its Subsidiaries are valid and subsisting and in full force and effect. The Company and its Subsidiaries has each complied in all respects with the terms of each of the leases described on Schedule 2.1(l) hereto, and has not received notice that it has failed to so comply from any applicable lessor. Pursuant to, and upon execution and delivery of, the Security Agreement and the Mortgage, the Company and its Subsidiaries shall have granted to the Lenders a perfected, first priority security interest in substantially all of the assets of the Company and the Subsidiaries.  Without limiting the generality of the foregoing, the Company has good and valid title to the mining claims described on Schedule 2.1(l) hereto, subject only to the paramount title of the United States and the requirement for discovery of minerals, and the Company is aware of no dispute or challenge to such claims; such claims are valid under the mining laws of the United States and the State of Nevada, and the Company has timely paid all fees, assessments and other amounts due the State of Nevada and United States with respect to such claims.

(m)       Actions Pending .  There is no action, suit, claim, investigation, arbitration, alternate dispute resolution proceeding or other proceeding pending or, to the knowledge of the Company, threatened against the Company or any Subsidiary which questions the validity of this Agreement or any of the other Transaction Documents or any of the transactions contemplated hereby or thereby or any action taken or to be taken pursuant hereto or thereto.  Except as set forth on Schedule 2.1(m) hereto, there is no action, suit, claim, investigation, arbitration, alternate dispute resolution proceeding or other proceeding pending or, to the knowledge of the Company, threatened against or involving the Company, any Subsidiary or any of their respective properties or assets, which individually or in the aggregate, would reasonably be expected, if adversely determined, to have a Material Adverse Effect.  There are no outstanding orders, judgments, injunctions, awards or decrees of any court, arbitrator or governmental or regulatory body against the Company or any Subsidiary or any officers or directors of the Company or Subsidiary in their capacities as such, which individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

(n)       Compliance with Law .  The business of the Company and the Subsidiaries has been and is presently being conducted in accordance with all applicable federal, state and local governmental laws, rules, regulations and ordinances, except such that, individually or in the aggregate, the noncompliance therewith could not reasonably be expected to have a Material Adverse Effect.  The Company and each of its Subsidiaries have all franchises, permits, licenses, consents and other governmental or regulatory authorizations and approvals necessary for the conduct of its business as now being conducted by it unless the failure to possess such franchises, permits, licenses, consents and other governmental or regulatory authorizations and approvals, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.  Other than the delivery of a bond in the amount of $2,183,846, the Company has all franchises, permits, licenses, consents and other governmental or regulatory authorizations and approvals necessary to conduct mining operations at the “Relief Canyon” mine described in the Commission Documents.

(o)       Taxes .  The Company and each of the Subsidiaries has accurately prepared and filed all federal, state and other tax returns required by law to be filed by it, has paid or made provisions for the payment of all taxes shown to be due and all additional assessments, and adequate provisions have been and are reflected in the financial statements of the Company and the Subsidiaries for all current taxes and other charges to which the Company or any Subsidiary is subject and which are not currently due and payable.  Except as disclosed on Schedule 2.1(o) hereto, none of the federal income tax returns of the Company or any Subsidiary have been audited by the Internal Revenue Service.  The Company has no knowledge of any additional assessments, adjustments or contingent tax liability (whether federal or state) of any nature whatsoever, whether pending or threatened against the Company or any Subsidiary for any period, nor of any basis for any such assessment, adjustment or contingency.

(p)       Disclosure .  Except for the transactions contemplated by this Agreement, the Company confirms that neither it nor any other person acting on its behalf has provided the Lenders or their agents or counsel with any information that constitutes or might constitute material, nonpublic information.  To the best of the Company’s knowledge, neither this Agreement or the Schedules hereto nor any other documents, certificates or instruments furnished to the Lenders by or on behalf of the Company or any Subsidiary in connection with the transactions contemplated by this Agreement contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made herein or therein, in the light of the circumstances under which they were made herein or therein, not misleading.

(q)       Environmental Compliance .  The Company and each of its Subsidiaries have obtained all material approvals, authorization, certificates, consents, licenses, orders and permits or other similar authorizations of all governmental authorities, or from any other person, that are required under any  Environmental Laws.  “ Environmental Laws ” shall mean all applicable laws relating to the protection of the environment including, without limitation, all requirements pertaining to reporting, licensing, permitting, controlling, investigating or remediating emissions, discharges, releases or threatened releases of hazardous substances, chemical substances, pollutants, contaminants or toxic substances, materials or wastes, whether solid, liquid or gaseous in nature, into the air, surface water, groundwater or land, or relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of hazardous substances, chemical substances, pollutants, contaminants or toxic substances, material or wastes, whether solid, liquid or gaseous in nature.  

The Company has all necessary governmental approvals required under all Environmental Laws as necessary for the Company’s business or the business of any of its subsidiaries.  To the best of the Company’s knowledge, the Company and each of its subsidiaries are also in compliance with all other limitations, restrictions, conditions, standards, requirements, schedules and timetables required or imposed under all Environmental Laws.  Except for such instances as would not individually or in the aggregate have a Material Adverse Effect, there are no past or present events, conditions, circumstances, incidents, actions or omissions relating to or in any way affecting the Company or its Subsidiaries that violate or may violate any Environmental Law after the date hereof or that may give rise to any environmental liability, or otherwise form the basis of any claim, action, demand, suit, proceeding, hearing, study or investigation (i) under any Environmental Law, or (ii) based on or related to the manufacture, processing, distribution, use, treatment, storage (including without limitation underground storage tanks), disposal, transport or handling, or the emission, discharge, release or threatened release of any hazardous substance.

(r)       Books and Records; Internal Accounting Controls .  The records and documents of the Company and its Subsidiaries accurately reflect in all material respects the information relating to the business of the Company and its Subsidiaries, the location and collection of their assets, and the nature of all transactions giving rise to the obligations or accounts receivable of the Company or any Subsidiary. The Company is in material compliance with all provisions of the Sarbanes-Oxley Act of 2002 which are applicable to it as of the applicable Closing Date. The Company and its Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The Company has established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and designed such disclosure controls and procedures to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. The Company’s certifying officers have evaluated the effectiveness of the Company’s disclosure controls and procedures as of the end of the period covered by the Company’s most recently filed periodic report under the Exchange Act (such date, the “ Evaluation Date ”). The Company presented in its most recently filed periodic report under the Exchange Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no changes in the Company’s internal control over financial reporting (as such term is defined in the Exchange Act) that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

(s)       Material Agreements .  The Company and each of its Subsidiaries have performed all obligations required to be performed by them to date under any written or oral contract, instrument, agreement, commitment, obligation, plan or arrangement, filed or required to be filed with the Commission (the “ Material Agreements ”).  Neither the Company nor any of its Subsidiaries has received any notice of default under any Material Agreement.  Neither the Company nor any of its Subsidiaries is in default under any Material Agreement now in effect.

(t)       Transactions with Affiliates .  Except as set forth on Schedule 2.1(t) hereto and in the Commission Documents, there are no loans, leases, agreements, contracts, royalty agreements, management contracts or arrangements or other continuing transactions between (a) the Company, any Subsidiary or any of their respective customers or suppliers on the one hand, and (b) on the other hand, any officer, employee, consultant or director of the Company, or any of its Subsidiaries, or any person owning at least 5% of the outstanding capital stock of the Company or any Subsidiary or any member of the immediate family of such officer, employee, consultant, director or stockholder or any corporation or other entity controlled by such officer, employee, consultant, director or stockholder, or a member of the immediate family of such officer, employee, consultant, director or stockholder which, in each case, is required to be disclosed in the Commission Documents or in the Company’s most recently filed definitive proxy statement on Schedule 14A, that is not so disclosed in the Commission Documents or in such proxy statement.

(u)       Securities Act of 1933 .  The Company has complied and will comply with all applicable federal and state securities laws in connection with the offer, issuance and sale of the Securities hereunder.  Neither the Company nor anyone acting on its behalf, directly or indirectly, has or will sell, offer to sell or solicit offers to buy any of the Securities or similar securities to, or solicit offers with respect thereto from, or enter into any negotiations relating thereto with, any person, or has taken or will take any action so as to bring the issuance and sale of any of the Securities under the registration provisions of the Securities Act and applicable state securities laws, and neither the Company nor any of its affiliates, nor any person acting on its or their behalf, has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D under the Securities Act) in connection with the offer or sale of any of the Securities.  The Company is not, and has never been, a company described in Rule 144(i)(1) under the Securities Act, and is a “reporting issuer” as described in Rule 144(c)(1) under the Securities Act.   Neither the Company, nor any of its directors, officers or controlling persons, has taken or will, in violation of applicable law, take, any action designed to or that might reasonably be expected to cause or result in, or which has constituted, stabilization or manipulation of the price of the Common Stock to facilitate the sale or resale of the securities issued or issuable in connection with the transactions contemplated hereunder.

(v)       Employees .  Neither the Company nor any Subsidiary has any collective bargaining arrangements or agreements covering any of its employees, except as set forth on Schedule 2.1(v) hereto.  Except as set forth on Schedule 2.1(v) hereto, neither the Company nor any Subsidiary has any employment contract, agreement regarding proprietary information, non-competition agreement, non-solicitation agreement, confidentiality agreement, or any other similar contract or restrictive covenant, relating to the right of any officer, employee or consultant to be employed or engaged by the Company or such Subsidiary required to be disclosed in the Commission Documents that is not so disclosed.  No officer, consultant or key employee of the Company or any Subsidiary whose termination, either individually or in the aggregate, would be reasonably likely to have a Material Adverse Effect, has terminated or, to the knowledge of the Company, has any present intention of terminating his or her employment or engagement with the Company or any Subsidiary.

(w)       Absence of Certain Developments .  Except as set forth in the Commission Documents or provided on Schedule 2.1(w) hereto, since January 31, 2008, neither the Company nor any Subsidiary has:

(i)   issued any stock, bonds or other corporate securities or any right, options or warrants with respect thereto;

(ii)   borrowed any amount in excess of $100,000 or incurred or become subject to any other liabilities in excess of $100,000 (absolute or contingent) except current liabilities incurred in the ordinary course of business which are comparable in nature and amount to the current liabilities incurred in the ordinary course of business during the comparable portion of its prior fiscal year, as adjusted to reflect the current nature and volume of the business of the Company and its Subsidiaries;

(iii)   discharged or satisfied any lien or encumbrance in excess of $100,000 or paid any obligation or liability (absolute or contingent) in excess of $100,000, other than current liabilities paid in the ordinary course of business;

(iv)   declared or made any payment or distribution of cash or other property to stockholders with respect to its stock, or purchased or redeemed, or made any agreements so to purchase or redeem, any shares of its capital stock, in each case in excess of $50,000 individually or $100,000 in the aggregate;

(v)   sold, assigned or transferred any other tangible assets, or canceled any debts or claims, in each case in excess of $100,000, except in the ordinary course of business;

(vi)   sold, assigned or transferred any patent rights, trademarks, trade names, copyrights, trade secrets or other intangible assets or intellectual property rights in excess of $100,000, or disclosed any proprietary confidential information to any person except to customers in the ordinary course of business;

(vii)   suffered any material losses or waived any rights of material value, whether or not in the ordinary course of business, or suffered the loss of any material amount of prospective business;

(viii)   made any changes in employee compensation except in the ordinary course of business and consistent with past practices;

(ix)   made capital expenditures or commitments therefor that aggregate in excess of $100,000;

(x)   entered into any material transaction, whether or not in the ordinary course of business;

(xi)   made charitable contributions or pledges in excess of $10,000;

(xii)   suffered any material damage, destruction or casualty loss, whether or not covered by insurance;

(xiii)   experienced any material problems with labor or management in connection with the terms and conditions of their employment; or

(xiv)   entered into an agreement, written or otherwise, to take any of the foregoing actions.

(x)       Public Utility Holding Company Act and Investment Company Act Status .  The Company is not a “holding company” or a “public utility company” as such terms are defined in the Public Utility Holding Company Act of 1935, as amended.  The Company is not, and as a result of and immediately upon the Closing will not be, an “investment company” or a company “controlled” by an “investment company,” within the meaning of the Investment Company Act of 1940, as amended (the “ Investment Company Act ”).

(y)       ERISA .  No liability to the Pension Benefit Guaranty Corporation has been incurred with respect to any Plan by the Company or any of its Subsidiaries which is or would be materially adverse to the Company and its Subsidiaries.  The execution and delivery of this Agreement and the issuance and sale of the Securities will not involve any transaction which is subject to the prohibitions of Section 406 of the Employee Retirement Income Security Act of 1974, as amended (“ ERISA ”) or in connection with which a tax could be imposed pursuant to Section 4975 of the Internal Revenue Code of 1986, as amended.  As used in this Section 2.1(y), the term “ Plan ” shall mean an “employee pension benefit plan” (as defined in Section 3 of ERISA) which is or has been established or maintained, or to which contributions are or have been made, by the Company or any Subsidiary or by any trade or business, whether or not incorporated, which, together with the Company or any Subsidiary, is under common control, as described in Section 414(b) or (c) of the Code.

(z)       No Integrated Offering .  Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf, has directly or indirectly made any offers or sales of any security or solicited any offers to buy any security under circumstances tha