PROMISSORY NOTE

$955,756.22                                              Springfield, New Jersey
                                                         March 5, 1998


     FOR VALUE RECEIVED, the undersigned, FRANKLIN CONSOLIDATED MINING COMPANY,
INC., a Delaware corporation (hereinafter referred to as the "Maker") promises
to pay to POS FINANCIAL, INC., a New Jersey corporation (hereinafter referred to
as the "Lender"), or order, the principal sum Nine Hundred and Fifty Five
Thousand, Seven Hundred and Fifty Six Dollars and Twenty Two Cents ($955,756.22)
from December 31, 1997 until the note is paid in full pursuant to the following
terms and conditions.

1. Interest Rate.

     The unpaid amount of this Promissory Note shall bear interest at the rate
of Eight (8%) percent, per annum.

2. Computation of Interest.

     Interest chargeable hereunder shall be calculated from December 31,1997 on
all amounts outstanding until the date when the Note is paid in full. Interest
not paid when due shall be added to the unpaid principal balance and shall
thereafter bear interest at the same rate as principal. All payments hereunder
are to be applied first to the payment of accrued interest and the balance
remaining to the payment of principal.

3. Payment.

     All principal and accrued interest shall be due and payable on May 4, 1998.

4. Extension.

     If Maker informs Lender, in writing, at least ten (10) days prior to the
due date under the terms of this note of its inability to make the required
payment of principal and interest; Lender may, in its sole discretion, extend
the note until June 4, 1998.

5. Prepayment.

     This note may be prepaid, in whole or in part, without prepayment penalty.

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6.  Security Agreement.

     The obligations evidenced by this Promissory Note are secured by certain
collateral as set forth in that certain Security Agreement of even date herewith
(the "Security Agreement"). A copy of the Security Agreement is attached hereto
and marked Exhibit "A".

7.  Waivers.

     Except as may be set forth herein or in the Security Agreement, Maker, for
itself and for its legal representatives, successors, and assigns, expressly
waives presentment, protest, demand, notice of dishonor, notice of nonpayment,
notice of maturity, notice of protest, notice of intent to accelerate, notice of
acceleration, presentment for the purpose of accelerating maturity, and
diligence in collection.

8.  Default - Security Interests.

     It is expressly agreed that, upon the occurrence of an event of default
under the promissory note and/or security agreement, the unpaid principal
balance of this Promissory Note, together with interest accrued thereon, shall
be immediately due and payable as provided in the promissory note and Security
Agreement, without presentment, demand, protest, or notice of protest, of any
kind, all of which are hereby expressly waived. It is further understood that
this note is secured by, among other things, any of the security interests
granted to Lender under the Security Agreement and under any other agreement
between Lender and Maker which is executed in connection with the Promissory
Note and Security Agreement, in connection herewith, or in connection with the
transaction contemplated hereunder ("Collateral Documents"). All of the
covenants, conditions, warranties, representations and agreements contained in
such collateral documents, are hereby incorporated herein and made a part
hereof.

9.  Events of Default.

     If any one or more of the following events (each an "Event of Default")
shall occur, such occurrence shall be deemed an "Event of Default" under this
Note:

          (i) Failure of the Maker to make any payment of principal or interest
     under this note as and when the same shall become due and payable, whether
     at maturity or by acceleration.

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          (ii) The Maker shall make a general assignment for the benefit of
     creditors, file a petition in bankruptcy, be adjudicated insolvent or
     bankrupt, suffer an order for relief under any federal bankruptcy law,
     petition or apply to any tribunal for the appointment of a custodian,
     receiver or any trustee for the Maker or a substantial part of the assets
     of the Maker or a third party shall file for involuntary relief against the
     Maker

          (iii) The maker shall breach any provision of this Promissory Note,
     the Security Agreement or any collateral documents to this transaction.


10. Attorney's Fees and Costs

     In the event it should become necessary to employ counsel to collect under
the terms of this Promissory Note, Maker agrees to pay all reasonable attorney's
fees and costs of the Lender irrespective of whether suit is brought.

11. Amendments

     This Promissory Note may not be changed, modified or amended without a
written document containing such changes, modifications or amendments executed
by the Lender and Maker.

12. Choice of Law.

     This Promissory Note and all transactions hereunder and/or evidenced hereby
shall be governed by, construed under, and enforced in accordance with the laws
of the State of New Jersey.

13. Trial By Jury.

     Maker hereby waives any right to trial by jury in any action or proceeding
relating to this Promissory Note.


                                      Franklin Consolidated Mining Company, Inc.
                                      A Delaware Corporation


                                      By /s/  J. Terry Anderson
                                      --------------------------------
                                      J. Terry Anderson, President


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              ASSIGNMENT OF INTEREST AND ASSUMPTION OF LIABILITIES

     For value received, U.S. Mining, Inc., the Assignor, hereby assigns to
Franklin Consolidated Mining Company, Inc., the Assignee, all of its right,
title and interest in a certain California General Partnership, dated February
26, 1993 (as amended from time to time), known as the Zeus Joint Venture,
together with all liabilities associated therewith, as set forth in Exhibit "A",
a copy of which is attached hereto and incorporated herein by reference.

     For value received, Franklin Consolidated Mining Company, Inc., hereby
accepts the assignment of U.S. Mining, Inc's right, title and interest in a
certain California General Partnership, dated February 26, 1993 (as amended from
time to time), known as the Zeus Joint Venture, and assumes all liabilities
associated therewith, as set forth in Exhibit "A", a copy of which is attached
hereto and incorporated herein by reference.


Date: December 1, 1997                Assignor
                                      U.S. Mining, Inc.
                                      A New Jersey Corporation


                                      By /s/ William C. Martucci
                                      ------------------------------------------
                                      William C. Martucci, President

Date: December 1, 1997                Assignee
                                      Franklin Consolidated Mining Company, Inc.
                                      A Delaware Corporation


                                      By /s/ J. Terry Anderson
                                      ------------------------------------------
                                      J. Terry Anderson, President


<PAGE>

                                   EXHIBIT "A"

                                   ASSIGNMENT


     For good and valuable consideration, receipt of which is acknowledged,
POS, Financial, Inc., a New Jersey corporation (hereinafter referred to as
"Assignor") hereby assigns to US Mining, Inc., a New Jersey corporation
(hereinafter referred to as the "Assignee") all of its right, title and interest
in that certain Promissory Note, dated March 5, 1998, in the principal amount of
Nine Hundred and Fifty Five Thousand, Seven Hundred and Fifty Six Dollars and
Twenty Two Cents ($955,756.22) wherein Franklin Consolidated Mining Company,
Inc., a Delaware corporation is the maker and Assignor is the Payee. A copy of
said Promissory Note is attached hereto, marked Exhibit "A" and incorporated
herein by reference. 


Date: March 5, 1998                   POS, FINANCIAL, INC. 
                                      A New Jersey corporation


                                      By /s/ William C. Martucci
                                      ------------------------------------------
                                      William C. Martucci
                                      President



<PAGE>


                                   EXHIBIT "D"

                               SECURITY AGREEMENT


     THIS SECURITY AGREEMENT (the "Agreement") is entered into on May 5, 1998 by
and between, U.S. MINING, INC., a New Jersey corporation (hereinafter referred
to as the "Lender") and FRANKLIN CONSOLIDATED MINING COMPANY, INC., a Delaware
corporation

                                    RECITALS

     WHEREAS, Borrower has, by way of a separate document entitled, "Loan
Agreement" dated as of the date of this Agreement, acknowledged the existance of
a monetary obligation between Borrower and Lender. The monetary obligation is
evidenced by two promissory notes, one of which is referred to (in the Loan
Agreement) as the "Existing Indebtedness" and one of which is referred to (in
the Loan Agreement) as the "Additional Advances".

     WHEREAS, the Loan Agreement further acknowledges the possibility that
Lender may advance additional funds, in the future, to Borrower.

     WHEREAS, Borrower is a corporation in good standing in the State of
Delaware and is authorized to enter into the type of arrangement envisioned by
this Agreement, the Promissory Notes and any necessary collateral documentation.

     WHEREAS, Lender and Borrower are desirous of securing what has been termed,
in the Loan Agreement, the "Existing Indebtedness" and the "Additional Advances"
and any future advances that Lender may make to Borrower.


     NOW THEREFORE, in consideration of the mutual covenants, conditions,
representations, and warranties hereinafter set forth and for other good and
valuable consideration, the parties hereto mutually agree as follows:

                                       I.
                          Definitions and Construction

1.01. The following terms, as used in this Agreement, have the following
meanings:

          (a) Code means the Colorado Uniform Commercial Code, as amended and
     supplemented from time to time, and any successor statute.


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          (b) Collateral means that property, both personal property and real
     property, and tangible and intangible property set forth in Exhibit "A", a
     copy of which is attached hereto and incorporated herein by reference.

          (c) Ob1igations means all obligations of Borrower under this Agreement
     and the Promissory Notes (as defined herein), any other collateral
     documentation and all costs and expenses attendant with this transaction.

1.02. Unless the context of this Agreement clearly requires otherwise,
references to the plural include the singular, references to the singular
include the plural, and the term "including" is not limiting. The words
"hereof," "herein," "hereby," "hereunder" and other similar terms refer to this
Agreement as a whole and not to any particular provision of this Agreement. Any
references herein to any promissory notes includes any replacement,
substitutions, alterations, amendments, extensions, modifications, renewals, or
supplements thereto or thereof, as applicable. Neither the Agreement nor any
uncertainty or ambiguity herein shall be construed or resolved against any party
hereto, whether under any rule of construction or otherwise. On the contrary,
the Agreement has been reviewed by each party and shall be construed and
interpreted according to the ordinary meaning of the words used so as to fairly
accomplish the purposes and intentions of the parties hereto.

                                       II.
                          Pledge and Further Assurances

2.01. Borrower agrees that it will cooperate with Lender and shall execute and
deliver or cause to be executed and delivered, to Lender a UCC-1 Financing
Statement in the form of Exhibit "B", a copy of which is attached hereto, a Deed
of Trust in the form of Exhibit "C", a copy of which is attached hereto
instruments and other documents, and shall take all further action, at the
expense of Borrower, from time to time reasonably requested by Lender, in order
to maintain a continuing, first-priority perfected security interest in the
Collateral in favor of Lender, and to enable Lender to exercise and enforce
Lender's rights and remedies hereunder with respect to the Collateral. All
certificates or instruments representing or evidencing the Collateral shall be
delivered promptly to Lender or Lender's designated Attorney-in-Fact for the
benefit of Lender pursuant hereto and shall be in suitable form for transfer or
assignment in blank, all in form and substance satisfactory to the Lender or
Lender's designated representative. 


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                                      III.
                    Representations, Warranties and Covenants

     Borrower warrants, represents and covenants that:

3.01. There are no restrictions upon the transfer of any of the Collateral, and
Borrower is the sole and beneficial owner of the Collateral and has the right to
pledge and grant a security interest in or otherwise transfer such Collateral
free of any encumbrances or rights of third parties.

3.02. All of the Collateral is and shall remain free from all liens, claims,
encumbrances and purchase-money or other security interests.

3.03. The execution and delivery of this Agreement creates a valid, perfected,
and first-priority interest in the Collateral in favor of Lender.

3.04. All books, records and documents relating to the Collateral are and will
be genuine and in all respects what they purport to be.

3.05. All covenants, representations and warranties contained in this Agreement
shall be true and correct at the time of the execution of this Agreement and
shall be deemed to be continuing.

                                       IV.
                                Events of Default

     The occurrence of any of the following events shall constitute an Event of
Default hereunder:

4.01. The failure of Borrower to pay any amount required to be paid pursuant to
the Promissory Notes, whether at maturity or by acceleration.

4.02. Borrower shall make a general assignment for the benefit of creditors,
file a petition in bankruptcy, be adjudicated insolvent or bankrupt, suffer an
order for relief under any federal bankruptcy law, petition or apply to any
tribunal for the appointment of a custodian, receiver or any trustee for the
Borrower or a substantial part of the assets of Borrower or a third party shall
file for involuntary relief against the Borrower.

4.03. Borrower shall breach any provision of the Promissory Notes, this Security
Agreement or any collateral documents to this transaction.


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                                       V.
                              Remedies Upon Default

5.01. Upon the occurrence of an Event of Default, Lenders shall have, in
addition to any other rights given by law or in this agreement, or in any other
documents related to an Obligation, all of the rights and remedies with respect
to the personal property Collateral of a secured party under the Code.

                                       VI.
                               General Provisions

6.01. This Agreement shall be binding and deemed effective when executed by
Borrower and accepted and executed by Lender.

6.02. The enumeration herein of Lender's rights and remedies is not intended to
be exclusive, and such rights and remedies are in addition to and not by way of
limitation of any other rights or remedies that the Lender may have under the
Code or other applicable law. Lender shall have the right, in Lender's sole
discretion, to determine which rights and remedies are to be exercised and in
which order. The exercise of one right or remedy shall not preclude the exercise
of any others, all of which shall be cumulative.

6.03. No act, failure to act, or delay by Lender shall constitute a waiver of
any of Lender's rights and remedies. No single or partial waiver by Lender of
any provision of this Agreement or any other Loan Document, or of a breach or
default hereunder or thereunder, or of any right or remedy which the Lender may
have, shall operate as a waiver of any other provision, breach, default, right,
or remedy or of the same provision, breach, default, right, or remedy on a
future occasion. No waiver by Lender shall affect Lender's right to require
strict performance of this Agreement.

6.04. If any provision of this Agreement shall be prohibited or invalid, under
applicable law, it shall be effective only to such extent without invalidating
the remainder of the Agreement.

6.05. This Agreement shall be deemed to have been made in the State of Colorado
and shall be governed by and interpreted in accordance with the laws of such
state.

6.06. All of Borrower's representations and warranties contained in this
Agreement shall survive the execution, delivery, and acceptance thereof by the
parties.

6.07. In the event it shall be necessary to enforce any provision hereof; Lender
shall be entitled to reimbursement of all of Lenders' reasonable costs and


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expenses, including without limitation: (a) attorney's and paralegals fees and
disbursements of counsel to Lenders, (b) costs and expenses of lien searches,
(c) charges attendant with actions to perfect, protect, and continue the
security interest created herein, (d) fees and costs incurred by Lenders to
defend any claims made or threatened against the Lenders arising out of the
transaction contemplated hereby. The parties agree that attorney's fees and
costs incurred in enforcing any judgment are recoverable as a separate item in
addition to fees and costs incurred in obtaining the judgment, and are not to be
deemed merged into any judgment. In the event of a dispute between the parties
arising out of this Agreement or otherwise, the prevailing party, as determined
by a court of competent jurisdiction, shall be entitled to recovery of
reasonable attorney's fees and costs incurred in connection with litigation or
other resolution of the dispute whether or not litigation is initiated.

6.08. Except as otherwise provided herein, all notices, demands and requests
that either party is required or elects to give to the other shall be in
writing, shall be delivered personally against receipt, or sent by recognized
overnight courier service, or mailed by registered or certified mail, return
receipt requested, postage prepaid and shall be addressed as follows:

Borrower:
                  J. Terry Anderson
                  President
                  Franklin Consolidated Mining Company, Inc.
                  76 Beaver Street
                  Suite 500
                  New York, New York 10005

Lender:
                  William Martucci
                  President
                  U.S. Mining, Inc.
                  3 Dundar Road
                  Springfield, New Jersey 07081


6.09. The provisions of this Agreement shall be binding upon and inure to the
benefit of the respective representatives, successors and assigns of the parties
hereto.

6.10. This Agreement is intended by Borrower and Lender to be the final,
complete, and exclusive expression of the agreement between them. This Agreement
supersedes any and all prior oral or written agreements relating to the subject
matter hereof. No modifications, recission, waiver, release or amendment of any
provision of this Agreement shall be made, except by written agreement executed
by the parties hereto. 



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6.11. This Agreement may be executed in any number of counterparts and by Lender
and Borrower in separate counterparts, each of which shall be an original, but
all of which shall together constitute one and the same agreement.

6.12. The captions contained in this agreement are for convenience only, are
without substantive meaning and should not be construed to modify, enlarge, or
restrict any provision.


                                              Lender
                                              U.S. Mining, Inc.
                                              A New Jersey corporation


                                          By /s/ William C. Martucci
                                             ----------------------------------
                                             WILLIAM C. MARTUCCI
                                             President


                                        Borrower
                                        Franklin Consolidated Mining Co. Inc.
                                        A Delaware corporation


                                      By /s/ J. Terry Anderson
                                         --------------------------------------
                                         J. TERRY ANDERSON
                                         President


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                                   EXHIBIT "A"

                                   COLLATERAL

     All mining claims and mining properties as well as all of Borrower's right,
title and interest of whatsoever nature, in and to that certain Mineral Lease,
including any extensions thereto, dated November 12, 1976 between David I.
Hayden and Audrey I. Hayden, husband and wife, Dorothy L. Kennec, individually
and Dorothy L. Kennec trustee and Gold Developers and Producers, Incorporated,
and all of Borrower's right, title and interest in and to all mines, minerals,
lodes, veins dips and spurs, dumps, plants, fixtures, equipment, improvements,
water rights and/or any and all other rights, casements, and/or appurtenances
whatsoever relating thereto, including, without limitation, all of the exclusive
right, title and interest of Borrower to mine, extract, explore, develop, mill,
store, remove, and market all of the minerals, metals, ore materials of
whatsoever nature or sort to be found either on, in, under, upon and/or
belonging to or associated with or used or usable in connection with the
property rights and interest or related in any way to the subsurface of that
certain property known as the Franklin Mine and Mill site located in the County
of Clear Creek, in the State of Colorado.