EXHIBIT 10.12

                           EXHIBIT 10.12

                  Securities Purchase Agreement

              Letter of Terra Silex Holdings, LLC.
                          July 23, 2001



Xxxx Xxxxxxxxx
President
Daleco Resources, Inc.
Xxxx Xxxxxxx, XX  00000

Dear Xxxx,

     This letter, when accepted by you, will set forth the
intent of the parties as to general terms upon which Terra Silex
Holdings LLC. ("Terra Silex") will acquire up to 30% of the
Common Stock of Daleco Resources Inc. ("Daleco") ("Common
Stock").

     1.  At the closing of the sale ("Closing"), Daleco will
         receive in immediately available funds (a) not less
         than $4,000,000 or such greater amount as necessary so
         that Terra Silex will own, immediately after Closing,
         30% of the issued and outstanding Common Stock.  The
         Common Stock will be purchased at the price of $1.75
         per share.;

     2.  At the Closing, Terra Silex would receive:

         (a)  2,285,714 shares of Daleco common stock;

         (b)  2 seats on the board of directors of Daleco;

         (c)  "Dilution Protection" in the form of warrants at
               an exercise price equal to $2 per share.  Said
               "Dilution Protection" shall be limited to the
               conversion and/or execution of all outstanding
               preferred shares, options and warrants existing
               as of the date of this Letter of Intent and
               expressly excludes any subsequent transaction(s);
               and,

         (d)  A 3% commission on any contract executed by Daleco
              for the sale and/or lease of products and services
              obtained by and through the direct efforts of
              Terra Silex, but not otherwise.  Said commission
              to be directly applied to the potential execution
              of any warrants issued to Terra Silex as part of
              the "Dilution Protection".

     3.  Daleco will provided a "discussion draft" of the Stock
         Purchase Agreement by August 3, 2001. The Stock
         Purchase Agreement will provide for normal
         representations and warranties associated with this
         type of equity transaction.  The parties will work in
         good faith to sign a definitive Stock Purchase
         Agreement on or before August 31, 2001 ("Closing
         Date").

     4.  Each party shall bear its own legal, investment
         banking, and other expenses in connection with the
         negotiation, documentation, and closing of the stock
         acquisition, whether or not the closing occurs.  No
         party has engaged any broker or finder in connection
         with the acquisition.

The parties agree that this letter is merely an expression of
intent and neither party is under any legal obligation to the
other (and no third party shall have any right) until a
definitive Purchase Agreement is executed

     If the foregoing is in accordance with your understanding,
please execute and return the enclosed copy of this letter.

                              Very truly yours,



                              Managing Partner,
                              Terra Silex LLC.


Agreed to this day of July, 2001
Daleco Ressources Corporation

By________________________
  President