<PAGE>
 
                                     - 1 -


                                                                     EXHIBIT 2.7

                         EXECUTIVE EMPLOYMENT AGREEMENT

        THIS AGREEMENT made the 1st day of December, 1996 BETWEEN: MERIDIAN GOLD
COMPANY (hereinafter referred to as the "Company") OF THE FIRST PART and EDWARD
H. COLT (hereinafter referred to as the "Executive") OF THE SECOND PART
(hereinafter collectively referred to as the "Parties").

        WHEREAS the Company wishes to retain the services of the Executive and
the Executive wishes to be retained by the Company on the terms and conditions
specified herein;

        AND WHEREAS the Company and the Executive desire to enter into a written
agreement which contains the agreed-upon terms and conditions of employment;

        NOW THEREFORE for the good and valuable consideration of the mutual
covenants and agreements hereinafter contained, the Parties mutually covenant
and agree as follows:

        Employment
        ----------

        The Company hereby agrees to employ the Executive in the position of
Vice-President, Finance and Chief Financial Officer, and the Executive hereby
accepts such employment.

        The Executive shall serve the Company in the capacity of Vice-President,
Finance and Chief Financial Officer to perform such duties and exercise such
powers as may be reasonably required of him or be vested in him by the Board of
Directors of the Company. During his employment hereunder, the Executive shall
devote his full time and attention and exert his best efforts, knowledge, skill
and energy to his employment hereunder and will not, without the prior written
consent of the Board of Directors, assume other employment or engage in any
other business. The Executive shall report to the President.

        Term     -
        ----

        The term of the Executive's employment shall commence on December 1,
        1996 and shall, upon written notice from one party to the other given no
        later than June 1, 2001, terminate on December 1, 2001, unless
        terminated sooner pursuant to Paragraph 7.

        If neither party gives to the other notice of termination pursuant to
        subparagraph 1.3(a) above, the term of the Executive's employment shall
        be automatically renewed for a second term, which shall automatically
        terminate on December 1, 2006, unless terminated sooner pursuant to
        Paragraph 7.

        Compensation
        ------------

        Base Salary - During the first year of his employment, the Executive
        -----------
shall receive an annual base salary of U.S. $125,000 (less required statutory
and other deductions authorized by the Executive), which base salary shall be
paid in accordance with the Company's normal payroll practices. The Executive's
base salary shall be reviewed by the Compensation Committee of the Board of
Directors on an annual basis thereafter. Any adjustment to the Executive's base
salary shall be determined in the sole discretion of the Board of Directors of
the Company ("Board of Directors") based on the recommendations of the
Compensation Committee.

        Bonus - If the Board of Directors of the Company determines to establish
        -----
a bonus plan for any of its employees, the Executive shall be entitled to
participate in such bonus plan in accordance with its terms.

        Stock Options - If the Board of Directors of the Company determines to
        -------------
establish a stock option plan for any of its employees, the Executive shall be
entitled to participate in such stock option plan in accordance with its terms.
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                                     - 2 -

        Benefits and Vacation
        ---------------------

        While employed by the Company, the Company shall make available to the
Executive the benefits under the Company's employee benefits program which, in
its sole discretion, it makes available to other employees of the Company from
time to time. These benefits include, without limitation, participation in the
Company Salaried Employees' Retirement Plan (the "Pension Plan") and Salaried
Employees' Equivalent Retirement Plan (collectively the "Retirement Plans").

        While employed by the Company:

        the Executive shall be entitled to four weeks' vacation per year, to be
        scheduled at the mutual convenience of the Parties; and

        the Executive shall be entitled to the regular holidays schedule
        recognized by the Company location at which he works.

        Other Executive Benefits
        ------------------------

        The Executive shall participate in the supplementary benefits made
available by the Company generally to its employees from time to time.

        Reimbursement of Expenses
        -------------------------

        The Executive shall be reimbursed for all expenses incurred by him in
compliance with Company policies, as may be modified from time to time.

        Officer of the Company
        ----------------------

        So long as the Board of Directors, in its sole discretion, shall desire,
the Executive shall serve as a officer of the Company or any subsidiary or
affiliate, without any additional remuneration to the Executive.

        Termination
        -----------

        In the event the Executive's employment with the Company is terminated

        by reason of the Executive's death,

        by reason of the Executive becoming Permanently Disabled as described in
        subparagraph 7.3, or 

        for Cause,

then except as otherwise provided in subparagraphs 3.1, 3.2, and 7.3, all
obligations of the Company hereunder shall terminate. If the Executive's
employment with the Company shall terminate for Cause, or due to death,
disability or Voluntary Termination, any portion of his fixed salary pursuant to
subparagraph 2.1 which is earned but unpaid as of the date of termination shall
be paid to the Executive, or his designated beneficiary in the event of his
death, or if known to his then living spouse, or if none, to the duly appointed
personal representative of his estate.

        If the Executive's employment with the Company shall terminate by reason
of an Involuntary Termination, the Executive shall be entitled to payment
(within 14 days of the Termination Date) of any portion of his fixed salary
pursuant to subparagraph 2.1 which is earned but unpaid as of the Termination
Date and to severance pay and benefits as follows:

        Severance Pay.The Company shall, not later than 14 days after the
        -------------
        Termination Date, pay to the Executive a lump sum amount equal to the
        Executive's Regular Monthly Compensation multiplied by 18.
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                                     - 3 -

        Medical and Dental Benefits. The Company must, at the election of the
        ---------------------------
        Executive made within ten days after the Termination Date, either:

               not later than 14 days after the Termination Date, pay to the
               Executive a lump sum amount equal to the aggregate cost to the
               Company (without discount or present valuation) of the Regular
               Employee Benefits for the Termination Period; or

               continue to make the contributions necessary to maintain the
               Executive's coverage pursuant to the Regular Employee Benefits
               until the earlier of (i) the end of the Termination Period, or
               (ii) the month after the Executive obtains comparable replacement
               benefits at any alternative employment.

        Incentive. The Company will pay to the Executive the Current Year's
        ---------
        Incentive Plan(s) Amount prorated in proportion to the number of months
        in the year before the Termination Date and on a percentage basis
        comparable to the average for executives paid in the preceding two
        years. If the Executive has been employed for less than two years, the
        Executive will receive his base percentage bonus.

        Outplacement Assistance. Professional executive outplacement services
        -----------------------
        will be provided to the Executive at the Company's expense. The cost of
        such services will not exceed 15% of the Executive's annual base salary.

        If, during the Executive's employment with the Company the Executive
becomes Permanently Disabled, the Company shall have the right, on not less than
60 days' written notice to the Executive, to terminate the Executive's
employment. In the event that the Executive's employment is terminated on
account of Disability, the Executive shall continue to be eligible for long-term
disability benefits in accordance with the provision of the long-term disability
policy then in effect and the Retirement Plans benefits will be payable as
described therein. Except for such long-term disability benefits and the
Retirement Plans benefits, the Executive shall not be entitled to receive any
further compensation or benefits pursuant to this Agreement other than those
accrued to the date of the Executive's termination hereunder.

        Any unused and accrued vacation will be paid with the final check
following any termination of employment with the Company.

        Restrictive Covenant
        --------------------

        During the Executive's employment with the Company and for a period of
eighteen months following the termination of the Executive's employment with the
Company for any reason, including termination occasioned by the expiration of
this Agreement, the Executive shall not interfere with the relationship between
the Company and any of its employees, agents or representatives.

        Non-disclosure of Confidential Information
        ------------------------------------------
        
        The Executive acknowledges that the Company may disclose certain
confidential information to the Executive during the term of this Agreement to
enable him to perform his duties hereunder. The Executive hereby covenants and
agrees that he will not, without the prior written consent of the Company,
during the term of this Agreement or at any time thereafter, disclose or permit
to be disclosed to any third party by any method whatsoever any of the
confidential information of the Company. For purposes of this Agreement,
"confidential information shall include, but not be limited to, any scientific
or technical information, design, process, procedure, formula, improvement,
confidential business or financial information, records notes memoranda, data,
ideas, processes, methods, techniques, systems, patents, models, devices,
programs, customer software, writings, research, or personnel or customer
information.

        The foregoing paragraph shall not be applicable if and to the extent
Executive is required to testify in a judicial or regulatory proceeding pursuant
to an order of a judge or administrative law judge issued after Executive and
his legal counsel urge that the aforementioned confidentiality be preserved.
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                                     - 4 -

        The Executive agrees promptly to reduce to writing to disclose and
assign, and hereby does assign, to the Company, its parent, subsidiaries,
successors, assigns and nominees, all inventions, discoveries, improvements,
copyrightable material, trademarks, programs, computer software and ideas
concerning the same, capable of use in connection with the business of the
Company, which employee may make or conceive, either solely or jointly with
others, during the period of his employment by the Company, its parent,
subsidiaries or successors.

        The Executive agrees, without charge to the Company and at the Company's
expense, to execute, acknowledge and deliver to the Company all such papers,
including applications for patents, application soft copyright and trademark
registrations, and assignments thereof, as may be necessary, and at all times to
assist the Company, its parent, subsidiaries, successors, assigns and nominees
in every proper way to patent or register said programs, computer software,
ideas, inventions, discoveries, improvements, copyrightable material or
trademarks in any and all countries and to vest title thereto in the Company,
its parent, subsidiaries, successors, assigns or nominees.

        The Executive will promptly report to the Company all discoveries,
inventions, or improvements of whatsoever nature conceived or made by him at any
time he was employed by the Company, its parent, subsidiaries or successors. All
such discoveries, inventions and improvements which are applicable in any way to
the Company's business shall be the sole and exclusive property of the Company.

        The covenants set forth in this paragraph which are made by the
Executive are in consideration of the employment, or continuing employment of,
and the compensation paid to, the Executive during his employment by the
Company. The foregoing covenants will not prohibit Executive from disclosing
confidential or other information to other employees of the company or third
parties to the extent that such disclosure is necessary to the performance of
his duties under this Agreement.

        The covenants set forth in paragraphs 8.1, 9.1, 9.2, 9.3 and 10 shall
survive the expiration or termination of this Agreement and shall continue in
full force and effect in accordance with the terms of such obligations.

        Additional Remedies
        -------------------

        The Executive recognizes that irreparable injury will result to the
Company and to its business and properties in the event of any breach Executive
of any of the provisions of Paragraphs 8 and 9 of this Agreement or either of
them, and that the Executive's continued employment is predicated on the
commitments undertaken by him pursuant to said paragraphs. In the event of any
breach of any of the Executive's commitments pursuant to Paragraphs 8 and 9 or
either of them, the Company shall be entitled, in addition to any other remedies
and damages available, to injunctive relief to restrain the violation of such
commitments by the Executive or by any person or persons acting for or with the
Executive in any capacity whatsoever.

        Non-Assignment
        --------------
        
        This Agreement is personal to Executive and shall not be assigned by
him. Executive shall not hypothecate, delegate, encumber, alienate, transfer or
otherwise dispose of his rights and duties hereunder. The Company may assign
this Agreement without Executive's consent to any other entity who, in
connection with such assignment, acquires all or substantially all of the
Company's assets or into or with which the Company is merged or consolidated.

        Waiver
        ------

        The waiver by the Company of a breach by Executive of any provision of
this Agreement shall not be construed as a waiver of any subsequent breach by
Executive.
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                                     - 5 -

        Arbitration, Interpretation, etc.
        --------------------------------

        Any controversy or claim arising out of or relating to this Agreement,
or the breach thereof, except a claimed violation of Sections 8 and 9, shall be
settled by arbitration in accordance with Title 9 of the U.S. Code and the
Employment Dispute Resolution Rules of the American Arbitration Association in
Reno, Nevada, and judgment upon the award rendered by the arbitrator may be
entered in any court having jurisdiction thereof. All statutes of limitations
which would otherwise be applicable shall apply to any arbitration proceeding
pursuant to this paragraph. All reasonable legal costs relating to the
arbitration proceedings shall be paid by the Company.

        If any clause, phrase, provision or portion of this Agreement or the
application thereof to any person or circumstances shall be invalid or
unenforceable under any applicable law, such event shall not affect or render
invalid or unenforceable the remainder of this Agreement, which shall be
construed as if such invalid or unenforceable provision were omitted.

        The division of this Agreement into Paragraphs, Articles and Sections
and the insertion of headings are for the convenience of reference only and
shall not affect the construction or interpretation of this Agreement. The terms
"this Agreement", "hereof", "hereunder" and similar expressions refer to this
Agreement and not to any particular Article, Section or other portion hereof and
include any agreement or instrument supplemental or ancillary hereto. Unless
something in the subject matter or context is inconsistent therewith, references
herein to Paragraphs, Articles, Sections and clauses are to Paragraphs,
Articles, Sections and clauses of this Agreement.

        In this Agreement, words importing the singular number only shall
include the plural and vice versa, and words importing the masculine gender
shall include the feminine and neuter genders and vice versa, and words
importing persons shall include individuals, partnerships, associations, trusts,
unincorporated organizations and corporations.

        The Company shall withhold from any amounts payable under this Agreement
such taxes and other amounts as may be required to be withheld pursuant to any
applicable law or regulation.

        In consideration of the payments provided for in subparagraph 7.2, the
Executive agrees to execute before a witness and deliver to the Company a
release in the form of the attached Schedule "A" and agrees to be bound by its
terms.

        The Executive hereby acknowledges receipt of a copy of this Agreement
duly signed by the Company.

        The Executive agrees that after any termination of his employment, he
will tender his resignation from any position he may hold as an officer or
director of the Company or any of its affiliated or associated companies.

        Benefit
        -------

        The provisions of this Agreement shall inure to the benefit of the
Company, its successors and assigns, and shall be binding upon the Company and
Executive, its and his heirs, personal representatives and successors, including
without limitation Executive's estate and the executors, administrators, or
trustees of such estate.

        Relevant Law
        ------------

        This Agreement shall be construed and enforced in accordance with the
laws of the State of Nevada.

        Notices
        -------

        All notices, requests, demands and other communications in connection
with this Agreement shall be made in writing and shall be deemed to have been
given when delivered by hand or 72 hours after facsimile transmission and/or
mailing at any general or branch United States or Canadian Post Office, by
registered or certified mail, postage prepaid, addressed as follows, or to such
other address as shall have been designated in writing by the addressee:
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                                     - 6 -

(a)     If to the Company:

        5011 Meadowood Way
        Reno, NV   89502
        Facsimile:  702-827-7133

(b)     If to the Executive:

        c/o Meridian Gold Company
        5011 Meadowood Way
        Reno, NV   89502
        Facsimile:  702-827-7133

        Entire Agreement
        ----------------
        
        The Parties hereto agree that this Agreement contains the whole
agreement and understanding of the Parties and supersedes and replaces all oral
or written contracts or representations, and that this Agreement cannot be
amended, modified or supplemented in any respect except by subsequent written
agreement signed by both Parties hereto.

        Further Assurances
        ------------------

        The Parties hereto shall do such things and sign such documents as may
be necessary and desirable to give full effect and force to this Agreement.

        Definitions
        -----------

For the purposes of this Agreement,

        "Cause" shall be deemed to exist if, and only if:

        the Executive willfully refuses to perform services hereunder;

        the Executive materially breaches Paragraph 8 or Paragraph 9 of this
        Agreement;

        the Executive engages in acts of dishonesty or fraud in connection with
        his services hereunder; or

        the Executive engages in other serious misconduct of such a nature that
        the continued employment of the Executive may reasonably be expected to
        adversely affect the business or properties of the Company,

provided that, if the Company determines that a reason constituting cause for
termination under clauses (a), (b) or (d) has occurred, it shall give the
Executive written notice thereof at least 14 days prior to the proposed date of
termination of employment. If the Executive shall take the necessary steps to
remedy the condition constituting Cause within 10 days after the receipt of such
notice, then a reason for termination for Cause shall be deemed not to have
occurred. If the Executive shall not remedy the condition constituting Cause
within such time period to the reasonable satisfaction of the Company, then
termination for Cause shall occur on the date set forth in the notice from the
Company.

        "Change of Control" shall mean any of:

        a sale, transfer or other disposition of all or substantially all of the
        property or assets of the Company other than to an affiliate, within the
        meaning of Rule 405 of Regulation C adopted under the Securities Act of
        1933.
<PAGE>
 
                                     - 7 -

        a merger or consolidation of the Company;

        any change in the holding, direct or indirect of shares in the capital
        of the Company as a result of which a person, or a group of persons or
        persons acting jointly or in concert, or persons associated or
        affiliated with any such person or group within the meaning of section
        13(d)(3) of the Securities Exchange Act of 1934 are in a position to
        exercise effective control of the Company, provided that for the
        purposes of this Agreement a person or group of persons holding shares
        and/or other securities in excess of the number which, directly or
        following conversion thereof, would entitle the holders thereof to cast
        more than 30% of the votes attaching to all shares in the capital of the
        Company which may be cast to elect directors of the Company shall be
        deemed to be in a position to exercise effective control of the Company,
        and further provided that at the time of such acquisition, no other
        person or group of persons shall hold securities entitled to more than
        30% of such votes;

        Incumbent Directors no longer constituting at least a majority of the
        Board at or prior to the conclusion of the first twelve (12) months from
        the Effective Date.

        "Effective Date" means the date upon which this Agreement takes effect;

        "Good Reason" means:

        a reduction by the Company to the Executive's base salary;

        the failure by the Company to continue in effect any Plan in which the
        Employee participates, unless such Plan (a) is replaced by a successor
        Plan providing to Executive substantially similar compensation and
        benefits (which replacement Plan shall continue to be subject to this
        provision) or (b) terminates as a result of the normal expiration of
        such Plan in accordance with its terms; or the taking of any other
        action, or the failure to act, by the Company which would materially
        adversely affect the Executive's continued participation in any of such
        Plans without the consent of the Executive, including by materially
        reducing the Executive's benefits in the future under any of such plans;

        effecting a diminution in the position or duties and responsibilities of
        the Executive; or

        Company requiring the Executive to be based anywhere more than 45 miles
        from the location of the Executive's office immediately prior to the
        date hereof;

provided, however, that the events set out above in this subparagraph 19.2 shall
be considered to be Good Reason only if the Executive either before or within 30
days following notification from the Company of the occurrence of any such
event, notifies the Company that the event is not acceptable to the Executive
and the Company does not, within 14 days after such notice, rescind or rectify
to the reasonable satisfaction of the Executive the event that was not
acceptable to the Executive. Failure to object to an event set out above shall
not, however, preclude the Executive from reliance on such event if the
Executive objects to a subsequent event or events in accordance with this
subparagraph 19.2.

        "Permanently Disabled" means that the Executive, by reason of illness,
disease, mental or physical disability or similar cause as determined by a
qualified medical practitioner mutually agreed to by the Executive and the
Company ("Disability"), is permanently disabled so as to be unable to fulfil the
Executive's duties, responsibilities and obligations hereunder and such
Disability shall continue for any consecutive 365-day period or for any period
of 365 days (whether or not consecutive) in any consecutive 24-month period.

        "Incumbent Directors" shall mean those persons who are directors of the
Company on the Effective Date and shall include any person who becomes a
director of the Company thereafter and whose election, or nomination for
election, by the Company's shareholders was approved by a majority of the
Incumbent Directors then on the Board of Directors.
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                                     - 8 -

        "Involuntary Termination" means:

        the termination of the Executive's employment by the Company, except for
        Cause or pursuant to subparagraph 7.3;

        the termination of the Executive's employment by the Executive for Good
        Reason; or

        termination of the Executive's employment on September 1, 2001 pursuant
        to the notice given by the Company under subparagraph 1.3(a),

        resignation from employment by the Executive following a Change of
        Control, provided that both the resignation and Change of Control occur
        within twelve (12) months from the Effective Date;

provided, however, a reassignment of the Executive to a position reasonably
comparable in responsibilities and duties to the position created under this
Agreement with a subsidiary, affiliate or related entity to the Company (the
"successor employer") will not constitute an Involuntary Termination under (a),
(b) and (c) above if the successor employer agrees to enter into an agreement
with the Executive that is substantially similar to this Agreement.

        "Regular Monthly Compensation" shall mean one-twelfth (1/12) of the sum
         of:

        annual salary as at Termination Date, plus

        either (i) the average of the awards of cash compensation (or if such
        awards were not made in cash, the cash equivalent thereof) paid or
        payable to the executive under any Incentive Plan(s) in respect of the
        three calendar years completed immediately prior to his termination from
        employment, or (ii) if the Executive has not been employed for at least
        three calendar years before the Termination Date, the Current Year's
        Incentive Plan(s) Amount.

        "Incentive Plan(s)" shall mean executive compensation or bonus or
incentive plans established by the Company, and shall include any bonus or other
plans established both prior and subsequent to the date of this Agreement.

        "Termination Period" shall mean the shorter of (i) the period starting
with the month in which the Executive's termination occurs and ending on the
last day of the 18th month thereafter, or (ii) the period starting with the
month in which the Executive's termination occurs and ending on his normal
retirement date (as defined in the Pension Plan).

        "Voluntary Termination" means the resignation from employment by the
Executive except for "Good Reason".

        "Termination Date" shall mean:

        in the case of an Involuntary Termination as defined in subparagraph
        19.7(a), the effective date of termination of the Executive's
        employment;

        in the case of an Involuntary Termination as defined in subparagraph
        19.7(b), the date notice is given by the Executive to the Company of the
        termination of the Executive's employment by the Executive for Good
        Reason; and

(c)     in the case of an Involuntary Termination as defined in subparagraph
        19.7(d), the date notice of resignation is given by the Executive to the
        Company.

        "Current Year's Incentive Plan(s) Amount" means the amount that would
otherwise be payable to the Executive under the Incentive Plan(s) in the year in
which the Termination Date occurs had the Executive remained 
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                                     - 9 -

employed to the end of the Termination Period calculated on the basis that all
targets and the performance objectives under the Incentive Plan(s) were
achieved.

        "Regular Employee Benefits" means those medical or insurance benefits
which the Company provides to the Executive.

        IN WITNESS WHEREOF the Parties hereto have executed this Agreement on
the day and year first above written.

SIGNED, SEALED AND DELIVERED     )
  In the presence of:                  )
                                       )                                   l/s
                                         --------------------------------
                                       )   EDWARD H. COLT

--------------------------------
Witness                          )

                                              MERIDIAN GOLD COMPANY

                                              By:                          c/s
                                                  ------------------------