Exhibit 4.5

Mr. Notary:

Please issue a Deed in your Registry of Public Deeds,  recording the Exploration
CESION and MINING RIGHTS Purchase OPTION  celebrated  between,  on the one hand,
Compania  de  Exploraciones,   Desarrollo  e  Inversiones  Mineras,  S.A.,  with
RUCN(degree)  10128358,  registered in Record 1, File 10.003 of the  Contractual
Societies and Other Juridical  Entities  Register of the Public Mining Registry,
Central  Registry  Office of Lima,  located at Luis N. Saenz No  447-449,  Jesus
Maria - Lima, duly  represented by its Manager,  Mr.  Jean-Marie  Georgel Paris,
identified with French Passport N(degree)  914552529,  according to the power of
attorney granted by the Board of Directors'  minutes dated March 14, 1997, whose
pertinent  parts on a notarised  certified  copy,  you shall  insert,  who shall
henceforth be known as CEDIMIN; and on the other hand, Compania Minera MANHATTAN
S.A.,  with RUC N(degree)  25182898,  registered in entry 001, file 40091 of the
Contractual Societies and Other Juridical Entities Register of the Public Mining
Registry,  Central  Registry  Office of Lima,  located at  Baltazar  de la Torre
N(degree) 685, San Isidro - Lima,  duly  represented by its Director,  Mr. Harry
Percy Sutherland Dyason,  identified with Canadian Passport N(degree)  VN846462,
and its General  Manager,  Mr. Ruben Corvalan  Camps,  identified  with Canadian
Passport  N(degree)  WX140383,  duly authorised  according the power of attorney
granted by the Meeting of the  General  Extraordinary  Shareholder's  Meeting of
November 22, 1996, which in its pertinent parts and on a certified copy before a
Notary,  shall be inserted by you, Mr. Notary,  who shall henceforth be known as
MANHATTAN.

CEDIMIN and MANHATTAN shall be jointly known as The PARTIES.

Based on the  good  faith of The  PARTIES,  the  terms  and  conditions  of this
contract are the following:

1.   First Clause - On the MINING RIGHTS

     1.1  CEDIMIN  declares  to be the  titleholder  of the  following  metallic
          MINING RIGHTS,  henceforth the MINING RIGHTS,  located in the District
          of Tambo Grande,  Province and Department of Pittra (Sheet 10C and 11C
          of the IGN).

                       Public Mining Registry Registration
                               MINING RIGHTS' Book

        Name                   Register      Hectares      State    Entry   File
        El Papayo 1            2249          1000          C
        El Papayo 2            2250          400           C
        Locuto 1               2329          700           C
        Locuto 2               2330          500           C
        Locuto 3               2331          400           C
        Vega Hoyada Honda      2341          100           C
        Vega La Rita I         2322          100           C
        C = ConCESION


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1.2  Regarding the MINING RIGHTS listed in 1.1 CEDIMIN declares and guarantees:

     1.2.1     That it is the sole  titleholder of the MINING RIGHTS,  and is up
               to  date  with  the  payment  of  the  Validity  Tax  up to  1997
               inclusive;  and,  likewise  they are subject to no  encumbrances,
               liens or judicial or  extra-judicial  measures of any nature that
               might limit the execution of the exploration activities.

     1.2.2     That during the whole  validity of this contract it shall perfect
               the title  documents  of all and each one of the  MINING  RIGHTS,
               which it shall also maintain in force and free of encumbrances.

     1.2.3     That  should it  acquire  new mining  properties  by any means to
               cover adjoining areas to the MINING RIGHTS,  and should it decide
               to  transfer  them  later,   it  shall  grant  first   purchasing
               preferential  right to the  company  that shall be  incorporated,
               provided  MANHATTAN  exercise  the OPTION  which  further down is
               conferred in its favour.

     1.2.4     That should it acquire the surface  properties  by any means that
               comprise the MINING RIGHTS or are  adjoining to them,  and should
               it decide to transfer them later, it shall grant first purchasing
               preferential  right to the  company  that shall be  incorporated,
               provided  MANHATTAN  exercise  the OPTION  which  further down is
               conferred in its favour.

     1.2.5     That no contract has been celebrated with third PARTIES, contrary
               to this present one.

     1.2.6     That there are no interim or precautionary  measures of any type,
               pending or executed, judicial, administrative,  taxation or claim
               proceedings,  that affect or that might  affect  MANHATTAN in any
               way to impede or obstruct  the  celebration  and/or  execution of
               this present contract. Likewise, declares that it is not aware of
               the existence of events that might give rise to said actions, not
               that said actions are to be initiated.

     1.2.7     That to date there are no  administrative  regulations  regarding
               security,  health and/or environmental protection demands, on the
               MINING RIGHTS or on the surface  properties that they cover, such
               as: fines,  indemnities,  reparations,  constructions  or capital
               investments.  Should any damage for these concepts be detected as
               a result of the activities of CEDIMIN prior to the celebration of
               this contract, CEDIMIN shall repair the damage at its expense.

     1.2.8     That it has presented the reports,  studies, maps and other data,
               in its possession, related to the MINING RIGHTS to MANHATTAN.

     1.2.9     That  in  the   hypothetical   case  that  a  partial   or  total
               superposition  of one or various MINING  RIGHTS,  subject to this
               contract,  with third party MINING RIGHTS is determined,  and new
               companies are  established as


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               titleholders  of new  MINING  RIGHTS  that  cover the  superposed
               areas, it undertakes to vote their  corresponding  participations
               or shares in said new  companies  and execute all efforts  and/or
               procedures  within its reach so that the new companies  celebrate
               with MANHATTAN  CESION and/or OPTION  contracts  regarding  their
               MINING RIGHTS.

               Should the  superposition  be  parties,  and  CEDIMIN  obtain new
               MINING RIGHTS and/or the area of the existing ones be reduced, it
               shall be understood that this present  contract  includes the new
               MINING  RIGHTS  and/or that it  continues to apply to those whose
               were reduced.

     1.3  Should  MANHATTAN  acquire by any legal means,  new mining  properties
          that cover the  neighbouring  areas to the MINING  RIGHTS,  or surface
          properties  that cover the surface  areas of the MINING  RIGHTS or its
          neighbouring  areas,  and should it decide to transfer them later,  it
          undertakes to grant first purchasing preferential right to the company
          that shall be  incorporated,  provided  MANHATTAN  exercise the OPTION
          which further down is conferred in its favour.

     1.4  For the  purposes  foreseen  in 1.2.3 and 1.2.4 of 1.2 ad in 1.3,  the
          PARTIES  define  as  adjoining  areas to the  MINING  RIGHTS  the area
          determined by the following UTM coordinates, which henceforth shall be
          known as the AREA of INTEREST.

          -        56.600 E         94.38000 N

          -        56.600 E         94.50000 N

          -        57.700 E         94.50000 N

          -        57.700 E         94.38000 N

2.   Second Clause - On the MINING RIGHTS' Exploration CESION

     2.1  On the CESION:

          By this present,  CEDIMIN  pursuant to article 166 of the Only Ordered
          Text of the General MINING LAW,  approved by Supreme Decree  N(degree)
          014-92-EM,  henceforth known as the MINING LAW, cedes to MANHATTAN and
          the latter in turn  accepts,  its rights to explore the MINING  RIGHTS
          referred to in the First Clause,  which  henceforth  shall be known as
          the CESION.

          The PARTIES agree as payment in concept for the CESION, the investment
          by MANHATTAN of US$4,950,000.00 subject to Annual Exploration Programs
          for sums not less than  US$100,000.00  without  detriment to the total
          undertaken investment.

     2.2  On the CESION duration:


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          The duration of the CESION,  agreed to jointly by The  PARTIES,  is of
          five (5) years, from the date this present contract takes effect.

          This term is compulsory for CEDIMEN but not for MANHATTAN who by means
          of a Notarial Letter  addressed to the domicile of CEDIMEN may, at any
          time and without expressing any cause,  terminate the CESION, in which
          case The PARTIES must celebrate a corresponding Rescission Contract of
          the CESION, for is registration in the Public Mining Registry.

     2.3  On the scope of the CESION:

          2.3.1     By the CESION,  MANHATTAN,  in relation to the MINING RIGHTS
                    object of the same, and in accordance with that regulated by
                    Article  166(degree)of the MINING LAW, takes full possession
                    of the same, and  substitutes  CEDIMEN in all its rights and
                    obligations  to carry on the  exploration  activities.  This
                    substitution  nevertheless  does not  include the defence of
                    the title deeds of the MINING  RIGHTS  transferred,  nor the
                    superficial  areas  where  such  rights  are  located;  such
                    defence  which  in its  case  must be  executed  by  CEDIMIN
                    notwithstanding the collaboration that to such ends it might
                    require from  MANHATTAN;  a  collaboration  which the latter
                    undertakes to provide at this time by this present contract.

                    It is expressly  established that CEDIMIN may not capitulate
                    nor  desist   from  any   procedure,   without  the  express
                    acceptance of MANHATTAN.

                    Regarding the title  documentation  of the MINING RIGHTS and
                    the superficial properties included by the AREA of INTEREST,
                    CEDIMIN  undertakes  towards  MANHATTAN  to keep the  latter
                    informed   of  any   action,   including   cadastral,   both
                    administrative and/or judicial.

          2.3.2     The CESION  includes the fields,  clearings,  camps,  roads,
                    facilities and everything that by fact and/or right forms an
                    integral  and/or  accessory part of the MINING RIGHTS object
                    of the CESION.

          2.3.3     During the duration of the CESION,  MANHATTAN is  authorized
                    to freely execute,  at its expense and risk, all studies and
                    technical surveying, prospecting and/or exploration works in
                    the area of the MINING RIGHTS,  on the surface and/or within
                    mines,  and  likewise to perform  sampling,  analysis,  etc.
                    without  detriment to executing  them in any rational way in
                    accordance  with the option and  criteria  of its  technical
                    personnel, and complying, at all times, with the regulations
                    of the  MINING  LAW and its  Regulation  on Mining  Welfare,
                    Security and  Environment.  Likewise,  it is  authorized  to
                    execute all types of constructions, facilities and introduce
                    machinery and/or equipment.

          2.3.4     MANHATTAN is  authorized  to freely  dispose of the minerals
                    they extract as a result of their exploration works provided
                    such disposal not be by way


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                    of a Purchase-Sale. To sell said minerals they shall require
                    the written authorization from CEDIMIN.

          2.3.5     MANHATTAN undertakes to comply,  regarding the MINING RIGHTS
                    subject to the CESION, with those obligations established by
                    the  Sixth  Heading,  Chapters  I and V of  the  MINING  LAW
                    regarding  exploration  investments,  annual payments of the
                    Validity  Fees;  archiving of drill cores and/or  samples of
                    the  perforations;  presentation  of  affidavits;  and other
                    legal   obligations,   specially,   regarding   the  use  of
                    superficial   lands.   Non-compliance   of  any   of   these
                    obligations resulting in the extinction of the MINING RIGHTS
                    shall be  sufficient  cause to  automatically  rescind  this
                    contract.  All  non-compliance  subject  to a fine  shall be
                    assumed by MANHATTAN.

          2.3.6     During the  validity of this  present  CESION,  at any time,
                    CEDIMIN may,  prior notice by letter or Fax with at least 10
                    calendar  days in advance,  inspect the MINING RIGHTS object
                    of the CESION,  being permitted to make this inspection with
                    its own personnel or by means of authorized representatives,
                    but not  interfering in any way with the  exploration  works
                    and other activities of MANHATTAN.

                    MANHATTAN   shall  provide  the   designated   inspector  or
                    inspectors  whatever  necessary to facilitate their mission.
                    During their visit,  the  inspector or  inspectors  shall be
                    accompanied  by the person  directly in charge of the mining
                    works.

                    Likewise CEDIMIN shall have the right to be provded with the
                    information   and   documentation   that  it  might  request
                    regarding the execution of the explorations.

          2.3.7     Any installation,  construction,  machinery,  equipment,  or
                    materials that MANHATTAN might introduce on its own it shall
                    conserve as its  property,  and on  terminating  the CESION,
                    whatever  the cause that  produce it, it may  withdraw  them
                    within a period of six months from the date of resolution of
                    the CESION.  It is nevertheless  established  that MANHATTAN
                    may not withdraw  what  constitutes  an integral part of the
                    MINING  RIGHTS  and/or  any  support   material,   when  its
                    withdrawal may produce collapses or landslides of the mining
                    works,  which shall remain in benefit of CEDIMIN without any
                    payment to MANHATTAN.

          2.3.8     MANHATTAN  shall  exercise  its rights and shall comply with
                    its  obligations  under this present  contract  with its own
                    personnel,  being  free to such  effect  to  contract  third
                    PARTIES, including CEDIMIN.

          2.3.9     MANHATTAN  may at any  time,  by means  of a  letter  or Fax
                    addressed to the domicile of CEDIMIN,  terminate  the CESION
                    regarding  one,  various or all or more of the MINING RIGHTS
                    without  detriment to continue  with


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                    the same  subject to the terms and  conditions  agreed to in
                    this present contract, without alterations.

3.   Third Clause - On the OPTION

     3.1  On the OPTION:

          By this  present,  CEDIMIN  pursuant to Article 165 of the MINING LAW,
          grants to  MANHATTAN  and that  latter  in turn  accepts,  a  Purchase
          Option,  henceforth  known as the OPTION,  regarding 51% of its rights
          and shares of all and each one of the MINING RIGHTS referred to in the
          first clause, including their integrating pats and accessories.

     3.2  On the duration of the OPTION:

          The  duration  of the  present  OPTION is jointly  agreed  between The
          PARTIES  to be five (5)  years,  from the date this  present  contract
          becomes valid.

     3.3  On exercising the OPTION:

          3.3.1     MANHATTAN may exercise the OPTION any time during the period
                    of its validity up to 11:55 p.m., Lima time, of the last day
                    of validity of the OPTION, provided it has complied with the
                    investment of the US$4,950.00.00 foreseen in 2.1 except when
                    with  a  lower  investment  the  works  executed  prove,  to
                    MANHATTAN's unfettered opinion, the existence of reserves in
                    sufficient volumes to continue with the studies and/or works
                    through  a  Company  that  shall  be  responsible   for  the
                    exploration.  Exercising the OPTION and the  constitution of
                    the Company does not free  MANHATTAN from making the balance
                    of the investment to complete the US$4,950,000.00, regulated
                    by Appendix I integrating this contract.  Nevertheless it is
                    established  that every  necessary  expenditure to establish
                    the new Company forms part of the US$4,950,000.00.

          3.3.2     The OPTION shall be exercised by means of a Notarial  letter
                    addressed  to the  domicile  of  CEDIMIN,  to which shall be
                    attached  a  Manager's  check  for the  global  price of the
                    Purchase-Sale  of the MINING  RIGHT.  3.3.3 The global price
                    for the 51% of the rights  and shares of the MINING  RIGHTS,
                    object of the OPTION,  is jointly agreed between The PARTIES
                    to be  US$50,000.00,  distributed in equal parts between all
                    the MINING RIGHTS included in the Purchase-Sale.

                    It is expressly established between The PARTIES that CEDIMIN
                    shall  apply the whole price to the  exploration  works that
                    might be necessary or in its defect to cover, as far as they
                    might reach, the expenses and/or investments  responsibility
                    of the Company.  To these effects  CEDIMIN shall present the
                    price  received  to  the  Company,   once  constituted,   in
                    accordance with that foreseen in 3.3.4 following.

          3.3.3     The global price for the 51% of the rights and shares of the
                    MINING  RIGHTS,  object of the  OPTION,  is  jointly  agreed
                    between The PARTIES to be US$50,000.00, distributed in equal
                    parts  between  all  the  MINING  RIGHTS   included  in  the
                    Purchase-Sale.

                    It is expressly established between The PARTIES that CEDIMIN
                    shall  apply the whole price to the  exploration  works that
                    might be necessary or in its defect to cover, as far as they
                    might reach, the expenses and/or investments  responsibility
                    of the Company.  To these effects  CEDIMIN shall present the
                    price  received  to  the  Company,   once  constituted,   in
                    accordance with that foreseen in 3.3.4 following.


<PAGE>


          3.3.4     Once CEDIMIN has received the Notarial letter exercising the
                    OPTION,  The  PARTIES  must,  within a period that shall not
                    exceed 30  calendar  days from the date on which the  letter
                    was   received,   subscribe  the  minutes  and  public  deed
                    corresponding to the constitution and Articles of the public
                    Corporation which shall be called MINERA PAPAYO S.A., should
                    it be constituted.  This public corporation shall constitute
                    the legal  Company  which,  in its defect and pursuant  with
                    Article 184 of the MINING LAW should have to be established.

                    In MINERA PAPAYO S.A. CEDIMIN shall participate with 49% and
                    MANHATTAN with 51%.

          3.3.5     MINERA PAPAYO S.A. shall have an initial capital stock equal
                    to the  equivalent  in New Soles of the  total  price of the
                    Purchase-Sale  agreed to in 3.3.3., plus a sum equivalent in
                    New Soles of  US$10,000.00  which The  PARTIES  shall pay in
                    proportion to their respective participating  percentages in
                    said Company in  accordance  with 3.3.4.  The MINING  RIGHTS
                    shall  form part of the  corporate  assets of MINERA  PAPAYO
                    S.A. once it has been constituted.

          3.3.6     Appendix 1 shall form an integral part of this contract,  in
                    which the  linearments of the  Constitution  and Articles of
                    MINERA PAPAYO S.A. are  stipulated,  and likewise the rights
                    and obligations of the partners  towards the Company and the
                    members (shareholders) among themselves.

     3.4  On the Resolution of the OPTION:

          MANHATTAN may at any time, by means of a Notarial letter  addressed to
          the domicile of CEDIMIN,  terminate  the OPTION;  which  automatically
          implies the resolution of the CESION.

          Once the  resolution  has taken place,  MANHATTAN  shall have no other
          responsibility  than to conclude the  exploration  works object of the
          annual  budget in execution  at the moment of  receiving  the notarial
          letter referred to above,  and present the  information  obtained from
          all the exploration to CEDIMIN,  including plans,  analysis,  samples,
          etc.; and likewise,  present to the mining  authorities the statements
          and other  reports  order by law,  pursuant to that foreseen in 2.3.5;
          having also to subscribe the corresponding resolution contract of this
          present CESION and OPTION,  for its  registration in the Public Mining
          Registry.  The Notarial and registry  expenses shall be on MANHATTAN'S
          account.

4.   Fourth Clause - On the CESION and OPTION Conditions

     4.1  It is a condition to celebrate the CESION and OPTION contained in this
          contract  that  MANHATTAN  invest  the sum of  US$4,950,000.00  in the
          exploration of the MINING  RIGHTS,  foreseen in 2.1 including the case
          stipulated in 3.3.1.


<PAGE>


     4.2  That the  investment  of  US$4,950,000.00  be made  subject  to Annual
          Exploration  Programs  in sums not  inferior to  US$100,000.00  in any
          year, duly approved by the TECHNICAL  COMMITTEE,  which is established
          in the next clause,  integrated by representatives of the PARTIES, and
          subject to that which The PARTIES agree in the following fifth clause.

     4.3  It is a condition  for the  celebration  of the CESION and OPTION that
          MANHATTAN  pay  CEDIMIN  in  concept  of an  OPTION  FEE  the  sum  of
          US$250,000.00.  This  obligator  shall be  complied by means of annual
          payment sof US$50,000.00 each, having to make the first payment on the
          effective  date  of  this  present  contract  and  successively   each
          contractual year, except in the event foreseen in 3.3.1 in which case,
          jointly with the  Purchase-Sale  price and in the same way as foreseen
          in 3.3.2,  it shall pay  CEDIMIN  the sum  balance  in  concept of the
          OPTION FEE. Should  MANHATTAN  exercise or not its OPTION right, it is
          expressly established that these payments shall be definite.

          It  is  also  expressly  established  that  in  accordance  with  that
          stipulated in 3.4,  MANHATTAN  shall not continue to be obliged to pay
          in concept of the OPTION  FEE from the moment  when,  in its case,  it
          releases the OPTION.

     4.4  It is a condition  for the  celebration  of the CESION and OPTION that
          CEDIMIN  not  transfer,  cede or encumber  the MINING  RIGHTS to third
          PARTIES; expressly agreeing that if for reasons of a legal or economic
          order this were indispensable, convenient or necessary to proceed with
          such a step,  with the written  approval of  MANHATTAN,  regarding the
          total or partial  part of the  MINING  RIGHTS  and/or its  integrating
          and/or accessory parts;  prior and as condition to do so, the possible
          acquirer or beneficiary of the encumbrance  must accept,  entirely and
          in writing,  this  present  contract  without  altering  its terms and
          conditions,  and without such an acceptance said agreements shall have
          no effect.

          In accordance  with what has been foreseen in the previous  paragraph,
          prior to the  materialisation of any transfer,  CESION or encumbrance,
          CEDIMIN  undertakes to communicate  this fact in writing to MANHATTAN,
          defining  the  reasons  and  the  name  of the  possible  acquirer  or
          beneficiary,  and to only proceed  with such an action once  MANHATTAN
          has given its approval.

     4.5  That  MANHATTAN  keep an account of the  investments it is responsible
          for in accordance with the generally  accepted  accounting  principles
          for the mining activitiy, pursuant to the demands of the laws of Peru.
          To this effect,  The PARTIES agree that the  investments  in charge of
          MANHATTAN,  independently of the fact that they might be accounted for
          in  national  currency,  they shall be  accounted  for based on United
          States of America  dollars.  For these  effects the exchange  rate for
          buying in force on the date that each investment is made shall apply.


<PAGE>


5.   Fifth Clause - On the TECHNICAL COMMITTEE

     5.1  Hereby The PARTIES jointly establish a TECHNICAL COMMITTEE,  in charge
          of defining  the policy to follow  during the validity of this present
          contract, to which The PARTIES shall submit. Likewise, it shall be the
          responsibility  of the  TECHNICAL  COMMITTEE  to  approve  the  Annual
          Exploration  Programs and also their  corresponding  Budgets,  and any
          other aspect  related to the  execution of this  contract,  till it is
          fulfilled.

          The PARTIES  are duly  represented  in the  TECHNICAL  COMMITTEE  in a
          proportion  of three (3)  representatives  of each one of them,  among
          which  a  President  of  the  TECHNICAL  COMMITTEE  shall  be  elected
          annually,  who  may be  re-elected.  The  President  of the  TECHNICAL
          COMMITTEE shall be elected from among the representatives of MANHATTAN
          before that body.

     5.2  The TECHNICAL COMMITTEE shall obligatory meet once a year in the month
          of  March,  and  other  times  that  it  might  be  necessary  to  the
          understanding  of the President.  The TECHNICAL  COMMITTEE shall adopt
          its   agreements  by  a  majority  of  votes.   To  this  effect  each
          representative  or member of the  TECHNICAL  COMMITTEE  shall have the
          right  to  one  vote.  In the  case  of a tie,  the  President  of the
          TECHNICAL COMMITTEE shall have the casting vote.

          The President of the TECHNICAL  COMMITTEE  shall convene to the annual
          session by means of a letter or Fax, with a return  notice,  addressed
          to CEDIMIN and MANHATTAN,  with 10 calendar days advance  notice,  and
          for any  other  meeting,  shall  proceed  in the  same way but with 20
          calendar  days  advance  notice.  In the call to the  meeting he shall
          indicate  the day,  hour and place  where the  sessions  will be held,
          either in the city of Lima or abroad,  and the matters  proposed to be
          deal with.  With the annual  notification,  the  Project of the Annual
          Exploration  Program  for the  following  year  and its  corresponding
          Budget shall be sent, which shall be prepared by MANHATTAN.

          Not precluding  that foreseen in the preceding  paragraph,  any of The
          PARTIES may, at any time,  request the  President to call a meeting of
          the TECHNICAL  COMMITTEE,  who shall  convene a session,  within the 3
          calendar days following the date of reception of the request  received
          to such an effect.  The  notification  shall be made with 20  calendar
          days advance notice.

          The meetings of the TECHNICAL  COMMITTEE shall be held  preferentially
          in the city of Lima.

     5.3  The results of the execution of the Annual Exploration  Programs shall
          be presented by MANHATTAN in its  character of executor of the same to
          the  TECHNICAL   COMMITTEE,   for  their  approval,   comments  and/or
          observations.

     5.4  Regarding the sessions of the TECHNICAL  COMMITTEE,  at any meeting it
          shall be a  requirement  that at  least  four  (4) of its  members  be
          present,  provided


<PAGE>


          that two (2) of them  represent  MANHATTAN and the other two represent
          CEDIMIN.

          There must be a difference of 10 calendar days between the date of the
          first and second convening,  and the date for the second convening, in
          its case, may be indicated at the time the first convening is made.

          The meetings of the  TECHNICAL  COMMITTEE and the  agreements  that it
          might  adopt shall be  recorded  in minutes  that shall be signed,  at
          least, by 2 members present at each meeting. The minutes shall be kept
          on loose leafs.

6.   Sixth Clause - On MINERA PAPAYO SOCIEDAD ANONIMA should MANHATTAN  exercise
the OPTION

By this present The PARTIES agree that,  once MINERA PAPAYO S.A. is constituted,
provided  MANHATTAN  exercises the OPTION  conferred in its favour,  it shall be
subject to the general lineaments that for such a possible Company they agree to
in an  independent  document  which,  like Appendix 3, forms an integral part of
this contract.

7.   Seventh Clause - On the Declarations and/or Guaranties of MANHATTAN

Hereby MANHATTAN declares and/or guarantees:

     7.1  That it is a duly  constitutes and existing Company in accordance with
          the laws of Peru; and,  likewise is duly able to possess MINING RIGHTS
          and execute all the mining  activities  regulated by the MINING LAW on
          the same.

     7.2  That it possesses  economic  capacity to execute the  investments  and
          payments agreed to in the CESION and OPTION.

     7.3  That  it is  subject  to no  process;  and  that  it is  free  of  any
          dissolution, liquidation and/or bankruptcy procedure.

     7.4  That is have  obtained all the  authorizations  necessary to celebrate
          and execute  this  present  contract  and  likewise to  undertake  the
          obligations agreed to in this present contract.

     7.5  That it knows the legal regulations in force regarding Mining Security
          and Health,  and the  Environment,  and  undertakes  to implement  and
          respect them so as not to breach them in  executing  the works that it
          must perform as transferee.

8. Eighth Clause - On the CESION or Transfer of the Contractual Position.

It is agreed  that The PARTIES may  transfer,  without any prior  authorization,
part or the  whole  of  their  rights  under  this  contract  to an  affiliated,
subsidiary  and/or  in tits  case  their  head  Company,  an event in which  the
receiving  Company  shall be  subject  to all the terms and  conditions  of this
present contract. For these effects it shall be understood that:


<PAGE>


Affiliated Company:

Is that  Company in which 50% or more of its shares or  participations  with the
right to vote are the direct or  indirect  property of the person or persons who
are in turn proprietors of 50% or more of the shares or participations  with the
right to vote of the part that wishes to transfer.

Subsidiary Company:

Is that  Company  whose shares or  participations  with the right to vote are at
least 50% the property,  directly or  indirectly,  of the Company that wishes to
transfer its participation in this contract.

Head Company:

Is that Company that directly or indirectly is the  proprietor of 50% or more of
the shares or  participations  with the right to vote of the part that wishes to
transfer.

9.   Ninth Clause - On Confidentiality

Hereby,  The  PARTIES  agree  to  maintain  in  the  strictest   confidence  the
information to which they have access in relation to the exploration  activities
and likewise their results and processes used.  Nevertheless,  MANHATTAN may use
the information it possesses in order to comply with the  obligations  regarding
statements to the authorities and the public, in accordance with the law.

It  is  understood  that  Confidential   information  includes  all  information
regarding  the  MINING  RIGHTS,   including  but  not  limited  to,  geological,
geochemical,  geophysical data, maps, geological charts, calculations, analysis,
drill cores, reports and any other written or oral information, in possession or
in control of The PARTIES.

10.  Tenth Clause - On Force Majeure

It is expressly  agreed that, if as a consequence of a duly accredited cause out
of control of The  PARTIES  force  majeure or act of God,  any of The PARTIES is
impeded from complying with their undertakings  regarding this present contract,
it must  communicate it immediately  and through a Notarial  letter to the other
Party.

In this case,  the  fulfillment of the  obligations  he is responsible  for that
would have been  affected  will be  suspended  until the  moment  that the force
majeure event, act of God or duly accredited cause out of control of The PARTIES
ceases to exist,  extending  the  corresponding  time  periods and  likewise the
correlative obligations of the other Party.

After  thirty  days in which  the  event of  force  majeure,  act of God or duly
accredited  cause out of  control  of The  PARTIES  occurred  without  the party
affected  being able to reinitiate  compliance of its  obligations,  The PARTIES
shall meet to establish in writing, by common consent, the steps to be taken.


<PAGE>


The events of force majeure, acts of God or duly accredited cause out of control
of The  PARTIES  will have no  consequences  other than those  foreseen  in this
clause.

11.  Eleventh Clause - On resolving controversies

By this present and in accordance to that  established  in Law N(degree)  26572,
The  PARTIES   agree  that  the   controversies   between  Them   regarding  the
interpretation  and/or  application  of this  present  contract,  that cannot be
solved through a direct agreement within 15 calendar days from the date on which
the written  communication  is received  informing  about the  existence  of the
matter, subject of the controversy,  it will be resolved through the arbitration
of one or three arbitrators,  which shall be subject to the Laws and Regulations
of the International Chamber of Commerce, to be held in the city of New York, in
accordance  with  said  Regulation.  The  arbitrators  shall  be  persons  of  a
recognised  experience in the mining  industry,  be they lawyers or of any other
profession. The languages of the arbitration shall be Spanish and English.

The  Arbitration  Award shall be definite and may not be  appealed.  The PARTIES
expressly  renouncing to submit any  controversy to the judicial courts of their
respective domiciles or any other entity of Peru or abroad.

12.  Twelfth Clause - On the domiciles of The PARTIES and notifications

The PARTIES declare as their domiciles those that appear in the  introduction to
the present contract.  Additionally, they delcare their Fax telephone numbers to
the be the following:

         MANHATTAN         :

                           :

Communications or notifications made to said domiciles to Fax telephone numbers,
will be considered well executed unless their  modification had been informed by
the other party by a Notarial  letter or Fax,  with at least 15 calendar days in
advance.

13.  Thirteenth Clause - On applicable Laws

The laws of the Republic of Peru shall be applicable to this contract.

14.  Fourteenth Clause - On taking effect

This  present  contract  will go into  effect on the date on which  The  PARTIES
subscribe  these present  minutes not precluding it be elevated to a Public Deed
and registered  among the MINING RIGHTS  registry  records in the Book of MINING
RIGHTS of the Public Mining Registry.

15.  Fifteenth Clause - On Taxes

It is expressly declared that the celebration of this present contract is exempt
of all  tributes  and that,  if in the future any tribute be created  that might
affect the same,  the latter shall be paid by The PARTIES in proportion to their
participation in this present contract, at the time when the


<PAGE>


taxable  event takes place,  provided  the payment of said  tribute  necessarily
corresponds to one of them by law.

16.  Sixteenth Clause - On expenses

The Notarial expenses  originated as a result of elevating these present minutes
to a public deed and its  registration  in the Public Mining  Registry  shall be
totally payable by MANHATTAN,  whose  equivalent in North American dollars shall
be computed on account of the investment, responsibility of MANHATTAN under this
present contract.

Add, Mr. Notary,  the legal clauses and the inserts that correspond,  and having
done so, elevate these present minutes as a public deed.



Lima, November 3, 1997



For CEDIMIN                                 FOR MANHATTAN

[Illegible signature]                       [Illegible signature]

Jean-Marie Georgel                          Harry Percy Sutherland Dyason

Manager                                     Director



                                            FOR MANHATTAN

                                            [Illegible signature]

                                            Ruben Corvalan Camps

                                            General Manager



<PAGE>


                                   Appendix I

                     On the Lineament of MINERA PAPAYO S.A.

1.   Shareholders:

     CEDIMIN and MANHATTAN.

2.   Capital Stock:

     It  shall  be   equivalent  in  New  Soles  to  the  global  price  of  the
     Purchase-Sale plus US$10,000.00, in its equivalent in New Soles.

3.   Social Object of the Company:

     It shall have the object of  exercising  every mining  activity  allowed by
     Law.

4.   Initial participation of the Shareholders in the Capital Stock:

     MANHATTAN:        51%

     CEDIMIN:          49%

5.   Preferential Purchase Rights:

     The   shareholders,   pro  rata,  in  proportion  to  their   corresponding
     participating  percentages  in the capital  stock of the Company shall have
     preferential  rights  should  one of the  shareholders  desire  to sell his
     shares to third PARTIES other than shareholders.

6.   On the Contributions of the Shareholders:

     Once the Company is constituted,  each shareholder  shall contribute to the
     budget  of  the  same  in  proportion  to  their  respective  participating
     percentages in the capital stock, except in the following cases:

     6.1  Should the Company be constituted  without  MANHATTAN having concluded
          the  investment  of  US$4,950,000.00  (condition  of  the  CESION  and
          OPTION),  then the budgets of the Company shall be financed  solely by
          MANHATTAN till said  US$4,950,000.00 are completed,  and once complied
          with this  obligation,  the  difference  between  what was invested by
          MANHATTAN during the validity of the CESION and OPTION, and during the
          validity of the Company,  till this  investment was reached,  shall be
          considered  as  supplementary  premium  capital,   susceptible  to  be
          capitalized  in  favour of the  shareholders  in  proportion  to their
          respective  participating  proportions  in the  capital  stock  of the
          Company.

     6.2  Should  CEDIMIN or MANHATTAN,  within the term of ninety (90) calendar
          days following the date of on which the investment of  US$4,950,000.00
          is concluded,  by means of a letter  addressed to the President of the
          Board of Directors  decide not to continue with the second stage (five
          years) of the  project


<PAGE>


          (a  stage  in  charge  of the  Company);  then  it  shall  dilute  its
          participation  in the Company  till it retains only 20% of its shares.
          In this  situation,  the party that means  must  invest,  from its own
          funds, the sum of US$10,000,000.00 in that second stage of five years;
          and,  once that  investments  is  concluded,  purchase  from the other
          party,  at no cost, the  corresponding  number of shares,  so that the
          diluted party retains for itself only 20% of the representative shares
          of the capital stock of the Company on the date of the transfer.

          Should the party  that  decides to  continue  investing  not manage to
          invest  US$10,000,000.00 in the said five years, CEDIMIN and MANHATTAN
          shall resume,  at no cost,  their original  corresponding  percentages
          (49% and 51%) of the capital stock of MINERO PAPAYO S.A., assuming any
          subsequent financing that the Company might require according to these
          percentages.

     6.3  Should CEDIMEN and MANHATTAN,  within the term of ninety (90) calendar
          days following the date of on which the investment of  US$4,950,000.00
          is  concluded,  by means of letters  addressed to the President of the
          Board of Directors, each one of them expressing their determination to
          contribute  towards the second stage (five years) of the project,  the
          responsibility of the Company, then CEDIMIN and MANHATTAN shall invest
          from  their  own  funds  pro rata  according  to  their  corresponding
          participating  percentages  in the  original  capital  stock of MINERA
          PAPAYO S.A. (49% - 51%), the sum of US$10,000,000.00. Nevertheless, if
          within the period of five years,  CEDIMIN or MANHATTAN decide to cease
          to invest,  then the party that continues investing shall complete the
          investment of US$10,000,000.00; and, once the investment is concluded,
          shall  purchase  from the  other  party,  at no cost,  the  number  of
          corresponding  shares,  so that the party that ceased to invest retain
          for itself only 20% of the representative  shares of the capital stock
          of the Company on the date of the transfer.

     6.4  In the cases  foreseen in 6.2 and 6.3, the party  acquiring the shares
          of the diluted party shall possess,  for the term of one year from the
          transfer of shares  according to 6.2 and 6.3,  the first  preferential
          right to purchase the  remaining 20% of the shares in the Company from
          the diluted party at the price of US$5,000,000.00.

7.   Administration of the Company:

     7.1  Shareholders' Meetings:

          For those  important  agreements,  other than those  regulated by this
          present  Appendix,   in  any  summons,  the  vote  in  favour  of  the
          shareholders  that represent at least, 66% of the capital stock of the
          Company shall be required.

     7.2  Board of Directors:

          The Board of Directors of the Company  shall be composed of 5 members,
          3 of which  shall be  elected  from  among  the  list of  people  that
          MANHATTAN  shall  propose  and 2 from  among the list of  people  that
          CEDIMIN  shall  propose.  The


<PAGE>


          charge of President of the Board of Directors shall fall on any one of
          the elected directors proposed by MANHATTAN.

     7.3  Manager:

          MANHATTAN  shall  be the  Manager  of the  Company,  and as  such  may
          designate its  representative,  and its representative or operator may
          be an individual or entity.  MINERA PAPAYO S.A.  shall pay the Manager
          or in its case the Operator that  MANHATTAN  shall nominate in concept
          of annual fees 7.5% of incurred expenses, which shall be accounted for
          each quarter. This fee forms part of the investment of US$4,950,000.00
          foreseen in clause 2.1 of the contract.

8.   Resolution of Discrepancies:

     Any discrepancies  between the shareholders,  and the shareholders with the
     Company,  shall be resolved  through the  arbitration of the  International
     Chamber of Commerce.  The languages of the arbitration shall be Spanish and
     English.


<PAGE>


                            Translator's Declaration

I, John  Churchill-Browne,  fluent in the English and Spanish languages,  hereby
declare that I have  translated  the  preceding  document (*), to the best of my
skills and  abilities,  and  according  to my  knowledge  it is a  faithful  and
truthful  translation  into  English  of the  original  text  provided  to me in
Spanish. E. & O. E.

Vancouver, British Columbia, February 17, 1998.









                              John Churchill-Browne



Associate  Member of STIBC (The  Society of  Translator's  and  Interpreters  of
British Columbia).

Accredited  Interpreter  before  the  Ministry  of  Attorney  General of British
Columbia.

Accredited  Interpreter  before the  Government of Canada - Immigration  Refugee
Board and Citizenship & Immigration Canada.



(*) Document  MINING RIGHTS'  Exploration  CESION and Purchase OPTION Contract -
CEDIMIN - MANHATTAN. [Amendment and changes to November 3, 1997]