EXHIBIT 10.1
                                                              

                      AMENDED AND RESTATED CREDIT AGREEMENT

                            DATED AS OF JULY 14, 1998

                                      AMONG

                            HOMESTAKE MINING COMPANY,
                      a Delaware corporation, as Guarantor,


                     HOMESTAKE MINING COMPANY OF CALIFORNIA,
                   a California corporation, as U.S. Borrower,

                             HOMESTAKE CANADA INC.,
                  an Ontario corporation, as Canadian Borrower,

                      HOMESTAKE GOLD OF AUSTRALIA LIMITED,
                         a South Australian corporation,
                                       and
                           PLUTONIC RESOURCES LIMITED,
                         a New South Wales corporation,
                            as Australian Borrowers,

                           THE LENDERS LISTED HEREIN,
                                   as Lenders,

                       THE CHASE MANHATTAN BANK OF CANADA,
                        as Canadian Administrative Agent,

                       CHASE SECURITIES AUSTRALIA LIMITED,
                       as Australian Administrative Agent,

                             CHASE SECURITIES INC.,
                                  as Arranger,

                            THE CHASE MANHATTAN BANK,
                            as Administrative Agent,

                                       and

                               DEUTSCHE BANK A.G.,
                             as Documentation Agent




<PAGE>


                            HOMESTAKE MINING COMPANY
                     HOMESTAKE MINING COMPANY OF CALIFORNIA
                              HOMESTAKE CANADA INC.
                       HOMESTAKE GOLD OF AUSTRALIA LIMITED
                           PLUTONIC RESOURCES LIMITED

                      AMENDED AND RESTATED CREDIT AGREEMENT


<TABLE>
<CAPTION>

                                TABLE OF CONTENTS

                                                                                                               Page

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Section 1.  DEFINITIONS...........................................................................................2

1.1      Certain Defined Terms....................................................................................2

1.2      Accounting Terms; Utilization of GAAP for Purposes of Calculations Under Agreement......................33

1.3      Other Definitional Provisions...........................................................................33

Section 2.  AMOUNTS AND TERMS OF COMMITMENTS AND LOANS...........................................................34

2.1      Commitments; Loans......................................................................................34

2.2      Interest on the Loans...................................................................................42

2.3      Fees....................................................................................................47

2.4      Prepayments and Reductions in Commitments; General Provisions Regarding Payments........................47

2.5      Use of Proceeds.........................................................................................52

2.6      Special Provisions Governing Eurodollar Rate Loans, Bank Bill Swap Rate Loans and Gold Loans............52

2.7      Letters of Credit.......................................................................................56

2.8      Bankers' Acceptances....................................................................................63

Section 3.  CONDITIONS TO EFFECTIVENESS OF AGREEMENT AND LOANS,..................................................66

3.1      Conditions to Effectiveness.............................................................................66

3.2      Conditions to All Loans.................................................................................71

3.3      Conditions to All Letters of Credit.....................................................................72

3.4      Conditions to All Bankers' Acceptances..................................................................72

Section 4.  REPRESENTATIONS AND WARRANTIES.......................................................................73

4.1      Organization, Powers, Qualification, Good Standing, Business and Subsidiaries...........................73

4.2      Authorization of Borrowing and Guaranty, etc............................................................74

4.3      Valid Issuance of Stock.................................................................................75

4.5      Financial Condition.....................................................................................75

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4.6      No Material Adverse Effect; No Restricted Junior Payments...............................................76

4.7      Title to Properties; Liens..............................................................................76

4.8      Litigation; Adverse Facts...............................................................................76

4.9      Payment of Taxes........................................................................................77

4.10     Performance of Agreements; Materially Adverse Agreements................................................77

4.11     Governmental Regulation.................................................................................77

4.12     Securities Activities...................................................................................77

4.13     Employee Benefit Plans..................................................................................77

4.14     Certain Fees............................................................................................78

4.15     Environmental Protection................................................................................78

4.16     Employee Matters........................................................................................78

4.17     Solvency................................................................................................78

4.18     Compliance with Laws....................................................................................78

4.19     Disclosure..............................................................................................79

Section 5.  AFFIRMATIVE COVENANTS................................................................................79

5.1      Financial Statements and Other Reports..................................................................79

5.2      Corporate Existence, etc................................................................................82

5.3      Payment of Taxes and Claims; Tax Consolidation..........................................................82

5.4      Maintenance of Properties; Insurance....................................................................83

5.5      Inspection; Lender Meeting; Reports of Subsidiaries.....................................................83

5.6      Compliance with Laws, etc...............................................................................83

5.7      Environmental Disclosure and Inspection.................................................................84

5.8      Company's Remedial Action Regarding Hazardous Materials.................................................84

5.9      Further Assurances......................................................................................85

5.10     Year 2000 Compliance....................................................................................85

Section6.  NEGATIVE COVENANTS....................................................................................85

6.1      Indebtedness............................................................................................85

6.2      Liens and Related Matters...............................................................................87

6.3      Investments; Joint Ventures.............................................................................88

6.4      Contingent Obligations..................................................................................89

6.5      Restricted Junior Payments..............................................................................90

6.6      Financial Covenants.....................................................................................91

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<PAGE>


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6.7      Restriction on Fundamental Changes; Asset Sales; Certain Asset Transfers................................91

6.8      Transactions with Shareholders and Affiliates...........................................................92

6.9      Disposal of Material Subsidiary Stock...................................................................92

6.10     Conduct of Business.....................................................................................93

6.11     Prepayments and Amendments to Subordinated Indebtedness.................................................93

Section7.EVENTS OF DEFAULT                                                                                       93

7.1      Failure to Make Payments When Due.......................................................................93

7.2      Default in Other Agreements.............................................................................94

7.3      Breach of Certain Covenants.............................................................................94

7.4      Breach of Warranty......................................................................................94

7.5      Other Defaults Under Loan Documents.....................................................................94

7.6      Involuntary Bankruptcy; Appointment of Receiver, etc....................................................94

7.7      Voluntary Bankruptcy; Appointment of Receiver, etc......................................................95

7.8      Judgments and Attachments...............................................................................96

7.9      Dissolution.............................................................................................96

7.10     Employee Benefit Plans..................................................................................96

7.11     Change in Control of Borrowers..........................................................................96

Section 8.  GUARANTIES OF COMPANY AND U.S. BORROWER OF...........................................................98

8.1      Guaranty by Company.....................................................................................98

8.2      Guaranty by U.S. Borrower..............................................................................101

Section9.  AGENTS...............................................................................................105

9.1      Appointment............................................................................................105

9.2      Powers; General Immunity...............................................................................105

9.3      Representations and Warranties; No Responsibility For Appraisal of Creditworthiness....................107

9.4      Right to Indemnity.....................................................................................107

9.5      Registered Persons Treated as Owners...................................................................108

9.6      Successor Agents.......................................................................................108

Section10.  MISCELLANEOUS.......................................................................................108

10.1     Assignments of and Participations in Commitments, Loans and Letters of Credit..........................108

10.2     Expenses...............................................................................................112

10.3     Indemnity..............................................................................................112

10.4     Set Off................................................................................................113


                                      iii
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10.5     Ratable Sharing........................................................................................114

10.6     Amendments and Waivers.................................................................................114

10.7     Increased Costs; Taxes; Capital Adequacy...............................................................115

10.8     Lenders' Obligation to Mitigate; Replacement of Lender.................................................118

10.9     Independence of Covenants..............................................................................119

10.10    Notices................................................................................................119

10.11    Survival of Representations, Warranties and Agreements.................................................119

10.12    Failure or Indulgence Not Waiver; Remedies Cumulative..................................................120
10.13    Marshalling; Payments Set Aside........................................................................120

10.14    Severability...........................................................................................120

10.15    Obligations Several; Independent Nature of Lenders' Rights.............................................120

10.16    Headings...............................................................................................121

10.17    Applicable Law.........................................................................................121

10.18    Successors and Assigns.................................................................................121

10.19    Consent to Jurisdiction and Service of Process.........................................................121

10.20    Waiver of Jury Trial...................................................................................122

10.21    Confidentiality........................................................................................122

10.22    Entire Agreement.......................................................................................123

10.23    Counterparts; Effectiveness............................................................................123

10.24    Judgment Currency......................................................................................123

10.25    Change in Control......................................................................................124

</TABLE>


                                       iv
<PAGE>


SCHEDULES

(Note:  Schedules not included in electronic filing.)


2.1               LENDERS' COMMITMENTS AND PRO RATA SHARES
4.1               LIST OF SUBSIDIARIES
4.5               CONTINGENT OBLIGATIONS AND FORWARD COMMITMENTS
4.8               LITIGATION
4.10              CERTAIN DEFAULTS
4.13              CERTAIN EMPLOYEE BENEFIT PLANS
6.1               EXISTING INDEBTEDNESS
6.2               CERTAIN EXISTING LIENS
6.3               EXISTING INVESTMENTS
6.4               EXISTING CONTINGENT OBLIGATIONS
6.8               TRANSACTIONS WITH AFFILIATES



                                    EXHIBITS


I                 FORM OF NOTICE OF BORROWING
II                FORM OF NOTICE OF CONVERSION/CONTINUATION
III-A             FORM OF DRAFT
III-B             FORM OF DRAWING NOTICE
IV-A              FORM OF CANADIAN BORROWER NOTE
IV-B              FORM OF HGAL NOTE
IV-C              FORM OF PLUTONIC NOTE
IV-D              FORM OF U.S. BORROWER NOTE
V                 FORM OF GRID GOLD ACKNOWLEDGEMENT
VI                FORM OF COMPLIANCE CERTIFICATE
VII-A             FORM OF OPINION OF THELEN, MARRIN, JOHNSON & BRIDGES
VII-B             FORM OF OPINION OF WAYNE KIRK, ESQ.
VIII-A            FORM OF OPINION OF OSLER, HOSKIN & HARCOURT
VIII-B            FORM OF OPINION OF MALLESONS STEPHEN JAQUES
IX                FORM OF OPINION OF O'MELVENY & MYERS
X-A               FORM OF ASSIGNMENT AND ACCEPTANCE (CANADIAN LENDER)
X-B               FORM OF ASSIGNMENT AND ACCEPTANCE (U.S. LENDER)
X-C               FORM OF ASSIGNMENT AND ACCEPTANCE (AUSTRALIAN LENDER)
XI                FORM OF NOTICE OF ISSUANCE OF LETTER OF CREDIT
XII               FORM OF SUBORDINATION PROVISIONS
XIII              FORM OF NOTICE OF ALLOCATION

                                       v
<PAGE>


                           HOMESTAKE MINING COMPANY
                     HOMESTAKE MINING COMPANY OF CALIFORNIA
                              HOMESTAKE CANADA INC.
                       HOMESTAKE GOLD OF AUSTRALIA LIMITED
                           PLUTONIC RESOURCES LIMITED

                      AMENDED AND RESTATED CREDIT AGREEMENT


                  This AMENDED AND RESTATED CREDIT AGREEMENT is dated as of July
14, 1998 and entered  into by and among  HOMESTAKE  MINING  COMPANY,  a Delaware
corporation  ("Company"),  HOMESTAKE MINING COMPANY OF CALIFORNIA,  a California
corporation  ("U.S.  Borrower"),  HOMESTAKE CANADA INC., an Ontario  corporation
("Canadian  Borrower"),  HOMESTAKE GOLD OF AUSTRALIA LIMITED, ACN 008 143 137, a
South Australia  corporation  ("HGAL"),  PLUTONIC RESOURCES LIMITED, ACN 006 245
629, a New South Wales  corporation  ("Plutonic";  and  collectively  with HGAL,
"Australian  Borrowers"),  THE  FINANCIAL  INSTITUTIONS  LISTED ON THE SIGNATURE
PAGES  HEREOF  (each   individually   referred  to  herein  as  a  "Lender"  and
collectively  as "Lenders"),  THE CHASE  MANHATTAN  BANK OF CANADA,  as Canadian
Administrative  Agent  for  Lenders  ("Canadian  Administrative  Agent"),  CHASE
SECURITIES  AUSTRALIA  LIMITED,  ACN 002 888 011, as  Australian  Administrative
Agent for Lenders ("Australian Administrative Agent"), CHASE SECURITIES INC., as
Arranger  ("Arranger"),  THE CHASE MANHATTAN BANK, as  Administrative  Agent for
Lenders  ("Administrative Agent") and DEUTSCHE BANK A.G., as Documentation Agent
("Documentation Agent"). Capitalized terms used herein and not otherwise defined
shall  have  the  respective  meanings  set  forth  in  subsection  1.1 of  this
Agreement.

                                 R E C I T A L S

                  WHEREAS, pursuant to that certain Credit Agreement dated as of
September  20,  1996 (the  "Existing  Credit  Agreement")  among  Company,  U.S.
Borrower,  Canadian  Borrower,  HGAL, the lenders listed on the signature  pages
thereof  ("Existing  Lenders"),   Canadian   Administrative  Agent,   Australian
Administrative  Agent,  Administrative  Agent  and  Canadian  Imperial  Bank  of
Commerce,  as  documentation  agent,  Existing  Lenders have made certain credit
facilities available to U.S. Borrower, Canadian Borrower, and HGAL in accordance
with the terms thereof; and

                  WHEREAS,  Company,  U.S. Borrower,  Canadian Borrower and HGAL
desire to refinance the Existing Credit  Agreement and, among other things,  add
Plutonic  as  an  Australian   Borrower  and  increase  the  aggregate   Overall
Commitments of all Lenders to $400,000,000; and

                  WHEREAS, for ease of reference and clarity, the parties to the
Existing Credit  Agreement  desire to restate the Existing  Credit  Agreement to
incorporate the amendments which were made prior to the date hereof by and among
the parties to the Existing Credit Agreement and


                                       1
<PAGE>


the additional  amendments  which are made hereby,  and to amend and restate the
promissory notes issued by U.S. Borrower, Canadian Borrower and HGAL pursuant to
the Existing Credit Agreement (the "Existing Promissory Notes"); and

                  WHEREAS,  the parties to the Existing Credit Agreement and the
parties  hereto  expressly  disclaim  any  intent  to  effect a  novation  or an
extinguishment  or discharge of the  obligations  under the Loan  Documents as a
result of entering into this Agreement and the other  documents as  contemplated
herein, but merely intend to amend and restate such obligations.

                  NOW,  THEREFORE,  in  consideration  of the  premises  and the
agreements,  provisions  and  covenants  herein  contained,  and other  good and
valuable  consideration,   the  receipt  and  sufficiency  of  which  is  hereby
acknowledged, Company, Borrowers, Lenders, Agents and Arranger agree as follows:

Section 1.  DEFINITIONS

1.1      Certain Defined Terms.

                  The  following  terms  used in this  Agreement  shall have the
following meanings:

                  "Adjusted  Eurodollar  Rate"  means,  for  any  Interest  Rate
Determination  Date with respect to a Eurodollar Rate Loan, the rate obtained by
dividing (i) the  Eurodollar  Rate on such Interest Rate  Determination  Date by
(ii) a  percentage  equal to 100% minus the stated  maximum  rate of all reserve
requirements   (including,   without   limitation,   any  marginal,   emergency,
supplemental, special or other reserves) applicable generally to any member bank
of the  Federal  Reserve  System in respect  of  "Eurocurrency  liabilities"  as
defined  in  Regulation  D (or  any  successor  category  of  liabilities  under
Regulation D). The Administrative  Agent shall determine the Adjusted Eurodollar
Rate and such determination shall be conclusive absent manifest error.

                  "Administrative  Agent" means Chase and any successor  thereto
appointed pursuant to subsection 9.6.

                  "Affected Lender" has the meaning assigned to that term in 
subsection 2.6C.

                  "Affected Loans" has the meaning assigned to that term in 
subsection 2.6C.

                  "Affiliate",  as applied to any Person, means any other Person
directly or indirectly controlling, controlled by, or under common control with,
that Person.  For the purposes of this definition,  "control"  (including,  with
correlative meanings, the terms "controlling", "controlled by" and "under common
control  with"),  as applied to any Person,  means the  possession,  directly or
indirectly,  of the power to direct or cause the direction of the management and
policies of that Person,  whether through the ownership of voting  securities or
by contract or otherwise.


                                       2
<PAGE>


                  "Agent" or "Agents" means Administrative Agent and/or Canadian
Administrative Agent and/or Australian Administrative Agent and/or Documentation
Agent, or any of them.

                  "Agreement"  means this Amended and Restated Credit Agreement,
dated as of July 14,  1998,  as it may be  amended,  restated,  supplemented  or
otherwise modified from time to time.

                  "Alternate  Base  Rate"  means,  for any day, a rate per annum
(rounded  upwards,  if necessary,  to the next 1/16 of one percent) equal to the
greatest  of (a) the Prime  Rate in effect on such day,  (b) the Base CD Rate in
effect on such day plus 1% and (c) the Federal Funds Effective Rate in effect on
such day plus 1/2 of 1%. For  purposes  hereof,  "Prime  Rate" means the rate of
interest per annum publicly announced from time to time by Administrative  Agent
as its prime  rate in  effect at its  principal  office in New York  City;  each
change in the Prime Rate shall be  effective on the date such change is publicly
announced as being effective. "Base CD Rate" means the sum of (a) the product of
(i) the  Three-Month  Secondary CD Rate and (ii) Statutory  Reserves and (b) the
Assessment  Rate.  "Three-Month  Secondary  CD Rate"  means,  for any  day,  the
secondary market rate for three-month  certificates of deposit reported as being
in effect on such day (or,  if such day shall not be a  Business  Day,  the next
preceding  Business Day) by the Board through the public  information  telephone
line of the Federal Reserve Bank of New York (which rate will, under the current
practices  of the Board,  be published in Federal  Reserve  Statistical  Release
H.15(519)  during the week following such day), or, if such rate shall not be so
reported on such day or such next  preceding  Business  Day,  the average of the
secondary  market  quotations for three month  certificates  of deposit of major
money center banks in New York City received at  approximately  10:00 a.m.,  New
York City time, on such day (or, if such day shall not be a Business Day, on the
next preceding  Business Day) by  Administrative  Agent from three New York City
negotiable certificate of deposit dealers of recognized standing selected by it.
"Federal Funds Effective Rate" means,  for any day, the weighted  average of the
rates on  overnight  Federal  funds  transactions  with  members of the  Federal
Reserve  System  arranged by Federal  funds  brokers,  as  published on the next
succeeding  Business Day by the Federal  Reserve  Bank of New York,  or, if such
rate is not so published for any day which is a Business Day, the average of the
quotations for the day of such  transactions  received by  Administrative  Agent
from three Federal funds brokers of recognized  standing  selected by it. If for
any reason Administrative Agent shall have determined (which determination shall
be conclusive  absent manifest error) that it is unable to ascertain the Base CD
Rate or the Federal Funds  Effective Rate or both for any reason,  including the
inability of Administrative Agent to obtain sufficient  quotations in accordance
with the terms  thereof,  the Alternate  Base Rate shall be  determined  without
regard to clause (b) or (c), or both, of the first sentence of this  definition,
as appropriate,  until the circumstances giving rise to such inability no longer
exist.  Any change in the Alternate Base Rate due to a change in the Prime Rate,
the  Three-Month  Secondary CD Rate or the Federal Funds Effective Rate shall be
effective  on the  effective  date  of  such  change  in  the  Prime  Rate,  the
Three-Month Secondary CD Rate or the Federal Funds Effective Rate, respectively.
If any U.S. Base Rate Loans are outstanding,  Administrative  Agent will give to
U.S.  Borrower notice of any such changes promptly after the Alternate Base Rate
changes; provided, however, that the failure to


                                       3
<PAGE>


give such notice shall not limit or otherwise  affect the obligations of Company
or any Borrower under this Agreement or any other Loan Document.

                  As to any loan, the Prime Rate and the Alternate Base Rate are
reference rates that vary from time to time and do not necessarily represent the
lowest or best rate actually charged to any customer by Administrative  Agent or
any U.S. Lender for loans denominated in Dollars.  Administrative Agent and U.S.
Lenders may make commercial loans or other loans denominated in Dollars at rates
of interest at, above or below the Prime Rate or the  Alternate  Base Rate.  The
Alternate Base Rate shall automatically change upon any date that Administrative
Agent  announces any change in its applicable  prime rate or determines that the
interest  rates set forth in clauses  (b) and (c) in the first  sentence of this
definition have changed, to the extent necessary to reflect any such change.

                  "Applicable  Administrative  Agent"  means (i)  Administrative
Agent in the  case of U.S.  Loans  or U.S.  Letters  of  Credit,  (ii)  Canadian
Administrative  Agent in the case of Canadian Loans,  Canadian Letters of Credit
or Bankers' Acceptances and (iii) Australian Administrative Agent in the case of
Australian Loans or Australian Letters of Credit.

                  "Applicable  Margin"  means,  with  respect  to  any  Loan  or
Bankers'  Acceptance,  the applicable  percentage set forth below based upon the
actual  or  stated  senior  implied  ratings  established  by S&P  and  Moody's,
respectively,  applicable  on such  date to the  senior,  unsecured,  non-credit
enhanced, long-term Indebtedness for borrowed money of Company (or, if no actual
or stated senior implied ratings are in effect,  the ratings one category higher
than  the  actual  ratings  for  subordinated,  unsecured,  non-credit  enhanced
long-term Indebtedness for borrowed money of Company):


      Category            S&P/Moody's Rating                      Percentage
         1                BBB+/Baa1                                  0.40%
                          or above
         2                BBB/Baa2                                   0.50%
         3                BBB-/Baa3                                  0.625%
         4                BB+/Ba1                                    0.875%
         5                BB/Ba2                                     1.00%
         6                BB-/Ba3 or below                           1.125%

                  For purposes of the foregoing,  (i) if neither Moody's nor S&P
shall  have in  effect a  rating  for the  senior  or  subordinated,  unsecured,
non-credit enhanced, long-term Indebtedness for borrowed money of Company (other
than by reason of the  circumstances  referred  to in the last  sentence of this
definition),  then the  Applicable  Margin shall be based on Category 6; (ii) if
only one of  Moody's  and S&P shall  have in effect a rating  for the  senior or
subordinated,   unsecured,   non-credit  enhanced,  long-term  Indebtedness  for
borrowed money of Company, then the


                                       4
<PAGE>


Applicable Margin shall be determined on the basis of such rating;  (iii) if the
ratings established or deemed to have been established by Moody's or S&P for the
senior or subordinated,  unsecured, long-term Indebtedness for borrowed money of
Company shall fall within different  Categories,  the Applicable Margin shall be
based on the Category corresponding to the lower rating (higher percentage); and
(iv) if any rating  established or deemed to have been established by Moody's or
S&P shall be changed (other than as a result of a change in the rating system of
Moody's or S&P),  such change  shall be  effective as of the date on which it is
first announced by the applicable  rating agency.  Each change in the Applicable
Margin shall apply during the period  commencing on the  effective  date of such
change and ending on the date  immediately  preceding the effective  date of the
next such change. If the rating system of Moody's or S&P shall change, or if any
such rating  agency shall cease to be in the business of rating  corporate  debt
obligations,  Company and  Lenders  shall  negotiate  in good faith to amend the
references to specific ratings in this definition to reflect such changed rating
system or the  non-availability  of ratings from such rating agency, and pending
the effectiveness of any such amendment,  the ratings of such rating agency most
recently  in effect  prior to such  change or  cessation  shall be  employed  in
determining the Applicable Margin.

                   "Arranger" has the meaning assigned to that term in the 
introductory paragraph of this Agreement.

                  "Assessment  Rate" means for any date the annual rate (rounded
upwards,   if  necessary,   to  the  next  .01%)  most  recently   estimated  by
Administrative Agent as the then-current net annual assessment rate that will be
employed in determining  amounts payable by Administrative  Agent to the Federal
Deposit Insurance  Corporation (or any successor) for such date for insurance by
the Federal Deposit  Insurance  Corporation (or such successor) of time deposits
made in Dollars at Administrative Agent's domestic offices.

                  "Asset  Sale"  means  the  sale  by  Company  or  any  of  its
Subsidiaries to any Person other than Company or any of its  Subsidiaries of (i)
any of the stock of any of Company's Subsidiaries, (ii) substantially all of the
assets  of  any  division  or  line  of  business  of  Company  or  any  of  its
Subsidiaries,  or (iii) any other assets  (whether  tangible or  intangible  and
including  intercompany  Indebtedness)  of  Company  or any of its  Subsidiaries
outside  of the  ordinary  course  of  business;  provided  that (i) any sale of
surplus assets (including land and mineral interests but excluding  intercompany
Indebtedness)  not being used in the day-to-day  conduct of Company's  principal
businesses or worn or obsolete  equipment in the ordinary  course of business or
assets sold in the ordinary  course of business in  connection  with the routine
replacement  of fixed or  capital  assets;  (ii) any  disposition  of  Company's
interest  in the oil and gas and  sulphur  business  and any assets used in such
businesses  and not in  Company's  principal  businesses;  or (iii)  any sale of
Company's or any of its  Subsidiaries'  interest in Lachlan Resources N.L. shall
not be deemed to be an "Asset Sale."

                  "Assignment and Acceptance" means an Assignment and Acceptance
entered into by a Lender and an Eligible  Assignee,  and accepted by Agents,  in
substantially  the form of Exhibit  X-A,  Exhibit  X-B,  or Exhibit  X-C annexed
hereto, as applicable.


                                       5
<PAGE>


                  "Australian   Administrative  Agent"  means  Chase  Securities
Australia  Limited,  ACN  002 888  011,  a  company  incorporated  with  limited
liability in the  Australian  Capital  Territory,  Australia,  and any successor
thereto appointed pursuant to subsection 9.6.

                  "Australian  Allocation"  means  the  portion  of the  Overall
Commitments  allocated  to  Australian  Borrowers in Schedule 2.1 or in the most
recent  Notice of  Allocation  delivered  by Borrowers  and Company  pursuant to
subsection 2.1A.

                  "Australian Borrowers" has the meaning assigned to that term 
in the introduction of this Agreement.

                  "Australian   Commitment"   means  the   commitment   of  each
Australian  Lender  (i)  to  make  or  maintain  Australian  Loans  pursuant  to
subsection  2.1A,  and (ii) to  issue  (in the  case of the  applicable  Issuing
Lender)  or acquire  risk  participations  (in the case of all other  Australian
Lenders)  in  Australian  Letters of Credit  pursuant  to  subsection  2.7 in an
aggregate  amount,  valued  in Dollar  Equivalents,  at no time  exceeding  such
Australian Lender's Pro Rata Share of the Australian Allocation.

                  "Australian  Commitment  Usage"  means,  as  of  any  date  of
determination,  the aggregate outstanding principal amount of (i) the Australian
Loans  denominated  in Dollars,  and (ii) the  Australian  Loans  denominated in
Australian  Dollars  (but  valued  in  Dollar  Equivalents  as of  such  date of
determination), and (iii) the Australian Letter of Credit Usage.

                  "Australian  Dollar  Loans"  means  Loans  denominated  in and
advanced to Australian Borrowers in Australian Dollars.

                  "Australian Dollars" or "A$" means the lawful money of 
Australia.

                  "Australian  Exposure"  means,  with respect to any Australian
Lender as of any date of determination, the Australian Lender Allocation of such
Australian Lender or, if the Overall  Commitments have been terminated,  the sum
of (a) the  aggregate  outstanding  principal  amount  of all  Australian  Loans
(valued  in  Dollar  Equivalents  as of  such  date  of  determination)  of that
Australian  Lender plus (b) in the event such Australian  Lender (or a Lender in
its Lending Unit) is an Issuing Lender,  the aggregate Letter of Credit Usage in
respect of all Australian Letters of Credit issued by such Australian Lender (or
such  Lender  in that  Lending  Unit)  (in each  case net of any  participations
purchased by other  Australian  Lenders in such Australian  Letters of Credit or
any unreimbursed  drawings  thereunder  (valued in Dollar Equivalents as of such
date of  determination))  plus (c) the  aggregate  amount of all  participations
purchased by that  Australian  Lender in any outstanding  Australian  Letters of
Credit  or any  unreimbursed  drawings  under  any  Australian  Letter of Credit
(valued in Dollar Equivalents as of such date of determination).

                  "Australian  Lender  Allocation"  means,  with  respect to any
Australian  Lender, the portion of the Australian  Allocation  allocated to such
Australian Lender.


                                       6
<PAGE>


                  "Australian  Lender Pro Rata Share" means, with respect to any
Australian Lender, the percentage  obtained by dividing the Australian  Exposure
of such Australian Lender by the aggregate Australian Exposure of all Australian
Lenders.

                  "Australian  Lenders"  means each of the  Lenders,  if any, of
each Lending Unit that is designated as the  Australian  Lender for such Lending
Unit  on the  signature  pages  hereof,  or in  any  applicable  Assignment  and
Acceptance.

                  "Australian   Lending   Office"  means,  in  relation  to  any
Australian Lender, its Sydney,  Melbourne or Canberra  Australian lending office
as specified  under its  signature on the  signature  pages hereof or such other
office as is  specified  by such  Lender in a written  notice to  Administrative
Agent, Australian Administrative Agent, and Australian Borrowers.

                  "Australian  Letter  of  Credit"  or  "Australian  Letters  of
Credit"  means  Standby  Letters  of Credit  issued,  or deemed  issued,  by the
applicable  Issuing Lender for the account of Australian  Borrowers  pursuant to
subsection 2.7.

                  "Australian  Letter of Credit Usage" means,  as at any date of
determination,   the  sum  of  (i)  the  maximum  aggregate  amount  (in  Dollar
Equivalents)  which is available  for drawing  under all  Australian  Letters of
Credit then outstanding  plus (ii) the aggregate amount (in Dollar  Equivalents)
of all drawings under all Australian Letters of Credit honored by the applicable
Issuing Lender and not theretofore reimbursed by Australian Borrowers.

                  "Australian  Loans" means the  Australian  Dollar Loans and/or
Dollar Loans made by  Australian  Lenders to  Australian  Borrowers  pursuant to
subsection 2.1A(ii).

                  "Authorized  Signor"  means,  in the  case  of any  Australian
Borrower, the Treasurer or the Assistant Treasurer of Company.

                  "BA Discount Rate" means, in respect of a Bankers' Acceptance,
the  rate  quoted  by  Canadian  Administrative  Agent at or  about  10:00  a.m.
(Toronto,  Canada time) on the date of acceptance  of such  Bankers'  Acceptance
(based on a year of 365 days),  as the discount rate at which it would  purchase
on such date its own bankers'  acceptances  having terms similar to the terms of
such Bankers' Acceptance.

                  "BA   Facility"   means  the  bankers'   acceptance   facility
established under subsection 2.8.

                  "BA  Fee"  means,  in  respect  of a  Bankers'  Acceptance,  a
stamping  fee  calculated  on the Face  Amount  and  maturity  of such  Bankers'
Acceptance at a rate per annum equal to the  Applicable  Margin,  payable on the
date of creation of such Bankers' Acceptance,  calculated on the basis of a year
of 365 days.

                  "BA  Usage"  means,  as at  any  date  of  determination,  the
aggregate  Face  Amount  (in Dollar  Equivalents)  of all  Bankers'  Acceptances
created by  Canadian  Lenders  pursuant  to  subsection  2.8 which have not been
repaid by Canadian Borrower, whether or not due and


                                       7
<PAGE>


whether or not held by any Lender. For purposes of this definition, any Bankers'
Acceptance which has been cash  collateralized in full in a manner  satisfactory
to Canadian Administrative Agent shall not be deemed to be outstanding.

                  "Bank Bill Swap Rate"  means,  in  relation  to each  Interest
Period with respect to any Bank Bill Swap Rate Loan, the rate per cent per annum
which is: (a) the  average  bid rate  (rounded  upwards,  if  necessary,  to the
nearest four decimal  places) for Bills  accepted by a bank having a tenor which
is closest to that Interest Period and published on the "BBSY" reference page of
the Reuters Monitor System at or about 10:30 a.m. (Sydney time) on the first day
of that  Interest  Period and (b) if on that day that rate is not  published  by
10:30 a.m. (Sydney time),  the rate determined by the Australian  Administrative
Agent in good faith to be the average of the buying rates being generally quoted
in the  market at or about that time to the Agent by each of not less than three
institutions  chosen by the  Australian  Administrative  Agent which  ordinarily
display  rates on that page at or about  that time as being the rates  generally
quoted by them for the purchase of Bills  accepted by an Australian  bank for an
amount  equal to that Bank Bill Swap Rate Loan on that day having a tenor  which
is closest to that Interest Period.

                   "Bank Bill Swap Rate Loan" means Australian Dollar Loans made
by Australian  Lenders  pursuant to subsection  2.1A(ii) and bearing interest at
rates  determined  by  reference  to the Bank  Bill  Swap  Rate as  provided  in
subsection 2.2A.

                  "Bankers'  Acceptance" means a Draft that has been accepted by
a Canadian Lender as provided in subsection 2.8.

                  "Bankers'  Acceptance Purchase Price" means, in respect of any
Bankers' Acceptance to be purchased by a Canadian Lender, the result (rounded to
the nearest whole cent,  with one-half of one cent being rounded up) obtained by
dividing the Face Amount of such Bankers'  Acceptance by the sum of one plus the
product of (x) the applicable BA Discount Rate multiplied by (y) a fraction, the
numerator of which is the term of maturity of such Bankers'  Acceptance  and the
denominator of which is 365.

                  "Bankruptcy  Code"  means  Title 11 of the United  States Code
entitled "Bankruptcy", the Bankruptcy and Insolvency Act (Canada), Part 5 of the
Corporations  Law  (Australia)  or  any  similar  statute  of  U.S.,   Canadian,
Australian  or other  laws as now and  hereafter  in  effect,  or any  successor
statute.

                  "Base Rate Loans" means Loans that bear interest at a floating
rate of interest,  which shall be either the Canadian  Base Rate, in the case of
Canadian Dollar Loans, or the Alternate Base Rate or U.S. Base Rate (Canada), as
applicable, in the case of Dollar Loans.

                  "Bills" has the same  meaning as in the Bills of Exchange  Act
1909 and a reference to the drawing or  acceptance or  endorsement  of, or other
dealing with, a Bill is to be interpreted in accordance with that act.

                  "Board"  means the Board of Governors  of the Federal  Reserve
System of the United States, together with its successors.


                                       8
<PAGE>


                  "Borrower" or "Borrowers" means U.S. Borrower and/or Canadian
Borrower and/or Australian Borrowers.

                  "Business  Day"  means  (i) for  all  purposes  other  than as
covered by clauses (ii), (iii), (iv) and (v) below, any day excluding  Saturday,
Sunday and any day which is a legal  holiday  under the laws of the State of New
York  or is a day on  which  banking  institutions  located  in such  state  are
authorized or required by law or other  governmental  action to close, (ii) with
respect to all notices, determinations, fundings and payments in connection with
Canadian Loans,  Canadian  Letters of Credit and Bankers'  Acceptances,  any day
that is a  Business  Day  described  in clause  (i)  above  which is not a legal
holiday under the laws of the Provinces of Ontario and British Columbia,  Canada
or a day on which banking  institutions located in such Provinces are authorized
or required by law or other governmental  action to close, (iii) with respect to
all notices, determinations, fundings and payments in connection with Australian
Loans and Australian Letters of Credit, any day that is a Business Day described
in clause (i) above which is not a Saturday, Sunday or public holiday in Sydney,
Melbourne   and  Perth,   Australia,   (iv)  with   respect   to  all   notices,
determinations,  fundings and payments in connection with the Eurodollar Rate or
any  Eurodollar  Rate Loans,  any day that is a Business Day described in clause
(i)  above and that is also a day for  trading  by and  between  banks in Dollar
deposits in the applicable  interbank Eurodollar market, and (v) with respect to
all  notices,  determinations,  fundings and  payments in  connection  with Gold
Loans,  any day that is a Business Day described in clause (i) above and that is
also a day upon  which the Price of Gold is fixed by the London  Bullion  Market
Association.

                  "Canadian  Administrative  Agent"  means Chase  Canada and any
successor thereto appointed pursuant to subsection 9.6.

                  "Canadian   Allocation"  means  the  portion  of  the  Overall
Commitments allocated to Canadian Borrower in Schedule 2.1 or in the most recent
Notice of Allocation  delivered by Borrowers and Company  pursuant to subsection
2.1A.

                  "Canadian  Base Rate"  means,  with  respect  to any  Canadian
Dollar Loan as of any date of determination,  the greater of (A) the fluctuating
interest rate per annum which Canadian Administrative Agent has announced as its
reference rate for determining interest chargeable by it on loans denominated in
Canadian Dollars made in Canada, as in effect on such date of determination, and
(B) the BA Discount Rate for such day for bankers'  acceptances having a term of
30 days plus 0.625%.  As to any loan, the Canadian Base Rate is a reference rate
that varies from time to time and does not  necessarily  represent the lowest or
best rate actually charged to any customer by Canadian  Administrative  Agent or
any  Canadian  Lender  for  loans  denominated  in  Canadian  Dollars.  Canadian
Administrative  Agent and Canadian  Lenders may make  commercial  loans or other
loans  denominated  in Canadian  Dollars at rates of interest at, above or below
the Canadian  Base Rate.  The  Canadian  Base Rate shall  automatically  change,
without  notice  to  Company  or any  Borrower,  upon  any  date  that  Canadian
Administrative  Agent  announces any change in said reference rate or determines
that the prevailing BA Discount Rate for 30-day bankers' acceptances has changed
to the extent  necessary to reflect any such change.  If any Canadian  Base Rate
Loans are outstanding, Canadian Administrative Agent will give


                                       9
<PAGE>


Canadian  Borrower  notice of any such change  promptly  after the Canadian Base
Rate changes; provided,  however, that the failure to give such notice shall not
limit or otherwise  affect the obligations of Company or any Borrower under this
Agreement or any other Loan Document.

                  "Canadian Base Rate Loans" means Canadian Dollar Loans made by
Canadian  Lenders  pursuant to subsection  2.1A(i) and bearing interest at rates
determined  by  reference to the  Canadian  Base Rate as provided in  subsection
2.2A.

                  "Canadian  Borrower" has the meaning  assigned to that term in
the  introduction  of this  Agreement,  and includes any  successor by merger or
amalgamation,  provided that any such successor is otherwise in compliance  with
this Agreement.

                  "Canadian  Commitment"  means the  commitment of each Canadian
Lender (i) to make or maintain  Canadian Loans pursuant to subsection 2.1A, (ii)
to  issue  (in the  case of the  applicable  Issuing  Lender)  or  acquire  risk
participations  (in the case of all other Canadian  Lenders) in Canadian Letters
of Credit pursuant to subsection 2.7, and (iii) to create and purchase  Bankers'
Acceptances pursuant to subsection 2.8 in an aggregate amount,  valued in Dollar
Equivalents,  at no time exceeding such Canadian  Lender's Pro Rata Share of the
Canadian Allocation.

                  "Canadian   Commitment   Usage"  means,  as  of  any  date  of
determination,  the aggregate  outstanding  principal amount of (i) the Canadian
Loans  denominated in Dollars,  (ii) the Canadian Loans  denominated in Canadian
Dollars (valued in Dollar Equivalents as of such date of  determination),  (iii)
the Canadian Letter of Credit Usage, and (iv) the BA Usage.

                  "Canadian Dollar Loans" means Loans denominated in and 
advanced to Canadian Borrower in Canadian Dollars.

                  "Canadian Dollars" or "Cdn.$" means the lawful money of 
Canada.

                  "Canadian  Exposure" means with respect to any Canadian Lender
as of any date of determination, the Canadian Lender Allocation of such Canadian
Lender or, if the Overall  Commitments have been terminated,  the sum of (a) the
aggregate  outstanding  principal amount of all Canadian Loans (valued in Dollar
Equivalents as of such date of  determination)  of that Canadian Lender plus (b)
in the  event  such  Canadian  Lender  (or a Lender in its  Lending  Unit) is an
Issuing Lender,  the aggregate Letter of Credit Usage in respect of all Canadian
Letters of Credit issued by such Canadian Lender (or such Lender in that Lending
Unit)  (in  each  case net of any  participations  purchased  by other  Canadian
Lenders  in  such  Canadian  Letters  of  Credit  or any  unreimbursed  drawings
thereunder (valued in Dollar Equivalents as of such date of determination)) plus
(c) the aggregate amount of all participations purchased by that Canadian Lender
in any outstanding Canadian Letters of Credit or any unreimbursed drawings under
any Canadian  Letter of Credit (valued in Dollar  Equivalents as of such date of
determination) plus (d) the BA Usage of that Canadian Lender.

                  "Canadian  Lender  Allocation"  means,  with  respect  to  any
Canadian  Lender,  the  portion of the  Canadian  Allocation  allocated  to such
Canadian Lender.


                                       10
<PAGE>


                  "Canadian  Lender Pro Rata Share"  means,  with respect to any
Canadian Lender,  the percentage  obtained by dividing the Canadian  Exposure of
such Canadian Lender by the aggregate Canadian Exposure of all Canadian Lenders.

                  "Canadian Lenders" means each of the Lenders,  if any, of each
Lending Unit, that is designated as the Canadian Lender for such Lending Unit on
the signature pages hereof, or in any applicable Assignment and Acceptance.

                  "Canadian  Lending  Office" means, in relation to any Canadian
Lender,  its Canadian  lending  office as specified  under its  signature on the
signature  pages hereof or such other office as is specified by such Lender in a
written  notice  to  Administrative  Agent,  Canadian  Administrative  Agent and
Canadian Borrower.

                  "Canadian  Letter of Credit" or  "Canadian  Letters of Credit"
means Standby  Letters of Credit  issued,  or deemed  issued,  by the applicable
Issuing Lender for the account of Canadian Borrower pursuant to subsection 2.7.

                  "Canadian  Letter of Credit  Usage"  means,  as at any date of
determination,   the  sum  of  (i)  the  maximum  aggregate  amount  (in  Dollar
Equivalents) which is available for drawing under all Canadian Letters of Credit
then outstanding  plus (ii) the aggregate amount (in Dollar  Equivalents) of all
drawings under all Canadian Letters of Credit honored by the applicable  Issuing
Lender and not theretofore reimbursed by Canadian Borrower.

                  "Canadian Loans" means the Canadian Dollar Loans and/or Dollar
Loans made by Canadian  Lenders to  Canadian  Borrower  pursuant  to  subsection
2.1A(i).

                  "Capital Lease", as applied to any Person,  means any lease of
any property (whether real, personal or mixed) by that Person as lessee that, in
conformity  with  GAAP,  is or  should  be  accounted  for as an  asset,  with a
corresponding liability, on the balance sheet of that Person.

                  "Cash" means money, currency or a credit balance in a Deposit
Account.

                   "Chase" means The Chase Manhattan Bank.

                  "Chase  Canada" means The Chase  Manhattan  Bank of Canada,  a
bank named in Schedule II to the Bank Act (Canada).

                   "Commitment"  means  commitments  of the  Lender(s)  of  each
Lending Unit to make  Canadian  Loans (if such Lending Unit  includes a Canadian
Lender),  to make U.S.  Loans,  to make  Australian  Loans (if such Lending Unit
includes an Australian Lender), to participate in Letters of Credit, and, in the
case of the Canadian Lender (if any), to create and purchase Bankers Acceptances
in an aggregate  amount for each  Lending Unit as set forth on Schedule  2.1, as
such amount may be adjusted from time to time pursuant to the provisions of this
Agreement.


                                       11
<PAGE>


                  "Commitment Fee  Percentage"  means on any date the applicable
percentage  set forth  below  based  upon the  actual or stated  senior  implied
ratings established by S&P and Moody's, respectively, applicable on such date to
the senior, unsecured,  non-credit enhanced, long-term Indebtedness for borrowed
money of Company  (or,  if no actual or stated  senior  implied  ratings  are in
effect,  the ratings  one  category  higher  than the ratings for  subordinated,
unsecured,  non-credit  enhanced  long-term  Indebtedness  for borrowed money of
Company`):


        Category          S&P/Moody's Rating                    Percentage
        --------          ------------------                    ----------
            1             BBB+/Baa1 or above                        0.15%
            2             BBB/Baa2                                  0.1875%
            3             BBB-/Baa3                                 0.20%
            4             BB+/Ba1                                   0.25%
            5             BB/Ba2                                    0.30%
            6             BB-/Ba3 or below                          0.35%

                  For purposes of the foregoing,  (i) if neither Moody's nor S&P
shall  have in  effect a  rating  for the  senior  or  subordinated,  unsecured,
non-credit enhanced, long-term Indebtedness for borrowed money of Company (other
than by reason of the  circumstances  referred  to in the last  sentence of this
definition),  then the Commitment  Fee Percentage  shall be based on Category 6;
(ii) if only one of Moody's  and S&P shall have in effect a rating for senior or
subordinated,   unsecured,   non-credit  enhanced,  long-term  Indebtedness  for
borrowed  money  of  Company,  then  the  Commitment  Fee  Percentage  shall  be
determined  on the basis of such  rating;  (iii) if the ratings  established  or
deemed  to  have  been   established  by  Moody's  or  S&P  for  the  senior  or
subordinated,   unsecured,   non-credit  enhanced,  long-term  Indebtedness  for
borrowed money of Company shall fall within different Categories, the Commitment
Fee Percentage shall be based on the Category  corresponding to the lower rating
(higher  percentage);  and (iv) if any rating established or deemed to have been
established  by  Moody's or S&P shall be  changed  (other  than as a result of a
change in the rating  system of Moody's or S&P),  such change shall be effective
as of the date on which it is first  announced by the applicable  rating agency.
Each change in the  Commitment  Fee  Percentage  shall  apply  during the period
commencing  on the  effective  date  of  such  change  and  ending  on the  date
immediately  preceding the effective date of the next such change. If the rating
system of  Moody's or S&P shall  change,  or if either of such  rating  agencies
shall cease to be in the business of rating corporate debt obligations,  Company
and Lenders  shall  negotiate in good faith to amend the  references to specific
ratings  in this  definition  to  reflect  such  changed  rating  system  or the
non-availability   of  ratings  from  such  rating   agency,   and  pending  the
effectiveness  of any such  amendment,  the ratings of such  rating  agency most
recently  in effect  prior to such  change or  cessation  shall be  employed  in
determining the Commitment Fee Percentage.

                  "Commitment Termination Date" means July 14, 2003.


                                       12
<PAGE>


                  "Commitment Usage means, as applicable, a Lending Unit's 
Australian Commitment Usage, Canadian Commitment Usage, or U.S. Commitment 
Usage.

                  "Company" has the meaning assigned to that term in the 
introduction to this Agreement.

                  "Company Change of Control" has the meaning assigned to that 
term in subsection 10.25A.

                  "Compliance Certificate" means a certificate  substantially in
the form of Exhibit  VI  annexed  hereto  delivered  to  Lenders by Company  and
Borrowers pursuant to subsection 5.1(iii).

                  "Consolidated   EBITDA"   means,   for  any  period,   without
duplication,  the sum of the  amounts for such  period of (i)  Consolidated  Net
Income,  (ii)  Consolidated  Interest  Expense,  (iii)  total  depreciation  and
amortization  expense and (iv) all non-cash  writedowns  (other than  writedowns
that constitute advance  recognition of future cash  expenditures)  reflected in
Consolidated  Net Income  after  December  31,  1997,  as reported in  Company's
consolidated statement of earnings in conformity with GAAP.

                  "Consolidated  Interest Expense" means, for any period,  total
interest  expense  without  deduction of any interest income received by Company
and its  Subsidiaries  for such  period as reported  in  Company's  consolidated
statement of earnings in conformity with GAAP.

                  "Consolidated  Net  Income"  means,  for any  period,  the net
income (or loss) of Company  and its  Subsidiaries  before any income and mining
taxes and minority interest  adjustments on a consolidated basis, as reported in
Company's consolidated statement of earnings in conformity with GAAP.

                  "Consolidated   Net   Worth"   means,   as  at  any   date  of
determination, the shareholder's equity of Company and its Subsidiaries plus the
amount of all  non-cash  writedowns  (other than items that  constitute  advance
recognition  of future cash  expenditures)  made after  December  31,  1997,  as
reported in Company's consolidated balance sheet in conformity with GAAP.

                  "Consolidated   Total   Debt"   means,   as  at  any  date  of
determination,  the  aggregate  amount of all  Indebtedness  of Company  and its
Subsidiaries  plus (without  duplication) the aggregate amount of all Contingent
Obligations of Company and its Subsidiaries  (other than Contingent  Obligations
in the form of  guarantees,  letters of credit and  surety  bonds,  in each case
securing reclamation and other performance obligations in the ordinary course of
business); provided that the obligations (contingent or otherwise) of Company or
any of its Subsidiaries under any Interest Rate Protection  Agreement,  Currency
Protection Agreement,  or any option, forward sales contract or futures contract
designed to protect Company and its Subsidiaries  from  fluctuations in interest
rates,  currency  values or the Price of Gold shall be valued  collectively on a
net aggregate  mark to market basis where a net  aggregate  mark to market value
for all  obligations  under such Interest Rate Protection  Agreements,  Currency
Protection Agreements, options and


                                       13
<PAGE>


contracts  greater than zero shall not be deducted from the sum of the aggregate
amounts of Indebtedness and Contingent Obligation used to calculate Consolidated
Total Debt and a net aggregate  mark to market value for all  obligations  under
such  Interest  Rate  Protection  Agreements,  Currency  Protection  Agreements,
options  and  contracts  of less  than  zero  shall  be  added to the sum of the
aggregate  amounts of  Indebtedness  and  Contingent  Obligations  to  calculate
Consolidated   Total  Debt.   Notwithstanding   the   foregoing,   no  aggregate
mark-to-market  loss is to be included as Consolidated  Total Debt to the extent
it has been included in the calculation of Consolidated  Net Worth and principal
and  interest  payable in respect of the  Subordinated  Debentures  shall not be
included  in the  calculation  of  Consolidated  Net Worth if such  Subordinated
Debentures shall have become  irrevocably  defeased in a manner  satisfactory to
Administrative Agent.

                   "Contingent Obligation",  as applied to any Person, means any
direct or indirect liability,  contingent or otherwise,  of that Person (i) with
respect to any Indebtedness,  lease,  dividend or other obligation of another if
the primary  purpose or intent  thereof by the Person  incurring the  Contingent
Obligation is to provide  assurance to the obligee of such obligation of another
that  such  obligation  of  another  will  be paid or  discharged,  or that  any
agreements  relating  thereto will be complied with, or that the holders of such
obligation  will be  protected  (in whole or in part)  against  loss in  respect
thereof,  (ii) with  respect to any letter of credit  issued for the  account of
that Person or as to which that Person is otherwise liable for  reimbursement of
drawings,  or  (iii)  under  Interest  Rate  Protection   Agreements,   Currency
Protection Agreements and options, forward sales contracts and futures contracts
designed to protect Company and its Subsidiaries  from  fluctuations in interest
rates,  currency  values  or the  Price of Gold.  Contingent  Obligations  shall
include,  without limitation,  (a) the direct or indirect guaranty,  endorsement
(otherwise  than for collection or deposit in the ordinary  course of business),
co-making, discounting with recourse or sale with recourse by such Person of the
obligation  of  another,  (b) the  obligation  to make  take-or-pay  or  similar
payments if required regardless of non-performance by any other party or parties
to an  agreement,  and (c) any  liability of such Person for the  obligation  of
another  through  any  agreement  (contingent  or  otherwise)  (X) to  purchase,
repurchase or otherwise acquire such obligation or any security therefor,  or to
provide  funds for the payment or discharge of such  obligation  (whether in the
form of loans, advances, stock purchases, capital contributions or otherwise) or
(Y) to  maintain  the  solvency or any  balance  sheet item,  level of income or
financial  condition of another if, in the case of any agreement described under
subclauses (X) or (Y) of this sentence, the primary purpose or intent thereof is
as described in the preceding sentence.  The amount of any Contingent Obligation
shall be equal to the  amount  of the  obligation  so  guaranteed  or  otherwise
supported  or,  if less,  the  amount to which  such  Contingent  Obligation  is
specifically limited.

                  "Contractual Obligation",  as applied to any Person, means any
provision of any Securities issued by that Person or of any material  indenture,
mortgage, deed of trust, contract, undertaking, agreement or other instrument to
which that Person is a party or by which it or any of its properties is bound or
to which it or any of its properties is subject. "Contractual Obligations" shall
include the Subordinated Debentures and the New Subordinated Indebtedness.

                  "Covered Tax" means any Tax that is not an Excluded Tax.


                                       14

<PAGE>


                  "Currency  Protection  Agreement"  means any foreign  exchange
contract,  currency swap agreement,  futures contract,  option contract or other
similar  agreement  or  arrangement  designed  to protect  Company or any of its
Subsidiaries against fluctuations in currency values.

                  "Date of  Determination"  means each date on which a Notice of
Borrowing  or Notice of  Conversion/Continuation  is given,  and the date of any
acceleration of the Obligations.

                   "Delivered"  or "Delivery"  to a particular  party means that
such party receiving Gold hereunder has received  confirmation  from the bullion
depository  designated  hereunder by such party that it is holding Gold for such
party's account in an allocated or unallocated account.

                  "Deposit Account" means a demand,  time, savings,  passbook or
like account  with a bank,  savings and loan  association,  credit union or like
organization,  other than an account  evidenced by a negotiable  certificate  of
deposit.

                  "Dollar  Equivalents"  means (i) with respect to the amount of
any Loan  funded in Canadian  Dollars or with  respect to the  aggregate  amount
which is available for drawing,  or which is drawn under, any Canadian Letter of
Credit  denominated  in  Canadian  Dollars  or the Face  Amount of any  Bankers'
Acceptances,  the  amount  of  Dollars  which is  equivalent  to such  amount of
Canadian Dollars determined at the rate of exchange quoted by The Bank of Canada
at 12:00 Noon (New York time) on the most recent Date of  Determination  for the
spot  purchase  in the foreign  exchange  market of Dollars  with an  equivalent
amount of Canadian  Dollars,  (ii) with respect to the amount of any Loan funded
in Australian Dollars or with respect to the aggregate amount which is available
for  drawing,  or  which  is  drawn  under,  any  Australian  Letter  of  Credit
denominated in Australian Dollars,  the amount of Dollars which is equivalent to
such amount of Australian  Dollars determined at the spot rate calculated by the
Australian  Administrative  Agent as the "United States Dollar hedge  settlement
rate (vs.  Australian  Dollars)"  that  appears on the HSRA page on the  Reuters
Screen under the heading "US Dollar hedge settlement rate" (or any page that can
reasonably be considered a replacement  page) at 9:45 A.M.  (Sydney time) on the
most recent Date of Determination  for the spot purchase in the foreign exchange
market of Dollars with an equivalent amount of Australian  Dollars or (iii) with
respect to the amount of any Loan funded in Gold, the amount in Dollars which is
the product of the number of Ounces of Gold  comprising  such Loan multiplied by
the Price of Gold as in effect on the most recent Date of Determination.

                  "Dollar Loans" means Loans denominated and advanced to any 
Borrower in Dollars.

                  "Dollars" and the sign "$" mean the lawful money of the United
States of America.

                  "Draft"   means,   at  any  time,   a  bill  of   exchange  in
substantially  the form of Exhibit III-A annexed hereto, or in substantially the
form customarily used by the applicable  Canadian Lender,  in each case drawn by
Canadian Borrower on a Canadian Lender and bearing such  distinguishing  letters
and numbers as such Canadian Lender may determine, but which at such


                                       15
<PAGE>


time,  except  as  otherwise  provided  herein,  has not been  accepted  by such
Canadian Lender as a Bankers' Acceptance.

                  "Drawing  Date"  means  any  Business  Day fixed  pursuant  to
subsection 2.8 for the creation of Bankers' Acceptances.

                  "Drawing Notice" has the meaning assigned to that term in
subsection 2.8B.

                  "Deutsche Bank" means Deutsche Bank AG.

                  "Effective  Date" means the date on or before July 14, 1998 on
which the conditions set forth in subsection 3.1 are satisfied or waived.

                  "Eligible  Assignee"  means (A)(i) a commercial  bank or trust
company organized under the laws of the United States or any state thereof; (ii)
a savings and loan  association or savings bank organized  under the laws of the
United  States or any state  thereof;  (iii) a commercial  bank or trust company
organized  under  the  laws of any  other  country  or a  political  subdivision
thereof; provided that (x) such bank or trust company is acting through a branch
or agency  located  in the  United  States or (y) such bank or trust  company is
organized under the laws of a country that is a member of the  Organization  for
Economic Cooperation and Development or a political subdivision of such country;
and (iv) any other  entity  which is an  "accredited  investor"  (as  defined in
Regulation D under the Securities Act) which extends credit or buys loans funded
in  Dollars,  Canadian  Dollars,  Australian  Dollars  and  Gold  as  one of its
businesses,  in each  case  (under  clauses  (i)  through  (iv)  above)  that is
reasonably acceptable to the Applicable  Administrative Agent and Administrative
Agent;  and (B) any Lender and any  Affiliate  of any Lender;  provided  that no
Affiliate of Company shall be an Eligible  Assignee;  and provided  further that
such Eligible Assignee must have at the time of determination unimpaired capital
and surplus of not less than $100,000,000.

                  "Employee  Benefit Plan" means any "employee  benefit plan" as
defined  in  Section  3(3) of ERISA that is subject to Title I of ERISA (a) that
is, or was within the past six years, maintained or contributed to by Company or
any of its ERISA  Affiliates and (b) with respect to which Company or any of its
ERISA Affiliates retains any liability.

                  "Environmental  Claim" means any notice of  violation,  claim,
demand,  abatement order or other order or direction  (conditional or otherwise)
by any governmental authority or any Person for any damage,  including,  without
limitation,  personal injury (including sickness, disease or death), tangible or
intangible property damage, contribution,  indemnity,  indirect or consequential
damages, damage to the environment,  nuisance, pollution, contamination or other
adverse effects on the environment, or for fines, penalties or restrictions,  in
each case relating to, resulting from or in connection with Hazardous  Materials
and relating to Company,  any of its Subsidiaries,  any Affiliates of Company or
any Facility.

                  "Environmental Laws" means all statutes,  ordinances,  orders,
rules, regulations or decrees relating to (i) environmental matters,  including,
without limitation,  those relating to fines, injunctions,  penalties,  damages,
contribution, cost recovery compensation, losses or injuries


                                       16
<PAGE>


resulting from the Release or threatened  Release of Hazardous  Materials,  (ii)
the generation, use, storage, transportation or disposal of Hazardous Materials,
or (iii) occupational  safety and health,  industrial  hygiene,  land use or the
protection of human, plant or animal health or welfare, in any manner applicable
to Company or any of its Subsidiaries or any or their respective properties.

                  "ERISA" means the Employee  Retirement  Income Security Act of
1974, as amended from time to time, and any successor statute.

                  "ERISA  Affiliate",  as applied to any  Person,  means (i) any
corporation  which is a member of a controlled group of corporations  within the
meaning of Section 414(b) of the Internal Revenue Code of which that Person is a
member;  (ii) any trade or  business  (whether or not  incorporated)  which is a
member  of a group of trades or  businesses  under  common  control  within  the
meaning of Section 414(c) of the Internal Revenue Code of which that Person is a
member;  and (iii) any member of an affiliated  service group within the meaning
of Section 414(m) or (o) of the Internal Revenue Code of which that Person,  any
corporation  described in clause (i) above or any trade or business described in
clause (ii) above is a member.

                  "ERISA  Event"  means  (i) a  "reportable  event"  within  the
meaning of Section  4043 of ERISA and the  regulations  issued  thereunder  with
respect to any Pension Plan (excluding  those for which the provision for 30-day
notice to the PBGC has been waived by regulation);  (ii) the failure to meet the
minimum  funding  standard  of Section  412 of the  Internal  Revenue  Code with
respect to any Pension Plan  (whether or not waived in  accordance  with Section
412(d) of the  Internal  Revenue  Code) or the failure to make by its due date a
material required  installment under Section 412(m) of the Internal Revenue Code
with respect to any Pension  Plan or the failure to make any  material  required
contribution to a Multiemployer  Plan; (iii) the provision by the  administrator
of any  Pension  Plan  pursuant  to Section  4041(a)(2)  of ERISA of a notice of
intent to  terminate  such plan in a distress  termination  described in Section
4041(c) of ERISA;  (iv) the withdrawal by Company or any of its ERISA Affiliates
from any Pension Plan with two or more contributing  sponsors or the termination
of any such Pension Plan  resulting in material  liability  pursuant to Sections
4063  or 4064 of  ERISA;  (v) the  institution  by the  PBGC of  proceedings  to
terminate any Pension Plan,  or the  occurrence of any event or condition  which
would  reasonably  be  expected  to  constitute  grounds  under  ERISA  for  the
termination of, or the appointment of a trustee to administer, any Pension Plan;
(vi) the  imposition  of  material  liability  on  Company  or any of its  ERISA
Affiliates  pursuant  to  Section  4062(e)  or 4069 of ERISA or by reason of the
application  of  Section  4212(c)  of  ERISA;  (vii)  the  complete  or  partial
withdrawal  by Company or any of its ERISA  Affiliates  (within  the  meaning of
Sections 4203 and 4205 of ERISA) from any Multiemployer  Plan, or the receipt by
Company or any of its ERISA  Affiliates  of notice from any  Multiemployer  Plan
that it is in reorganization  or insolvency  pursuant to Section 4241 or 4245 of
ERISA, or that it intends to terminate or has terminated  under Section 4041A or
4042 of ERISA,  in any such case if such event would  reasonably  be expected to
result in  material  liability  to Company or its ERISA  Affiliates;  (viii) the
occurrence  of an act or  omission  which could give rise to the  imposition  on
Company or any of its ERISA  Affiliates of material fines,  penalties,  taxes or
related  charges under Chapter 43 of the Internal  Revenue Code or under Section
409 or 502(c),  (i) or (l) or 4071 of ERISA in respect of any  Employee  Benefit
Plan;  (ix) the  assertion of a material  claim  (other than routine  claims for
benefits) against any


                                       17
<PAGE>


Employee Benefit Plan other than a Multiemployer Plan or the assets thereof,  or
against  Company  or any of its ERISA  Affiliates  in  connection  with any such
Employee  Benefit Plan; (x) receipt from the Internal  Revenue Service of notice
of the failure of any Pension Plan (or any other Employee  Benefit Plan intended
to be qualified  under Section  401(a) of the Internal  Revenue Code) to qualify
under Section  401(a) of the Internal  Revenue Code, or the failure of any trust
forming part of any Pension Plan to qualify for exemption  from  taxation  under
Section  501(a) of the Internal  Revenue Code; or (xi) the  imposition of a Lien
pursuant  to  Section  401(a)(29)  or 412(n)  of the  Internal  Revenue  Code or
pursuant to ERISA with respect to any Pension Plan.

                  "Eurodollar  Rate" means, for any Interest Rate  Determination
Date with respect to a Eurodollar Rate Loan, the rate (expressed as a percentage
per annum) which is the arithmetic mean (rounded upwards,  if necessary,  to the
next 1/16 of one percent) of the offered rates for Dollar  deposits for a period
equal to the Interest  Period for such  Eurodollar Rate Loan that appears on the
LIBO page on the Reuters Screen (or any page that can reasonably be considered a
replacement  page) at  approximately  11:00 a.m.,  London time, on such Interest
Rate  Determination  Date.  If the rate set forth above is not  available on the
Reuters Screen, such rate shall be the rate (rounded upwards,  if necessary,  to
the next 1/16 of one percent)  equal to the  arithmetic  mean of the  respective
rates per annum at which Dollar deposits approximately equal in principal amount
to such  Eurodollar  Rate Loan and for a maturity  comparable  to such  Interest
Period are offered in immediately  available funds to the London branches of the
Reference  Lenders in the London interbank  market at approximately  11:00 a.m.,
London time, on such Interest Rate Determination Date. The Administrative  Agent
shall determine the Eurodollar Rate and such  determination  shall be conclusive
absent manifest error.

                  "Eurodollar Rate Loans" means Dollar Loans bearing interest at
rates determined by reference to the Adjusted  Eurodollar Rate or the Eurodollar
Rate, as the case may be, as provided in subsection 2.2A.

                  "Event of Default" means each of the events set forth in 
Section 7.

                  "Exchange Act" means the  Securities  Exchange Act of 1934, as
amended from time to time, and any successor statute.

                  "Excluded  Tax"  means  any of the  following  taxes,  levies,
imposts, duties,  deductions,  withholdings or charges, and all liabilities with
respect  thereto:  taxes (without  regard to whether such taxes are collected by
withholding or otherwise)  imposed by a government or taxing  authority (and any
interest, additions to tax, penalties, fines or other charges in respect thereof
other  than  those  arising  from a breach by  Company  or any  Borrower  of its
obligations hereunder) on any Lender or any Agent that (i) are imposed on, based
on or  measured  by gross or net  income  or gross or net  receipts  (including,
without limitation,  capital gains taxes,  excess profits taxes,  minimum taxes,
alternative  minimum  taxes  and  taxes  on tax  preference  items)  or (ii) are
capital, net worth, intangible,  excise, franchise, doing business,  accumulated
earnings, personal holding company, or similar taxes other than franchise, doing
business  or  similar  taxes  imposed  solely  as a result  of the  transactions
contemplated hereby.


                                       18
<PAGE>


                  "Existing  Credit  Agreement" has the meaning assigned to that
term in the recitals of this Agreement.

                  "Existing Lenders" has the meaning assigned to that term in 
the recitals of this Agreement.

                  "Existing  Promissory  Notes" has the meaning assigned to that
term in the recitals of this Agreement.

                  "Exposure" means the Australian Exposure, the Canadian 
Exposure and/or the U.S. Exposure.

                  "Face  Amount"  means,  in  respect  of a Draft or a  Bankers'
Acceptance,  as the case may be, the amount payable to the holder thereof on its
maturity.

                  "Federal  Funds Rate"  means,  for any period,  a  fluctuating
interest  rate per annum equal for each day during  such period to the  weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers,  as published for such
day (or,  if such  day is not a  Business  Day,  for the  immediately  preceding
Business Day) by the Federal Reserve Bank of New York, or if such rate is not so
published for any day which is a Business Day, the average of the quotations for
such day on such  transactions  received  by  Administrative  Agent  from  three
Federal funds brokers of recognized standing selected by it.

                  "Fiscal  Year"  means the  fiscal  year of  Company  ending on
December 31 of each calendar year.

                  "Funding Date" means the date of the funding of a Loan.

                  "GAAP" means,  subject to the  limitations on the  application
thereof set forth in subsection 1.2,  generally accepted  accounting  principles
set forth in opinions and  pronouncements of the Accounting  Principles Board of
the American  Institute of  Certified  Public  Accountants  and  statements  and
pronouncements  of the  Financial  Accounting  Standards  Board or in such other
statements by such other entity as may be approved by a  significant  segment of
the United States accounting profession, in each case as the same are applicable
to the circumstances as of the date of determination.

                  "Gold" means  unallocated or pool account gold or refined gold
in bar form  (which  bears  the  stamp of a smelter  and  assayer  from the good
delivery  list of the  London  Bullion  Market  Association,  as such  terms are
understood in the gold trade) of a purity (i.e. the ratio of fine gold per 1,000
parts of gold,  expressed to the fourth decimal place) of at least .9950 or such
other ratio as U.S. Borrower and U.S. Lenders may agree with respect to any Gold
Loan.

                  "Gold Advance Date" means, in relation to any outstanding Gold
Loan  (including any Gold Loan that has been  continued for successive  Interest
Periods), the date upon which such Gold Loan initially was funded.


                                       19
<PAGE>


                  "Gold Loan" means a loan of Gold made by U.S.  Lenders to U.S.
Borrower hereunder and upon which interest shall accrue at the Gold Rate.

                  "Gold Rate" means,  with respect to any Gold Loan  advanced by
any U.S. Lender for any Interest Period applicable thereto, the rate of interest
per  annum,  calculated  on the  basis of a 360 day year  (rounded  upwards,  if
necessary,  to the next 1/16% of one  percent)  equal to the  greater of (i) the
Applicable  Margin, and (ii) the Eurodollar Rate plus the Applicable Margin less
the mean rate quoted in the London Interbank Forward Bullion Market as set forth
on the Reuters GOFO page at 11:00 A.M.  (London Time) two Business Days prior to
the  first  day of such  Interest  Period.  If the rate set  forth  above is not
available on the Reuters GOFO page,  the Gold Rate shall be the rate of interest
per annum,  calculated on the basis of a 360 day year,  equal to the  arithmetic
average (rounded upwards, if necessary, to the next 1/16% of one percent) of the
rates offered by the Gold Rate Reference  Lenders two Business Days prior to the
first day of the applicable Interest Period.

                  "Gold Rate Reference Lenders" means Chase and Deutsche Bank.

                  "Governmental   Authorization"  means  any  permit,   license,
authorization,  plan, directive,  consent order or consent decree of or from any
federal, state or local governmental authority, agency or court.

                  "Government Acts" has the meaning assigned to that term in
subsection 2.7H.

                  "Grid Gold Acknowledgement" means an acknowledgement by U.S. 
Borrower substantially in the form of Exhibit V annexed hereto.

                  "Hazardous Materials" means any pollutant,  contaminant, toxic
or  hazardous  substance,  toxic  or  hazardous  material,  toxic  or  hazardous
constituent  or toxic or  hazardous  waste,  as such  terms  are  defined  in or
pursuant to any Environmental Law.

                  "HCI  Exchangeable  Stock"  means  capital  stock of  Canadian
Borrower  which  conveys   voting  rights  with  respect  to  the  Company,   is
exchangeable  and redeemable,  under certain  circumstances,  for Company common
stock, and is satisfactory to the Administrative Agent.

                  "HGAL" has the meaning assigned to that term in the introduc-
tion to this agreement.

                  "Indebtedness",  as  applied  to any  Person,  means  (i)  all
indebtedness for borrowed money or gold loans,  (ii) that portion of obligations
with respect to Capital  Leases that is properly  classified as a liability on a
balance sheet in conformity  with GAAP,  (iii) notes payable and drafts accepted
representing  extensions of credit whether or not  representing  obligations for
borrowed  money,  (iv) any  obligation  owed for all or any part of the deferred
purchase  price of property or services,  which  purchase  price is (A) due more
than 180 days from the date of incurrence of the  obligation in respect  thereof
or  (B)  evidenced  by a  note  or  similar  written  instrument,  and  (v)  all
obligations  of the type  described in clauses (i) through (iv) above secured by
any Lien on any


                                       20
<PAGE>


property  or asset  owned  or held by that  Person  regardless  of  whether  the
indebtedness  secured  thereby  shall  have been  assumed  by that  Person or is
nonrecourse  to the  credit of that  Person.  Obligations  under  Interest  Rate
Protection  Agreements,  Currency Protection  Agreements,  and options,  forward
sales  contracts  and  futures  contracts  designed  to protect  Company and its
Subsidiaries from  fluctuations in interest rates,  currency values or the Price
of Gold  (excluding any Gold Loans)  constitute  Contingent  Obligations and not
Indebtedness.

                  "Indemnitee" has the meaning assigned to that term in subsec-
tion 10.3.

                  "Intellectual   Property"   means  all  patents,   trademarks,
tradenames,  copyrights, technology, know-how and processes used in or necessary
for the conduct of the  business of Company and its  Subsidiaries  as  currently
conducted that are material to the condition (financial or otherwise),  business
or operations of Company and its Subsidiaries, taken as a whole.

                  "Interest  Payment  Date"  means (i) with  respect to any Base
Rate  Loan,  March 31,  June 30,  September  30 and  December  31 of each  year,
commencing  on the first such date to occur after the Effective  Date,  and (ii)
with respect to any Eurodollar Rate Loan, Bank Bill Swap Rate Loan or Gold Loan,
the last day of each Interest Period  applicable to such Loan;  provided that in
the case of each Interest  Period of longer than three months or 90 days, as the
case may be,  "Interest  Payment Date" shall also include each three month or 90
day,  as the case  may be,  anniversary  of the  commencement  of such  Interest
Period.

                  "Interest  Period"  means (i) with respect to each  Eurodollar
Rate  Loan or Bank  Bill Swap Rate  Loan,  a period  of one,  two,  three or six
months,  and (ii) with  respect to each Gold Loan, a period of 30, 60, 90 or 180
days and any other period (subject to availability to each U.S. Lender), in each
case as selected by the applicable Borrower pursuant to a Notice of Borrowing or
a Notice of Conversion/Continuation; provided that, subject to the provisions of
subsection  2.6C, no Interest Period in respect of any Gold Loan may be selected
by U.S. Borrower if any U.S. Lender is for any reason unable to fund a Gold Loan
having such Interest Period.

                   "Interest  Rate  Determination  Date"  means  each  date  for
calculating the Adjusted  Eurodollar  Rate, the Eurodollar Rate or the Gold Rate
for purposes of determining the interest rate in respect of an Interest  Period.
The Interest Rate  Determination  Date shall be the second Business Day prior to
the first day of the related Interest Period.

                  "Interest Rate Protection  Agreement"  means any interest rate
swap  agreement,  interest rate cap agreement,  interest rate collar  agreement,
synthetic cap agreement or other similar  agreement or  arrangement  designed to
protect  Company or any of its  Subsidiaries  against  fluctuations  in interest
rates.

                  "Internal  Revenue  Code"  means the  United  States  Internal
Revenue  Code of 1986,  as  amended  to the date  hereof  and from  time to time
hereafter.

                  "Investment"  means (i) any  direct or  indirect  purchase  or
other  acquisition by Company or any of its  Subsidiaries of, or of a beneficial
interest in, stock or other  Securities of any other Person,  or (ii) any direct
or indirect loan, advance (other than advances to current or


                                       21
<PAGE>


former employees or directors  pursuant to employee  benefit plans,  programs or
employment  arrangements  or  otherwise  for  moving,  entertainment  and travel
expenses, drawing accounts and similar expenditures in each case in the ordinary
course  of  business)  or  capital   contribution  by  Company  or  any  of  its
Subsidiaries to any other Person (other than a Subsidiary of Company)  including
all  indebtedness  and accounts  receivable  from that other Person that are not
current  assets or did not arise from sales to that other Person in the ordinary
course of business. A contribution of undeveloped real property or other mineral
interests to a Joint Venture shall not be deemed to be a capital contribution to
any other  Person.  The amount of any  Investment  shall be the original cost of
such  Investment  plus the cost of all additions  thereto less the amount of all
cash  received as  repayment  of  principal  or return of  capital,  without any
adjustments  for increases or decreases in value,  or write-ups,  write-downs or
write-offs with respect to such Investment.

                  "Issuing Lender" means (i) with respect to any U.S. Letter of 
Credit or any Australian  Letter of Credit,  Chase, and (ii) with respect to any
Canadian Letter of Credit, Chase Canada.

                  "Joint  Venture" means a joint  venture,  partnership or other
similar arrangement, whether in corporate, partnership or other legal form.

                  "Lender"  and  "Lenders"  means  the  persons   identified  as
"Lenders" and listed on the  signature  pages of this  Agreement,  together with
their successors and permitted  assigns  pursuant to subsection  10.1;  provided
that the term  "Lenders",  when used in the context of a particular  Commitment,
shall mean Lenders having that Commitment.

                  "Lending  Office"  means,  in relation to any Lender that is a
Canadian  Lender,  such Lender's  Canadian  Lending  Office;  in relation to any
Lender that is an Australian Lender, such Lender's Australian Lending Office; in
relation to any Lender that is a U.S. Lender, such Lender's U.S. Lending Office;
or in relation to any Lender  that is two or more of a U.S.  Lender,  a Canadian
Lender and/or an Australian Lender,  such Lender's U.S. Lending Office,  insofar
as borrowings and payments  relating to U.S. Loans or U.S. Letters of Credit are
concerned,  Canadian Lending Office, insofar as borrowings and payments relating
to  Canadian  Loans,  Canadian  Letters of Credit or  Bankers'  Acceptances  are
concerned,  or Australian  Lending  Office,  insofar as borrowings  and payments
relating to Australian Loans or Australian Letters of Credit are concerned.

                  "Lending Unit" means (i) any U.S. Lender,  (ii) its affiliated
Canadian Lender (if any), and (iii) its affiliated  Australian  Lender (if any),
as set forth on the signature  pages hereof or in any applicable  Assignment and
Acceptance.

                  "Letter of  Credit"  or  "Letters  of  Credit"  means  Standby
Letters of Credit issued, or deemed issued, by the applicable Issuing Lender for
the account of any Borrower pursuant to subsection 2.7A.

                  "Letter  of  Credit  Fee  Percentage"   means  the  applicable
percentage  set forth  below  based  upon the  actual or stated  senior  implied
ratings established by S&P and Moody's, respectively, applicable on such date to
the senior, unsecured, non-credit enhanced, long-term


                                       22
<PAGE>


Indebtedness  for borrowed  money of Company (or, if no actual or stated  senior
implied ratings are in effect,  the ratings one category higher than the ratings
for subordinated,  unsecured,  non-credit  enhanced  long-term  Indebtedness for
borrowed money of Company):

<TABLE>
<CAPTION>

         Category                        S&P/Moody's Rating                          Percentage
         --------                        ------------------                          ----------
             <S>             <C>                                                         <C>  
             1               BBB+/Baa1 or above                                          0.40%
             2               BBB/Baa2                                                    0.50%
             3               BBB-/Baa3                                                   0.625%
             4               BB+/Ba1                                                     0.875%
             5               BB/Ba2                                                      1.00%
             6               BB-/Ba3 or below                                            1.125%
</TABLE>

                  For purposes of the foregoing,  (i) if neither Moody's nor S&P
shall  have in  effect a  rating  for the  senior  or  subordinated,  unsecured,
non-credit enhanced, long-term Indebtedness for borrowed money of Company (other
than by reason of the  circumstances  referred  to in the last  sentence of this
definition), then the Letter of Credit Fee Percentage shall be based on Category
6; (ii) if only one of  Moody's  and S&P shall  have in effect a rating  for the
senior or subordinated,  unsecured,  non-credit enhanced, long-term Indebtedness
for borrowed money of Company, then the Letter of Credit Fee Percentage shall be
determined  on the basis of such  rating;  (iii) if the ratings  established  or
deemed  to  have  been   established  by  Moody's  or  S&P  for  the  senior  or
subordinated,   unsecured,   non-credit  enhanced,  long-term  Indebtedness  for
borrowed money of Company, shall fall within different Categories, the Letter of
Credit Fee Percentage shall be based on the Category  corresponding to the lower
rating (higher percentage); and (iv) if any rating established or deemed to have
been established by Moody's or S&P shall be changed (other than as a result of a
change in the rating  system of Moody's or S&P),  such change shall be effective
as of the date on which it is first  announced by the applicable  rating agency.
Each change in the Letter of Credit Fee Percentage shall apply during the period
commencing  on the  effective  date  of  such  change  and  ending  on the  date
immediately  preceding the effective date of the next such change. If the rating
system of Moody's or S&P shall change,  or if any such rating agency shall cease
to be in the business of rating corporate debt obligations,  Company and Lenders
shall  negotiate in good faith to amend the  references  to specific  ratings in
this definition to reflect such changed rating system or the non-availability of
ratings  from such rating  agency,  and pending  the  effectiveness  of any such
amendment,  the ratings of such rating  agency most  recently in effect prior to
such change or cessation  shall be employed in determining  the Letter of Credit
Fee Percentage.

                  "Letter of Credit Usage" means the Australian Letter of Credit
Usage,  the Canadian  Letter of Credit  Usage  and/or the U.S.  Letter of Credit
Usage.

                                       23
<PAGE>


                  "Lien" means any lien, mortgage, pledge, assignment,  security
interest,  charge or encumbrance of any kind (including any conditional  sale or
other  title  retention  agreement,  any lease in the  nature  thereof,  and any
agreement  to give  any  security  interest)  and any  option,  trust  or  other
preferential  arrangement  having the practical  effect of any of the foregoing.
"Lien" shall not include any  arrangement  with respect to Joint  Ventures where
legal title to assets in which the  Company or  Borrower  or their  Subsidiaries
have a  beneficial  interest  is held in the  name of the  operator  or  another
participant  in such Joint  Venture or in the name of the Joint  Venture if such
arrangement  is not  for  the  purpose  of  securing  Indebtedness  (other  than
Indebtedness that may arise in respect of a participant's  lien or an operator's
lien).

                  "Loan" or "Loans" means any Canadian Loans, any Australian 
Loans, any U.S. Loans, or any combination thereof.

                  "Loan  Documents"  means  this  Agreement,  any  applications,
reimbursement  agreements and other documents or certificates  executed in favor
of any Issuing Lender relating to the Letters of Credit,  any Notes, any Drafts,
any Bankers' Acceptances and any Grid Gold Acknowledgements.

                  "Margin  Stock"  has the  meaning  assigned  to  that  term in
Regulation U of the Board as in effect from time to time.

                  "Marketable  Securities" means corporate cash investments with
a weighted average  portfolio  maturity of two years or less,  consisting of (i)
marketable direct obligations issued or unconditionally guaranteed by the United
States  Government or Canadian  Government or the  Commonwealth  of Australia or
issued by any  agency  thereof  and  backed by the full  faith and credit of the
United  States  or  Canada  or  the  Commonwealth  of  Australia  thereof;  (ii)
marketable  direct  obligations  issued  by any  state of the  United  States of
America or any Province of Canada or any state or territory of the  Commonwealth
of  Australia  or any  political  subdivision  of any such  state,  Province  or
territory  or any  public  instrumentality  thereof  at the time of  acquisition
having the highest rating  obtainable from S&P,  Moody's or Dominion Bond Rating
Service; (iii) commercial paper at the time of acquisition having a rating of at
least A-1 (or A-2,  provided such commercial  paper has a rating of at least P-1
from Moody's) from S&P, at least P-1 (or P-2, provided such commercial paper has
a rating  of at least  A-1 from S&P) from  Moody's  or least R-1  (Middle)  from
Dominion Bond Rating Service and, any of the preceding  ratings may be met by an
attached  letter  of  credit  from a bank  or  municipal  bond  insurance;  (iv)
certificates of deposit or bankers' acceptances issued by any commercial bank or
trust  company  organized  under the laws of the United States of America or any
state  thereof or the  District  of  Columbia or under the laws of Canada or any
Province thereof or under the laws of the Commonwealth of Australia or any state
or  territory  thereof  or any  non-U.S.  commercial  bank  which at the time of
acquisition  is ranked  among the 100  largest  banks in the world (by assets as
ranked by the American Banker  Journal),  and rated B/C or better by IBCA or KBW
rating  service  and having at least one of the  credit  ratings  identified  in
clause (iii) above (or higher credit ratings)  obtainable  from S&P,  Moody's or
Dominion Bond Rating Service;  (v) Eurodollar time deposits  purchased  directly
from any commercial  bank or trust company  described in clause (iv) above;  and
(vi) repurchase agreements and reverse repurchase agreements with any commercial
bank or trust  company  

                                       24
<PAGE>


described  in  clause  (iv)  above  or  with  any  financial  institution  whose
commercial  paper at the time of  acquisition  has a rating of at least A-1 from
S&P or whose  long-term  Indebtedness at the time of acquisition has a rating of
at least Aa, relating to marketable direct obligations issued or unconditionally
guarantied  by the  United  States  Government  or  Government  of Canada or the
Government of the  Commonwealth of Australia or issued by any agency thereof and
backed  by the full  faith  and  credit  of the  United  States or Canada or the
Commonwealth of Australia; and (vii) indebtedness of any corporation at the time
of acquisition rated A1 or AA by S&P or equivalent rating service.

                  "Material  Adverse Effect" means (i) a material adverse effect
upon the  business,  operations,  properties,  assets,  condition  (financial or
otherwise)  or prospects of Company,  Company and its  Subsidiaries,  taken as a
whole, or any Borrower, and in the case of any ERISA Event, the ERISA Affiliates
of Company taken as a whole, or (ii) a material adverse effect on the ability of
Company or any Borrower to perform,  or of any Agent or Lenders to enforce,  the
Obligations.

                  "Material Subsidiary" means any Borrower,  any Subsidiary that
owns any  assets  constituting  a  portion  of the  Mining  Group  and any other
Subsidiary  (i) whose total  assets at the end of any fiscal  quarter of Company
equal  more  than  10%  of  the  Consolidated  Net  Worth  of  Company  and  its
Subsidiaries  as at the end of such quarter or (ii) whose total  revenue for any
Fiscal Year of Company equals more than 10% of the consolidated  revenues of the
Company and its  Subsidiaries for such Fiscal Year determined in accordance with
GAAP. A Subsidiary that is or becomes a Material  Subsidiary  shall not cease to
be a Material  Subsidiary  if it  subsequently  fails to meet  either of the two
preceding  requirements  without  the  consent  of the  Requisite  Lenders.  The
Material  Subsidiaries  as of the Effective  Date are identified in Schedule 4.1
annexed hereto.

                  "Mining Group" means the currently  producing  mines,  part or
all of which are owned by Company or any of its Subsidiaries or Joint Ventures.

                  "Moody's" means Moody's Investors Service, Inc.

                  "Multiemployer Plan" means a "multiemployer  plan", as defined
in  Section  3(37)  of  ERISA,  (i)(a)  to  which  Company  or any of its  ERISA
Affiliates is contributing, or within the past six years has contributed, or (b)
to which  Company  or any of its ERISA  Affiliates  has,  or within the past six
years has had,  an  obligation  to  contribute,  and (ii) with  respect to which
Company or any of its ERISA Affiliates retains any liability.

                  "New  Subordinated  Indebtedness"  means up to $300 million of
Indebtedness  of  Company  or  Canadian  Borrower  (and any  guaranties  of such
Indebtedness)  issued after the  Effective  Date,  having a maturity of not less
than five years,  convertible  into  common  stock of  Company,  that,  in part,
refinances  the  Subordinated  Debentures,  and  that  is  subordinated  to  the
Obligations  (including any guaranty of the Obligations) on terms and conditions
approved in writing by the Administrative Agent.


                                       25
<PAGE>


                  "Non-Recourse  Debt" means  indebtedness for borrowed money or
gold  loans the  repayment  of which,  by its  express  contract  terms,  may be
enforced only by  foreclosure or other  realization  on any collateral  security
therefor  and as to which  the  obligor  thereon  shall not  otherwise  have any
personal liability.

                  "Notes"  means the  promissory  notes of  Borrowers  issued to
Lenders pursuant to subsection 2.1D,  substantially in the forms of Exhibit IV-A
(in the case of Canadian  Borrower),  Exhibit IV-B and Exhibit IV-C (in the case
of  Australian  Borrowers),  and  Exhibit  IV-D (in the  case of U.S.  Borrower)
annexed hereto,  and as they may be further  amended,  supplemented or otherwise
modified from time to time.

                  "Notice of  Allocation"  means a notice  substantially  in the
form  of  Exhibit  XIII  annexed  hereto  delivered  by  Borrowers  pursuant  to
subsection 2.1A for the purpose of allocating the Overall  Commitments among the
Canadian Allocation, the Australian Allocation and the U.S. Allocation.

                  "Notice of Borrowing" means a notice substantially in the form
of  Exhibit  I  annexed  hereto  delivered  by the  applicable  Borrower  to the
Applicable  Administrative Agent and Administrative Agent pursuant to subsection
2.1B with respect to a proposed borrowing of Loans.

                  "Notice   of    Conversion/Continuation"    means   a   notice
substantially  in the  form  of  Exhibit  II  annexed  hereto  delivered  by the
applicable  Borrower to the Applicable  Administrative  Agent and Administrative
Agent  pursuant to  subsection  2.2D with  respect to a proposed  conversion  or
continuation  of the  applicable  basis for  determining  the interest rate with
respect to the Loans specified therein.

                  "Notice of Issuance of Letter of Credit" means a notice in the
form of Exhibit XI annexed  hereto,  delivered  by a Borrower to the  Applicable
Administrative  Agent and Administrative  Agent pursuant to subsection 2.7B with
appropriate  insertions and deletions,  with respect to the proposed issuance or
amendment of a Letter of Credit.

                  "Obligations" means all obligations of every nature of Company
and each Borrower from time to time owed to Agents, Arranger,  Lenders or any of
them under the Loan Documents, whether for principal, interest, reimbursement of
amounts drawn under or cash  collateralization of Letters of Credit,  payment at
maturity or cash  collateralization  of Bankers'  Acceptances,  fees,  expenses,
indemnification or otherwise.

                  "Officers'  Certificate" means, as applied to any corporation,
a  certificate  executed on behalf of such  corporation  by its  chairman of the
board (if an officer) or its president or one of its vice  presidents and by its
chief  financial  officer or its  treasurer  or, with respect to any  Australian
Borrower,  any  director,  secretary  or  Authorized  Signor of such  Australian
Borrower;  provided  that  every  Officers'  Certificate  with  respect  to  the
compliance with a condition precedent to the making of any Loans or the issuance
of any Letter of Credit or the creation and purchase of any Bankers'  Acceptance
hereunder shall include (i) a statement that the officer or officers, directors,
secretary or Authorized Signor making or giving such Officers'  Certificate have
read such condition and any  definitions or other  provisions  contained in this
Agreement


                                       26
<PAGE>


relating thereto,  (ii) a statement that, in the opinion of the signer(s),  they
have made or have  caused to be made such  examination  or  investigation  as is
necessary  to enable  them to express an  informed  opinion as to whether or not
such condition has been complied  with, and (iii) a statement as to whether,  in
the opinion of the signers, such condition has been complied with.

                  "Operating  Lease" means, as applied to any Person,  any lease
(including,  without limitation,  leases that may be terminated by the lessee at
any time) of any  property  (whether  real,  personal  or  mixed)  that is not a
Capital Lease other than any such lease under which that Person is the lessor.

                  "Ounce" or "Ounces" means a fine troy ounce or fine troy
ounces.

                  "Overall Commitments" means the aggregate Commitments of all 
of the Lending Units.

                   "PBGC" means the Pension Benefit Guaranty Corporation (or any
successor thereto).

                  "Pension Plan" means any Employee  Benefit Plan,  other than a
Multiemployer Plan, which is subject to Section 412 of the Internal Revenue Code
or Section 302 of ERISA.

                  "Permitted Encumbrances" means the following types of Liens:

                  (i) Liens for taxes,  assessments or  governmental  charges or
                  claims the payment of which is not,  at the time,  required by
                  subsection  5.3,  other  than any  Lien  imposed  pursuant  to
                  Section  401(a)(29) or 412(n) of the Internal  Revenue Code or
                  pursuant  to Section  302(f) or 4068 of ERISA,  or deposits or
                  pledges to obtain the release of any such liens;

                  (ii)  statutory  Liens of  landlords  and  Liens of  carriers,
                  warehousemen,   mechanics  and  materialmen  and  other  Liens
                  imposed  by law and  Liens of  smelters,  refiners  and  other
                  processors of ore,  minerals and other  products  thereof,  in
                  each case where  incurred in the  ordinary  course of business
                  for sums not yet delinquent or being  contested in good faith,
                  or deposits or pledges to obtain the release of any such Liens
                  if such  reserve or other  appropriate  provision,  if any, as
                  shall be required by GAAP shall have been made therefor;

                  (iii) Liens  incurred or deposits made in the ordinary  course
                  of  business  in  connection   with   workers'   compensation,
                  unemployment  insurance and other types of social security, or
                  to secure the performance of tenders,  statutory  obligations,
                  surety and appeal bonds, bids, leases,  government  contracts,
                  trade  contracts,  performance and  return-of-money  bonds and
                  other similar  obligations  (exclusive of obligations  for the
                  payment of borrowed money);

                  (iv) any attachment or judgment Lien not constituting an Event
                  of Default under subsection 7.8;


                                       27
<PAGE>

                  (v) leases or subleases  granted to others not  interfering in
                  any material respect with the ordinary conduct of the business
                  of Company or any of its Subsidiaries;

                  (vi) easements,  rights-of-way,  restrictions,  minor defects,
                  encroachments  or  irregularities  in title and other  similar
                  charges or  encumbrances  or defects in title to property  not
                  interfering in any material  respect with the ordinary conduct
                  of the business of Company or any of its Subsidiaries;

                  (vii) any interest or title of a lessor or sublessor under any
                  lease not prohibited by this Agreement;

                  (viii)   precautionary   filings  relating  solely  to  leases
                  permitted by this Agreement;

                  (ix)  mineral,  oil,  gas, and  geothermal  leases,  licenses,
                  grazing  leases,  timber cutting  rights,  easements,  minimum
                  royalties  and  rents,  delayed  rentals,   work  commitments,
                  production   royalties,   profit   interests,   surface  owner
                  interests,  extralateral rights, and rights of subadjacent and
                  lateral support  burdening any properties of Company or any of
                  its Subsidiaries;

                  (x) the  paramount  rights of the United  States of America or
                  any  other  governmental  authority  in and to any  unpatented
                  mining or mill site claims or leases held by Company or any of
                  its Subsidiaries;

                  (xi) the reservations,  limitations, provisos, and conditions,
                  if any, expressed in any original grants from the Crown;

                  (xii) Liens of Joint  Venture  participants  and  operators on
                  properties  being  developed  or  operated  by Joint  Ventures
                  securing the respective  obligations of the joint venturers or
                  participants  to advance funds or reimburse  advances of funds
                  or to perform  obligations  under the applicable joint venture
                  agreements;

                  (xiii)   Liens in favor of Company or Borrowers; and

                  (xiv) Liens or  deposits or pledges to secure the  performance
                  by Company,  Borrowers or their Subsidiaries or Joint Ventures
                  with respect to the remediation,  reclamation or stabilization
                  of disturbed  properties currently or formerly owned or leased
                  by Company, Borrowers or their Subsidiaries or Joint Ventures;
                  provided that any such Liens attach only to the property to be
                  remediated, reclaimed or stabilized; and provided further that
                  Company  shall  have  first  used its best  efforts to cause a
                  letter of credit to be issued or deliver a guaranty  to assure
                  performance  in lieu of  granting  such  Liens or making  such
                  deposits or pledges; and provided further such Liens, deposits
                  or pledges are promptly  released  upon  satisfaction  of such
                  remediation, reclamation or stabilization obligation.

                                       28
<PAGE>

excluding,  however,  in any case prior to the Prime  Acquisition Date, any such
Liens  granted or created by  Company  or any of its  Subsidiaries  (other  than
Prime)  on or  with  respect  to  their  properties  or  assets  to  secure  any
obligations of Prime at any time that  Indebtedness  permitted under  subsection
6.1(vi) is outstanding.

                  "Person"   means  natural   persons,   corporations,   limited
partnerships,  general  partnerships,  joint stock  companies,  Joint  Ventures,
associations,  companies,  trusts, banks, trust companies, land trusts, business
trusts or other  organizations,  whether or not legal entities,  and governments
and agencies and political subdivisions thereof.

                  "Plutonic" has the meaning assigned to that term in the intro-
duction to this Agreement.

                  "Plutonic Acquisition" means the transaction pursuant to which
Plutonic  became a wholly-owned  Subsidiary of Company,  which  transaction  was
completed on or about April 30, 1998.

                  "Plutonic Acquisition  Documents" means each of the agreements
to which Plutonic and Company,  or any of Company's  Subsidiaries or Affiliates,
are parties  that  effectuated  or is related to the  Plutonic  Acquisition,  as
amended through the date hereof.

                  "Plutonic Credit Facility" means the $A400 million  Syndicated
Debt Facilities  Agreement dated as of June 23, 1997 among Plutonic  Finance Pty
Ltd; certain Guarantors, certain Arrangers, certain Lenders and Chase Securities
Australia Limited, as Agent.

                  "Potential  Event of Default" means a condition or event that,
after notice or lapse of time or both, would constitute an Event of Default.

                  "Price of Gold"  means,  on any day, and except as provided in
the next sentence,  the price per Ounce of Gold  collectively  set by the fixing
members of the London Bullion Market  Association in the afternoon (London time)
of such day,  (including an amount,  if any,  equal to the premium and any other
additional  amounts that would be payable in the applicable market in connection
with a purchase of Gold).  If there is no such  fixing,  then (a) if such day is
any day other than a Saturday,  Sunday or holiday in London, the "Price of Gold"
shall be the  publicly  quoted  price in Dollars per Ounce of Gold on such other
accessible  international  bullion  market as may be selected by  Administrative
Agent or (b) if no such  quotation is  available,  or such day is a Saturday,  a
Sunday or a holiday  in London,  the "Price of Gold"  shall be the last price so
set by the fixing members of the London Bullion Market Association.

                  "Prime" means Prime Resources Group,  Inc., a British Columbia
corporation, approximately 50.6% of the capital stock of which, on the Effective
Date, is owned  directly or indirectly by Canadian  Borrower,  together with its
Subsidiaries.

                  "Prime  Acquisition Date" means the date upon which Company or
one of its wholly owned  Subsidiaries  acquire all of the capital stock of Prime
not owned by Company and its wholly owned Subsidiaries.

                                       29
<PAGE>

                  "Pro Rata Share" means,  with respect to any Lending Unit (and
of any Lender(s)  constituting  such Lending Unit),  the percentage  obtained by
dividing (x) the Commitment of that Lending Unit by (y) the aggregate  amount of
the Overall  Commitments,  in any such case as the applicable  percentage may be
adjusted by assignments  permitted pursuant to subsection 10.1B. The initial Pro
Rata Share of each Lending Unit (and of any Lender(s)  constituting such Lending
Unit) is set  forth  opposite  the name of that  Lending  Unit in  Schedule  2.1
annexed hereto.

                  "Purchase   Money  Security   Interest"   means  any  security
interest,  however denominated,  on any property created or retained at the time
of  acquisition  of such  property  in  order to  secure  all or any part of the
acquisition cost thereof or in order to secure all or any Indebtedness  incurred
for the  purpose  of  financing  or  refinancing  (without  increasing  the then
outstanding amount) such Indebtedness.

                  "Reference Lenders" means Chase, and Deutsche Bank.

                "Register" has the meaning assigned to that term in subsection 
10.1.F.

                  "Regulation D" means  Regulation D of the Board,  as in effect
from time to time.

                  "Release"  means  any  release,   spill,  emission,   leaking,
pumping, pouring, injection, escaping, deposit, disposal, discharge,  dispersal,
dumping,  leaching or  migration  of Hazardous  Materials  into the  environment
(including,  without  limitation,  the  abandonment  or disposal of any barrels,
containers or other closed receptacles  containing any Hazardous Materials),  or
into or out of any Facility,  including  the movement of any Hazardous  Material
through the air, soil, surface water, groundwater or property.

                  "Requisite  Lenders"  means  prior to an  acceleration  of the
Obligations,  Lending  Units  having  or  holding  51% or more of the sum of the
Overall  Commitments of all Lending Units and upon and after an  acceleration of
the  Obligations,  Lending  Units  having  or  holding  51% or more of the total
aggregate Exposure outstanding.

                  "Responsible  Officer" means, with respect to any Person,  any
one of the chairman of the board (if an officer),  president,  vice  presidents,
chief  financial  officer and  treasurer  of such Person or, with respect to any
Australian  Borrower,  any  director,  secretary  or  Authorized  Signor of such
Australian Borrower.

                  "Restricted   Junior   Payment"  means  (i)  any   redemption,
retirement,  sinking fund or similar payment,  purchase or other acquisition for
value,  direct or  indirect,  of any  shares  of any class of stock of  Company,
Canadian  Borrower or any  Wholly-owned  Subsidiary  of Company,  other than any
redemption or other payment where the  consideration is common stock of Company,
(ii) any  payment of  dividends  to  shareholders  by  Canadian  Borrower or any
Wholly-owned  Subsidiary  of  Company,  and (iii) any payment or  prepayment  of
principal  of,  premium,  if any,  or  interest  on,  or  redemption,  purchase,
retirement,  defeasance  (including  in-substance or legal defeasance),  sinking
fund or similar  payment  with  respect to any  Subordinated  Indebtedness.  For
purposes of this definition,  "Wholly-owned  Subsidiary" means any Subsidiary of
which the

                                       30
<PAGE>

Company owns,  directly or indirectly,  all of the economic and voting
interest,  provided  that  directors  qualifying  shares  shall  not  be  deemed
outstanding for purposes of this definition.

                  "S&P" means  Standard & Poor's  Ratings  Group - a McGraw Hill
Company.

                  "Securities" means any stock, shares,  partnership  interests,
voting trust  certificates,  certificates  of interest or  participation  in any
profit-sharing agreement or arrangement,  options,  warrants, bonds, debentures,
notes, or other evidences of  indebtedness,  secured or unsecured,  convertible,
subordinated  or  otherwise,  or in general any  instruments  commonly  known as
"securities"  or any  certificates  of  interest,  shares or  participations  in
temporary or interim  certificates  for the purchase or  acquisition  of, or any
right to subscribe to, purchase or acquire, any of the foregoing.

                  "Securities  Act" means the Securities Act of 1933, as amended
from time to time, and any successor statute.

                  "Solvent"  means,  with respect to any Person,  that as of the
date of  determination  (i) the then fair saleable value of the property of such
Person as a going  concern is (y) greater than the total  amount of  liabilities
(including  anticipated  Contingent Obligations and other contingent liabilities
only to the extent of the probable  liability  with  respect to such  Contingent
Obligations  and other  contingent  liabilities)  of such Person and (z) greater
than the amount that will be required to pay the  probable  liabilities  of such
Person's  then  existing  debts as they become  absolute and matured;  (ii) such
Person's  capital is not  unreasonably  small in relation to its business or any
contemplated or undertaken transaction; and (iii) such Person does not intend to
incur, or believe that it will incur, debts beyond its ability to pay such debts
as they become due.

                  "Standby  Letter of Credit" means any standby letter of credit
or similar  instrument  issued for the purpose of supporting (i) Indebtedness of
Company  or any  of  its  Subsidiaries  in  respect  of  industrial  revenue  or
development  bonds or  financings,  (ii) workers'  compensation  liabilities  of
Company  or any of its  Subsidiaries,  (iii)  the  obligations  of  third  party
insurers of Company or any of its Subsidiaries  arising by virtue of the laws of
any jurisdiction  requiring third party insurers,  (iv) obligations with respect
to Capital Leases or Operating Leases of Company or any of its Subsidiaries, (v)
performance,  payment,  deposit or surety  obligations  of Company or any of its
Subsidiaries,  in any case if required by law or governmental rule or regulation
or  agreement  in  accordance  with custom and  practice in the  industry,  (vi)
obligations  of  Company or any of its  Subsidiaries  imposed by statute or by a
court of  competent  jurisdiction  to post  appeal  bonds or other  security  in
connection with litigation  appeals,  and (vii) other  obligations of Company or
any of its Subsidiaries approved by Administrative Agent in its sole discretion;
provided  that  Standby  Letters of Credit may not be issued for the  purpose of
supporting trade payables.

                  "Statutory   Reserves"  means  a  fraction   (expressed  as  a
decimal),  the numerator of which is the number one and the denominator of which
is the  number  one minus  the  aggregate  of the  maximum  reserve  percentages
(including any marginal,  special, emergency or supplemental reserves) expressed
as a decimal  established by the Board and any other banking  authority to which
Administrative Agent is subject for new negotiable non-personal time deposits in
Dollars 

                                       31
<PAGE>

of over $100,000 with  maturities  approximately  equal to three months.
Such reserve percentages shall include those imposed pursuant to such Regulation
D of the Board.  Statutory Reserves shall be adjusted automatically on and as of
the effective date of any change in any reserve percentage.

                  "Subordinated  Debentures"  means  Company's 5.5%  Convertible
Subordinated  Notes  due 2000 in the  aggregate  original  principal  amount  of
$150,000,000.

                  "Subordinated   Indebtedness"   means  (i)  the   Subordinated
Debentures  and  the  New   Subordinated   Indebtedness,   and  (ii)  any  other
Indebtedness of Company or any of its  Subsidiaries  that is subordinated to the
Obligations  (including any guaranty of the Obligations) on terms and conditions
approved in writing by Requisite Lenders.

                  "Subsidiary"   means,   with   respect  to  any  Person,   any
corporation, partnership, association, Joint Venture or other business entity of
which  50% or more of the  total  voting  power  of  shares  of  stock  or other
ownership   interests   entitled  (without  regard  to  the  occurrence  of  any
contingency)  to  vote  in  the  election  of the  Person  or  Persons  (whether
directors,  managers,  trustees or other Persons  performing  similar functions)
having the power to direct or cause the direction of the management and policies
thereof is at the time owned or  controlled,  directly  or  indirectly,  by that
Person or one or more of the other  Subsidiaries of that Person or a combination
thereof.

                  "Tax" or  "Taxes"  means  any  present  or future  tax,  levy,
impost,  duty, charge,  fee, deduction or withholding of any nature and whatever
called, by whomsoever,  on whomsoever and wherever imposed,  levied,  collected,
withheld or assessed.

                  "Tax Transferee" means any Person who acquires any interest in
the Loans  (whether or not by  operation of law) or the office to which a Lender
or any Agent has  transferred  its Loans for purposes of  determining  where the
Loans are made, accounted for or booked.

                  "Total  Utilization of Overall  Commitments"  means, as at any
date of  determination,  the sum of (i) the  aggregate  principal  amount of all
outstanding   Loans   (valued  in  Dollar   Equivalents   as  of  such  date  of
determination),  plus (ii) the Canadian  Letter of Credit Usage,  plus (iii) the
Australian  Letter of Credit Usage,  plus (iv) the U.S.  Letter of Credit Usage,
plus (v) the BA Usage.

                  "U.S. Allocation" means the portion of the Overall Commitments
allocated  to U.S.  Borrowers  in Schedule  2.1 or in the most recent  Notice of
Allocation delivered by Borrowers and Company pursuant to subsection 2.1A.

                  "U.S. Base Rate (Canada)" means the rate of interest per annum
equal to the greater of (i) the rate which the principal  office of the Canadian
Administrative  Agent in  Toronto,  Ontario  announces  from time to time as its
"base  rate"  and  which is its  reference  rate of  interest  for loans in U.S.
Dollars to its  Canadian  borrowers;  and (ii) 1/2 of 1% above the U.S.  Federal
Funds Rate, adjusted automatically with each change in such rate all without the
necessity of any notice to Canadian Borrower or any other Person.

                                       32
<PAGE>

                  "U.S. Base Rate (Canada) Loans" means Dollar Loans made by
Canadian  Lenders  pursuant to subsection  2.1A(i) and bearing interest at rates
determined by reference to the U.S. Base Rate (Canada) as provided in subsection
2.2A.

                  "U.S. Base Rate Loans" means Dollar Loans made by U.S. Lenders
pursuant to  subsection  2.1A(iii) and bearing  interest at rates  determined by
reference to the Alternate Base Rate as provided in subsection 2.2A.

                  "U.S. Borrower Account" means that certain account with the 
Administrative Agent, care of Agent Bank Services Group, 140 E. 45th Street, New
York, New York, 10017, Clearing Account Number 323508308, maintained at Chase.

                  "U.S. Commitment" means the commitment of each U.S. Lender (i)
to make or maintain U.S.  Loans  pursuant to subsection  2.1A, and (ii) to issue
(in the case of the applicable Issuing Lender) or acquire risk participations in
(in the case of all other  U.S.  Lenders)  U.S.  Letters of Credit  pursuant  to
subsection 2.7 in an aggregate amount, valued in Dollar Equivalents,  at no time
exceeding such U.S. Lender's Pro Rata Share of the U.S.
Allocation.

                  "U.S.   Commitment   Usage"   means,   as  of  any   date   of
determination,  the aggregate outstanding principal amount of (i) the U.S. Loans
that are Dollar  Loans,  and (ii) the U.S.  Loans that are Gold Loans (valued in
Dollar  Equivalents based on the Price of Gold as of such date of determination)
plus the U.S. Letter of Credit Usage.

                  "U.S.  Exposure"  means with respect to any U.S.  Lender as of
any date of  determination,  the U.S.  Allocation of such U.S. Lender or, if the
Overall  Commitments  have  been  terminated,  the  sum  of  (a)  the  aggregate
outstanding  principal amount of all U.S. Loans (valued in Dollar Equivalents as
of such date of  determination)  of that U.S.  Lender plus (b) in the event such
U.S.  Lender  (or a Lender  in its  Lending  Unit)  is an  Issuing  Lender,  the
aggregate Letter of Credit Usage in respect of all U.S. Letters of Credit issued
by such U.S.  Lender (or such Lender in that Lending  Unit) (in each case net of
any  participations  purchased  by other U.S.  Lenders  in such U.S.  Letters of
Credit or any unreimbursed  drawings  thereunder valued in Dollar Equivalents as
of  such  date  of   determination)   plus  (c)  the  aggregate  amount  of  all
participations  purchased by that U.S. Lender in any outstanding U.S. Letters of
Credit or any  unreimbursed  drawings under any U.S. Letter of Credit (valued in
Dollar Equivalents as of such date of determination).

                  "U.S. Lender Allocation" means, with respect to any U.S. 
Lender, the portion of the U.S. Allocation allocated to such U.S. Lender.

                  "U.S. Lender Pro Rata Share" means, with respect to any U.S. 
Lender,  the  percentage  obtained  by dividing  the U.S.  Exposure of such U.S.
Lender by the aggregate U.S. Exposure of all U.S. Lenders.

                  "U.S.  Lenders" means each of the Lenders of each Lending Unit
designated  as the U.S.  Lender for such  Lending  Unit on the  signature  pages
hereof or in any applicable Assignment and Acceptance.

                                       33
<PAGE>

                  "U.S. Lending Office" means, in relation to any U.S. Lender,
its U.S.  lending office as specified under its signature on the signature pages
hereof or such other office as is  specified by such Lender in a written  notice
to Administrative Agent and U.S. Borrower.

                  "U.S.  Letter of  Credit" or "U.S.  Letters  of Credit"  means
Standby Letters of Credit issued,  or deemed issued,  by the applicable  Issuing
Lender for the account of U.S. Borrower pursuant to subsection 2.7.

                  "U.S.  Letter  of  Credit  Usage"  means,  as at any  date  of
determination,  the sum of (i) the maximum  aggregate  amount which is available
for drawing  under all U.S.  Letters of Credit then  outstanding,  plus (ii) the
aggregate amount of all drawings under all U.S. Letters of Credit honored by the
applicable Issuing Lender and not theretofore reimbursed by Borrowers.

                  "U.S. Loans" means Dollar Loans and/or Gold Loans made by U.S.
Lenders to U.S. Borrower pursuant to subsection 2.1A(iii).

1.2      Accounting Terms; Utilization of GAAP for Purposes of Calculations 
Under Agreement.

                  Except as otherwise expressly provided in this Agreement,  all
accounting terms not otherwise  defined herein shall have the meanings  assigned
to them in conformity  with GAAP.  Financial  statements  and other  information
required to be delivered by Company to Lenders pursuant to clauses (i), (ii) and
(xi) of subsection 5.1 shall be prepared in accordance with GAAP as in effect at
the time of such preparation. If any changes in accounting principles from those
used in the  preparation of the financial  statements  referred to in subsection
4.5  hereafter   occasioned   by  the   promulgation   of  rules,   regulations,
pronouncements and opinions by or required by the Financial Accounting Standards
Board or the American  Institute of Certified Public  Accountants (or successors
thereto or agencies with similar  functions) result in a change in the method of
calculation  of financial  covenants,  standards or terms found in Sections 1, 5
and 6 hereof,  the parties hereto agree to enter into  negotiations  in order to
amend such  provisions so as to equitably  reflect such changes with the desired
result  that  the  criteria  for  evaluating  Company's  consolidated  financial
condition  shall be the same after such  changes as if such changes had not been
made.

1.3      Other Definitional Provisions.

                  References  to  "Sections"  and  "subsections"   shall  be  to
Sections and  subsections,  respectively,  of this  Agreement  unless  otherwise
specifically  provided.  Any of the terms defined in subsection 1.1 may,  unless
the context otherwise requires, be used in the singular or the plural, depending
on the reference.

Section 2.  AMOUNTS AND TERMS OF COMMITMENTS AND LOANS

2.1      Commitments; Loans.

                                       34
<PAGE>

                  A.  Commitments.  Subject to the terms and  conditions of this
Agreement and in reliance upon the representations and warranties of Company and
Borrowers  herein set forth,  each Lender  hereby  severally  agrees to make the
Loans described in this subsection 2.1A that are,  pursuant to the terms of this
subsection  2.1A, to be made by such Lender.  The  commitments of the Lenders to
make such Loans consist of the Canadian Commitments of the Canadian Lenders, the
Australian Commitments of the Australian Lenders and the U.S. Commitments of the
U.S. Lenders, such commitments being more fully described below. Initially,  the
amount  of  each  Lending  Unit's  U.S.  Commitment,  Canadian  Commitment,  and
Australian  Commitment  are set forth  opposite its name on Schedule 2.1 and the
aggregate  amount  of  the  U.S.  Commitments  of all  Lending  Units  shall  be
$430,000,000,  the aggregate  amount of the Canadian  Commitments of all Lending
Units  shall  be  $380,000,000,  and  the  aggregate  amount  of the  Australian
Commitments  of all Lending Units shall be  $340,000,000.  Company and Borrowers
shall  initially   allocate  the  Overall   Commitments  to  Canadian  Borrower,
Australian  Borrowers  and U.S.  Borrower,  subject  to the  provisions  of this
Agreement.  The  initial  amounts of the  Canadian  Allocation,  the  Australian
Allocation and the U.S.  Allocation and initial  Canadian Lender Pro Rata Share,
Australian Lender Pro Rata Share, U.S. Lender Pro Rata Share, and Pro Rata Share
of each  Lender  are set forth on  Schedule  2.1.  Company  and  Borrowers  may,
effective as of the first Business Day of each June and December,  commencing on
December 1, 1998, change the amount of the Overall Commitments  allocated to the
Canadian Allocation,  the Australian  Allocation and the U.S. Allocation and the
allocation  among the Lenders by delivering an irrevocable  Notice of Allocation
to Administrative Agent at least 14 days and not more than 60 days prior to date
upon which such allocation is to be effective; provided that (1) such allocation
shall be reasonably  acceptable to the Administrative Agent, (2) such allocation
shall maximize,  to the greatest extent possible,  the Commitment of each Lender
available to each Borrower, (3) the aggregate amount of the Canadian Allocation,
the Australian Allocation and the U.S. Allocation of each Lending Unit shall not
exceed its Commitment, (4) the Canadian Allocation for each Lending Unit may not
exceed its Canadian  Commitment and may not be reduced to an amount that is less
than the  outstanding  Canadian  Commitment  Usage of such Lending Unit, (5) the
Australian  Allocation  for each  Lending  Unit may not  exceed  its  Australian
Commitment and may not be reduced to an amount that is less than the outstanding
Australian  Commitment  Usage of such Lending Unit, and (6) the U.S.  Allocation
for each Lending Unit may not exceed its U.S.  Commitment and may not be reduced
to an amount that is less than the  outstanding  U.S.  Commitment  Usage of such
Lending  Unit.  Administrative  Agent shall  promptly  notify each Lender of any
proposed  change in the allocation of the  Commitments or of any proposed change
in any Lending Unit's Australian Lender Pro Rata Share, Canadian Lender Pro Rata
Share,  or U.S.  Lender Pro Rata  Share.  The  aggregate  amount of the  Overall
Commitments  may be  permanently  reduced from time to time in  accordance  with
subsection 2.4.

                  (i) Canadian  Borrower Loans. The Canadian Lender,  if any, of
                  each Lending Unit severally agrees, subject to the limitations
                  set forth below with respect to the maximum amount of Canadian
                  Loans  permitted to be outstanding  from time to time, to lend
                  to Canadian  Borrower from time to time during the period from
                  the Effective Date to but excluding the Commitment Termination
                  Date Dollars and/or Canadian Dollars,  in an aggregate amount,
                  when valued in Dollar  Equivalents  and  combined  with the BA
                  Usage of such Canadian Lender and its Canadian Lender 

                                       35
<PAGE>

                  Pro Rata Share of the Canadian  Letter of Credit Usage,  not
                  exceeding  the  lesser of (a) its  Canadian  Lender Pro Rata
                  Share of the Canadian  Allocation  as in effect from time to
                  time and (b) the  Commitment of its Lending Unit, to be used
                  for the purposes identified in subsection 2.5A.

                  (ii) Australian Loans. The Australian  Lender, if any, of each
                  Lending Unit severally agrees,  subject to the limitations set
                  forth below with respect to the maximum  amount of  Australian
                  Loans  permitted to be outstanding  from time to time, to lend
                  to Australian Borrowers severally and from time to time during
                  the  period  from  the  Effective  Date to but  excluding  the
                  Commitment Termination Date Dollars and/or Australian Dollars,
                  in an aggregate amount, when valued in Dollar Equivalents, and
                  combined  with its  Australian  Lender  Pro Rata  Share of the
                  Australian Letter of Credit Usage, not exceeding the lesser of
                  (a) its  Australian  Lender Pro Rata  Share of the  Australian
                  Allocation  as in  effect  from  time  to  time  and  (b)  the
                  Commitment  of its Lending  Unit,  to be used for the purposes
                  identified in subsection 2.5A.

                  (iii)  U.S.  Loans.  The  U.S.  Lender  of each  Lending  Unit
                  severally  agrees,  subject to the limitations set forth below
                  with respect to the maximum amount of U.S. Loans  permitted to
                  be  outstanding  from time to time,  to lend to U.S.  Borrower
                  from time to time during the period from the Effective Date to
                  but excluding the Commitment  Termination  Date Dollars and/or
                  Gold,   in  an  aggregate   amount,   when  valued  in  Dollar
                  Equivalents,  and combined with its U.S. Lender Pro Rata Share
                  of the U.S.  Letter of Credit Usage,  not exceeding the lesser
                  of (a) its U.S.  Lender Pro Rata Share of the U.S.  Allocation
                  as in effect from time to time and (b) the  Commitment  of its
                  Lending  Unit,  to be used  for  the  purposes  identified  in
                  subsection 2.5A.

                  (iv)  Lending  Unit  Commitments.  Each Lending Unit agrees to
                  maintain a U.S. Commitment and either an Australian Commitment
                  or a Canadian Commitment. Each Lending Unit maintaining a U.S.
                  Commitment and an Australian  Commitment also hereby agrees to
                  maintain a Canadian  Commitment  unless the maintenance of, or
                  any advances of funds under,  such Canadian  Commitment  would
                  result in the imposition of withholding  taxes on any payments
                  to be  received  by  such  Lending  Unit as a  result  of such
                  Canadian  Commitment.  Each  Lending Unit  maintaining  a U.S.
                  Commitment  and a Canadian  Commitment  also hereby  agrees to
                  maintain an Australian  Commitment  unless the maintenance of,
                  or any advances of funds  under,  such  Australian  Commitment
                  would result in the  imposition  of  withholding  taxes on any
                  payments to be received  by such  Lending  Unit as a result of
                  such Australian Commitment.

                  (v)  Additional  Limitations  on  Loans.  The  amounts  of the
                  Canadian  Allocation,  the  Australian  Allocation,  the  U.S.
                  Allocation,  and the Overall Commitments shall be reduced from
                  time to time by the  amount  of any  reductions  thereto  made
                  pursuant to subsection  2.4A.  Each Lending Unit's  Commitment
                  and  the  Canadian 

                                       36
<PAGE>


                  Commitment,   if  any,   the   Australian
                  Commitment,  if any, and the U.S.  Commitment  of such Lending
                  Unit's Canadian  Lender,  Australian  Lender and U.S.  Lender,
                  respectively,  shall expire on the Commitment Termination Date
                  and all  Loans  and all  other  amounts  owed  hereunder  with
                  respect to Loans, Bankers' Acceptances,  Letters of Credit and
                  Overall  Commitments  shall be paid in full no later than that
                  date.  Amounts  borrowed  under  this  subsection  2.1A may be
                  repaid  and   reborrowed  to  but  excluding  the   Commitment
                  Termination Date.

                  Anything   contained   in  this   Agreement  to  the  contrary
                  notwithstanding,  the Loans and the Overall  Commitments shall
                  be subject to the following limitations:

                          (a) Subject to the provisions of subsection 2.4A(iii),
         the Total  Utilization  of  Overall  Commitments  shall not at any time
         exceed the Overall Commitments then in effect;

                          (b) Subject to the provisions of subsection 2.4A(iii),
         each Lending  Unit's U.S.  Lender Pro Rata Share of the U.S  Commitment
         Usage shall not at any time exceed such Lending Unit's U.S.
         Allocation and U.S. Commitment then in effect;

                          (c) Subject to the provisions of subsection 2.4A(iii),
         each Lending Unit's  Australian Lender Pro Rata Share of the Australian
         Commitment  Usage  shall not at any time  exceed  such  Lending  Unit's
         Australian Allocation and Australian Commitment then in effect;

                          (d) Subject to the provisions of subsection 2.4A(iii),
         each  Lending  Unit's  Canadian  Lender Pro Rata Share of the  Canadian
         Commitment  Usage  shall not at any time  exceed  such  Lending  Unit's
         Canadian Allocation and Canadian Commitment then in effect;

                          (e) Subject to the provisions of subsection 2.4A(iii),
         neither the aggregate amount of the Canadian  Exposure for all Canadian
         Lenders nor the aggregate  amount of the Canadian  Commitments  for all
         Canadian Lenders shall, in either case, at any time exceed the Canadian
         Allocation then in effect;

                          (f) Subject to the provisions of subsection 2.4A(iii),
         neither  the  aggregate  amount  of the  Australian  Exposure  for  all
         Australian   Lenders  nor  the  aggregate   amount  of  the  Australian
         Commitments  for all Australian  Lenders shall,  in either case, at any
         time exceed the Australian Allocation then in effect;

                          (g) Subject to the provisions of subsection 2.4A(iii),
         neither the aggregate amount of the U.S.  Exposure for all U.S. Lenders
         nor the aggregate  amount of the U.S.  Commitments for all U.S. Lenders
         shall,  in either case, at any time exceed the U.S.  Allocation then in
         effect;

                                       37
<PAGE>

                          (h) The amount otherwise available for borrowing under
         the  Overall  Commitments  as of any  time of  determination  shall  be
         reduced by the Total Utilization of Overall Commitments;

                          (i)  Canadian  Borrower  shall not  request  or borrow
         Canadian  Dollar  Loans if,  immediately  after  giving  effect to such
         borrowing, the aggregate outstanding principal amount of Canadian Loans
         and the Canadian  Letter of Credit Usage and the BA Usage,  when valued
         in Dollar Equivalents, would exceed 95% of the Canadian Allocation then
         in effect;

                          (j) Australian  Borrowers  shall not request or borrow
         Australian  Dollar Loans if,  immediately  after giving  effect to such
         borrowing,  the aggregate  outstanding  principal  amount of Australian
         Loans and the Australian  Letter of Credit Usage, when valued in Dollar
         Equivalents,  would  exceed 95% of the  Australian  Allocation  then in
         effect;

                          (k) U.S. Borrower shall not request any Gold Loans if,
         immediately  after  giving  effect  to such  borrowing,  the  aggregate
         outstanding amount of Gold Loans advanced to U.S. Borrower would exceed
         750,000 Ounces; and

                          (l) For  purposes  of  computing  compliance  with the
         foregoing  clauses (a) through (k), any  extension of credit  hereunder
         the  proceeds  of which  are  used on the  same  day to  repay  another
         extension  of credit  hereunder  shall not be treated as an increase in
         the utilization of the Overall Commitments on such day.

                  B. Borrowing Mechanics.  Loans made on any Funding Date (other
than Loans made pursuant to subsection  2.7C for the purpose of reimbursing  any
Issuing Lender for the amount of a drawing under a Letter of Credit issued by it
or Loans made (or deemed made)  pursuant to  subsection  2.8F for the purpose of
reimbursing  any  Canadian  Lender for the Face Amount of any  matured  Bankers'
Acceptance)  shall be in an  aggregate  minimum  amount  of (i)  $5,000,000  and
integral multiples of $1,000,000 in excess of that amount, in the case of Dollar
Loans, (ii) Cdn.$5,000,000 and integral multiples of Cdn.$1,000,000 in excess of
that  amount,  in the case of  Canadian  Dollar  Loans,  (iii)  A$5,000,000  and
integral  multiples  of  A$1,000,000  in excess of that  amount,  in the case of
Australian Dollar Loans, and (iv) 10,000 Ounces and integral  multiples of 2,000
Ounces in excess of that amount, in the case of Gold Loans.  Whenever a Borrower
desires that Lenders  make Loans it shall  deliver a Notice of Borrowing  (i) in
the case of U.S. Base Rate Loans,  to  Administrative  Agent no later than 11:00
A.M.  (New York  time) at least one  Business  Day in  advance  of the  proposed
Funding Date, (ii) in the case of Eurodollar Rate Loans or Gold Loans to be made
to U.S.  Borrower,  to  Administrative  Agent no later than 11:00 A.M. (New York
time) at least three  Business  Days in advance of the  proposed  Funding  Date,
(iii) in the case of Eurodollar Rate Loans to be made to Canadian  Borrower,  to
Canadian  Administrative Agent and Administrative Agent no later than 11:00 A.M.
(Toronto time) at least three  Business Days in advance of the proposed  Funding
Date,  (iv) in the  case  of  Eurodollar  Rate  Loans  to be made to  Australian
Borrowers, to Australian  Administrative Agent and Administrative Agent no later
than 12:00 Noon  (Sydney  time) at least three  Business  Days in 

                                       38
<PAGE>


advance of the proposed Funding Date, (v) in the case of U.S. Base Rate (Canada)
Loans and  Canadian  Base  Rate  Loans,  to  Canadian  Administrative  Agent and
Administrative  Agent no later  than  11:00  A.M.  (Toronto  time) at least  one
Business Day in advance of the proposed  Funding  Date,  and (vi) in the case of
Bank Bill Swap Rate Loans, to Australian Administrative Agent and Administrative
Agent no later than  12:00  Noon  (Sydney  time) at least two  Business  Days in
advance of the proposed Funding Date; provided that, notwithstanding anything to
the  contrary,  a Borrower may deliver a Notice of  Borrowing to  Administrative
Agent at least two Business Days in advance of the Effective Date in the case of
the initial  Loans.  The Notice of Borrowing  shall specify (i) the  Borrower(s)
requesting the proposed Loans,  (ii) the proposed Funding Date (which shall be a
Business Day), (iii) whether such Loans will be denominated in Canadian Dollars,
Australian Dollars, Dollars or Ounces of Gold, (iv) in the case of Dollar Loans,
whether  such  Dollar  Loans are to be U.S.  Base  Rate  Loans,  U.S.  Base Rate
(Canada) Loans or Eurodollar Rate Loans, (v) in the case of Gold Loans,  whether
U.S.  Borrower  is  requesting  that the amount of such Loan be  converted  into
Dollars  (based on the Price of Gold as in effect two Business Days prior to the
proposed  Funding  Date) or that an  amount  of Gold  constituting  such Loan be
Delivered, and if so where, (vi) in the case of Gold Loans to be funded in Gold,
whether U.S.  Borrower is requesting to pay interest during the initial Interest
Period on such Gold Loan in Dollars or in Gold, and, if payable in Dollars,  the
basis for calculating the amount according to one of the alternatives  specified
in subsection  2.2F, and (vii) in the case of Eurodollar  Rate Loans,  Bank Bill
Swap Rate Loans, or Gold Loans, the requested Interest Period.  Each such Notice
of Borrowing shall also show the calculation of the Canadian  Commitment  Usage,
the  Australian  Commitment  Usage,  the U.S.  Commitment  Usage  and the  Total
Utilization  of  Overall   Commitments  after  giving  effect  to  the  proposed
borrowing,  which calculation shall demonstrate  compliance with the limitations
on Loans set forth in subsection 2.1A(v). Loans may be continued as or converted
into  Loans  denominated  in the same  currency  (or in the case of Gold  Loans,
Ounces of Gold) in the manner provided in subsection 2.2D. In lieu of delivering
the  above-described  Notice of Borrowing,  the applicable Borrower may give the
Applicable  Administrative  Agent and Administrative  Agent telephonic notice by
the required time of any proposed borrowing under this subsection 2.1B; provided
that such notice shall be promptly  confirmed in writing by delivery of a Notice
of Borrowing to the Applicable  Administrative Agent and Administrative Agent on
or before the applicable Funding Date.

                  Neither any Agent nor any Lender shall incur any  liability to
any  Borrower  in acting  upon any  telephonic  notice  referred  to above  that
Administrative  Agent or the  Applicable  Administrative  Agent believes in good
faith to have been given by a duly authorized officer or other person authorized
to borrow on behalf of such Borrower or for otherwise acting in good faith under
this  subsection  2.1B, and upon funding of Loans by Lenders in accordance  with
this Agreement  pursuant to any such telephonic  notice such Borrower shall have
effected Loans hereunder to such Borrower.

                  Except as otherwise  provided in  subsections  2.6B,  2.6C and
2.6G, a Notice of Borrowing for a Eurodollar Rate Loan, a Base Rate Loan, a Bank
Bill Swap Rate Loan or a Gold Loan (or telephonic  notice in lieu thereof) shall
be irrevocable when given, and the Borrower  delivering such Notice of Borrowing
shall be bound to make a borrowing in accordance therewith.

                                       39
<PAGE>

         C.       Disbursement of Funds.

                  (i) Canadian  Borrower Loans.  All Loans requested by Canadian
                  Borrower  under  this  Agreement  shall  be made  by  Canadian
                  Lenders simultaneously and proportionately to their respective
                  Canadian  Lender Pro Rata Shares.  Promptly  after  receipt by
                  Canadian  Administrative  Agent and Administrative  Agent of a
                  Notice of Borrowing pursuant to subsection 2.1B (or telephonic
                  notice  in lieu  thereof)  from  Canadian  Borrower,  Canadian
                  Administrative  Agent shall notify each Canadian Lender of the
                  proposed  borrowing  and the details  thereof.  Each  Canadian
                  Lender  shall  make the  amount of its Loan  available  in the
                  appropriate currency to Canadian Administrative Agent, in same
                  day funds at Canadian  Administrative  Agent's  Lending Office
                  not later  than 1:00 P.M.  (New York  time) on the  applicable
                  Funding Date.  Upon  satisfaction  or waiver of the conditions
                  precedent  specified  in  subsections  3.1 (in the case of the
                  initial  Loans) and 3.2 (in the case of all  Loans),  Canadian
                  Administrative  Agent shall make the proceeds of such Canadian
                  Loans,  in the  appropriate  currency,  available  to Canadian
                  Borrower on the  applicable  Funding Date by causing an amount
                  of same day  funds  equal to the  proceeds  of all such  Loans
                  received  by  Canadian   Administrative  Agent  from  Canadian
                  Lenders to be credited to the account of Canadian  Borrower at
                  Canadian Administrative Agent's Lending Office.

                  (ii)  Australian  Borrowers  Loans.  All  Loans  requested  by
                  Australian  Borrowers  under this  Agreement  shall be made by
                  Australian Lenders simultaneously and proportionately to their
                  respective  Australian Lender Pro Rata Shares.  Promptly after
                  receipt by Australian  Administrative Agent and Administrative
                  Agent of a Notice of Borrowing pursuant to subsection 2.1B (or
                  telephonic notice in lieu thereof) from Australian  Borrowers,
                  Australian  Administrative  Agent shall notify each Australian
                  Lender of the proposed borrowing and the details thereof. Each
                  Australian  Lender shall make the amount of its Loan available
                  in  the  appropriate  currency  to  Australian  Administrative
                  Agent, in same day funds at Australian  Administrative Agent's
                  Lending  Office not later than 12:00 Noon (Sydney time) on the
                  applicable  Funding Date.  Upon  satisfaction or waiver of the
                  conditions precedent specified in subsections 3.1 (in the case
                  of the  initial  Loans)  and 3.2 (in the  case of all  Loans),
                  Australian  Administrative  Agent  shall make the  proceeds of
                  such Australian Loans, in the appropriate currency,  available
                  to the  applicable  Australian  Borrower,  on  the  applicable
                  Funding  Date by causing an amount of same day funds  equal to
                  the  proceeds  of  all  such  Loans   received  by  Australian
                  Administrative Agent from Australian Lenders to be credited to
                  the   account   of   Australian    Borrowers   at   Australian
                  Administrative Agent's Lending Office.

                  (iii)  U.S.  Borrower  Loans.  All  Loans  requested  by  U.S.
                  Borrower  under this Agreement  shall be made by U.S.  Lenders
                  simultaneously  and  proportionately  to their respective U.S.
                  Lender   Pro  Rata   Shares.   Promptly   after   receipt   by
                  Administrative  Agent of a Notice  of  Borrowing  pursuant  to
                  subsection  2.1B (or  telephonic  notice in lieu thereof) from
                  U.S.  Borrower,  Administrative  Agent shall 


                                       40
<PAGE>



                  notify each U.S.  Lender of the proposed  borrowing  and the
                  details  thereof.  Each U.S. Lender shall make the amount of
                  its Loan  (other  than any Gold  Loan to be  funded in Gold)
                  available  in  Dollars to  Administrative  Agent in same day
                  funds at  Administrative  Agent's  Lending  Office not later
                  than 1:00 P.M.  (New York  time) on the  applicable  Funding
                  Date.  In the case of any Gold  Loan to be  funded  in Gold,
                  each  U.S.  Lender  shall  make the  amount of its Gold Loan
                  available  in Gold to  Administrative  Agent by  Delivery of
                  such Gold not later  than 11:00  A.M.  (London  time) on the
                  applicable  Funding  Date  to  the  Administrative   Agent's
                  account with J.P.  Morgan,  London,  England,  or such other
                  London   bullion   account   as   may   be   designated   by
                  Administrative  Agent by notice to U.S. Lenders from time to
                  time  not  later  than  three  Business  Days  prior  to the
                  applicable  Funding Date. Upon satisfaction or waiver of the
                  conditions  precedent  specified in subsections  3.1 (in the
                  case of the  initial  Loans)  and  3.2  (in the  case of all
                  Loans), Administrative Agent shall make the proceeds of such
                  Loans in Dollars or Gold,  as the case may be,  available to
                  U.S.  Borrower on the applicable  Funding Date by (a) in the
                  case of Loans in  Dollars,  causing  an  amount  of same day
                  funds equal to the  proceeds  of all such Loans  received by
                  Administrative Agent from U.S. Lenders to be credited to the
                  U.S.  Borrower  Account  or (b) in the  case of Gold  Loans,
                  either  (1)  advancing  the Dollar  Equivalent  of such Gold
                  Loans,  which shall be calculated based on the Price of Gold
                  as in  effect  on the  second  Business  Day  preceding  the
                  applicable  Funding Date,  and causing an amount of same day
                  funds  equal to such amount of Dollars to be credited to the
                  U.S.  Borrower Account or (2) effecting the Delivery of Gold
                  comprising  such Gold  Loans to a location  mutually  agreed
                  upon by U.S. Borrower and Administrative Agent and set forth
                  in the Notice of Borrowing.

                  (iv) Failure to Fund Loans. No Lender shall be responsible for
                  any  default  by any  other  Lender  in  that  other  Lender's
                  obligation  to make a Loan  requested  hereunder nor shall the
                  Commitment of any Lender to make the  particular  type of Loan
                  requested  be  increased or decreased as a result of a default
                  by any other Lender in that other Lender's  obligation to make
                  a   Loan   requested   hereunder.    Unless   the   Applicable
                  Administrative  Agent  shall have been  notified by any Lender
                  prior to the  Funding  Date for any Loans to be funded by such
                  Lender that such Lender does not intend to make  available  to
                  the  Applicable   Administrative  Agent  the  amount  of  such
                  Lender's Loan  requested on such Funding Date,  the Applicable
                  Administrative Agent may assume that such Lender has made such
                  amount  available to the  Applicable  Administrative  Agent on
                  such Funding Date and the Applicable Administrative Agent may,
                  in its sole  discretion,  but shall not be obligated  to, make
                  available to the applicable Borrower a corresponding amount on
                  such Funding Date. If such corresponding amount is not in fact
                  made available to the Applicable  Administrative Agent by such
                  Lender, the Applicable  Administrative Agent shall be entitled
                  to  recover  such  corresponding  amount on  demand  from such
                  Lender together with interest thereon,  for each day from such
                  Funding  Date  until  the  date  such  amount  is  paid to the
                  Applicable  Administrative Agent, at the customary rate set by
                  the  Applicable  Administrative  Agent for the  

                                       41
<PAGE>


                    correction of errors among banks for three Business Days and
                    thereafter  at the Canadian Base Rate plus 1.0% or, if less,
                    at the  customary  rate set by the  Canadian  Administrative
                    Agent for the correction of errors among banks,  in the case
                    of any Canadian  Dollar Loan,  the Bank Bill Swap Rate for a
                    one month  Interest  Period,  in the case of any  Australian
                    Dollar Loans,  the  Alternate  Base Rate, in the case of any
                    Dollar Loan made by any U.S.  Lender or  Australian  Lender,
                    the U.S. Base Rate (Canada),  in the case of any Dollar Loan
                    made by any Canadian Lender, or the applicable Gold Rate, in
                    the case of any Gold Loan.  If such Lender does not pay such
                    corresponding   amount   forthwith   upon   the   Applicable
                    Administrative   Agent's  demand  therefor,  the  Applicable
                    Administrative  Agent shall  promptly  notify the applicable
                    Borrower  and  such  Borrower  shall  immediately  pay  such
                    corresponding amount to the Applicable  Administrative Agent
                    together  with  interest  thereon,  for each  day from  such
                    Funding  Date  until  the date  such  amount  is paid to the
                    Applicable Administrative Agent, at the rate then applicable
                    to  Canadian  Base Rate Loans plus 1.0% or, if less,  at the
                    customary rate set by the Canadian  Administrative Agent for
                    the  correction  of errors among  banks,  in the case of any
                    Canadian  Dollar Loan, the rate then  applicable to the Bank
                    Bill Rate Swap Loans for a one month Interest  Period in the
                    case of any Australian Dollar Loan, the rate then applicable
                    to Base Rate  Loans,  in the case of any Dollar  Loan or the
                    applicable  Gold Rate,  in the case of any Gold Loan. In all
                    of the foregoing instances,  such interest in respect of any
                    Gold  Loan  shall  be  payable  in  Dollars   and  shall  be
                    calculated  daily  in  accordance  with  the  provisions  of
                    subsection  2.2F.  Nothing in this  subsection 2.1C shall be
                    deemed to relieve any Lender from its  obligation to fulfill
                    its  commitments  hereunder or to prejudice  any rights that
                    any  Borrower may have against any Lender as a result of any
                    default by such Lender hereunder.

                  (v) Confirmation of Delivery,  Risk of Loss, Delivery Charges.
                  Unless the Administrative  Agent receives notice from the U.S.
                  Borrower within seven Business Days of U.S. Borrower's receipt
                  of any Gold,  the quantity and quality of the Gold so received
                  shall  be  deemed  to be as set  forth  in the  Administrative
                  Agent's  delivery  order.  If there is any  discrepancy in the
                  amount or quality of Gold  actually  Delivered,  the amount of
                  such  difference  shall be settled  in  Dollars  (based on the
                  Dollar Equivalent on the date of Delivery of the Gold required
                  to be  advanced  hereunder  and the Gold  actually  Delivered)
                  promptly after the Delivery thereof. U.S. Borrower assumes all
                  risk of loss,  theft or  detention  of or  damage  to any Gold
                  Delivered  hereunder  from the  date  U.S.  Borrower  receives
                  Delivery of such Gold until the date of its return by Delivery
                  to the Administrative Agent. U.S. Borrower shall pay all costs
                  and  charges  (including  costs and  expenses  of  collection,
                  shipment,   cartage,   warehousing,    packaging,    refining,
                  converting or insurance and any applicable  location premiums)
                  directly relating to the physical Delivery of Gold pursuant to
                  this  Agreement  incurred on and after request for Delivery of
                  Gold by U.S. Borrower until return of Gold by U.S. Borrower at
                  the required location.

                                       42
<PAGE>

                  D. Note  Option.  If so  requested  by any  Lender by  written
notice to the applicable  Borrower (with a copy to  Administrative  Agent),  the
Borrower to whom such  request is made shall  execute and deliver to such Lender
(within  three  Business  Days of such  Borrower's  receipt  of such  notice)  a
promissory note  substantially  in the form of Exhibit IV-A to this Agreement to
evidence such Lender's  Canadian  Loans,  in the form of Exhibit IV-B or Exhibit
IV-C to this Agreement to evidence such Lender's  Australian  Loans, in the form
of Exhibit IV-D to this  Agreement to evidence such  Lender's U.S.  Loans (other
than Gold  Loans),  or a Grid Gold  Acknowledgement  in the form of Exhibit V to
this Agreement to evidence such Lender's Gold Loans.

                  E. Risk  Participations.  The  Lenders  intend  that  after an
acceleration  of the  Obligations  pursuant  to  Section  7, the  ratio for each
Lending Unit of the aggregate  Exposure of the Borrowers to such Lending Unit to
the  aggregate  Exposure of the  Borrowers to all Lending Units shall equal such
Lending Unit's Pro Rata Share. Accordingly, immediately upon the acceleration of
the Obligations  pursuant to Section 7, each Canadian Loan, each Australian Loan
and each Obligation  relating  thereto shall be deemed to be a Dollar Loan in an
amount equal to the Dollar Equivalent of such Canadian Loan, Australian Loans or
other Obligations, as applicable, and accordingly the liability of the Borrowers
to pay and the right of the Lenders to receive  payment of all  Canadian  Loans,
Australian  Loans and Obligations  relating thereto shall thereupon be to pay or
to receive, respectively, Dollar in the amounts so determined. At such time, the
Administrative  Agent shall determine for which Lending Units, if any, the ratio
of the aggregate Exposure of the Borrowers to such Lending Unit to the aggregate
Exposure of the Borrowers to all Lending Units is less than such Lending  Unit's
Pro Rata Share (such Lending Unit is herein called  "Purchasing  Lending Unit"),
and for which Lending Units, if any, the ratio of the aggregate  exposure of the
Borrowers to such Lending Unit to the aggregate Exposure of the Borrowers to all
Lending  Units is greater than such Lending  Unit's Pro Rata Share (such Lending
Unit  is  herein  called  a  "Selling   Lending   Unit).   Promptly  after  such
determination is made,  notwithstanding  the allocation of the Commitment of any
Lending Unit as among the Canadian Commitments,  the Australian  Commitments and
the U.S.  Commitments,  each  Purchasing  Lending Unit shall  purchase  from the
Selling  Lending  Units,  and  each  Selling  Lending  Unit  shall  sell to each
Purchasing  Lending Unit,  for cash and without  representation  or warranty,  a
portion  of the  outstanding  Loans  from  such  Selling  Lending  Unit,  and if
necessary to achieve the objective of this Section, each Purchasing Lending Unit
shall also purchase risk  participations in respect of a portion of such Selling
Lending Unit's liability for outstanding Bankers' Acceptances, Letters of Credit
and Gold Loans, such that each Lending Unit's share of the aggregate Exposure of
the Borrowers shall equal its Pro Rata Share. The amounts and particulars of the
purchases and sales of the Loans,  Bankers'  acceptances,  Letters of Credit and
Gold Loans for the purpose of the foregoing  arrangements shall be determined in
each case by the  Administrative  Agent upon  consultation  with the  applicable
Lending Units, and the administrative  Agent shall have the power to execute any
documentation  as attorney for any Lender in order to complete  any  transaction
required by this Section.  The foregoing  arrangements may require a Borrower to
make  payments  pursuant to Section 10.7 that it would not have been required to
make in the absence of such arrangements.

2.2      Interest on the Loans.

                                       43
<PAGE>

                  A. Rate of Interest.  Subject to the provisions of subsections
2.6 and 10.7,  each Loan shall bear  interest  on the  unpaid  principal  amount
thereof  from the  date  made  through  maturity  (whether  by  acceleration  or
otherwise) at a rate  determined  by reference to: (i) the Alternate  Base Rate,
the U.S. Base Rate (Canada), the Eurodollar Rate or the Adjusted Eurodollar Rate
in the case of any Dollar Loan;  (ii) the Canadian  Base Rate in the case of any
Canadian Dollar Loan; (iii) the Bank Bill Swap Rate in the case of an Australian
Dollar Loan; or (iv) the Gold Rate in the case of any Gold Loan.  The applicable
basis for  determining  the rate of interest  with  respect to any Loan shall be
selected by the applicable  Borrower initially at the time a Notice of Borrowing
is given with respect to such Loan  pursuant to subsection  2.1B.  The basis for
determining  the interest rate with respect to any Loan may be changed from time
to time pursuant to subsection 2.2D.

                  Subject to the  provisions of  subsections  2.2E and 10.7, the
Loans shall bear interest through maturity as follows:

                  (i)      if a U.S. Base Rate Loan, then at the Alternate Base 
                  Rate per annum;

                  (ii) if a Canadian  Base Rate Loan,  then at the Canadian Base
                   Rate per annum;

                  (iii)    if a U.S. Base Rate (Canada) Loan, then at the U.S. 
                  Base Rate (Canada) per annum;

                  (iv) if a Bank  Bill Swap  Rate  Loan,  then at the sum of the
                  Bank Bill Swap Rate plus the Applicable Margin per annum;

                  (v) if a  Eurodollar  Rate  Loan  that  is a U.S.  Loan  or an
                  Australian  Loan,  then at the sum of the Adjusted  Eurodollar
                  Rate plus the Applicable Margin per annum;

                  (vi) if a Eurodollar  Rate Loan that is a Canadian Loan,  then
                  at the sum of the Eurodollar  Rate plus the Applicable  Margin
                  per annum; or

                  (vii) if a Gold Loan, then at the Gold Rate per annum;

                  B. Interest  Periods.  In connection with each Eurodollar Rate
Loan, each Bank Bill Swap Rate Loan and each Gold Loan, the applicable  Borrower
may,   pursuant   to  the   applicable   Notice  of   Borrowing   or  Notice  of
Conversion/Continuation,  as the case may be,  select an  Interest  Period to be
applicable to such Loan; provided that:

                  (i) the initial  Interest Period for any Eurodollar Rate Loan,
                  Bank Bill Swap Rate Loan,  or Gold Loan shall  commence on the
                  Funding  Date of such  Loan,  in the case of a Loan  initially
                  made as a Eurodollar Rate Loan, a Bank Bill Swap Rate Loan, or
                  a Gold Loan, or on the date specified in the applicable Notice
                  of Conversion/Continuation,  in the case of any Loan converted
                  into a Eurodollar Rate Loan;


                                       44
<PAGE>

                  (ii) in the case of immediately  successive  Interest  Periods
                  applicable to any  Eurodollar  Rate Loan,  Bank Bill Swap Rate
                  Loan,  or Gold Loan  continued as such pursuant to a Notice of
                  Conversion/Continuation,  each such successive Interest Period
                  shall  commence  on the day on which  the  preceding  Interest
                  Period expires;

                  (iii) if an Interest  Period would  otherwise  expire on a day
                  that is not a Business Day, such Interest  Period shall expire
                  on the next  succeeding  Business Day;  provided  that, in the
                  case of a Eurodollar  Rate Loan, if any Interest  Period would
                  otherwise  expire on a day that is not a Business Day but is a
                  day of the month after which no further Business Day occurs in
                  such month,  such  Interest  Period  shall  expire on the next
                  preceding Business Day;

                  (iv) any  Interest  Period  for a  Eurodollar  Rate  Loan that
                  begins on the last  Business Day of a calendar  month (or on a
                  day for which there is no numerically corresponding day in the
                  calendar  month  at the end of such  Interest  Period)  shall,
                  subject to clause (v) of this subsection 2.2B, end on the last
                  Business Day of a calendar month;

                  (v) no Interest  Period with  respect to any Loan shall extend
                  beyond the Commitment Termination Date; and

                  (vi)  there  shall  be no  more  than  five  Interest  Periods
                  relating to  Eurodollar  Rate Loans  outstanding  at any time,
                  there shall be no more than five Interest  Periods relating to
                  Bank Bill Swap Rate  Loans  outstanding  at any time and there
                  shall be no more than five Interest  Periods  relating to Gold
                  Loans outstanding at any time.

                  C. Interest Payments; Currencies. Subject to the provisions of
subsection  2.2E,  interest  on each Loan  shall be payable in arrears on and to
each Interest  Payment Date applicable to that Loan, upon any prepayment of that
Loan (to the extent  accrued on the amount being  prepaid) and at maturity.  All
payments of interest  shall be paid to the  Applicable  Administrative  Agent in
accordance with the provisions of subsection 2.4B.

                  Interest  payable on any Loan  denominated in a currency shall
be  payable  in the same  currency.  Interest  payable on any Gold Loan shall be
payable,  at U.S.  Borrower's  option,  in (a) Gold or (b)  Dollars  in  amounts
determined in accordance with the provisions of 2.2F. U.S. Borrower shall advise
Administrative  Agent of its  intention to pay interest on Gold Loans in Gold in
the  applicable  Notice  of  Borrowing  or  Notice  of  Conversion/Continuation;
provided that  Administrative  Agent shall,  notwithstanding any request of U.S.
Borrower to pay such  interest in Gold,  have the right to require that interest
with  respect to any Gold Loan be paid in  Dollars by notice  given on or before
the related Funding Date in the case of the initial Interest  Period,  and prior
to the date of  continuation,  in the case of a continuation.  If U.S.  Borrower
fails  timely  to  advise  Administrative  Agent of its  desire  to pay  accrued
interest  in Gold,  U.S.  Borrower  shall be deemed to have  elected to pay such
interest in Dollars.

                  D.  Conversion or  Continuation.  Subject to the provisions of
subsection 2.6, (i) each of U.S.  Borrower and Canadian  Borrower shall have the
option to convert at any time all 

                                       45
<PAGE>

or any part of its  outstanding  Dollar Loans equal to  $5,000,000  and integral
multiples  of  $1,000,000  in excess of that amount from  Dollar  Loans  bearing
interest at a rate  determined by reference to one basis to Dollar Loans bearing
interest at a rate  determined by reference to an alternative  basis,  (ii) each
Borrower  shall have the option,  upon the  expiration  of any  Interest  Period
applicable  to a  Eurodollar  Rate Loan,  to continue all or any portion of such
Eurodollar Rate Loan equal to $5,000,000 and integral multiples of $1,000,000 in
excess of that amount as a  Eurodollar  Rate Loan,  (iii)  Australian  Borrowers
shall have the option,  upon the expiration of any Interest Period applicable to
a Bank Bill Swap Rate Loan,  to  continue  all or any  portion of such Bank Bill
Swap Rate Loan equal to  A$5,000,000  and integral  multiples of  A$1,000,000 in
excess of that amount as a Bank Bill Swap Rate Loan,  (iv) U.S.  Borrower  shall
have the option, upon the expiration of any Interest Period applicable to a Gold
Loan,  to continue  all or any portion of such Gold Loan equal to 10,000  Ounces
and integral  multiples of 2,000 Ounces in excess of that amount as a Gold Loan;
provided, however, that a Eurodollar Rate Loan may only be converted into a U.S.
Base  Rate  Loan or a U.S.  Base  Rate  (Canada)  Loan,  as  applicable,  on the
expiration date of an Interest Period applicable thereto; provided further that,
subject to the  following  proviso,  no Loan may be made as or converted  into a
U.S.  Base Rate Loan or a U.S.  Base Rate  (Canada)  Loan during the period from
December 24 of any year to and including January 7 of the immediately succeeding
year for the  purpose of  investing  in  securities  bearing  interest at a rate
determined  by  reference  to any other  basis for the purpose of  arbitrage  or
speculation;  and provided still further that no Loan may be converted  into, or
continued  as, a  Eurodollar  Rate Loan (except that  Australian  Borrowers  may
continue  Eurodollar Rate Loans with a period of one month), or a Bank Bill Swap
Rate Loan with a period in excess of one month,  or a Gold Loan at any time that
a  Potential  Event of  Default  or an  Event of  Default  has  occurred  and is
continuing.

                  The   applicable   Borrower   shall   deliver   a  Notice   of
Conversion/Continuation  (i) in the case of a  conversion  to a U.S.  Base  Rate
Loan, to Administrative  Agent no later than 12:00 Noon (New York time) at least
one Business Day in advance of the proposed  conversion/continuation  date, (ii)
in the case of a conversion  to, or a  continuation  of, a Eurodollar  Rate Loan
made to U.S. Borrower or a continuation of a Gold Loan made to U.S. Borrower, to
Administrative  Agent,  no later than 12:00 Noon (New York time) at least  three
Business Days in advance of the proposed  conversion/continuation date, (iii) in
the case of a conversion to, or a continuation  of, a Eurodollar  Rate Loan made
to Canadian Borrower, to Canadian  Administrative Agent and Administrative Agent
no later than 11:00 A.M.  (Toronto time) at least three Business Days in advance
of the proposed  conversion/continuation  date, (iv) in the case of a conversion
to a U.S.  Base  Rate  (Canada)  Loan,  to  Canadian  Administrative  Agent  and
Administrative  Agent no later  than  11:00  A.M.  (Toronto  time) at least  one
Business Day in advance of the proposed conversion/continuation date, (v) in the
case of a continuation of a Eurodollar  Rate Loan made to Australian  Borrowers,
or a continuation of a Bank Bill Swap Rate Loan made to Australian Borrowers, to
Australian  Administrative  Agent and  Administrative  Agent no later than 12:00
Noon  (Sydney  time) at least  three  Business  Days in advance of the  proposed
conversion/continuation  date. A Notice of Conversion/Continuation shall specify
(i) the  applicable  Borrower,  (ii) the proposed  conversion/continuation  date
(which  shall  be  a  Business  Day),  (iii)  the  amount  of  the  Loan  to  be
converted/continued,  (iv) the nature of the  proposed  conversion/continuation,
(v) in the case of a conversion to or a continuation  of a Eurodollar  Rate Loan
or a  continuation  of a Bank Bill Swap Rate Loan or a Gold Loan,  the requested
Interest 


                                       46
<PAGE>

Period,  (vi) in the case of the  continuation of a Gold Loan,  whether
U.S.  Borrower  is  requesting  to pay  interest  in Dollars or in Gold,  and if
payable in Dollars, the basis for calculating the amount according to one of the
alternatives specified in subsection 2.2F, and (vii) in the case of a conversion
to or a continuation of a Eurodollar Rate Loan (except by Australian  Borrowers)
or a continuation of a Gold Loan, that no Potential Event of Default or Event of
Default  has   occurred  and  is   continuing.   In  lieu  of   delivering   the
above-described Notice of  Conversion/Continuation,  the applicable Borrower may
give  Administrative  Agent and the Applicable  Administrative  Agent telephonic
notice by the required time of any proposed  conversion/continuation  under this
subsection  2.2D;  provided  that such  notice  shall be promptly  confirmed  in
writing by delivery  of a Notice of  Conversion/Continuation  to  Administrative
Agent  and  the  Applicable  Administrative  Agent  on or  before  the  proposed
conversion/continuation date.

                  Neither any Agent nor any Lender shall incur any  liability to
any  Borrower  in acting  upon any  telephonic  notice  referred  to above  that
Administrative  Agent or the  Applicable  Administrative  Agent believes in good
faith to have been given by a duly authorized officer or other person authorized
to act on behalf of such  Borrower or for  otherwise  acting in good faith under
this  subsection  2.2D, and upon  conversion or  continuation  of the applicable
basis for  determining the interest rate with respect to any Loans in accordance
with this Agreement pursuant to any such telephonic notice,  such Borrower shall
have effected a conversion or continuation, as the case may be, hereunder.

                  Except as otherwise  provided in  subsections  2.6B,  2.6C and
2.6G, a Notice of Conversion/Continuation  for conversion to, or continuation of
a Eurodollar Rate Loan or a continuation of a Bank Bill Swap Rate Loan or a Gold
Loan (or telephonic notice in lieu thereof) shall be irrevocable when given, and
the Borrower delivering such Notice of Conversion/Continuation shall be bound to
effect a conversion or continuation in accordance therewith.

                  If   any    Borrower    fails   to    submit   a   Notice   of
Conversion/Continuation  with respect to any maturing  Eurodollar  Rate Loans or
Bank Bill Swap Rate Loans in  accordance  with the forgoing  provisions  of this
subsection  2.2D,  then upon the  expiration  of the  Interest  Period  for such
Eurodollar  Rate Loans or Bank Bill Swap Rate Loans,  as applicable,  such Loans
shall (i) if no Event of  Default  or  Potential  Event of  Default  shall  have
occurred and be continuing,  automatically  continue as Eurodollar Rate Loans or
Bank Bill Swap Rate Loans,  as applicable,  in each case with an Interest Period
of one month and (ii) if an Event of Default or Potential Event of Default shall
have occurred and be continuing,  automatically be converted into U.S. Base Rate
Loans or U.S. Base Rate (Canada) Loans, as applicable, in the case of U.S. Loans
and Canadian  Loans, or continue as Eurodollar Rate Loans or Bank Bill Swap Rate
Loans with an Interest  Period of one month in the case of Australian  Loans. If
U.S. Borrower fails to submit a Notice of  Conversion/Continuation  with respect
to any maturing  Gold Loans in accordance  with the forgoing  provisions of this
subsection  2.2D,  then upon the expiration of the Interest Period for such Gold
Loans, such Loans shall automatically be continued as Gold Loans having a 30-day
Interest Period. Upon the continuation (including automatic continuation) of any
Loan,  the  Applicable   Administrative  Agent  shall  notify  Company  and  the
applicable Borrower of such continuation; provided, however, that the failure to
give such notice shall not limit or otherwise

                                       47
<PAGE>


affect the  obligations  of Company or any Borrower  under this Agreement or any
other Loan Document.

                  E. Post-Maturity Interest. Any principal payments on the Loans
not paid when due and, to the extent  permitted by applicable  law, any interest
payments on the Loans owed  hereunder not paid when due, in each case whether at
stated maturity,  by notice of prepayment,  by acceleration or otherwise,  shall
thereafter  bear interest  (including  post-petition  interest in any proceeding
under the Bankruptcy Code or other applicable bankruptcy laws) payable on demand
at a rate which is 2% per annum in excess of the interest rate otherwise payable
under  this  Agreement  in  respect of such Loans (or in the case of any fees or
other  amounts,  a rate  which is 2% per annum in excess  of the  interest  rate
otherwise payable under this Agreement for U.S. Base Rate Loans); provided that,
in the case of Eurodollar  Rate Loans or Gold Loans,  upon the expiration of the
Interest  Period in effect at the time any such  increase  in  interest  rate is
effective,  such Eurodollar Rate Loans or Gold Loans (in the case of Gold Loans,
by  converting  the  outstanding  amount of such Loans into Dollars based on the
Price of Gold as in effect on such expiration  date) shall thereupon become U.S.
Base Rate Loans or U.S.  Base Rate  (Canada)  Loans,  as  applicable,  and shall
thereafter bear interest  payable upon demand at a rate which is 2% per annum in
excess of the interest rate otherwise  payable under this Agreement at such time
for U.S.  Base Rate Loans or U.S.  Base Rate (Canada)  Loans,  respectively,  as
applicable,  except that in the case of Australian  Borrowers,  such  Eurodollar
Rate Loans shall be continued as Eurodollar  Rate Loans with an Interest  Period
of one  month,  and  provided  further  that in the case of Bank  Bill Swap Rate
Loans,  such Bank Bill Swap Rate  Loans  shall  continue  as Bank Bill Swap Rate
Loans  with an  Interest  Period of one  month.  Payment  or  acceptance  of the
increased  rates  of  interest  provided  for in this  subsection  2.2E is not a
permitted alternative to timely payment and shall not constitute a waiver of any
Event of Default or  otherwise  prejudice or limit any rights or remedies of any
Agent or any Lender.

                  F. Computation of Interest.  Interest on the Loans denominated
in currency shall be computed, in the case of Base Rate Loans and Bank Bill Swap
Rate Loans, on the basis of a 365-day or 366-day year, as the case may be, or in
the case of Eurodollar  Rate Loans, on the basis of a 360-day year, in each case
for the actual number of days elapsed in the period during which it accrues, and
shall be determined  daily with respect to the amount of such Loans  outstanding
each day during such period. Interest on each Gold Loan shall be computed on the
basis of a 360-day  year and the  actual  number of days  elapsed  in the period
during  which it  accrues  and  shall  be  determined  daily  (i) in the case of
interest  to be paid in Gold,  with  respect  to the  number  of  Ounces of Gold
outstanding  under such Gold Loan on each day during such period, or (ii) in the
case of interest to be paid in Dollars, with respect to the average of the daily
values  (such  values  being  equal to the  number  of  Ounces of such Gold Loan
multiplied  by the  Price of Gold) of such  Gold  Loan,  in  Dollar  Equivalents
(determined  daily unless U.S.  Borrower  requests in its Notice of Borrowing or
Notice of  Conversion/Continuation  that the Price of Gold be fixed at the Price
of Gold on the second Business Day prior to the related  Interest Period for the
purpose of determining  accrued  interest during the applicable  Interest Period
and Requisite  Lenders have not objected on or before the  commencement  of such
Interest  Period,  in their sole  discretion,  to use such fixed  price for such
purpose  during such  period),  for each day during such  period.  In  computing
interest on any Loan, the date of the making of such Loan or the first day of an
Interest  


                                       48
<PAGE>

Period  applicable  to such  Loan or,  with  respect  to a Loan  being
converted from a Eurodollar Rate Loan, the date of conversion of such Eurodollar
Rate  Loan,  shall be  included,  and the date of  payment  of such  Loan or the
expiration date of an Interest  Period  applicable to such Loan or, with respect
to a Loan being  converted to a Eurodollar  Rate Loan, the date of conversion to
such Eurodollar Rate Loan, shall be excluded;  provided that if a Loan is repaid
on the same day on which it is made,  one day's  interest  shall be paid on that
Loan.

                  For the  purposes  of this  Agreement,  whenever  interest  is
calculated on the basis of a year of 360 days, each rate of interest  determined
pursuant to such calculation expressed as an annual rate for the purposes of the
Interest Act (Canada) is equivalent to such rate as so determined  multiplied by
the  actual  number  of days in the  calendar  year in  which  the same is to be
ascertained and divided by 360.

2.3      Fees.

                  A. Commitment Fees.  Borrowers  jointly and severally agree to
pay to  Administrative  Agent (i) for distribution to each Canadian  Lender,  in
proportion  to that  Lender's  Canadian  Lender Pro Rata  Share of the  Canadian
Allocation,  commitment fees for the period from and after the Effective Date to
and excluding the Commitment Termination Date, equal to the quarterly average of
the daily excess of the Canadian  Allocation over the Canadian  Commitment Usage
(in Dollar Equivalents)  multiplied by the applicable  Commitment Fee Percentage
per annum,  (ii) for  distribution to each Australian  Lender,  in proportion to
that Lender's  Australian  Lender Pro Rata Share of the  Australian  Allocation,
commitment  fees  for the  period  from  and  after  the  Effective  Date to and
excluding the Commitment  Termination Date equal to the quarterly average of the
daily excess of the Australian  Allocation over the Australian  Commitment Usage
(in Dollar Equivalents)  multiplied by the applicable  Commitment Fee Percentage
per annum, and (iii) for distribution to each U.S. Lender, in proportion to that
Lender's U.S. Lender Pro Rata Share of the U.S. Allocation,  commitment fees for
the period from and after the Effective  Date to and  excluding  the  Commitment
Termination Date, equal to the quarterly average of the daily excess of the U.S.
Allocation  over  the  U.S.   Commitment  Usage  multiplied  by  the  applicable
Commitment Fee Percentage per annum;  all such  commitment fees to be payable in
Dollars, quarterly in arrears on March 1, June 1, September 1, and December 1 of
each year and on the  Commitment  Termination  Date and to be  calculated on the
basis of a 360-day year and the actual  number of days  elapsed;  provided  that
notwithstanding  the  foregoing,  the  commitment  fees payable to each Canadian
Lender shall be paid to the Canadian  Administrative  Agent.  Reductions  in the
amounts available for borrowing under the Commitments arising from the operation
of the  limitations  set forth in clauses (a), (b), (c), (d), (e), (f) (g), (h),
(i) and (j) of subsection 2.1A(v) shall not constitute usages of Commitments for
purposes  of this  subsection  2.3A and  shall  not  reduce  the  amount  of the
commitment fees that are payable under this subsection 2.3A.

                  B.  Other  Fees.   Company  and  Borrowers  agree  to  pay  to
Administrative  Agent,  Arranger and Issuing  Lenders the fees agreed to, and in
the amounts and at the times,  set forth in writing  among  Company,  Borrowers,
Administrative Agent, Arranger and Issuing Lenders.


                                       49
<PAGE>

2.4      Prepayments and Reductions in Commitments; General Provisions Regarding
         Payments.

                  A.       Prepayments; Reductions in Commitments; Cash
Collateralization of Standby Letters of Credit and Bankers' Acceptances.

                  (i)  Voluntary  Prepayments.  Each Borrower may, upon not less
                  than one Business Day's (in the case of Base Rate Loans),  two
                  Business  Days' (in the case of Bank Bill Swap Rate  Loans) or
                  three Business Days' (in the case of Eurodollar  Rate Loans or
                  Gold   Loans)   prior   written   notice  to  the   Applicable
                  Administrative  Agent and  Administrative  Agent (which notice
                  the Applicable  Administrative Agent will promptly transmit by
                  telecopy,  telegram,  telex or telephone to each U.S.  Lender,
                  Canadian Lender or Australian Lender, as appropriate),  at any
                  time and from  time to time  prepay  any  Loans in whole or in
                  part on any Business Day (a) in an aggregate minimum amount of
                  $2,500,000  and  integral  multiples  of $500,000 in excess of
                  that amount in the case of Dollar  Loans,  (b) in an aggregate
                  minimum  amount of  Cdn.$2,500,000  and integral  multiples of
                  Cdn.$500,000  in excess of that amount in the case of Canadian
                  Dollar  Loans,   (c)  in  an  aggregate   minimum   amount  of
                  A$2,500,000  and integral  multiples of A$500,000 in excess of
                  that amount in the case of Australian  Dollar Loans, or (d) in
                  an  aggregate  minimum  amount of 10,000  Ounces and  integral
                  multiples of 2,000 Ounces in excess of that amount in the case
                  of Gold Loans;  provided,  however,  that if a Eurodollar Rate
                  Loan,  a Bank Bill Swap Rate Loan or a Gold Loan is prepaid on
                  a  date  other  than  the  last  day of  the  Interest  Period
                  applicable thereto,  the Borrower making such prepayment shall
                  be liable for any payments required by subsection 2.6D. Notice
                  of prepayment  having been given as  aforesaid,  the principal
                  amount of the Loans  specified in such notice shall become due
                  and payable on the prepayment date specified therein. Any such
                  voluntary   prepayment   shall  be  applied  as  specified  in
                  subsection 2.4A(iv).

                  (ii) Voluntary Reductions of Commitments.  Borrowers may, upon
                  not less than three  Business  Days' prior  written  notice to
                  Administrative  Agent (which notice  Administrative Agent will
                  promptly transmit by telecopy, telegram, telex or telephone to
                  each Lender),  at any time and from time to time  terminate in
                  whole or  permanently  reduce  in  part,  without  premium  or
                  penalty, the Overall Commitments in an amount up to the amount
                  by which the Overall  Commitments exceed the Total Utilization
                  of  Overall   Commitments   at  the  time  of  such   proposed
                  termination  or  reduction;  provided  that any  such  partial
                  reduction of the Overall  Commitments shall be in an aggregate
                  minimum  amount  of  $2,500,000  and  integral   multiples  of
                  $500,000 in excess of that amount;  and provided  further that
                  no  reduction  shall  reduce the  Canadian  Allocation  to any
                  amount that is less than the Canadian  Commitment  Usage,  the
                  Australian  Allocation  to any  amount  that is less  than the
                  Australian  Commitment  Usage  or the  U.S.  Allocation  to an
                  amount that is less than the U.S. Commitment Usage. Borrowers'
                  notice to Administrative Agent shall designate the date (which
                  shall be a Business Day) of such termination or 


                                       50
<PAGE>


                  reduction,  the  amount  of any  partial  reduction  and the
                  allocation of any reduction  among the Canadian  Allocation,
                  the Australian Allocation and the U.S. Allocation,  and such
                  termination or reduction of the Overall Commitments shall be
                  effective  on the date  specified in  Borrowers'  notice and
                  shall   reduce  the   Commitment   of  each   Lending   Unit
                  proportionately  to its Pro  Rata  Share  and  such  partial
                  reduction and allocation of such reduction  shall be made so
                  that (i) the  Australian  Allocation  shall not  exceed  the
                  Australian  Commitment,  (ii) the Canadian  Allocation shall
                  not  exceed  the  Canadian  Commitment  and  (iii)  the U.S.
                  Allocation shall not exceed the U.S. Commitment.

                  (iii)    Mandatory Prepayments of Loans.

                           (a) If on any date (A) the sum of (1) the outstanding
                  amount of all Loans  denominated in currency (valued in Dollar
                  Equivalents as of the most recent Date of Determination),  (2)
                  the BA Usage plus the Canadian  Letter of Credit Usage (valued
                  in  Dollar   Equivalents   as  of  the  most  recent  Date  of
                  Determination),  (3) the  Australian  Letter of  Credit  Usage
                  (valued in Dollar  Equivalents  as of the most  recent Date of
                  Determination),  (4) the U.S.  Letter of Credit  Usage and (5)
                  the  outstanding  amount of all Gold  Loans  (valued in Dollar
                  Equivalents  based  upon the  Price  of Gold as of such  date)
                  (such sum being the "Aggregate Dollar Equivalent Loan Amount")
                  exceeds the Overall  Commitments  in effect on such date,  (B)
                  the portion of the  Aggregate  Dollar  Equivalent  Loan Amount
                  relating  to  the  Canadian   Borrower  exceeds  the  Canadian
                  Allocation, (C) the portion of the Aggregate Dollar Equivalent
                  Loan Amount relating to the Australian  Borrowers  exceeds the
                  Australian  Allocation,  or (D) the  portion of the  Aggregate
                  Dollar  Equivalent Loan Amount  relating to the U.S.  Borrower
                  exceeds the U.S.  Allocation,  then, subject to the provisions
                  of the immediately succeeding sentence, Borrowers shall prepay
                  Loans and/or reduce the outstanding BA Usage,  Canadian Letter
                  of Credit Usage,  Australian  Letter of Credit Usage,  or U.S.
                  Letter of Credit Usage (it being agreed and  understood  that,
                  for the  purposes  of this  subsection  2.4A(iii),  BA  Usage,
                  Canadian Letter of Credit Usage,  Australian  Letter of Credit
                  Usage and U.S.  Letter of Credit Usage shall be reduced to the
                  extent that the  applicable  Borrower has cash  collateralized
                  its  reimbursement   obligations  under  outstanding  Bankers'
                  Acceptances  or Letters  of Credit  pursuant  to  arrangements
                  satisfactory  to  Administrative   Agent  and  the  applicable
                  Issuing  Lender)  in an  amount  equal  to  any  such  excess;
                  provided  that if any such  excess  exists,  and to the extent
                  that any such excess  results  from an average net increase of
                  less  than 50% in the  outstanding  amount  of all Gold  Loans
                  (valued in Dollar  Equivalents based upon the Price of Gold as
                  of such  date)  since  the  second  Business  Day prior to the
                  related  Gold  Advance  Dates for such Gold  Loans  because of
                  changes in the Price of Gold,  until the Total  Utilization of
                  Overall  Commitments  equals 125% of the Overall  Commitments,
                  Borrowers  shall not be so  required  to prepay  Loans  and/or
                  reduce the  outstanding  BA Usage,  Canadian  Letter of Credit
                  Usage,  Australian  Letter of Credit  Usage or U.S.  Letter of
                  Credit Usage to such extent.  Notwithstanding  the  foregoing,
                  Borrowers  shall not be  required  to prepay the Gold Loans if

                                       51
<PAGE>

                  Borrowers  pledge cash,  U.S.  Treasury  securities or Gold as
                  collateral  to  Administrative  Agent for the  benefit  of the
                  Lenders  in an amount  equal to the  amount of Gold Loans that
                  would  otherwise be required to be prepaid in accordance  with
                  this subsection 2.4A(iii) pursuant to arrangements in form and
                  substance  satisfactory  to  Administrative  Agent.  Any  such
                  mandatory   prepayments  shall  be  applied  as  specified  in
                  subsection 2.4A(iv)(c).

                           (b) Borrowers shall also prepay the Loans as required
                  pursuant to subsection  10.25 upon the occurrence of a Company
                  Change of Control.

                  (iv)     Application of Prepayments.

                          (a)     Application of Voluntary Prepayments.  Any 
                 voluntary  prepayments  by Borrowers  pursuant to subsection
                 2.4A(i)  shall be applied to the Loans of each Borrower as 
                 specified by Borrowers;

                          (b)   Application   of  Mandatory   Prepayments.   Any
                 mandatory  prepayments  by  Borrowers  pursuant  to  subsection
                 2.4A(iii)(b) shall be applied to repay outstanding Loans and to
                 reduce permanently the Overall  Commitments  (allocated ratably
                 to the Canadian Allocation,  the Australian  Allocation and the
                 U.S. Allocation unless otherwise specified by Borrowers); and

                          (c)  Application  of  Prepayments  to Base Rate Loans,
                 Bank Bill  Swap  Rate  Loans and  Eurodollar  Rate  Loans.  Any
                 prepayment by or for the benefit of a Borrower shall be applied
                 first to Base Rate Loans of such  Borrower  to the full  extent
                 thereof  before  application  to Bank Bill Swap Rate  Loans and
                 Eurodollar  Rate  Loans  of such  Borrower,  in each  case in a
                 manner which  minimizes the amount of any payments  required to
                 be made by the applicable Borrower pursuant to subsection 2.6D.

         B.       General Provisions Regarding Payments.

                  (i)  Manner  and Time of  Payment.  Borrowers  shall  make all
                  payments in respect of any Loan denominated in any currency in
                  the same  currency,  and shall make all payments in respect of
                  Gold Loans in Dollars or, if a Borrower  so elects  and,  with
                  respect to interest,  the U.S.  Administrative  Agent does not
                  require  payment in Dollars,  Gold. If U.S.  Borrower does not
                  deliver  to the  Administrative  Agent at least  two  Business
                  Days' prior  written  notice of its  intention to repay a Gold
                  Loan in Gold, U.S. Borrower shall be deemed to have elected to
                  repay such Loan in  Dollars.  If the  principal  amount of any
                  Gold Loan is to be repaid in Dollars, the corresponding amount
                  of Dollars to be repaid shall equal the Dollar  Equivalent  of
                  the amount of Gold  constituting  such Gold Loan determined as
                  of the second Business Day preceding the repayment date.

                          (a) Currency Payments by U.S.  Borrower.  All currency
                 payments by U.S.  Borrower of principal and interest in respect
                 of (1) Dollar  Loans,  (2) Gold 


                                       52
<PAGE>

                  Loans to be repaid in Dollars,  (3)  Letters of Credit,  and
                  (4) fees and other Obligations hereunder and under any Notes
                  or Grid Gold  Acknowledgements  shall be made in Dollars, in
                  same day funds and without defense,  setoff or counterclaim,
                  free of any  restriction  or  condition,  and  delivered  to
                  Administrative  Agent not later  than  12:00  Noon (New York
                  time)  on the  date due at  Administrative  Agent's  Lending
                  Office to the U.S. Borrower Account.

                          (b)  Payments by Canadian  Borrower.  All  payments by
                 Canadian  Borrower of principal  and interest in respect of (1)
                 Loans, (2) Letters of Credit, (3) Bankers' Acceptances, and (4)
                 any other fees and  Obligations  hereunder  and under any Notes
                 shall be made in the same  currency  as  incurred,  in same day
                 funds and without defense, setoff or counterclaim,  free of any
                 restriction   or   condition,   and   delivered   to   Canadian
                 Administrative  Agent not later than 12:00 Noon (Toronto  time)
                 on the  date due at  Canadian  Administrative  Agent's  Lending
                 Office.

                          (c) Payments by Australian Borrowers.  All payments by
                 Australian  Borrowers of  principal  and interest in respect of
                 (1) Loans,  (2)  Letters of Credit,  and (3) any other fees and
                 Obligations  hereunder and under any Notes shall be made in the
                 same  currency  as  incurred,  in same day  funds  and  without
                 defense,  setoff or  counterclaim,  free of any  restriction or
                 condition, and delivered to Australian Administrative Agent not
                 later  than  12:00  Noon  (Sydney  time)  on  the  date  due at
                 Australian Administrative Agent's Lending Office.

                          (d) Gold Payments.  All payments of Gold shall be made
                 by Delivery of such Gold by U.S. Borrower to the Administrative
                 Agent's  account with J.P.  Morgan,  London,  England,  or such
                 other bullion depository as may be designated by the Applicable
                 Administrative  Agent  from  time to time,  before  12:00  Noon
                 (London time) on the day specified for payment.

         Funds  or Gold  received  by the  Applicable  Administrative  Agent  or
         Administrative  Agent after the times  specified above on the due dates
         specified  above shall be deemed to have been paid by  Borrowers on the
         next succeeding Business Day.

                  |(ii)  Application of Payments to Principal and Interest.  All
                  payments in respect of the principal  amount of any Loan shall
                  include  payment of accrued  interest on the principal  amount
                  being  repaid  or  prepaid,  and all  such  payments  shall be
                  applied  to the  payment of  interest  before  application  to
                  principal.

                  |(iii)  Apportionment  of Payments.  Aggregate  principal  and
                  interest  payments shall be apportioned  among all outstanding
                  Loans  to  which   such   payments   relate,   in  each   case
                  proportionately  to each Lending Unit's respective  Australian
                  Lender Pro Rata Share,  Canadian Lender Pro Rata Share or U.S.
                  Lender Pro Rata share, as applicable,  of such Loans.  Subject
                  to the  last  sentence  of  subsection  2.7D,  the  Applicable
                  Administrative Agent or Administrative  Agent, as the case may
                  be, shall promptly  distribute to each Lender,  at its Lending
                  Office or at such other  address as such  Lender may  request,
                  its  proportionate  share of all such payments received by the

                                       53
<PAGE>

                  Applicable  Administrative  Agent (or any  Issuing  Lender) or
                  Administrative  Agent,  as the case may be, and the commitment
                  fees  of  such   Lender  when   received  by  the   Applicable
                  Administrative Agent or Administrative  Agent, as the case may
                  be, pursuant to subsection 2.3.  Notwithstanding the foregoing
                  provisions of this subsection  2.4B(iii),  if, pursuant to the
                  provisions    of    subsection    2.6C,    any    Notice    of
                  Conversion/Continuation is withdrawn as to any Affected Lender
                  or if any Affected  Lender makes U.S.  Base Rate Loans in lieu
                  of its share of any  Eurodollar  Rate  Loans,  the  Applicable
                  Administrative Agent or Administrative  Agent, as the case may
                  be,  shall  give  effect  thereto  in  apportioning   payments
                  received thereafter.

                  |(iv)  Payments on Business  Days.  Whenever any payment to be
                  made hereunder  shall be stated to be due on a day that is not
                  a  Business  Day,  such  payment  shall  be made  on the  next
                  succeeding  Business  Day,  but not later than the  Commitment
                  Termination Date, and such extension of time shall be included
                  in the computation of the payment of interest  hereunder or of
                  the commitment fees hereunder, as the case may be.

                  (v)  Notation  of  Payment.  Each  Lender  agrees  that before
                  disposing of any Note or Grid Gold Acknowledgement held by it,
                  or any part  thereof  (other than by  granting  participations
                  therein),  that  Lender  will make a  notation  thereon of all
                  Loans evidenced by that Note or Grid Gold  Acknowledgement and
                  all principal payments previously made thereon and of the date
                  to which  interest  thereon has been paid;  provided  that the
                  failure to make (or any error in the making of) a notation  of
                  any Loan made  under  such  Note or Grid Gold  Acknowledgement
                  shall not limit,  increase or otherwise affect the obligations
                  of any  Borrower  hereunder  or under  such  Note or Grid Gold
                  Acknowledgement  with  respect to any Loan or any  payments of
                  principal   or   interest   on  such   Note   or   Grid   Gold
                  Acknowledgement.

2.5      Use of Proceeds.

                  A. Loans.  The proceeds of the initial  Loans shall be used by
Borrowers to repay all amounts owing under the Existing Credit  Agreement on the
Effective  Date and repay any amounts owing under the Plutonic  Credit  Facility
and the  proceeds  of the Loans  shall be used by  Borrowers  to provide for the
working capital requirements of Borrowers and their respective Subsidiaries,  to
provide for general  corporate  purposes and to pay fees and expenses related to
the transactions contemplated hereby.

                  B.  Margin  Regulations.  No  portion of the  proceeds  of any
borrowing under this Agreement shall be used by any Borrower,  Company or any of
its Subsidiaries in any manner that might cause the borrowing or the application
of such proceeds to violate  Regulation  T,  Regulation U or Regulation X of the
Board or any other  regulation  of the Board or to violate the Exchange  Act, in
each case as in effect  on the date or dates of such  borrowing  and such use of
proceeds.

                                       54
<PAGE>

2.6      Special Provisions Governing Eurodollar Rate Loans, Bank Bill Swap Rate
         Loans and Gold Loans.

                  Notwithstanding  any other  provision of this Agreement to the
contrary,  the  provisions  set forth in this  subsection  2.6 shall govern with
respect to Eurodollar Rate Loans, Bank Bill Swap Rate Loans and Gold Loans as to
the matters covered.

         A.       Determination of Eurodollar Rate, Bank Bill Swap Rate and Gold
Rate.

                  (i) Eurodollar Rate Loans. As soon as practicable  after 10:00
                  A.M. (New York time) on any Interest Rate  Determination  Date
                  with respect to any Eurodollar Rate Loan, Administrative Agent
                  shall determine (which  determination  shall,  absent manifest
                  error, be final,  conclusive and binding upon all parties) the
                  interest  rate that shall apply to such  Eurodollar  Rate Loan
                  for which an interest  rate is then being  determined  for the
                  applicable  Interest  Period and shall  promptly  give  notice
                  thereof (in writing or by  telephone  confirmed in writing) to
                  the applicable Borrower and each applicable Lender.

                  |(ii) Gold Loans. As soon as practicable after 10:00 A.M. (New
                  York  time)  on the  Interest  Rate  Determination  Date  with
                  respect to any Gold Loan, Administrative Agent shall determine
                  (which  determination  shall, absent manifest error, be final,
                  conclusive  and binding upon all  parties)  the interest  rate
                  that shall apply to such Gold Loan for which an interest  rate
                  is then being  determined for the applicable  Interest Period,
                  and  Administrative  Agent shall  promptly give notice thereof
                  (in  writing or by  telephone  confirmed  in  writing) to U.S.
                  Borrower and each applicable Lender.

                  |(iii) Bank Bill Swap Rate Loans. As soon as practicable after
                  11:00  A.M.  (Sydney  time) on any  proposed  Funding  Date or
                  proposed continuation date, as applicable, with respect to any
                  Bank Bill  Swap Rate  Loan,  Australian  Administrative  Agent
                  shall determine (which  determination  shall,  absent manifest
                  error,  be final,  conclusive  and binding on all parties) the
                  interest  rate  that  shall  apply to such Bank Bill Swap Rate
                  Loan for which an interest rate is then being  determined  for
                  the applicable  Interest Period and shall promptly give notice
                  thereof (in writing or by  telephone  confirmed in writing) to
                  Australian Borrowers and each applicable Lender.

                  B.  Inability to Determine  Applicable  Interest  Rate. If the
Applicable Administrative Agent shall have determined (which determination shall
be final and  conclusive  and binding  upon all parties  hereto) on any Interest
Rate  Determination  Date that by reason of  circumstances  affecting the London
interbank market or because no Reference Lender is able to provide its quotation
of a rate, in the case of Eurodollar Rate Loans, or affecting the  international
precious  metals  markets or because  no Gold Rate  Reference  Lender is able to
provide its  quotation of a rate,  in the case of Gold Loans,  adequate and fair
means do not exist for  ascertaining the interest rate applicable to such Loans,
the Applicable  Administrative Agent shall on such date give notice (by telecopy
or by  telephone  confirmed  in  writing) to  Borrowers  and each Lender of such

                                       55
<PAGE>

determination,  whereupon (i) no Loans may be made as, or continued or converted
to,  Eurodollar Rate Loans or made or continued as Gold Loans until such time as
the  Applicable  Administrative  Agent  notifies  Borrowers and Lenders that the
circumstances giving rise to such notice no longer exist, and (ii) any Notice of
Borrowing  or  Notice  of  Conversion/Continuation  given by any  Borrower  with
respect to the Loans in respect  of which such  determination  was made shall be
deemed to be rescinded by such Borrower.

                  C.  Illegality or  Impracticability  of Eurodollar Rate Loans,
Bank Bill Swap Rate Loans or Gold  Loans.  If on any date any Lender  shall have
determined (which  determination  shall be final and conclusive and binding upon
all parties hereto but shall be made only after consultation with Administrative
Agent) that the making,  maintaining  or  continuation  of its  Eurodollar  Rate
Loans,  Bank Bill Swap Rate  Loans or Gold  Loans,  as the case may be,  (i) has
become  unlawful as a result of compliance by such Lender with any law,  treaty,
governmental  rule,  regulation,  guideline or order (or would conflict with any
such treaty,  governmental rule,  regulation,  guideline or order not having the
force of law even though the failure to comply  therewith would not be unlawful)
or (ii) has become impracticable,  or would cause such Lender material hardship,
as a result of  contingencies  occurring  after the date of this Agreement which
materially  and  adversely  affect the London  interbank  market (in the case of
Eurodollar Rate Loans),  the international  precious metals markets (in the case
of Gold Loans), the bills of exchange market (in the case of Bank Bill Swap Rate
Loans) or the position of such Lender in any such market,  then, and in any such
event,  such Lender shall be an "Affected  Lender" and it shall on that day give
notice (by  telecopy or by  telephone  confirmed  in writing) to  Borrowers  and
Administrative  Agent of such determination  (which notice  Administrative Agent
shall promptly transmit to each other Lender). Thereafter, (a) the obligation of
the Affected  Lender to make Loans as, or to convert Loans to or continue  Loans
as,  Eurodollar Rate Loans, Bank Bill Swap Rate Loans or Gold Loans, as the case
may be, shall be suspended  until such notice shall be withdrawn by the Affected
Lender, (b) to the extent such determination by the Affected Lender relates to a
Eurodollar  Rate  Loan,  a Bank Bill  Swap  Rate Loan or a Gold Loan then  being
requested  by a  Borrower  pursuant  to a Notice  of  Borrowing  or a Notice  of
Conversion/Continuation, the Affected Lender shall make such Loan as (or convert
such Loan to, as the case may be) (i) a U.S.  Base Rate Loan if the  Borrower is
the U.S.  Borrower,  (ii) a U.S.  Base Rate  (Canada)  Loan if the  Borrower  is
Canadian Borrower,  and (iii) if one of the Borrowers is an Australian Borrower,
at the  election of such  Australian  Borrower  made within one  Business Day of
receipt of notice from the  Affected  Lender,  a Bank Bill Swap Rate Loan with a
period of one month (if that option is available)  or a Loan in Dollars  bearing
interest at the  Australian  Administrative  Agent's cost of funds as reasonably
determined  by  Administrative  Agent,  plus the  Applicable  Margin  (such Loan
bearing  interest at the Bank Bill Swap Rate if no timely election is made), (c)
the Affected  Lender's  obligation to maintain its  outstanding  Eurodollar Rate
Loans,  Bank  Bill  Swap  Rate  Loans  or Gold  Loans,  as the  case may be (the
"Affected Loans"), shall be terminated at the earlier to occur of the expiration
of the Interest  Period then in effect with respect to the Affected  Loans or if
earlier when  required by law, and (d) the  Affected  Loans shall  automatically
convert  on the date of such  termination  to (i) a U.S.  Base  Rate Loan if the
Borrower  is the U.S.  Borrower,  (ii) a U.S.  Base  Rate  (Canada)  Loan if the
Borrower  is  Canadian  Borrower,  and  (iii)  if  one of  the  Borrowers  is an
Australian Borrower, at the election of such Australian Borrower made within one
Business  Day of receipt of notice from the  Affected  Lender,  a Bank Bill Swap


                                       56
<PAGE>

Rate Loan with a period of one month (if that option is  available) or a Loan in
Dollars bearing  interest at the Alternate Base Rate (such Loan bearing interest
at the Alternate Base Rate if no timely election is made).  Notwithstanding  the
foregoing,  to the extent a  determination  by an Affected  Lender as  described
above  relates to a  Eurodollar  Rate Loan, a Bank Bill Swap Rate Loan or a Gold
Loan then being requested by any Borrower pursuant to a Notice of Borrowing or a
Notice of Conversion/Continuation,  such Borrower shall have the option, subject
to the  provisions  of  subsection  2.6D, to rescind such Notice of Borrowing or
Notice  of  Conversion/Continuation  as to all  Lenders  by  giving  notice  (by
telecopy or by telephone  confirmed in writing) to Administrative  Agent and the
Applicable  Administrative  Agent of such  rescission  on the date on which  the
Affected  Lender gives  notice of its  determination  as described  above (which
notice of rescission the Applicable Administrative Agent shall promptly transmit
to  each  other  applicable  Lender).  Except  as  provided  in the  immediately
preceding sentence,  nothing in this subsection 2.6C shall affect the obligation
of any Lender other than an Affected  Lender to make or maintain Loans as, or to
convert or continue Loans as,  Eurodollar Rate Loans,  Bank Bill Swap Rate Loans
or Gold Loans in accordance  with the terms of this  Agreement.  Borrowers shall
have the right  upon 20 days'  notice to each  Lender  and upon  consent  by the
Applicable  Administrative  Agents,  which  consent  shall  not be  unreasonably
withheld, and so long as no Potential Event of Default or Event of Default shall
have occurred,  to substitute Eligible Assignees for the Affected Lender and any
Lender that belongs to the Affected  Lender's  Lending Unit hereunder;  provided
such  substitute  Lenders,  taken  together,  will constitute a Lending Unit. If
Borrowers select such substituted  Lenders,  the Affected Lender,  and any other
Lender  belonging  to the Affected  Lender's  Lending  Unit,  shall assign their
Notes,  Grid Gold  Acknowledgements  and  rights  under this  Agreement  to such
substitute  Lenders in accordance with subsection 10.1B (but without the payment
of any recordation fee) for the amount due on prepayment  pursuant to subsection
2.4(A)(i) together with any amounts that may be due pursuant to subsection 2.6D.

                  D. Compensation For Breakage or  Non-Commencement  of Interest
Periods. Any Borrower having borrowed, or having delivered a Notice of Borrowing
or a  Notice  of  Conversion/Continuation  to  request  to  borrow,  convert  or
continue,  any Eurodollar Rate Loan, Bank Bill Swap Rate Loan or Gold Loan shall
compensate each Lender, upon written request by that Lender (which request shall
set forth the basis for  requesting  such amounts),  for all reasonable  losses,
expenses and liabilities  (including,  without limitation,  any interest paid by
that Lender to lenders of funds (or Gold in the case of Gold Loans)  borrowed by
it to make or carry its Eurodollar Rate Loans, Bank Bill Swap Rate Loans or Gold
Loans, as the case may be) (including loss of anticipated  profits) sustained by
that Lender in connection  with the liquidation or  re-employment  of such funds
(or Gold),  which that Lender may sustain:  (i) if for any reason  (other than a
default by that Lender) the  borrowing of the  Eurodollar  Rate Loan,  Bank Bill
Swap Rate Loan or Gold Loan  requested by such Borrower does not occur on a date
specified  therefor  in such Notice of  Borrowing  or a  telephonic  request for
borrowing,  or the conversion to or  continuation  requested by such Borrower of
any Eurodollar  Rate Loan,  Bank Bill Swap Rate Loan or Gold Loan does not occur
on a  date  specified  therefor  in a  Notice  of  Conversion/Continuation  or a
telephonic  request for  conversion or  continuation,  (ii) if any prepayment or
conversion of any Eurodollar Rate Loans, Bank Bill Swap Rate Loans or Gold Loans
made to such  Borrower by such Lender  occurs on a date that is not the last day
of an Interest  Period  applicable to that Loan,  


                                       57
<PAGE>

(iii) if any prepayment of any such Eurodollar  Rate Loans,  Bank Bill Swap Rate
Loans or Gold Loans is not made on any date  specified in a notice of prepayment
given by such  Borrower,  or (iv) as a consequence  of any other default by such
Borrower to repay its Eurodollar  Rate Loans,  Bank Bill Swap Rate Loans or Gold
Loans when required by the terms of this Agreement.

                  E. Booking of Eurodollar Rate Loans. Subject to the provisions
of subsection 10.8, any Lender may make, carry or transfer Eurodollar Rate Loans
at,  to, or for the  account  of any of its  branch  offices or the office of an
Affiliate of that Lender.

                  F.  Assumptions  Concerning  Funding of Eurodollar Rate Loans.
Calculation  of all amounts  payable to a Lender under this  subsection  2.6 and
under  subsection  10.7A shall be made as though that Lender had actually funded
each of its relevant  Eurodollar Rate Loans through the purchase of a Eurodollar
deposit  bearing  interest at the rate  obtained  pursuant to the  definition of
Eurodollar  Rate in an amount equal to the amount of such  Eurodollar  Rate Loan
and having a maturity comparable to the relevant Interest Period and through the
transfer of such Eurodollar  deposit from an offshore office of that Lender to a
domestic  office of that  Lender in the  United  States  of  America,  Canada or
Australia;  provided,  however, that each Lender may fund each of its Eurodollar
Rate  Loans in any  manner it sees fit and the  foregoing  assumptions  shall be
utilized  only for the  purposes  of  calculating  amounts  payable  under  this
subsection 2.6 and under subsection 10.7A.

                  G. Eurodollar  Rate Loans,  Bank Bill Swap Rate Loans and Gold
Loans After Default. Except as provided in subsection 2.2D, after the occurrence
of and during the  continuation  of a Potential  Event of Default or an Event of
Default, (i) Borrowers may not elect to have a Loan be made or maintained as, or
converted  to, a  Eurodollar  Rate  Loan,  Bank Bill Swap Rate Loan or Gold Loan
after the  expiration  of any  Interest  Period then in effect for that Loan and
(ii) subject to the  provisions of subsection  2.6D,  any Notice of Borrowing or
Notice  of  Conversion/Continuation  given  by  a  Borrower  with  respect  to a
requested borrowing or  conversion/continuation  that has not yet occurred shall
be deemed to be rescinded by such Borrower.

2.7      Letters of Credit

                  A. Letters of Credit.  Subject to the terms and  conditions of
this  Agreement  and in reliance  upon the  representations  and  warranties  of
Company and Borrowers set forth herein, each Borrower may request, in accordance
with the  provisions of this  subsection  2.7A,  that on and after the Effective
Date the  applicable  Issuing  Lender issue Letters of Credit for the account of
such Borrower  denominated in (i) Dollars (in the case of U.S.  Borrower),  (ii)
Canadian  Dollars  or  Dollars  (in the  case of  Canadian  Borrower)  or  (iii)
Australian  Dollars  or  Dollars  (in the case of  Australian  Borrowers).  Such
Letters of Credit  shall be issued  solely for the  purpose  of  supporting  the
obligations of Borrowers and their respective Subsidiaries. Issuances of Letters
of Credit shall be subject to the following limitations:

                  (i) No Borrower  shall  request any Letter of Credit if, after
                  giving effect to such issuance,  (a) the Total  Utilization of
                  Overall Commitments would exceed the Overall Commitments,  (b)
                  the  Canadian  Commitment  Usage  would  exceed  the  


                                       58
<PAGE>

                  Canadian  Allocation,  (c) the Australian  Commitment  Usage
                  would  exceed  the  Australian  Allocation,   (d)  the  U.S.
                  Commitment Usage would exceed the U.S.  Allocation,  (e) the
                  Letter of Credit Usage would exceed $125,000,000, or (f) any
                  Lending  Unit's Pro Rata Share of the Total  Utilization  of
                  Overall  Commitments  after giving  effect to such  issuance
                  would exceed such Lending Unit's  Commitment then in effect;
                  and

                  (ii) In no event  shall any  Issuing  Lender  issue,  reissue,
                  amend or permit  the  extension  of:  (x) any Letter of Credit
                  having an expiration  date  (including  after giving effect to
                  any extension)  later than the Commitment  Termination Date in
                  effect  at the  time of  issuance,  reissuance,  amendment  or
                  extension (automatic or otherwise) thereof; (y) subject to the
                  foregoing   clause  (x),  any  Letter  of  Credit   having  an
                  expiration date more than one year after its date of issuance;
                  provided that subject to the foregoing clause (x), this clause
                  (y) shall not prevent such Issuing Lender from agreeing that a
                  Letter of Credit will automatically be extended annually for a
                  period not to exceed one year if such Issuing  Lender does not
                  cancel such extension.

                  It shall  be a  condition  precedent  to the  issuance  of any
Letter of Credit in accordance  with the provisions of this  subsection 2.7 that
each condition set forth in subsection 3.3 shall have been satisfied.

                  Immediately  upon the issuance of each Letter of Credit,  each
Canadian  Lender,  in the case of any Letter of Credit issued for the account of
Canadian  Borrower,  each Australian Lender, in the case of any Letter of Credit
issued for the account of Australian Borrowers, or each U.S. Lender, in the case
of any Letter of Credit issued for the account of U.S. Borrower, shall be deemed
to, and hereby agrees to, have irrevocably purchased from the applicable Issuing
Lender an undivided and  continuing  participation  in such Letter of Credit and
drawings  thereunder in an amount equal to such Lender's  Australian  Lender Pro
Rata Share,  Canadian  Lender Pro Rata Share or U.S.  Lender Pro Rata Share,  as
applicable,  of the maximum amount which is or at any time may become  available
to be drawn thereunder.

                  The  applicable  Issuing  Lender may upon the occurrence of an
Event of Default and the acceleration of the maturity of the Loans,  provide for
the deposit of funds in an account to secure payment to the  beneficiary and any
funds so deposited  shall be paid to the  beneficiary of the Letter of Credit if
conditions to such payment are satisfied or returned to the  applicable  Issuing
Lender for  distribution  to Lenders  (or,  if all  Obligations  shall have been
indefeasibly  paid in full,  to the  applicable  Borrower)  if no payment to the
beneficiary  has been  made and 30 days  after  the  final  date  available  for
drawings under the Letter of Credit has passed. Each payment or deposit of funds
by the applicable  Issuing Lender as provided in this paragraph shall be treated
for all purposes of this  Agreement as a drawing duly honored by the  applicable
Issuing Lender under the related Letter of Credit.

                  B. Notice of Issuance.  Whenever Canadian Borrower desires the
issuance  of a Letter of Credit,  it shall  deliver to  Canadian  Administrative
Agent and  Administrative  Agent a 

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<PAGE>

Notice of Issuance of Letter of Credit in the form of Exhibit XI hereto no later
than 1:00 P.M. (Toronto time) at least five Business Days or such shorter period
as may be agreed to by the applicable Issuing Lender in any particular instance,
in advance of the proposed  date of issuance.  Whenever an  Australian  Borrower
desires  the  issuance  of a Letter of Credit,  it shall  deliver to  Australian
Administrative  Agent and Administrative Agent a Notice of Issuance of Letter of
Credit in the form of Exhibit XI hereto no later than 1:00 P.M. (Sydney time) at
least  five  Business  Days or such  shorter  period  as may be agreed to by the
applicable Issuing Lender in any particular instance, in advance of the proposed
date of issuance.  Whenever  U.S.  Borrower  desires the issuance of a Letter of
Credit, it shall deliver to Administrative  Agent a Notice of Issuance of Letter
of Credit in the form of  Exhibit  XI hereto no later  than 1:00 P.M.  (New York
time) at least five Business Days or such shorter  period as may be agreed to by
the  applicable  Issuing Lender in any  particular  instance,  in advance of the
proposed  date of  issuance.  Each Notice of Issuance of Letter of Credit  shall
specify (i) the Borrower,  (ii) the proposed date of issuance  (which shall be a
Business  Day),  (iii)  the  face  amount  of the  Letter  of  Credit,  (iv) the
expiration  date of the  Letter  of  Credit,  (v) the  name and  address  of the
beneficiary,  (vi) a summary of the purpose and the verbatim text of such Letter
of Credit,  and (vii) a precise  description  of the  documents and the proposed
text of any certificate to be presented by the  beneficiary  which, if presented
by the beneficiary  prior to the expiration date of the Letter of Credit,  would
require  the  applicable  Issuing  Lender to make  payment  under the  Letter of
Credit;  provided that the applicable  Issuing  Lender,  in its sole  reasonable
judgment,  may  require  changes in any such  documents  and  certificates;  and
provided  further  that no Letter  of Credit  shall  require  payment  against a
conforming  draft to be made thereunder on the same Business Day that such draft
is  presented  if such  presentation  is made after  11:00 A.M.  (New York time,
Toronto time or Sydney time, as applicable,) on such Business Day. Promptly upon
the issuance of a Letter of Credit,  the applicable  Issuing Lender shall notify
the  applicable  Lenders of the  applicable  Borrower of such  issuance  and the
details thereof.  In determining  whether to pay under any Letter of Credit, the
applicable  Issuing  Lender  shall be  responsible  only to  determine  that the
documents and certificates  required to be delivered under that Letter of Credit
have been delivered and that they comply on their face with the  requirements of
that Letter of Credit.

                  C. Payment of Amounts  Drawn Under  Letters of Credit.  In the
event of any drawing under any Letter of Credit by the beneficiary  thereof, the
applicable  Issuing Lender shall promptly  notify the Borrower for whose account
such  Letter of  Credit  was  issued,  and such  Borrower  shall  reimburse  the
applicable  Issuing  Lender on the date on which such  drawing is honored in the
same  currency as the drawing in an amount in same day funds equal to the amount
of such drawing;  provided  that,  anything  contained in this  Agreement to the
contrary  notwithstanding,  (i) unless such  Borrower  shall have  notified  the
Applicable  Administrative Agent prior to 11:00 A.M. (New York Toronto or Sydney
time, as applicable,) on the Business Day immediately  prior to the date of such
drawing that such Borrower  intends to reimburse the  applicable  Issuing Lender
for the amount of such drawing with funds other than the proceeds of Loans, such
Borrower shall be deemed to have (1) in the case of Canadian  Borrower,  given a
Notice of Borrowing to Canadian  Administrative  Agent and Administrative  Agent
requesting  Canadian  Lenders to make  Canadian  Loans (which shall be U.S. Base
Rate (Canada) Loans or Canadian Base Rate Loans denominated in the same currency
as the drawing) to the extent of the unused  Canadian  Allocation on the date on
which such  drawing is honored in an amount  equal to

                                       60
<PAGE>


the amount of such drawing or, (2) in the case of Australian Borrowers,  given a
Notice of Borrowing to Australian  Administrative Agent and Administrative Agent
requesting Australian Lenders to make Australian Loans (which shall be Bank Bill
Swap Rate Loans or Eurodollar  Rate Loans with a one month  interest  period) to
the extent of the unused Australian Allocation on the date on which such drawing
is honored in an amount  equal to the amount of such drawing and (3) in the case
of U.S. Borrower, given a Notice of Borrowing to Administrative Agent requesting
U.S.  Lenders to make U.S.  Loans (which  shall be U.S.  Base Rate Loans) to the
extent of the  unused  U.S.  Allocation  on the date on which  such  drawing  is
honored in an amount  equal to the amount of such  drawing,  and (ii) subject to
satisfaction  or waiver of the  conditions  specified in  subsection  3.2,  such
Lenders  shall,  on the date of such  drawing,  make such Loans in the aggregate
amount of such drawing,  the proceeds of which shall be applied  directly by the
Applicable  Administrative  Agent to reimburse the applicable Issuing Lender for
the amount of such drawing;  and provided further that, if Loans are required to
be made and for any reason  proceeds of Loans are not received by the applicable
Issuing  Lender on such date in an amount  equal to the amount of such  drawing,
the applicable  Borrower shall reimburse the applicable  Issuing Lender,  on the
Business Day  immediately  following the date of such  drawing,  in an amount in
same day funds (and in the same currency as the  unreimbursed  drawing) equal to
the excess of the amount of such drawing over the amount of such Loans which are
so  received,  plus  accrued  interest  on such  amount at the rate set forth in
subsection 2.7E(ii).

                  D. Payment by Lenders  with  Respect to Letters of Credit.  If
any Borrower shall fail to reimburse the  applicable  Issuing Lender as provided
in  subsection  2.7C in an amount equal to the amount of any drawing  honored by
the applicable  Issuing Lender under a Letter of Credit issued by the applicable
Issuing Lender for the account of such Borrower,  the applicable  Issuing Lender
shall  promptly  notify the Applicable  Administrative  Agent and the Applicable
Administrative  Agent  shall  promptly  notify  Administrative  Agent  and  each
applicable  Lender of the unreimbursed  amount of such drawing,  the currency in
which such drawing was funded,  and of such  Lender's  respective  participation
therein, which participation shall be equal to such Lender's Canadian Lender Pro
Rata Share,  Australian  Lender Pro Rata Share or U.S. Lender Pro Rata Share, as
applicable,  of the unreimbursed amount of such drawing.  Each applicable Lender
shall make  available to the  applicable  Issuing  Lender an amount equal to its
respective  participation  in same day  funds  and in the same  currency  as the
drawing,  at the  office of the  applicable  Issuing  Lender  specified  in such
notice,  not  later  than 1:00 P.M.  (New  York,  Toronto  or  Sydney  time,  as
applicable)  on the day such  notice is given to such  Lender by the  Applicable
Administrative  Agent.  If any applicable  Lender fails to make available to the
applicable  Issuing  Lender the amount of such  Lender's  participation  in such
Letter of Credit as provided in this  subsection  2.7D, the  applicable  Issuing
Lender  shall be  entitled  to recover  such  amount on demand  from such Lender
together  with  interest at the  customary  rate set by the  applicable  Issuing
Lender for the  correction  of errors  among banks for three  Business  Days and
thereafter at the Canadian Base Rate, in the case of Canadian  Dollar  drawings,
the  Bank  Bill  Swap  Rate  for a one  month  Interest  Period  in the  case of
Australian  Dollar  drawings or the  Alternate  Base Rate, in the case of Dollar
drawings by U.S. Borrower and Australian Borrowers,  and U.S. Base Rate (Canada)
in the case of Dollar drawings by Canadian Borrower.  Nothing in this subsection
2.7 shall be deemed to  prejudice  the right of any Lender to  recover  from the
applicable  Issuing  Lender any  amounts  made  available  by such Lender to the
applicable  Issuing Lender  pursuant to this 
\

                                       61
<PAGE>

subsection  2.7D if the  payment  with  respect  to a Letter  of  Credit  by the
applicable  Issuing  Lender in respect of which  payment was made by such Lender
constituted gross negligence or willful misconduct on the part of the applicable
Issuing Lender, as finally determined by a court of competent jurisdiction.  The
applicable  Issuing  Lender shall  distribute to the  Applicable  Administrative
Agent for  distribution  to each other Lender which has paid all amounts payable
by it under this  subsection 2.7D with respect to any Letter of Credit issued by
the  applicable  Issuing  Lender such other  Lender's  Canadian  Lender Pro Rata
Share,  Australian  Lender Pro Rata  Share or U.S.  Lender  Pro Rata  Share,  as
applicable,  of all payments received by the applicable  Issuing Lender from any
Borrower in reimbursement  of drawings honored by the applicable  Issuing Lender
under such Letter of Credit when such  payments  are  received.  Notwithstanding
anything to the contrary  herein,  each Lender that has paid all amounts payable
by it under this subsection 2.7D shall have a direct right to  reimbursement  of
such  amounts  from the  applicable  Borrower,  subject  to the  procedures  for
reimbursing Lenders set forth in this subsection 2.7.

                  E.   Compensation.   Each  Borrower  agrees  to  pay,  without
duplication, the following amounts to the applicable Issuing Lender with respect
to each Letter of Credit issued by the applicable Issuing Lender for the account
of such Borrower:

                  (i) with respect to each Letter of Credit,  a letter of credit
                  fee  payable  to  the  applicable   Issuing  Lender  equal  to
                  applicable  Letter of Credit  Fee  Percentage  of the  maximum
                  amount  available  from  time to time to be drawn  under  such
                  Letter of Credit,  calculated  on the basis of a 360-day year,
                  in the case of  Letters of Credit  issued  for the  account of
                  U.S.  Borrower or  Australian  Borrowers,  or a 365 or 366-day
                  year (as  applicable)  in the case of Letters of Credit issued
                  for the account of Canadian  Borrower,  and, in each case, the
                  actual number of days elapsed and payable quarterly in arrears
                  on March 31,  June 30,  September  30 and  December 31 of each
                  year in immediately  available  funds and in the same currency
                  as the Letter of Credit;

                  (ii) with respect to drawings made under any Letter of Credit,
                  interest, payable on demand in immediately available funds and
                  in the same currency as the drawing, on the amount paid by the
                  applicable Issuing Lender in respect of each such drawing from
                  the date of the  drawing  through  the  date  such  amount  is
                  reimbursed  by  the  applicable  Borrower  (but  only  if  not
                  reimbursed when due) at a rate which is 2% per annum in excess
                  of the rate of interest otherwise payable under this Agreement
                  for  Canadian  Base Rate  Loans,  in the case of any  Canadian
                  Dollar  drawings,  the Bank  Bill  Swap  Rate for a one  month
                  Interest Period,  in the case of Australian Dollar drawings or
                  U.S.  Base Rate Loans,  in the case of any Dollar  drawings by
                  U.S.  Borrower and  Australian  Borrowers,  or U.S.  Base Rate
                  (Canada) Loans in the case of any Dollar  drawings by Canadian
                  Borrower; and

                  (iii) with respect to the  issuance,  amendment or transfer of
                  each  Letter  of  Credit  and each  drawing  made  thereunder,
                  documentary  and  processing  charges in  accordance  with the
                  applicable Issuing Lender's standard schedule for such charges
                  in effect at the time of such issuance, amendment, transfer or
                  drawing, as 


                                       62
<PAGE>

                  the case may be, or as otherwise agreed by Issuing Lender,
                  Company and Borrowers.

                  Promptly upon receipt by the applicable  Issuing Lender of any
amount  described  in  subdivision  (i) or  (ii) of this  subsection  2.7E,  the
applicable  Issuing  Lender shall  distribute to the  Applicable  Administrative
Agent  for  distribution  to each  Canadian  Lender,  Australian  Lender or U.S.
Lender,  as the case may be,  its  Canadian  Lender Pro Rata  Share,  Australian
Lender Pro Rata Share or U.S.  Lender Pro Rata  Share,  as  applicable,  of such
amount.

                  F.  Obligations  Absolute.  The obligation of each Borrower to
reimburse  any  Issuing  Lender for  drawings  made under the  Letters of Credit
issued  for  such  Borrower's  account  and the  obligations  of  Lenders  under
subsection  2.7D  shall  be  unconditional  and  irrevocable  and  shall be paid
strictly in accordance with the terms of this Agreement under all circumstances,
including, without limitation, the following circumstances:

                  (i)      any lack of validity or enforceability of any Letter 
                  of Credit;

                  (ii) the  existence  of any claim,  set-off,  defense or other
                  right the  applicable  Borrower may have at any time against a
                  beneficiary  or any transferee of any Letter of Credit (or any
                  persons  or  entities  for  whom any  such  transferee  may be
                  acting),  any  Issuing  Lender,  any Agent,  any Lender or any
                  other Person,  whether in connection with this Agreement,  the
                  transactions  contemplated herein or any unrelated transaction
                  (including any underlying transaction between such Borrower or
                  any of its  Subsidiaries  and the  beneficiary  for  which the
                  Letter of Credit was procured);

                  (iii)  any  draft,  demand,   certificate  or  other  document
                  presented  under any  Letter of Credit  proving  to be forged,
                  fraudulent or invalid in any respect or any statement  therein
                  being untrue or inaccurate in any respect;

                  (iv) payment by any Issuing Lender against a demand,  draft or
                  certificate  or other  document which does not comply with the
                  terms of such  Letter of Credit  unless  such  Issuing  Lender
                  failed to exercise  reasonable  care in  ascertaining  whether
                  such  document  appeared on its face to comply in all material
                  respects with such terms;

                  (v)      any other circumstance or happening whatsoever, which
                  is similar to any of the foregoing; or

                  (vi) the fact that an Event of Default or a Potential Event of
                  Default shall have occurred and be continuing.

                  G.  Additional  Payments.  If by reason  of (a) any  change in
applicable law, regulation, rule, decree or regulatory requirement or any change
in the interpretation or application by any judicial or regulatory  authority of
any law, regulation, rule, decree or regulatory requirement or (b) compliance by
any Issuing  Lender or any Lender  with any  direction,

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<PAGE>

request  or  requirement  (whether  or not  having  the  force  of  law)  of any
governmental or monetary authority including, without limitation, Regulation D:

                  (i) any reserve, deposit or similar requirement is or shall be
                  applicable,  imposed or  modified in respect of any Letters of
                  Credit issued by any Issuing Lender or participations  therein
                  purchased by any Lender; or

                  (ii)  there  shall be  imposed  on any  Issuing  Lender or any
                  Lender any other condition  regarding this subsection 2.7, any
                  Letter of Credit or any participation therein;


and the result of the foregoing is to directly or  indirectly  increase the cost
to any Issuing Lender or any Lender of issuing, making or maintaining any Letter
of Credit or of purchasing  or  maintaining  any  participation  therein,  or to
reduce the amount  receivable  in respect  thereof by any Issuing  Lender or any
Lender,  then and in any such case such Issuing Lender or such Lender may notify
the  Borrower  for whose  account  such  Letter of Credit  was  issued  and such
Borrower  shall pay within ten days of  receipt of notice  such  amounts as such
Issuing Lender or such Lender may specify pursuant to the certificate  described
below to be necessary to compensate  such Issuing Lender or such Lender for such
additional cost or reduced  receipt,  together with interest on such amount from
the date of such  demand  until  payment in full  thereof at a rate equal at all
times to the Alternate  Base Rate per annum.  The  determination  by any Issuing
Lender or any  Lender,  as the case may be, of any amount due  pursuant  to this
subsection  2.7G as set forth in a  certificate  setting  forth the  calculation
thereof in reasonable detail,  shall, in the absence of manifest error, be final
and conclusive and binding on all of the parties hereto.

                  H.  Indemnification;  Nature of Issuing  Lender's  Duties.  In
addition to amounts  payable as elsewhere  provided in this subsection 2.7, each
Borrower hereby agrees to protect,  indemnify,  pay and save each Issuing Lender
harmless  from and against any and all claims,  demands,  liabilities,  damages,
losses, costs, charges and expenses (including reasonable attorneys' fees) which
such  Issuing  Lender  may incur or be subject  to as a  consequence,  direct or
indirect,  of (i) the  issuance  of any Letter of Credit for the account of such
Borrower, or (ii) the failure of any Issuing Lender to honor a drawing under any
such Letter of Credit as a result of any act or  omission,  whether  rightful or
wrongful,  of  any  present  or  future  de  jure  or  de  facto  government  or
governmental  authority  (all such acts or omissions  herein called  "Government
Acts").

                  As  between  any  Issuing  Lender and any  Borrower  for whose
account any Issuing  Lender issues any Letter of Credit,  such Borrower  assumes
all risks of the acts and omissions of or misuse of any such Letter of Credit by
the  beneficiary  of any  such  Letter  of  Credit.  In  furtherance  and not in
limitation of the foregoing, no Issuing Lender shall be responsible: (i) for the
form,  validity,  sufficiency,  accuracy,  genuineness  or legal  effect  of any
document  submitted  by any party in  connection  with the  application  for and
issuance of such Letters of Credit, even if it should in fact prove to be in any
or all respects invalid,  insufficient,  inaccurate,  fraudulent or forged; (ii)
for the validity or sufficiency of any instrument  transferring  or assigning or
purporting  to  transfer  or assign  any such  Letter of Credit or the rights or
benefits thereunder or proceeds 

                                       64
<PAGE>

thereof,  in whole or in part,  which may prove to be invalid or ineffective for
any reason; (iii) for failure of the beneficiary of any such Letter of Credit to
comply fully with the  conditions  required in order to draw upon such Letter of
Credit; (iv) for errors,  omissions,  interruptions or delays in transmission or
delivery of any messages, by mail, cable, telegraph, telex or otherwise, whether
or not they be in cipher;  (v) for errors in  interpretation of technical terms;
(vi) for any loss or delay in the  transmission  or  otherwise  of any  document
required  in order to make a drawing  under any such  Letter of Credit or of the
proceeds  thereof;  (vii) for the  misapplication by the beneficiary of any such
Letter of Credit of the proceeds of any drawing under such Letter of Credit; and
(viii) for any  consequences  arising  from  causes  beyond  the  control of any
Issuing Lender, including,  without limitation, any Government Acts. None of the
above shall  affect,  impair,  or prevent  the  vesting of any Issuing  Lender's
rights or powers hereunder.

                  In  furtherance  and  extension  and not in  limitation of the
specific  provisions  hereinabove set forth,  any action taken or omitted by any
Issuing Lender under or in connection with the Letters of Credit issued by it or
the related  certificates,  if taken or omitted in good faith and without  gross
negligence or willful  misconduct as finally  determined by a court of competent
jurisdiction, shall not put such Issuing Lender under any resulting liability to
any Borrower or Company.

                  Notwithstanding  anything to the  contrary  contained  in this
subsection  2.7, no Borrower  shall have any obligation to indemnify any Issuing
Lender in respect of any liability  incurred by such Issuing  Lender arising out
of the gross negligence or willful misconduct of such Issuing Lender, as finally
determined by a court of competent jurisdiction, or out of the wrongful dishonor
by such  Issuing  Lender of proper  demand for payment made under the Letters of
Credit issued by it; provided that payment  against a draft or demand  presented
after the expiration  date of any Letter of Credit shall be deemed to constitute
gross negligence.

                  I.  Computation  of  Interest.  Interest  payable  pursuant to
subsection  2.7 shall be computed on the basis of a 360-day  year and the actual
number of days elapsed in the period  during which it accrues.  For the purposes
of this subsection 2.7I,  whenever interest is calculated on the basis of a year
of 360 days,  each rate of  interest  determined  pursuant  to such  calculation
expressed  as an annual rate for the  purposes of the  Interest  Act (Canada) is
equivalent to such rate as so determined multiplied by the actual number of days
in the calendar year in which the same is to be ascertained and divided by 360.

2.8      Bankers' Acceptances.

                  A.  Bankers'  Acceptance  Commitment.  Canadian  Borrower  may
request  pursuant to this  subsection  2.8,  from time to time during the period
from the Effective Date to but excluding the Commitment  Termination  Date, that
each  Canadian  Lender  create  Bankers'  Acceptances  by accepting  Drafts from
Canadian  Borrower in an aggregate  amount not exceeding such Canadian  Lender's
Canadian  Lender Pro Rata Share of the  aggregate  Face  Amount of the  Bankers'
Acceptances to be created on any Drawing Date;  provided that Canadian  Borrower
shall not request the  creation of any  Bankers'  Acceptance  if,  after  giving
effect thereto,  (a) the Total  Utilization of Overall  Commitments would exceed
the Overall  Commitments  then in effect,  or 

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<PAGE>

(b) the Canadian  Commitment Usage would exceed the Canadian  Allocation then in
effect,  and no Canadian Lender shall have any obligation to create any Bankers'
Acceptance if, after giving effect thereto, (a) the Total Utilization of Overall
Commitments of its Lending Unit would exceed such Lending Unit's Commitment,  or
(b) its Canadian  Commitment  Usage would exceed its Canadian  Commitment or its
Canadian Lender Pro Rata Share of the Canadian Allocation.  Each Canadian Lender
shall also  purchase  Bankers'  Acceptances  created by it as more  particularly
specified in this subsection 2.8.

                  The aggregate  Face Amount of the Bankers'  Acceptances  to be
created on any Drawing Date shall be not less than Cdn.  $5,000,000 and shall be
in integral  multiples of Cdn.$1,000,000 in excess thereof.  If apportionment of
Bankers'  Acceptances  among the  Canadian  Lenders  cannot be made on a ratable
basis in even multiples of  Cdn.$100,000,  Canadian  Administrative  Agent shall
round  the  allocations  among  Canadian  Lenders  up or  down  to  the  nearest
Cdn.$100,000.

         B.       Drawing Notice.

                  Bankers'  Acceptances  shall be created on two Business  Days'
prior written notice given not later than 11:00 A.M. (Toronto time), by Canadian
Borrower to Canadian Administrative Agent, which shall give each Canadian Lender
prompt  notice  thereof and of such  Canadian  Lender's  ratable  portion of the
aggregate  Face  Amount of the Drafts to be  accepted  (and  purchased)  by such
Canadian Lender. Each such notice (a "Drawing Notice") shall be in substantially
the form of Exhibit III-B annexed hereto or by telephone  confirmed  promptly in
writing,  containing  the same  information  as would be  contained in a Drawing
Notice,  and shall specify therein (i) the Drawing Date; (ii) the aggregate Face
Amount of Drafts to be accepted (and purchased); and (iii) the maturity date for
such Drafts (it being agreed and  understood  that Canadian  Borrower  shall not
request a maturity date for Drafts which would be  subsequent to the  Commitment
Termination Date).

                  Neither Canadian  Administrative Agent nor any Canadian Lender
shall incur any liability to Company or any Borrower in acting on any telephonic
notice  referred to above that  Canadian  Administrative  Agent or such Canadian
Lender believes in good faith to have been given by a duly authorized officer or
other  person  authorized  to  borrow  on behalf  of  Canadian  Borrower  or for
otherwise  acting in good faith under this subsection 2.8, and upon the creation
and purchase of Bankers'  Acceptances  pursuant to any such  telephonic  notice,
Canadian Borrower shall be liable with respect thereto as provided herein.

                  Each  Drawing  Notice  shall be  irrevocable  and  binding  on
Canadian  Borrower.  Canadian  Borrower  shall  indemnify  each Canadian  Lender
against any loss or expense  incurred by such Canadian Lender as a result of any
failure by Canadian  Borrower to fulfill or honor before the applicable  Drawing
Date the applicable  conditions  set forth in this  subsection 2.8 or subsection
3.4 if as a result of such failure,  the requested Bankers'  Acceptances are not
created and/or purchased on such Drawing Date.

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<PAGE>

         C.       Form of Bankers' Acceptances.

                  Each Draft  presented  by  Canadian  Borrower  shall (i) be an
integral multiple of Cdn.$100,000;  (ii) be dated the date of acceptance thereof
by the  applicable  Canadian  Lender;  (iii)  mature and be payable by  Canadian
Borrower  on a Business  Day which  occurs 30, 60, 90 or, if  available  to each
Canadian Lender,  180 days after the date thereof;  (iv) be substantially in the
form of Exhibit III-A annexed hereto; and (iv) be otherwise  consistent with the
provisions of this Agreement relating to the amounts and maturity dates thereof.
The acceptance endorsed by a Canadian Lender on any Draft shall be substantially
in the form of the endorsement set forth in Exhibit III-A annexed hereto or such
other form as may be agreed by Canadian Borrower and such Canadian Lender.

                  Canadian Borrower hereby  renounces,  and shall not claim, any
days of grace for the payment of any Bankers' Acceptances.

         D.       Acceptance and Purchase of Drafts.

                  Not later  than  11:00 A.M.  (Toronto  time) on an  applicable
Drawing Date,  each Canadian  Lender shall complete  Drafts,  dated such Drawing
Date,  with the maturity  date and  denominations  specified  in the  applicable
Drawing Notice,  and following  fulfillment of any applicable  conditions and as
specified  in the  applicable  Drawing  Notice,  shall  accept  such  Drafts and
purchase the Bankers'  Acceptances  thereby created for the applicable  Bankers'
Acceptance Purchase Price.

                  Canadian  Borrower  hereby  authorizes each Canadian Lender to
deduct from the amount to be remitted by it to the Canadian Administrative Agent
in respect of the Bankers'  Acceptance Purchase Price or other purchase price of
any  Bankers'  Acceptance  created by it the BA Fee in respect of such  Bankers'
Acceptance.

                  The failure of any  Canadian  Lender to create and purchase or
deliver  Bankers'  Acceptances  shall not relieve  such  Canadian  Lender of its
obligation,  if any,  to create and  purchase  or deliver  Bankers'  Acceptances
hereunder, but a Canadian Lender shall not be responsible for the failure of any
other Canadian Lender to create and purchase or deliver Bankers'  Acceptances on
any Drawing Date.

         E.       Payment of the Banker's Acceptance Purchase Price and Other 
Purchase Price.

                  Subject to subsection 2.8B and  satisfaction of the conditions
set forth in subsection 3.4, each Canadian  Lender shall,  (i) before 12:00 noon
(Toronto  time)  on the  applicable  Drawing  Date in the  case of the  Bankers'
Acceptance Purchase Price for each Bankers'  Acceptance  purchased by it or (ii)
upon receipt by it on the applicable  Drawing Date of the purchase price payable
by a third  party  in  respect  of any  Bankers'  Acceptance  created  by it and
purchased by such third party, pay or cause to be paid such amount by depositing
or causing to be deposited such amount (less the applicable BA Fee as aforesaid)
to such account maintained by Canadian  Administrative  Agent as shall have been
notified to such Canadian Lender by Canadian  


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<PAGE>

Administrative  Agent,  in  Canadian  Dollars in same day funds.  Promptly  upon
receipt  of such  funds,  Canadian  Administrative  Agent  shall make such funds
available to Canadian Borrower by debiting such account (or causing such account
to be debited),  and (a) by crediting Canadian  Borrower's account, as specified
by Canadian Borrower in writing to Canadian  Administrative Agent prior thereto,
maintained  with  Canadian  Administrative  Agent (or causing such account to be
credited) with like funds in the aggregate amount of such funds or (b) by wiring
such funds in such  amount to the  account of  Canadian  Borrower  with  another
financial institution specified prior thereto by Canadian Borrower in writing to
Canadian Administrative Agent.

                  Bankers' Acceptances  purchased by a Canadian Lender hereunder
may be held by it for its own account  until  maturity or sold by it at any time
prior  thereto in any  relevant  market  therefor  in Canada,  in such  Canadian
Lender's sole discretion.

         F.       Payment at Maturity.

                  Canadian Borrower shall pay to the applicable Canadian Lender,
and there shall  become due and  payable,  at 12:00 noon  (Toronto  time) on the
maturity date for each  Bankers'  Acceptance,  an amount in Canadian  Dollars in
same day  funds  equal to the  Face  Amount  of such  Bankers'  Acceptance.  The
obligation of Canadian  Borrower to make such payment shall not be prejudiced by
the fact that the holder of any such Bankers'  Acceptance is the Canadian Lender
that accepted such Bankers' Acceptance.

                  If Canadian  Borrower fails to pay to the applicable  Canadian
Lender the Face Amount of any Bankers'  Acceptance  as required by the preceding
paragraph, Canadian Borrower shall be deemed to have given a Notice of Borrowing
to  Canadian  Administrative  Agent and  Administrative  Agent  requesting  such
Canadian  Lender to make a Canadian Base Rate Loan on the date that such payment
is due and payable,  and thereupon such Canadian  Lender shall, as of such date,
make such  Canadian Base Rate Loan to Canadian  Borrower,  the proceeds of which
shall be applied  directly to reimburse such Canadian Lender for the Face Amount
of such Bankers' Acceptance paid by it. Canadian  Administrative Agent will give
to Canadian  Borrower  notice of any such action promptly after any such action;
provided,  however,  that the  failure  to give such  notice  shall not limit or
otherwise affect the obligations of Company or any Borrower under this Agreement
or any other Loan Document.

         Bankers' Acceptances may not be prepaid.

         G.       Powers of Attorney.

                  To enable  Canadian  Lenders to complete Drafts and create and
purchase  Bankers'  Acceptances in the manner  specified in this subsection 2.8,
Canadian Borrower shall supply each Canadian Lender with an irrevocable Power of
Attorney satisfactory in form and content to the Canadian  Administrative Agent,
duly  endorsed and  executed on behalf of Canadian  Borrower  allowing  Canadian
Lenders to take such actions.  Notwithstanding that any of the individuals whose
signature appears on any Power of Attorney may no longer hold office at the date
thereof or at any time  thereafter,  any Power of  Attorney  so signed  shall be
valid and binding upon Canadian Borrower.


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<PAGE>

         H.       Circumstances Making Bankers' Acceptances Unavailable.

                  If Canadian  Administrative  Agent  determines  in good faith,
which  determination  shall be  final,  conclusive  and  binding  upon  Canadian
Borrower,  and notifies  Canadian  Borrower and each  Canadian  Lender that,  by
reason of  circumstances  affecting  the money market (i) there is no market for
Bankers'   Acceptances;   or  (ii)  the  demand  for  Bankers'   Acceptances  is
insufficient  to allow the sale or trading of the Bankers'  Acceptances  created
and purchased hereunder; then:

                  (i) the right of Canadian  Borrower to request  that  Bankers'
                  Acceptances  be created  hereunder  shall be  suspended  until
                  Canadian    Administrative    Agent    determines   that   the
                  circumstances  causing  such  suspension  no longer  exist and
                  Canadian   Administrative   Agent  so  notifies  the  Canadian
                  Borrower; and

                  (ii)  any  Drawing  Notice  which  is  outstanding   shall  be
                  cancelled and the Bankers' Acceptances requested therein shall
                  not be created.

         I.       Use of Proceeds of Bankers' Acceptances.

                  The proceeds of any  Bankers'  Acceptance  created  under this
subsection 2.8 shall be used by Canadian  Borrower for working capital  purposes
and general corporate purposes.

Section 3.  CONDITIONS TO EFFECTIVENESS OF AGREEMENT AND LOANS,
            LETTERS OF CREDIT AND BANKERS' ACCEPTANCES

3.1      Conditions to Effectiveness.

                  The effectiveness of this Agreement is subject to the prior or
concurrent satisfaction of the following conditions:

                  A. Company Documents. On or before the Effective Date, Company
shall  deliver or cause to be delivered to Lenders (or to  Administrative  Agent
for Lenders with sufficient  originally executed copies, where appropriate,  for
each Lender and its counsel) the following,  each, unless otherwise noted, dated
the Effective Date:

                  (i)  Certified  copies of its  Certificate  of  Incorporation,
                  together with a good standing  certificate  from the Secretary
                  of State of the States of Delaware and California,  each dated
                  a recent date prior to the Effective Date;

                  (ii) Copies of its Bylaws,  certified as of the Effective Date
                  by its corporate secretary or an assistant secretary;

                  (iii)  Resolutions  of its Board of  Directors  approving  and
                  authorizing  the execution,  delivery and  performance of this
                  Agreement and any other Loan Documents to which it is a party,
                  certified as of the Effective Date by its corporate  secretary
                  or an  assistant  secretary  as being in full force and effect
                  without modification or amendment;

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<PAGE>

                  (iv)  Signature and  incumbency  certificates  of its officers
                  executing this Agreement and any other Loan Documents to which
                  it is a party;

                  (v) Executed  originals of this  Agreement  and any other Loan
                  Documents to which it is a party; and

                  (vi) Such other documents as any Lender through Administrative
                  Agent may reasonably request.

                  B.  Canadian  Borrower  Documents.  On or before the Effective
Date, Canadian Borrower shall deliver or cause to be delivered to Lenders (or to
Administrative  Agent for Lenders with sufficient  originally  executed  copies,
where appropriate,  for each Lender and its counsel) the following, each, unless
otherwise noted, dated the Effective Date:

                  (i)  Certified  or  notarial  copies  of  Canadian  Borrower's
                  Certificate  of  Incorporation,  together with evidence of its
                  corporate  status in the  Provinces  of  Ontario  and  British
                  Columbia,  each  dated a recent  date  prior to the  Effective
                  Date;

                  (ii) Copies of Canadian Borrower's Bylaws, certified as of the
                  Effective  Date by its  corporate  secretary  or an  assistant
                  secretary;

                  (iii)  Resolutions of Canadian  Borrower's  Board of Directors
                  approving  and   authorizing   the  execution,   delivery  and
                  performance  of this Agreement and any other Loan Documents to
                  which it is a party, certified as of the Effective Date by its
                  corporate secretary or an assistant secretary as being in full
                  force and effect without modification or amendment;

                  (iv)  Signature  and  incumbency   certificates   of  Canadian
                  Borrower's  officers  executing  this  Agreement and any other
                  Loan Documents to which it is a party;

                  (v) Executed originals of this Agreement,  any Notes requested
                  by Lenders  and any other  Loan  Documents  to which  Canadian
                  Borrower is a party; and

                  (vi) Such other documents as any Lender through Administrative
                  Agent may reasonably request.

                  C. Australian Borrowers Documents.  On or before the Effective
Date, each Australian Borrower shall deliver or cause to be delivered to Lenders
(or to  Administrative  Agent for Lenders with  sufficient  originally  executed
copies, where appropriate, for each Lender and its counsel) the following, each,
unless otherwise noted, dated the Effective Date:

                  (i) Certified copies of such Australian Borrower's Certificate
                  of  Incorporation  and Articles of  Association,  each dated a
                  recent date prior to the Effective Date;

                  (ii)  Resolutions  of  such  Australian  Borrower's  Board  of
                  Directors  (a)  approving  and   authorizing   the  execution,
                  delivery and  performance of this Agreement and any other Loan
                  Documents  to which it is a party,  and (b) 


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<PAGE>

                  authorizing each Authorized Signor to sign on behalf of, and
                  thereby bind, such Australian Borrower,  certified as of the
                  Effective  Date by its  corporate  secretary or an assistant
                  secretary  as  being  in  full  force  and  effect   without
                  modification or amendment;

                  (iii) Signature and incumbency certificates of such Australian
                  Borrower's   directors,   officers  and   Authorized   Signors
                  executing this Agreement and any other Loan Documents to which
                  it is a party;

                  (iv) Executed originals of this Agreement, any Notes requested
                  by  Lenders  and  any  other  Loan  Documents  to  which  such
                  Australian Borrower is a party; and

                  (v) Such other documents as any Lender through  Administrative
                  Agent may reasonably request.

                  D. U.S. Borrower  Documents.  On or before the Effective Date,
U.S.  Borrower  shall  deliver  or  cause  to be  delivered  to  Lenders  (or to
Administrative  Agent for Lenders with sufficient  originally  executed  copies,
where appropriate,  for each Lender and its counsel) the following, each, unless
otherwise noted, dated the Effective Date:

                  (i)   Certified   copies  of  U.S.   Borrower's   Articles  of
                  Incorporation,  together with good standing  certificates from
                  the Secretary of State of the States of California, Nevada and
                  South Dakota,  each dated a recent date prior to the Effective
                  Date;

                  (ii) Copies of U.S.  Borrower's  Bylaws,  certified  as of the
                  Effective  Date by its  corporate  secretary  or an  assistant
                  secretary;

                  (iii)  Resolutions  of  U.S.  Borrower's  Board  of  Directors
                  approving  and   authorizing   the  execution,   delivery  and
                  performance  of this Agreement and any other Loan Documents to
                  which it is a party, certified as of the Effective Date by its
                  corporate secretary or an assistant secretary as being in full
                  force and effect without modification or amendment;

                  (iv) Signature and incumbency  certificates of U.S. Borrower's
                  officers executing this Agreement and any other Loan Documents
                  to which it is a party;

                  (v) Executed  originals of this  Agreement,  any Notes and any
                  Grid Gold Acknowledgements  requested by Lenders and any other
                  Loan Documents to which U.S. Borrower is a party; and

                  (vi) Such other documents as any Lender through Administrative
                  Agent may reasonably request.

                  E.   Opinions   of   Company's   and    Borrowers'    Counsel.
Administrative Agent on behalf of Lenders,  with sufficient  originally executed
copies for each Lender,  shall have received (i) originally  executed  copies of
one or more favorable written opinions of (a) Thelen, 


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<PAGE>

Reid & Priest,  counsel for Company and U.S. Borrower,  and (b) Wayne Kirk, Vice
President  and General  Counsel of Company and U.S.  Borrower,  each in form and
substance reasonably  satisfactory to Administrative Agent and its counsel, each
dated as of the Effective  Date and setting forth  substantially  the matters in
the  opinions  designated  in Exhibits  VII-A and VII-B,  respectively,  annexed
hereto  and as to such  other  matters as  Administrative  Agent may  reasonably
request,  (ii)  originally  executed  copies  of one or more  favorable  written
opinions of Osler, Hoskin & Harcourt, counsel for Canadian Borrower, in form and
substance reasonably satisfactory to Administrative Agent and its counsel, dated
as of the Effective Date and setting forth  substantially the matters designated
in Exhibit VIII-A annexed hereto and as to such other matters as  Administrative
Agent may reasonably  request,  and (iii)  originally  executed copies of one or
more  favorable  written  opinions  of  Mallesons  Stephen  Jaques,  counsel for
Australian  Borrowers,   in  form  and  substance  reasonably   satisfactory  to
Administrative Agent and its counsel, dated as of the Effective Date and setting
forth  substantially the matters designated in Exhibit VIII-B annexed hereto and
as to such other matters as Administrative Agent may reasonably request.

                  F. Opinions of Administrative Agent's Counsel.  Administrative
Agent on behalf of Lenders,  with sufficient originally executed copies for each
Lender,  shall have received originally executed copies of one or more favorable
written opinions of O'Melveny & Myers, counsel to Administrative Agent, dated as
of the Effective  Date,  substantially  in the form of Exhibit IX annexed hereto
and as to such other matters as Administrative Agent may reasonably request.

                  G.       Fees.  Company shall have paid to Administrative 
Agent for distribution (as appropriate) to  Administrative  Agent,  Arranger and
Lenders the fees payable on the Effective Date referred to in subsection 2.3.

                  H. No Material Adverse Effect; New Disclosures. Since December
31, 1997,  there shall not have  occurred any change,  or  development  or event
involving a prospective change,  which in either case, in the opinion of Lenders
has had or could have a Material Adverse Effect,  and  Administrative  Agent and
Documentation  Agent shall not have become aware of any  previously  undisclosed
information  that is material  and  adverse  with  respect to (i) the  business,
assets, operations,  condition (financial or otherwise) or prospects of Company,
Company  and  its  Subsidiaries  taken  as a  whole,  or any  Borrower,  or (ii)
Company's  or any  Borrower's  ability to perform,  or the ability of Lenders to
enforce, any of the Obligations.

                  I. Representations and Warranties;  Performance of Agreements.
Company  and each  Borrower  shall have  delivered  to  Administrative  Agent an
Officers'  Certificate,  in form and substance  satisfactory  to  Administrative
Agent, to the effect that the representations and warranties in Section 4 hereof
are  true,  correct  and  complete  in all  material  respects  on and as of the
Effective Date to the same extent as though made on and as of that date and that
Company and each Borrower has performed in all material  respects all agreements
and  satisfied  all  conditions  which  each  Loan  Document  provides  shall be
performed or satisfied by it on or before the Effective Date except as otherwise
disclosed  to and  agreed to in writing by  Administrative  Agent and  Requisite
Lenders.

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<PAGE>

                  J. No Disruption of Financial and Capital  Markets or Price of
Gold. There shall have been no material adverse change since June 2, 1998 to the
syndication  markets  for  credit  facilities  similar  in nature to the  credit
facilities  provided herein, and there shall not have occurred and be continuing
a material  disruption of or material  adverse  change in financial,  banking or
capital markets that would have an adverse effect on such syndication market, in
each case as determined by Administrative Agent and Arranger in their reasonable
discretion.  Additionally,  there shall have been no material  adverse change in
the price of gold prevailing in international markets that would have a Material
Adverse Effect.

                  K.  Company's  Consolidated  Net Worth.  Administrative  Agent
shall have received evidence satisfactory to it that Company's  Consolidated Net
Worth is not less than $500,000,000.

                  L.  Completion  of   Proceedings.   All  corporate  and  other
proceedings   taken  or  to  be  taken  in  connection  with  the   transactions
contemplated  hereby and all documents  incidental  thereto not previously found
acceptable by Administrative Agent, acting on behalf of Lenders, and its counsel
shall be  satisfactory  in form and  substance to  Administrative  Agent and its
counsel,  and Administrative  Agent and its counsel shall have received all such
counterpart  originals  or  certified  copies  of such  documents  as  they  may
reasonably request.

                  M.    Termination   of   the   Plutonic   Credit    Agreement.
Administrative  Agent shall have received  evidence  satisfactory to it that the
Plutonic Credit  Agreement and all borrowings and commitments  thereunder  shall
have  been  terminated  and that  the  Company  shall  have  issued  irrevocable
instructions to cause to be applied  borrowings  hereunder up to $175 million of
the Overall Commitments to repay in full all outstanding obligations thereunder.

                  N.  Delivery of  Compliance  Certificate.  Company  shall have
delivered to  Administrative  Agent a Compliance  Certificate  demonstrating  in
reasonable  detail  compliance  during and at the end of  Company's  most recent
fiscal quarter with the  restrictions  contained in  subsections  6.1, 6.2, 6.3,
6.4, 6.6 and 6.7;

                  O. Acquisition.  All aspects of the Plutonic Acquisition shall
have been consummated  substantially in accordance with the Plutonic Acquisition
Documents  and the  Administration  Agent  shall  have  received  copies  of the
Plutonic Acquisition Documents.

                  P.     Financial Statements.  The Lenders shall have received:

                  (i) copies of the  Company's  annual  reports on Form 10-K for
                  the periods  ending  December  31, 1996 and December 31, 1997,
                  and quarterly  report on Form 10-Q for the period ending March
                  31, 1998;

                  (ii) audited consolidated  supplementary  financial statements
                  of Company,  including  Plutonic,  for the fiscal  years ended
                  December 31, 1996 and 1997 prepared in conformity with GAAP;

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<PAGE>


                  (iii) unaudited  consolidated  summarized income statement and
                  balance sheet of Company,  including  Plutonic,  for the first
                  quarter of 1998 prepared in conformity with GAAP; and

                  (iv) unaudited  consolidated  summarized  income statement and
                  balance  sheet of Company,  including  Plutonic,  for the most
                  recent  month  ending at least 45 days prior to the  Effective
                  Date prepared in conformity with GAAP.

                  Q. Solvency.  The  Administrative  Agent and the Lenders shall
have  received a  certificate  of the chief  financial  officer or  treasurer of
Company  substantially  in the form of Exhibit XIV  supporting  the  conclusions
that, after giving effect to the transactions contemplated hereby, the Borrowers
will not be insolvent  nor rendered  insolvent by the  indebtedness  incurred in
connection  therewith,  or be left with unreasonably small capital with which to
engage in their  businesses,  or have  incurred  debts beyond its ability to pay
such debts as they mature.

                  R.       Other Documents.  Each of Company, Canadian Borrower,
Australian  Borrowers and U.S.  Borrower shall have delivered to  Administrative
Agent  such  other  documents  as any Lender  through  Administrative  Agent may
reasonably request.

3.2      Conditions to All Loans.

                  The  obligations of Lenders to make Loans on each Funding Date
are subject to the following further conditions precedent:

                  A. The  Applicable  Administrative  Agent  and  Administrative
Agent shall have  received  before that Funding  Date,  in  accordance  with the
provisions of subsection 2.1B, an originally executed Notice of Borrowing signed
by a Responsible Officer of the applicable Borrower, or by any executive officer
of the applicable  Borrower  designated by any Responsible  Officer on behalf of
the applicable Borrower, in a writing delivered to the Applicable Administrative
Agent and Administrative Agent.

                  B.       As of that Funding Date:

                  (i) The representations and warranties contained herein and in
                  the other Loan Documents  shall be true,  correct and complete
                  in all material respects on and as of that Funding Date to the
                  same extent as though  made on and as of that date,  except to
                  the extent that changes in the facts and  conditions  on which
                  such  representations and warranties are based are required or
                  permitted under this Agreement;

                  (ii) No event shall have  occurred and be  continuing or would
                  result from the consummation of the borrowing  contemplated by
                  such Notice of  Borrowing  that would  constitute  an Event of
                  Default or a Potential Event of Default;

                  (iii)  Company and each Borrower  shall have  performed in all
                  material  respects all agreements and satisfied all conditions
                  which  this  Agreement  and the other 

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<PAGE>

                  Loan  Documents  provide shall  be  performed  or  satisfied 
                  by it on or  before  that Funding Date;

                  (iv)  There  shall  not be  pending  or, to the  knowledge  of
                  Company  or  any  Borrower,   threatened,  any  action,  suit,
                  proceeding,  governmental investigation or arbitration against
                  or  affecting  Company  or  any  of  its  Subsidiaries  or any
                  property  of  Company  or any of its  Subsidiaries,  and there
                  shall have occurred no development  in any such action,  suit,
                  proceeding,  governmental investigation or arbitration,  that,
                  in either event,  in the opinion of Requisite  Lenders,  would
                  reasonably  be  expected  to have a Material  Adverse  Effect,
                  unless disclosed to and consented to by Requisite Lenders; and
                  no  injunction  or other  restraining  order  shall  have been
                  issued  and  no  hearing  to  cause  an  injunction  or  other
                  restraining  order to be issued  shall be  pending  or noticed
                  with  respect to any  action,  suit or  proceeding  seeking to
                  enjoin or otherwise prevent the consummation of, or to recover
                  any damages or obtain relief as a result of, the  transactions
                  contemplated  by this  Agreement  or the making of Loans,  the
                  issuance of Letters of Credit or the  creation and purchase of
                  Bankers' Acceptances hereunder; and

                  (v) No Company Change of Control shall have occurred.

3.3      Conditions to All Letters of Credit.

                  The obligation of any Issuing Lender to issue, extend or renew
any Letter of Credit hereunder is subject to prior or concurrent satisfaction of
all of the following conditions:

                  A. On or before the date of issuance,  extension or renewal of
any  Letter of Credit  hereunder,  the  applicable  Issuing  Lender  shall  have
received,  in accordance  with the  provisions  of subsection  2.7B, a Notice of
Issuance of Letter of Credit  relating  to the  proposed  Letter of Credit,  all
other  information  specified in subsection 2.7B and such other documents as the
applicable  Issuing  Lender  may  reasonably  require  in  connection  with  the
issuance, extension or renewal of such Letter of Credit.

                  B. On or before the date of issuance,  extension or renewal of
such Letter of Credit,  each of the conditions set forth in subsection 3.1 shall
have been  satisfied as of the  Effective  Date,  and, on such date of issuance,
extension or renewal,  all  conditions  precedent  described in subsection  3.2B
shall be  satisfied  to the same  extent as though the  issuance,  extension  or
renewal  of such  Letter  of  Credit  were the  making of a Loan and the date of
issuance, extension or renewal of such Letter of Credit were a Funding Date.

3.4      Conditions to All Bankers' Acceptances.

                  The creation of any Bankers'  Acceptance  hereunder is subject
to the following conditions precedent:

                  A. On or  before  the  date of the  creation  of any  Bankers'
Acceptance,  Canadian  Administrative  Agent shall have received,  in accordance
with the provisions of subsection  2.8, 


                                       75
<PAGE>

an originally  executed Drawing Notice,  signed by any executive officer or vice
president of Canadian Borrower.

                  B. On the date of the  creation  of any  Bankers'  Acceptance,
each of the  conditions set forth in subsection 3.1 shall have been satisfied as
of the Effective Date, and, on such date of creation,  all conditions  precedent
described  in  subsection  3.2B shall be  satisfied to the same extent as if the
creation of such Bankers'  Acceptance  were the making of a Loan and the Drawing
Date were a Funding Date.

Section 4.  REPRESENTATIONS AND WARRANTIES

                  In order to induce Lenders to enter into this Agreement and to
make the Loans, to induce Issuing Lenders to issue Letters of Credit,  to induce
Lenders to purchase  participations in Letters of Credit, and to induce Canadian
Lenders to create and purchase Bankers'  Acceptances,  Company and each Borrower
jointly and  severally  represent  and warrant to each Lender that the following
statements are true, correct and complete:

4.1      Organization, Powers, Qualification, Good Standing, Business and
Subsidiaries.

                  A.  Organization  and Powers.  Company is a  corporation  duly
organized,  validly existing and in good standing under the laws of the State of
Delaware. Canadian Borrower is a corporation duly organized and validly existing
under the laws of the Province of Ontario.  U.S.  Borrower is a corporation duly
organized,  validly existing and in good standing under the laws of the State of
California.  HGAL is a corporation duly organized and validly existing under the
laws of South  Australia.  Plutonic is a corporation  duly organized and validly
existing  under the laws of New South Wales.  Each of Company and each  Borrower
has  all  requisite  corporate  power  and  authority  to own  and  operate  its
properties,  to carry on its  business  as now  conducted  and as proposed to be
conducted, to enter into the Loan Documents to which it is a party, to carry out
the  transactions  contemplated  thereby  and to issue and pay any Notes and any
Grid Gold Acknowledgements to be issued by it.

                  B.  Qualification and Good Standing.  Each of Company and each
of its  Subsidiaries  is qualified to do business and in good  standing in every
jurisdiction  where its assets are located and  wherever  necessary to carry out
its business and operations,  except in jurisdictions where the failure to be so
qualified or in good  standing has not had and will not have a Material  Adverse
Effect.

                  C.  Conduct of  Business.  Company  and its  Subsidiaries  are
engaged only in the businesses permitted to be engaged in pursuant to subsection
6.10.

                  D. Subsidiaries.  All of the Subsidiaries of Company as of the
Effective Date (other than Joint Ventures that do not have an interest in any of
the currently  producing  mines in the Mining Group) are  identified in Schedule
4.1 annexed  hereto.  The capital stock of each of the Material  Subsidiaries of
Company that is a corporation  identified in Schedule 4.1 annexed hereto is duly
authorized,  validly  issued,  fully  paid  and  nonassessable  and none of such
capital stock  constitutes  Margin Stock.  Each of the Material  Subsidiaries of
Company  identified  in 

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<PAGE>

Schedule 4.1 annexed  hereto that is a  corporation  is validly  existing and in
good standing under the laws of its respective jurisdiction of incorporation set
forth  therein,  has full  corporate  power and  authority to own its assets and
properties and to operate its business as presently owned and conducted,  and is
qualified to do business and in good  standing in every  jurisdiction  where its
assets  are  located  and  wherever  necessary  to carry  out its  business  and
operations,  in each case except  where  failure to be so  qualified  or in good
standing or a lack of such  corporate  power and  authority has not had and will
not have a Material  Adverse Effect.  Schedule 4.1 annexed hereto correctly sets
forth the ownership  interest of Company in each of its Subsidiaries  identified
therein.

4.2      Authorization of Borrowing and Guaranty, etc.

                  A.  Authorization  of Borrowing and Guaranty.  The  execution,
delivery and  performance of this Agreement and any other Loan Documents and the
issuance,  delivery and payment of the Notes and the Grid Gold  Acknowledgements
have been  duly  authorized  by all  necessary  corporate  action on the part of
Company and each Borrower, as the case may be.

                  B. No Conflict.  The  execution,  delivery and  performance by
Company  and  Borrowers  of this  Agreement  and any other Loan  Documents,  the
issuance,  delivery and payment of the Notes or any Grid Gold Acknowledgments by
Borrowers, the issuance and sale of the New Subordinated Indebtedness by Company
and the  incurrence  and repayment of extensions of credit  pursuant to the Loan
Documents  have not, do not and will not (i) violate any provision of any law or
any  governmental  rule  or  regulation  applicable  to  Company  or  any of its
Subsidiaries,  the Certificate or Articles of  Incorporation  or Bylaws or other
charter  documents of Company or any of its Subsidiaries or any order,  judgment
or decree of any court or other agency of  government  binding on Company or any
of its  Subsidiaries,  (ii)  conflict  with,  result in a material  breach of or
constitute  (with due notice or lapse of time or both) a material  default under
any Contractual  Obligation of Company or any of its Subsidiaries,  (iii) result
in or require the creation or imposition of any Lien upon any of the  properties
or assets of Company or any of its  Subsidiaries  (other than any Liens  created
under any of the Loan  Documents in favor of  Administrative  Agent on behalf of
Lenders),  or (iv) require any approval of stockholders of Company or any of its
Subsidiaries  or any  approval  or consent of any Person  under any  Contractual
Obligation of Company or any of its  Subsidiaries,  except for consents obtained
on or before the Effective Date and disclosed in writing to Lenders.

                  C.  Governmental   Consents.   The  execution,   delivery  and
performance  by  Company  and each  Borrower,  as the  case may be,  of the Loan
Documents,  the  issuance,  delivery  and  payment  of the  Notes  and Grid Gold
Acknowledgements  and the consummation of the  transactions  contemplated by the
Loan  Documents do not and will not require any  registration  with,  consent or
approval of, or notice to, or other action to, with or by, any federal, state or
other governmental authority or regulatory body.

                  D.  Binding  Obligation.  This  Agreement  and each other Loan
Document has been duly executed and delivered by Company and each Borrower,  and
each Note and each Grid Gold  Acknowledgement  delivered  to any Lender has been
duly  issued by the  applicable  

                                       77
<PAGE>

Borrower,  and  each  such  Loan  Document  is the  legally  valid  and  binding
obligation of Company and each Borrower, as the case may be, enforceable against
Company and each Borrower, as the case may be, in accordance with its respective
terms, except as limited by bankruptcy, insolvency,  reorganization,  moratorium
or similar  laws  relating  to or limiting  creditors'  rights  generally  or by
equitable principles relating to enforceability.

4.3      Valid Issuance of Stock.

                  The Company  Common  Stock is duly and validly  issued,  fully
paid and nonassessable.  Except for rights under Company's  Stockholders  Rights
Agreement dated as of October 16, 1987, as amended,  and holders of directors or
employee  stock  options  and share  rights  and  holders  of  delayed  delivery
agreements  of  Canadian  Borrower  or  the  Subordinated  Debentures,  the  New
Subordinated  Indebtedness  and the HCI  Exchangeable  Stock,  no stockholder of
Company has or will have any  preemptive  rights to subscribe for any additional
equity  Securities of Company.  The Company Common Stock,  when issued and sold,
was either registered or qualified under applicable federal and state securities
laws or exempt therefrom.

4.4      Subordinated Indebtedness.

                  A. The  Subordinated  Debentures have been duly authorized and
validly  issued  by  Company  and  constitute  the  legally  valid  and  binding
obligations  of Company  enforceable  against  Company in accordance  with their
terms, except as limited by bankruptcy, insolvency,  reorganization,  moratorium
or similar  laws  relating  to or limiting  creditors'  rights  generally  or by
equitable principles relating to enforceability.

                  B. The New  Subordinated  Indebtedness,  when issued,  will be
duly  authorized  and  validly  issued by  Canadian  Borrower or the Company and
constitute  the legally  valid and  binding  obligations  of  Canadian  Borrower
enforceable  against Canadian Borrower in or of the Company  enforceable against
the  Company  accordance  with its  terms,  except  as  limited  by  bankruptcy,
insolvency, reorganization,  moratorium, or similar laws relating to or limiting
creditors'   rights   generally   or  by   equitable   principles   relating  to
enforceability.

                  C. The  Subordinated  Indebtedness,  when issued and sold, was
either  registered or qualified under  applicable  federal and state  securities
laws or exempt  therefrom.  The  subordination  provisions  of the  Subordinated
Debentures and the New  Subordinated  Indebtedness  are, or when issued will be,
enforceable  against  the  holders of the  Subordinated  Debentures  and the New
Subordinated  Indebtedness,  respectively.  The Obligations  constitute  "Senior
Debt" under the indentures pursuant to which the Subordinated Debentures and the
New Subordinated Indebtedness have been or will be issued.

4.5      Financial Condition.

                  Company  has  heretofore  delivered  to  Lenders,  at Lenders'
request,  the following  financial  statements and information:  (i) the audited
consolidated  balance sheet of Company and its  Subsidiaries  as at December 31,
1997 and the related consolidated statements of income, stockholders' equity and
cash flows of Company and its  Subsidiaries  for the Fiscal Year then 



                                       78
<PAGE>

ended, and (ii) the unaudited  consolidated  summarized balance sheet of Company
and its Subsidiaries as at March 31, 1998 and the related unaudited consolidated
summarized  statement  of income of Company and its  Subsidiaries  for the three
months then ended. All such statements were prepared in conformity with GAAP and
fairly present the financial position (on a consolidated  basis) of the entities
described in such financial  statements as at the  respective  dates thereof and
the results of operations and, where  applicable,  cash flows (on a consolidated
basis) of the  entities  described  therein for each of the periods  then ended,
subject,  in the case of any such  unaudited  financial  statements,  to changes
resulting  from audit and normal  year-end  adjustments.  Except as disclosed in
Schedule 4.5 annexed hereto, Company does not have any Contingent Obligation, or
liability  for any  taxes,  long-term  lease or  unusual  forward  or  long-term
financial  commitment  that  is not  reflected  in  the  most  recent  financial
statements  delivered  to Lenders or the notes  thereto,  if any,  or  otherwise
permitted  under  subsection  6.4 and  which in any  such  case is  material  in
relation to the business, operations, properties, assets or condition (financial
or otherwise) of Company and its Subsidiaries, taken as a whole.


4.6      No Material Adverse Effect; No Restricted Junior Payments.

                  Since  December 31, 1997, no event or change has occurred that
has  caused or  evidences,  either in any case or in the  aggregate,  a Material
Adverse  Effect.  Neither  Company nor any of its  Subsidiaries  has directly or
indirectly  declared,  ordered,  paid or made,  or set apart any sum or property
for,  any  Restricted  Junior  Payment or agreed to do so except as permitted by
subsection 6.5.

4.7      Title to Properties; Liens.

                  Company and its Subsidiaries  have good,  sufficient and legal
title, subject to Permitted Encumbrances,  to all of their respective properties
and assets  reflected  in the most  recent  financial  statements  delivered  to
Lenders,  except for (a) assets  held in Joint  Ventures  where the  operator or
another participant or the Joint Venture may hold legal title but Company or one
of its Subsidiaries holds a beneficial  ownership  interest therein,  (b) assets
disposed of since the date of such financial  statements in the ordinary  course
of  business,  (c) as otherwise  permitted  under  subsection  6.7, and (d) such
defects that have not had, or would not  reasonably  be expected to result in, a
Material  Adverse  Effect.  Except  for  Permitted  Encumbrances  and  except as
otherwise  permitted by this Agreement,  all such properties and assets are free
and clear of Liens.

4.8      Litigation; Adverse Facts.

                  Except as described in Schedule 4.8 or in the Company's Annual
Report on Form 10-K for 1997, there is no action, suit, proceeding,  arbitration
or governmental  investigation  (whether or not purportedly on behalf of Company
or any of its  Subsidiaries)  at law or in equity  or before or by any  federal,
state, municipal or other governmental  department,  commission,  board, bureau,
agency or instrumentality,  domestic or foreign, pending or, to the knowledge of
Company,  threatened  against or affecting Company or any of its Subsidiaries or
any  property of Company or any of its  Subsidiaries  (i) that has had, or would
reasonably  be  expected  to result in, a Material  Adverse  Effect or (ii) that
seeks to enjoin or otherwise  challenge any of the transactions  contemplated by
this Agreement or the enforceability of this Agreement.  Neither Company nor 

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<PAGE>

any of its  Subsidiaries is (i) in violation of any applicable law that has had,
or would reasonably be expected to result in, a Material Adverse Effect, or (ii)
subject to or in default with respect to any final judgment,  writ,  injunction,
decree,  rule or  regulation  of any court or any federal,  state,  municipal or
other   governmental   department,   commission,   board,   bureau,   agency  or
instrumentality,  domestic or  foreign,  that has had,  or would  reasonably  be
expected to result in, a Material Adverse Effect.

4.9      Payment of Taxes.

                  Except to the extent permitted by subsection 5.3, all material
taxes,  assessments,  fees and other  governmental  charges upon Company and its
Subsidiaries and upon their respective properties,  assets,  income,  businesses
and  franchises  which are due and payable have been paid.  Company  knows of no
proposed tax assessment  against Company or any of its Subsidiaries that has had
or would have a Material Adverse Effect,  which is not being actively  contested
by Company or such  Subsidiary  in good  faith and by  appropriate  proceedings;
provided that such reserves or other appropriate provisions, if any, as shall be
required in conformity with GAAP shall have been made or provided therefor.

4.10     Performance of Agreements; Materially Adverse Agreements.

                  A. Except as described in Schedule 4.10,  neither  Company nor
any  of  its  Subsidiaries  is in  default  in the  performance,  observance  or
fulfillment  of  any  of  the  material  obligations,  covenants  or  conditions
contained in any of its Contractual  Obligations,  and no condition exists that,
with the giving of notice or the lapse of time or both,  would constitute such a
default,  except where the consequences,  direct or indirect, of such default or
defaults, if any, has not had and would not have a Material Adverse Effect.

                  B. Neither  Company nor any of its  Subsidiaries is a party to
or is otherwise  subject to any  agreement or instrument or any charter or other
internal  restriction  which  has  had  or  will  have,  individually  or in the
aggregate, a Material Adverse Effect.

4.11     Governmental Regulation.

                  Neither  Company  nor any of its  Subsidiaries  is  subject to
regulation  under the Public  Utility  Holding  Company Act of 1935, the Federal
Power Act, the Interstate  Commerce Act or the Investment Company Act of 1940 or
under any other  Canadian,  Commonwealth  of Australia or U.S.  federal or state
statute or  regulation  which may limit its  ability to incur  Indebtedness  for
borrowed money.

4.12     Securities Activities.

                  Neither  Company  nor  any  of  its  Subsidiaries  is  engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying any Margin Stock.


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<PAGE>

4.13     Employee Benefit Plans.

                  A. Company and each of its ERISA  Affiliates are in compliance
with all applicable provisions and requirements of ERISA and the regulations and
published interpretations thereunder with respect to each Employee Benefit Plan,
and have performed all their obligations under each Employee Benefit Plan, where
failure to comply and perform such  obligations  would reasonably be expected to
have a Material Adverse Effect.

                  B. Except as set forth on Schedule  4.13  annexed  hereto,  no
ERISA  Event  has  occurred  or is  reasonably  expected  to occur  which  would
reasonably be expected to have a Material Adverse Effect.

                  C. Except to the extent required under Section 601 of ERISA or
Section  4980B of the  Internal  Revenue Code or except as described on Schedule
4.13  annexed  hereto,  no  Employee  Benefit  Plan  of  Company  or  any of its
Subsidiaries  provides  health or welfare  benefits  (through  the  purchase  of
insurance or otherwise) for any retired or former employees of Company or any of
its ERISA Affiliates.

                  D. As of the most recent  valuation date for any Pension Plan,
the amount of unfunded benefit liabilities (as defined in Section 4001(a)(18) of
ERISA),  individually  or in the aggregate for all Pension Plans  (excluding for
purposes of such  computation  any Pension  Plans with  respect to which  assets
exceed benefit  liabilities)  as set forth in the most recent  actuarial  report
prepared for such Pension Plan, does not exceed $20,000,000.

4.14     Certain Fees.

                  No broker's or finder's fee or commission will be payable with
respect to this Agreement or any of the transactions contemplated hereby.

4.15     Environmental Protection.

                  Except as  heretofore  disclosed  in  writing  by  Company  to
Lenders or otherwise  disclosed in Company's  Annual Report on Form 10-K for its
1997 fiscal year,  no event or condition has occurred with respect to Company or
any of its  Subsidiaries  relating  to any  Environmental  Laws  or  Release  of
Hazardous Materials which,  individually,  or in the aggregate, has had or would
have a Material Adverse Effect.

4.16     Employee Matters.

                  There is no  strike  or work  stoppage  in  existence  or,  to
Company's  knowledge,  threatened  involving  Company or any of its Subsidiaries
that has had or would reasonably be expected to have a Material Adverse Effect.

4.17     Solvency.

                  Company and its  Subsidiaries,  taken as a whole,  and each of
Borrowers are Solvent.


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<PAGE>

4.18     Compliance with Laws.

                  The businesses and operations of Company and its  Subsidiaries
comply with the  requirements  of all applicable  laws,  rules,  regulations and
orders of any governmental  authority,  except to the extent that  noncompliance
would not reasonably be expected to cause a Material Adverse Effect.

4.19     Disclosure.

                  No  representation  or  warranty  of  Company  or  any  of its
Subsidiaries  contained  in  any  Loan  Document,  or  in  any  other  document,
certificate or written statement furnished to Lenders by or on behalf of Company
or  any  of  its  Subsidiaries  for  use in  connection  with  the  transactions
contemplated by this Agreement  contains any untrue statement of a material fact
or omits to state a material fact (known to Company or any Borrower, in the case
of any document not furnished by it)  necessary in order to make the  statements
contained  herein or therein not  misleading  in light of the  circumstances  in
which the same were made. Any projections  and pro forma  financial  information
contained in such materials are based upon good faith  estimates and assumptions
believed by Company and  Borrowers to be  reasonable  at the time made, it being
recognized  by Lenders that such  projections  as to future events are not to be
viewed as facts and that actual results during the period or periods  covered by
any such  projections  may differ from the projected  results.  There is no fact
known (or which  should upon the  reasonable  exercise of diligence be known) to
Company or any Borrower (other than matters of a general  economic  nature) that
has had, or would reasonably be expected to result in, a Material Adverse Effect
and that has not been disclosed herein or in such other documents,  certificates
and statements  furnished to Lenders for use in connection with the transactions
contemplated hereby.

Section 5.  AFFIRMATIVE COVENANTS

                  Company and each Borrower  severally  covenant and agree that,
so long as any of the Overall  Commitments  hereunder shall remain in effect and
until  payment  in  full  of  all  of  the  Loans  and  other  Obligations,  the
cancellation or expiration of all Letters of Credit and Bankers' Acceptances and
the  reimbursement  of all amounts drawn  thereunder,  Company and each Borrower
shall  perform all  covenants in this Section 5 to be performed by it (including
in the case of any  Borrower,  covenants  applicable  to it in its capacity as a
Subsidiary of Company),  and Company and each Borrower shall cause each of their
respective  Subsidiaries to perform,  all covenants in this Section 5 applicable
to each such Subsidiary.

5.1      Financial Statements and Other Reports.

                  Company shall maintain,  and cause each of its Subsidiaries to
maintain, a system of accounting established and administered in accordance with
sound  business  practices  to  permit  preparation  of  consolidated  financial
statements in conformity with GAAP. Company shall deliver to Lenders:

                  (i)  Quarterly  Financials:  as soon as  available  and in any
                  event  within 50 days after the end of each fiscal  quarter of
                  each Fiscal Year  (beginning  with the fiscal  


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<PAGE>

                  quarter ending June 30, 1998), the consolidated balance sheets
                  of Company and its  Subsidiaries  as at the end of such fiscal
                  quarter and the related consolidated  statements of income and
                  cash flows of Company  and its  Subsidiaries  for such  fiscal
                  quarter  and for the  period  from the  beginning  of the then
                  current Fiscal Year to the end of such fiscal quarter,  all in
                  reasonable detail and certified by the chief financial officer
                  or chief  accounting  officer  of  Company  that  they  fairly
                  present the  consolidated  financial  condition of Company and
                  its  Subsidiaries as at the dates indicated and the results of
                  their  operations  and  the  cash  flows  of  Company  and its
                  Subsidiaries  for the  periods  indicated,  subject to changes
                  resulting from audit and normal year-end adjustments;

                  (ii)  Year-End  Financials:  as soon as  available  and in any
                  event  within 90 days after the end of each Fiscal  Year,  the
                  consolidated  balance sheets of Company and its  Subsidiaries,
                  Canadian  Borrower and its  Subsidiaries  and each  Australian
                  Borrower  and its  Subsidiaries  as at the end of such  Fiscal
                  Year  and  the  related  consolidated  statements  of  income,
                  stockholders'  equity  and  cash  flows  of  Company  and  its
                  Subsidiaries,  Canadian Borrower and its Subsidiaries and each
                  Australian Borrower and its Subsidiaries for such Fiscal Year,
                  all in reasonable  detail and certified by the chief financial
                  officer  or chief  accounting  officer  of  Company  that they
                  present  fairly  in all  material  respects  the  consolidated
                  financial condition of Company and its Subsidiaries,  Canadian
                  Borrower and its Subsidiaries and each Australian Borrower and
                  its  Subsidiaries as at the dates indicated and the results of
                  their   operations  and  their  cash  flows  for  the  periods
                  indicated;

                  (iii)  Officers' and  Compliance  Certificates:  together with
                  each delivery of consolidated  financial statements of Company
                  and its  Subsidiaries  pursuant to  subdivisions  (i) and (ii)
                  above,  (a) an  Officers'  Certificate  of  Company  and  each
                  Borrower  stating that the signers have  reviewed the terms of
                  this Agreement and have made, or caused to be made under their
                  supervision, a review in reasonable detail of the transactions
                  and  condition  of  Company  and its  Subsidiaries  during the
                  accounting  period  covered by such  financial  statements and
                  that such review has not disclosed the existence  during or at
                  the end of such accounting period, and that the signers do not
                  have  knowledge  of the  existence  as at  the  date  of  such
                  Officers'   Certificate,   of  any  condition  or  event  that
                  constitutes an Event of Default or Potential Event of Default,
                  or,  if  any  such  condition  or  event  existed  or  exists,
                  specifying the nature and period of existence thereof and what
                  action  Company  or any  Borrower  has  taken,  is taking  and
                  proposes to take with  respect  thereto;  and (b) a Compliance
                  Certificate  demonstrating  in  reasonable  detail  compliance
                  during  and at the end of the  applicable  accounting  periods
                  with the restrictions  contained in subsections 6.1, 6.2, 6.3,
                  6.4, 6.6 and 6.7;

                  (iv)  Accountants'  Reports:  promptly  upon  receipt  thereof
                  (unless  restricted  by  applicable  professional  standards),
                  copies of all  reports  submitted  to Company  by  independent
                  certified  public  accountants in connection with each annual,
                  interim  or 

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<PAGE>


                  special audit of the  financial  statements of Company and its
                  Subsidiaries  made by  such  accountants,  including,  without
                  limitation,  any comment letter  submitted by such accountants
                  to management in connection with their annual audit;

                  (v) Monthly  Business  Report:  promptly  upon their  becoming
                  available  (but in no event  later than 45 days after the last
                  day of each month,  or 90 days,  in the case of the last month
                  of each Fiscal Year),  the monthly business report relating to
                  Company's and its Subsidiaries' operations prepared internally
                  for Company's management;

                  (vi) SEC Filings and Press  Releases:  (a) promptly upon their
                  becoming  available,  copies of (1) all financial  statements,
                  reports,  notices and proxy  statements sent or made available
                  generally by Company to its security holders,  (2) all regular
                  and periodic  reports and all registration  statements  (other
                  than on Form S-8 or a similar form) and prospectuses,  if any,
                  filed  by  Company  or  any  of  its  Subsidiaries   with  the
                  Securities and Exchange  Commission or any national securities
                  exchange (including,  without limitation,  Company's Quarterly
                  Report  on Form 10-Q for the  fiscal  quarter  ended  June 30,
                  1998),  and (b)  concurrently  with or  immediately  following
                  their being made available to intended  recipients,  all press
                  releases  and other  statements  made  available  generally by
                  Company to the public concerning material  developments in the
                  business of Company or any of its Subsidiaries;

                  (vii) Events of Default,  etc.:  promptly upon any Responsible
                  Officer of Company or any Borrower obtaining  knowledge (a) of
                  any condition or event that constitutes an Event of Default or
                  Potential Event of Default, or becoming aware that any Lender,
                  or any Agent has  given any  notice or taken any other  action
                  with respect to a claimed Event of Default or Potential  Event
                  of  Default,  (b) that any  Person  has  given  any  notice to
                  Company or any of its  Subsidiaries  or taken any other action
                  with respect to a claimed default or event or condition of the
                  type  referred to in  subsection  7.2, (c) of any condition or
                  event  that would be  required  to be  disclosed  in a current
                  report  filed by  Company  with the  Securities  and  Exchange
                  Commission on Form 8-K (Items 1, 2, 4 and 6 of such Form as in
                  effect  on  the  date  hereof)  (information  required  to  be
                  disclosed  on Form 8-K shall be sent to Lenders  when sent for
                  filing with the Securities and Exchange Commission), or (d) of
                  the  occurrence  of any  event or  change  that has  caused or
                  evidences, either individually or in the aggregate, a Material
                  Adverse Effect, an Officers' Certificate specifying the nature
                  and period of existence of such condition, event or change, or
                  specifying the notice given or action taken by any such Person
                  and the nature of such  claimed  Event of  Default,  Potential
                  Event of Default, default, event or condition, and what action
                  Company and each Borrower has taken, is taking and proposes to
                  take with respect thereto;

                  (viii)  Litigation:  promptly upon any Responsible  Officer of
                  Company  or  any  Borrower  obtaining  knowledge  of  (X)  the
                  institution  of, or threat of, any action, 

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<PAGE>


                  suit,  proceeding,  governmental  investigation or arbitration
                  against or affecting Company or any of its Subsidiaries or any
                  property of Company or any of its Subsidiaries  (collectively,
                  "Proceedings") not previously  disclosed in writing by Company
                  to Lenders or (Y) any material  development  in any Proceeding
                  that, in the case of either clause (X) or (Y) could reasonably
                  be expected to cause a Material Adverse Effect, written notice
                  thereof  together  with  a  summary  of  such  Proceedings  or
                  material development;

                  (ix)  ERISA  Events:  promptly  upon  becoming  aware  of  the
                  occurrence  of or  forthcoming  occurrence  of any ERISA Event
                  which could reasonably be expected to cause a Material Adverse
                  Effect, a written notice  specifying the nature thereof,  what
                  action Company or any of its ERISA  Affiliates  has taken,  is
                  taking or  proposes to take with  respect  thereto  and,  when
                  known,  any action taken or threatened by the Internal Revenue
                  Service,  the  Department  of Labor or the PBGC  with  respect
                  thereto;

                  (x) ERISA Notices: with reasonable  promptness,  copies of (a)
                  all notices received by Company or any of its ERISA Affiliates
                  from a  Multiemployer  Plan sponsor  concerning an ERISA Event
                  which could reasonably be expected to cause a Material Adverse
                  Effect;  and (b) such other documents or governmental  reports
                  or  filings   relating  to  any   Employee   Benefit  Plan  as
                  Administrative Agent shall reasonably request;

                  (xi) Financial  Plans: as soon as practicable and in any event
                  no later than 90 days after the beginning of each Fiscal Year,
                  (a) a copy of Company's  annual budget promptly after approval
                  thereof by Company's Board of Directors, (b) a forecast of the
                  amount of capital  expenditures  anticipated  for such  Fiscal
                  Year, and (c) such other  information  and  projections as any
                  Lender  may  reasonably  request,  all in form  and  substance
                  satisfactory to Requisite Lenders;

                  (xii)  Environmental   Audits  and  Reports:   promptly  after
                  completion thereof (or receipt from an independent  consultant
                  in the  case of an  audit  conducted  by  Persons  who are not
                  employees  of Company or any of its  Subsidiaries),  copies of
                  all final environmental  audits and reports,  whether prepared
                  by  personnel  of  Company  or any of its  Subsidiaries  or by
                  independent   consultants,   with   respect   to   significant
                  environmental  matters at any  Facility or which  relate to an
                  Environmental  Claim  which  would  reasonably  be expected to
                  result in a Material Adverse Effect; and

                  (xiii) Other  Information:  with reasonable  promptness,  such
                  other  information  and data with respect to Company or any of
                  its  Subsidiaries  as  from  time to  time  may be  reasonably
                  requested by any Lender.

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<PAGE>

5.2      Corporate Existence, etc.

                  Except as permitted under  subsection  6.7,  Company will, and
will cause each of its Material  Subsidiaries to, at all times preserve and keep
in full force and effect its corporate  existence and all rights and  franchises
material to the business of Company and its Subsidiaries, taken as a whole.

5.3      Payment of Taxes and Claims; Tax Consolidation.

                  A. Company will, and will cause each of its  Subsidiaries  to,
pay all taxes, assessments and other governmental charges imposed upon it or any
of its  properties  or assets or in respect of any of its income,  businesses or
franchises  before any  penalty  accrues  thereon,  and all  claims  (including,
without limitation, claims for labor, services, materials and supplies) for sums
that have  become due and payable and that by law have or may become a Lien upon
any of its  properties  or  assets,  prior to the time when any  penalty or fine
shall be incurred  with  respect  thereto,  except for such taxes,  assessments,
governmental charges and claims which in the aggregate do not exceed $3,000,000;
provided  that no such charge or claim need be paid if being  contested  in good
faith by appropriate  proceedings  promptly instituted and diligently  conducted
and if such reserve or other appropriate provision, if any, as shall be required
in conformity with GAAP shall have been made therefor.

                  B.   Company   will  not,  nor  will  it  permit  any  of  its
Subsidiaries  to, file or consent to the filing of any  consolidated  income tax
return with any Person (other than Company or any of its  Subsidiaries)  for any
period ending on or after the Effective Date.

5.4      Maintenance of Properties; Insurance.

                  Company  will,  and will  cause each of its  Subsidiaries  to,
maintain or cause to be maintained in good repair,  working order and condition,
ordinary wear and tear excepted, all material properties used in the business of
Company and its  Subsidiaries,  taken as a whole,  or any  Borrower  (including,
without  limitation,  Intellectual  Property) and from time to time will make or
cause to be made all appropriate  repairs,  renewals and  replacements  thereof.
Company will  maintain or cause to be  maintained,  with  financially  sound and
reputable  insurers,  insurance  with respect to its properties and business and
the properties and businesses of its Subsidiaries  against loss or damage of the
kinds  customarily   carried  or  maintained  under  similar   circumstances  by
corporations  of  established  reputation  engaged in similar  activities in the
countries where such properties or businesses are located.

5.5      Inspection; Lender Meeting; Reports of Subsidiaries.

                  Company  and  Borrowers  shall,  and shall cause each of their
respective Subsidiaries to, permit any authorized  representatives designated by
any  Lender,  at the  expense of such  Lender,  to visit and  inspect any of the
properties  of Company,  any Borrower or any of their  respective  Subsidiaries,
including its and their financial and accounting  records,  and,  subject to the
provisions of subsection 10.21, to make copies and take extracts therefrom,  and
to discuss  its and their  affairs,  finances  and  accounts  with its and their
officers,  all upon reasonable notice and 

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<PAGE>

at such  reasonable  times during normal  business  hours and as often as may be
reasonably requested.  Without in any way limiting the foregoing,  Company will,
upon the request of Administrative Agent or Requisite Lenders,  participate in a
meeting  of Agents  and  Lenders  once  during  each  Fiscal  Year to be held at
Company's  corporate  offices  (or such  other  location  as may be agreed to by
Company  and  Administrative  Agent) at such time as may be agreed to by Company
and Administrative  Agent. Until the Prime Acquisition Date, Company shall cause
Lenders  to be added to the lists  maintained  by Prime of  Persons  to  receive
reports of the type described in subsection 5.1(vi).

5.6      Compliance with Laws, etc.

                  Company shall,  and shall cause each of its  Subsidiaries  to,
comply with the  requirements  of all applicable  laws,  rules,  regulations and
orders of any governmental authority, noncompliance with which in any case or in
the aggregate would reasonably be expected to cause a Material Adverse Effect.

5.7      Environmental Disclosure and Inspection.

                  A. Company shall, and shall cause each of its Subsidiaries to,
exercise all due diligence in order to comply with all Environmental  Laws where
failure to do so would  reasonably  be expected to result in a Material  Adverse
Effect.

                  B. Company  shall  promptly  advise  Lenders in writing and in
reasonable  detail of (i) any  Release  of any  Hazardous  Materials  that would
reasonably be expected to result in a Material Adverse Effect,  (ii) any and all
written  communications  with  respect to any  Environmental  Claims  that would
reasonably  be  expected  to  result in a  Material  Adverse  Effect,  (iii) any
remedial  action taken by or at the  direction of Company in response to (x) any
Hazardous  Materials  on, under or about any  Facility,  the  existence of which
would  reasonably  be  expected  to result in an  Environmental  Claim  having a
Material Adverse Effect, or (y) any Environmental Claim that would reasonably be
expected to result in a Material Adverse Effect, (iv) Company's discovery of any
occurrence or condition on any real property adjoining or in the vicinity of any
Facility that could cause such Facility or any part thereof to be subject to any
restrictions on the ownership,  occupancy,  transferability or use thereof under
any  Environmental  Laws and which would  reasonably  be expected to result in a
Material  Adverse  Effect,   and  (v)  any  request  for  information  from  any
governmental agency that indicates such agency is investigating  whether Company
or any of its  Subsidiaries  may be  potentially  responsible  for a Release  of
Hazardous  Materials,  the remediation of which would  reasonably be expected to
have a Material Adverse Effect.

                  C.  Company  shall  promptly  notify  Lenders of any  proposed
acquisition of stock,  assets, or property by Company or any of its Subsidiaries
that would  reasonably be expected to expose Company or any of its  Subsidiaries
to, or result in,  Environmental  Claims  that would  reasonably  be


                                       87
<PAGE>


expected  to result in a Material  Adverse  Effect or that would  reasonably  be
expected to have an adverse  effect on any material  Governmental  Authorization
then held by Company or any of its Subsidiaries.

                  D.  Company  shall  provide   copies  of  such   documents  or
information as  Administrative  Agent may reasonably  request in relation to any
matters disclosed pursuant to this subsection 5.7.

5.8      Company's Remedial Action Regarding Hazardous Materials.

                  Company  shall  promptly  take,  and shall  cause  each of its
Subsidiaries  promptly  to  take,  any  and all  necessary  remedial  action  in
connection with the presence, storage, use, disposal,  transportation or Release
of any  Hazardous  Materials  on, under or about any Facility in order to comply
with   all   applicable   Environmental   Laws   and   undisputed   Governmental
Authorizations where failure to comply would reasonably be expected to result in
a Material Adverse Effect. If Company or any of its Subsidiaries  undertakes any
remedial  action with respect to any Hazardous  Materials on, under or about any
Facility,  Company or such  Subsidiary  shall conduct and complete such remedial
action in material compliance with all applicable  material  Environmental Laws,
and in accordance with the policies, orders and directives of all federal, state
and local  governmental  authorities  except when,  and only to the extent that,
Company's  or  such  Subsidiary's  liability,  including  with  respect  to such
presence,  storage, use, disposal,  transportation or discharge of any Hazardous
Materials,  or  the  jurisdiction  or  the  authority  or  the  validity  or the
applicability of the Environmental Laws or the policies, orders or directions is
being contested in good faith by Company or such Subsidiary.

5.9      Further Assurances.

                  At any  time  or  from  time  to  time  upon  the  request  of
Administrative  Agent,  Company and  Borrowers  shall  execute and deliver  such
further documents and do such other acts and things as Administrative  Agent may
reasonably  request in order to effect fully the purposes of this  Agreement and
to provide for payment of the  Obligations in accordance  with the terms of this
Agreement, the Notes and the Grid Gold Acknowledgements.

5.10     Year 2000 Compliance.

                  Any reprogramming  required to permit the proper  functioning,
in and  following  the year  2000,  of (i) the  Company's  and  each  Borrower's
computer systems and (ii) equipment  containing embedded  microchips  (including
systems  and  equipment  supplied by others or with which the  Company's  or any
Borrower's systems interface) and the testing of all such systems and equipment,
as so  reprogrammed,  will be completed by October 1, 1999,  or, with respect to
financial  systems,  July 1, 1999,  except  where the failure to  complete  such
programming  could not reasonably be expected to have a Material Adverse Effect.
The cost to the Company or any Borrower of such reprogramming and testing and of
the  reasonably  foreseeable  consequences  of year 2000 to the  Company  or any
Borrower (including, without limitation, reprogramming errors and the failure of
others'  systems  or  equipment)  will not  result in an Event of  Default  or a
Material Adverse Effect. Except for such of the reprogramming referred to in the
preceding sentence as may be necessary,  the computer and management information
systems of the 

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<PAGE>

Company and each Borrower and its  Subsidiaries  are and,  with ordinary  course
upgrading and  maintenance,  will continue for the term of this Agreement to be,
sufficient to permit Company and each Borrower to conduct its business without a
Material Adverse Effect.


Section 6.  NEGATIVE COVENANTS

                  Company and each Borrower  severally  covenant and agree that,
so long as any of the Overall  Commitments  hereunder shall remain in effect and
until  payment  in  full  of  all  of  the  Loans  and  other  Obligations,  the
cancellation or expiration of all Letters of Credit and Bankers' Acceptances and
the  reimbursement  of all amounts drawn  thereunder,  Company and each Borrower
shall perform all covenants in this Section 6 to be performed by it  (including,
in the case of any  Borrower,  covenants  applicable  to it in its capacity as a
Subsidiary of Company),  and Company and each Borrower shall cause each of their
respective Subsidiaries to perform all covenants in this Section 6 applicable to
such Subsidiary.

6.1      Indebtedness.

                  Company   shall   not,   and  shall  not  permit  any  of  its
Subsidiaries to, directly or indirectly,  create,  incur, assume or guaranty, or
otherwise  become or remain  directly or indirectly  liable with respect to, any
Indebtedness, except:

                  (i)      Company and Borrowers may become and remain liable 
                  with respect to their respective Obligations;

                  (ii) Company and its Subsidiaries may become and remain liable
                  with respect to Indebtedness  arising in respect of Contingent
                  Obligations permitted by subsection 6.4;

                  (iii)  Company may become and remain  liable  with  respect to
                  Indebtedness to any of its Subsidiaries, and any Subsidiary of
                  Company (other than Agua de la Falda S.A.,  Lachlan  Resources
                  N.L.  and , prior to the Prime  Acquisition  Date,  Prime) may
                  become and remain  liable  with  respect  to  Indebtedness  to
                  Company  or any other  Subsidiary  of  Company  and Agua de la
                  Falda S.A.,  Lachlan  Resources  N.L. and,  prior to the Prime
                  Acquisition  Date,  Prime may become and  remain  liable  with
                  respect to Indebtedness to Company or any other  Subsidiary of
                  Company up to a maximum  of  $50,000,000  aggregate  principal
                  amount  (for all  such  companies)  at any  time  outstanding;
                  provided  that all  such  intercompany  Indebtedness  shall be
                  subordinated on the same terms as the subordination provisions
                  of subsection  8.1B in right of payment to the payment in full
                  of the Obligations;

                  (iv) Company and its Subsidiaries,  as applicable,  may remain
                  liable with respect to Indebtedness  described in Schedule 6.1
                  annexed hereto;

                  (v)      Company may become and remain liable with respect to 
                  the Subordinated Debentures;


                                       89
<PAGE>

                  (vi) Company or Canadian Borrower may become and remain liable
                  with respect to the New Subordinated Indebtedness;

                  (vii) Agua de la Falda S.A., Lachlan Resources N.L. and, prior
                  to the Prime  Acquisition  Date,  Prime, may become and remain
                  liable with respect to any amount of Indebtedness  incurred in
                  the ordinary  course of business,  which  Indebtedness  may be
                  secured by Liens on the assets and properties of such company;
                  provided  that  the  holders  of  such  Indebtedness  have  no
                  recourse against Company or any of its Subsidiaries other than
                  the company incurring such  Indebtedness,  including,  without
                  limitation,  any  recourse  that would  arise by reason of any
                  direct   financial   guaranty  or  any  letter  of  credit  or
                  performance  or  solvency   guaranties,   representations   or
                  warranties  made  or  entered  into  in  connection  with  the
                  incurrence or creation of such Indebtedness;

                  (viii) (a) Australian Borrowers,  Canadian Borrower, (prior to
                  the Prime  Acquisition  Date)  Prime,  and any  Subsidiary  of
                  Company  (other than U.S.  Borrower)  that does not own assets
                  included in the Mining Group may become and remain liable with
                  respect to Indebtedness  secured solely by Liens on (i) assets
                  and   properties   owned  on  the  Effective   Date  that  are
                  undeveloped  or (ii) assets and  properties  where such assets
                  and properties or the Subsidiary of Company owning such assets
                  and  properties  are acquired after the Effective Date and not
                  adjacent  to  or  relating  to  any  Mining  Group  properties
                  existing as of the  Effective  Date and (b) U.S.  Borrower may
                  become and remain liable with respect to Indebtedness  secured
                  solely  by  Liens  on  assets  and  properties  owned  on  the
                  Effective  Date  that  are  undeveloped;   provided  that  the
                  aggregate   principal   amount  of  Indebtedness   outstanding
                  pursuant  to clauses  (a) and (b) above  shall not at any time
                  exceed  $500,000,000 in the aggregate;  provided  further that
                  Requisite  Lenders shall be satisfied  that such  Indebtedness
                  outstanding   pursuant   to   clause   (a)  or  (b)  above  is
                  Non-Recourse Debt;

                  (ix) (a)  Subsidiaries  of  Borrowers  may  become  and remain
                  liable with respect to additional Indebtedness in an aggregate
                  outstanding   principal  amount  not  at  any  time  exceeding
                  $50,000,000  and (b)  Borrowers  may become and remain  liable
                  with  respect  to  additional  Indebtedness  in  an  aggregate
                  outstanding   principal  amount  not  at  any  time  exceeding
                  $170,000,000  less the then  outstanding  principal  amount of
                  Indebtedness of  Subsidiaries of Borrowers  pursuant to clause
                  (a) above; and

                  (x) Company and its  Subsidiaries may become and remain liable
                  in respect of any refinancing or extension of any Indebtedness
                  described in this subsection 6.1 for amounts not exceeding the
                  principal  amounts of the Indebtedness so refunded or extended
                  and with maturities no earlier than such  Indebtedness  and if
                  secured,  only  by  the  property  theretofore  securing  such
                  Indebtedness;   provided   that   amounts   refinancing   such
                  Indebtedness  shall  be  included  in the  calculation  of any

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                  numerical   limitations   in  the  relevant   clause  of  this
                  subsection  6.1  pursuant  to  which  such   Indebtedness  was
                  originally permitted.

6.2      Liens and Related Matters.

                  A.  Prohibition  on Liens.  Company  shall not,  and shall not
permit any of its Subsidiaries to, directly or indirectly, create, incur, assume
or permit to exist any Lien on or with  respect to any  property or asset of any
kind  (including  any  document  or  instrument  in respect of goods or accounts
receivable)  of  Company  or any of  its  Subsidiaries,  whether  now  owned  or
hereafter  acquired,  or any income or profits therefrom,  or file or permit the
filing  of, or permit to remain in  effect,  any  financing  statement  or other
similar notice of any Lien with respect to any such property,  asset,  income or
profits, except:

                  (i)      Permitted Encumbrances;

                  (ii)     Liens described in Schedule 6.2 annexed hereto;

                  (iii)  Purchase  Money  Security  Interests  securing up to an
                  aggregate  principal  amount  of  $100,000,000  at any time of
                  Indebtedness  permitted  to be  outstanding  under  subsection
                  6.1(ix); and

                  (iv) Liens securing  Indebtedness  permitted to be outstanding
                  under  subsections  6.1(vii)  and  (viii),  and as provided in
                  subsection 6.1(x).

                  B.  Equitable  Lien in Favor of Lenders.  If Company or any of
its  Subsidiaries  shall create or assume any Lien upon any of its properties or
assets,  whether now owned or hereafter  acquired,  to secure Indebtedness other
than Liens excepted by the provisions of subsection 6.2A, it shall make or cause
to be made effective  provision  whereby the Obligations will be secured by such
Lien equally and ratably with any and all other Indebtedness  secured thereby as
long  as any  such  other  Indebtedness  shall  be so  secured;  provided  that,
notwithstanding the foregoing, this covenant shall not be construed as a consent
by  Requisite  Lenders  to the  creation  or  assumption  of any  such  Lien not
permitted by the provisions of subsection 6.2A.

                  C. No Restrictions on Subsidiary  Distributions  to Company or
Other  Subsidiaries.  Except as set forth in Schedule 6.2, and except in respect
of  Indebtedness  permitted by  subsections  6.1(vii) and (viii) and also,  with
respect to clause (iv) below, except with respect to properties  dedicated under
Joint Ventures and in respect of Indebtedness secured by Purchase Money Security
Interests,  and except for permitted  refinancings of such Indebtedness,  and as
provided  herein,  Company will not, and will not permit any of its Subsidiaries
to,  create  or  otherwise  cause or suffer  to exist or  become  effective  any
consensual  prohibition of any kind on the ability of any such Subsidiary to (i)
pay  dividends  or make  any  other  distributions  on any of such  Subsidiary's
capital stock owned by Company or any other Subsidiary of Company, (ii) repay or
prepay  any  Indebtedness  owed by  such  Subsidiary  to  Company  or any  other
Subsidiary  of  Company,  (iii) make loans or  advances  to Company or any other
Subsidiary of Company, or (iv) transfer any of its property or assets to Company
or any other  Subsidiary  of 

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Company;  provided that any restrictions  based on financial or other tests (not
effectively acting as prohibitions) shall not be deemed prohibitions.

6.3      Investments; Joint Ventures.

                  Company   shall   not,   and  shall  not  permit  any  of  its
Subsidiaries  to,  directly or  indirectly,  make or own any  Investment  in any
Person, including any Joint Venture, except:

                  (i)      Company and its Subsidiaries may make and own 
                  Investments in Marketable Securities;

                  (ii) Company and its Subsidiaries may make intercompany  loans
                  to the extent permitted under subsection 6.1(iii);

                  (iii)    [Reserved];

                  (iv)  Company  and its  Subsidiaries  may  continue to own the
                  Investments  owned  by them  and  described  in  Schedule  6.3
                  annexed  hereto or, if not  described in Schedule  6.3, in the
                  aggregate not exceeding $20,000,000;

                  (v) Company and its  Subsidiaries may continue to own and make
                  Investments   in   or   make    acquisitions   of   businesses
                  substantially  similar to those currently conducted by Company
                  or in related  industries and Borrowers and their Subsidiaries
                  may  make  Investments  in  new  and  existing   Subsidiaries;
                  provided  that  any  such  Investments  are  permitted  by the
                  provisions of subsection 6.7(v);

                  (vi) Borrowers and their  respective  Subsidiaries may acquire
                  and retain  ownership of Investments in connection  with Asset
                  Sales  permitted  by  subsection  6.7(iv);  provided  that the
                  aggregate net amount of all such Investments described in this
                  subsection 6.3(vi) shall not at any time exceed  $100,000,000;
                  and provided further, however, that for purposes of compliance
                  with  this  subsection   6.3(vi)  Asset  Sales  involving  the
                  simultaneous  receipt  of notes  and  sale of such  notes to a
                  third party shall be excluded;

                  (vii)   Company  and  its   Subsidiaries   may  make  and  own
                  Investments  received in  connection  with the  bankruptcy  or
                  reorganization of suppliers and customers and in settlement of
                  delinquent  obligations of, and other disputes with, customers
                  and suppliers arising in the ordinary course of business;

                  (viii)  Company  and  its   Subsidiaries   may  make  and  own
                  Investments with respect to Contingent  Obligations  which are
                  permitted by subsection 6.4; and

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<PAGE>

                  (ix) Company and its Subsidiaries may make and continue to own
                  Investments  in,  and may make and own  Investments  resulting
                  from capital calls, buyout obligations or similar requirements
                  in  respect  of,  Joint  Ventures  in the  ordinary  course of
                  business.

6.4      Contingent Obligations.

                  Company   shall   not,   and  shall  not  permit  any  of  its
Subsidiaries to, directly or indirectly,  create or become or remain liable with
respect to any Contingent Obligation, except:

                  (i) Company and its  Subsidiaries may become and remain liable
                  with  respect  to  Contingent  Obligations  (a) in  respect of
                  Letters of Credit, or (b) set forth in this Agreement;

                  (ii) Company and its Subsidiaries may become and remain liable
                  with respect to  Contingent  Obligations  under  Interest Rate
                  Protection  Agreements having a notional  principal amount not
                  exceeding  $100,000,000 with respect to Indebtedness permitted
                  under subsection 6.1;

                  (iii)  Company  and its  Subsidiaries  may  become  and remain
                  liable with respect to  Contingent  Obligations  in respect of
                  customary   indemnification   and  purchase  price  adjustment
                  obligations  incurred  in  connection  with  sales  of  assets
                  permitted under subsection 6.7;

                  (iv)  Company  and  its   Subsidiaries   may   guarantee   any
                  obligations of their respective  Subsidiaries (including Joint
                  Ventures)  provided that the aggregate amount  guaranteed does
                  not exceed $200,000,000;

                  (v) Company and U.S. Borrower,  as applicable,  may become and
                  remain liable with respect to  guaranties of New  Subordinated
                  Indebtedness that are subordinated to the Obligations;

                  (vi) Company and its Subsidiaries,  as applicable,  may remain
                  liable with  respect to  Contingent  Obligations  described in
                  Schedule 6.4 annexed hereto;

                  (vii)  Company  and its  Subsidiaries  may  become  and remain
                  liable with respect to gold futures,  options or forward sales
                  contracts  and  Currency  Protection   Agreements  or  similar
                  arrangements  designed  to  protect  Company  or  any  of  its
                  Subsidiaries  against fluctuations in the price of Gold or the
                  relative  exchange  rates for  currencies in  accordance  with
                  current industry practice or the past practices of Company and
                  its  Subsidiaries  and in the ordinary course of the Company's
                  and its Subsidiaries' business;

                  (viii)  Company  and its  Subsidiaries  may  become and remain
                  liable  with  respect to (a)  standby  letters of credit  with
                  respect to pollution  control bonds identified on Schedule 6.4
                  and refinancings thereof and Contingent Obligations in respect
                  of  

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<PAGE>

                  standby  letters of credit,  surety  bonds and  guaranties
                  securing  reclamation and other performance  obligations under
                  contracts,  permits,  statutes and regulations and made in the
                  ordinary course of business, but not including Indebtedness or
                  Contingent  Obligations  of Company and its  Subsidiaries  for
                  borrowed money or as described in subsection 6.4(vi),  and (b)
                  standby   letters  of  credit  and   surety   bonds   securing
                  Indebtedness  or  Contingent  Obligations  of Company  and its
                  Subsidiaries  for  borrowed  money  or to  support  Contingent
                  Obligations  described in subsections 6.4(ii) through (iv) and
                  subsection  6.4(vi)  in  an  aggregate  amount  not  exceeding
                  $100,000,000 at any time, it being understood that all letters
                  of  credit  and  surety  bonds  for  which   Company  and  its
                  Subsidiaries   are  liable  shall  be  permitted   only  under
                  subsection 6.4(i) or this subsection 6.4(vii); and

                  (ix)  Company  and its  Subsidiaries  may  become  liable  for
                  reimbursement  obligations to providers of credit  enhancement
                  for  the  New   Subordinated   Indebtedness;   provided   such
                  reimbursement obligations are subordinated to repayment of the
                  Obligations  on  the  same  terms  as  the  New   Subordinated
                  Indebtedness.

6.5      Restricted Junior Payments.

                  Company   shall   not,   and  shall  not  permit  any  of  its
Subsidiaries to, directly or indirectly,  declare, order, pay, make or set apart
any sum for any Restricted  Junior Payment;  provided that (i) so long as (a) no
Event of Default or (b) Potential Event of Default under subsections 7.1 or 7.6,
shall have occurred and be continuing,  or result from such payment, (w) Company
and its Subsidiaries may make scheduled payments of interest on the Subordinated
Debentures and the New Subordinated  Indebtedness in accordance with their terms
from all available  sources,  (x) Company and its Subsidiaries may pay principal
and interest on Subordinated Indebtedness other than the Subordinated Debentures
and the New  Subordinated  Indebtedness,  (y)  Subsidiaries may pay dividends to
their respective shareholders, and (z) Company and Subsidiaries may redeem their
capital stock, (ii) so long as no Event of Default or Potential Event of Default
shall have occurred and be  continuing or result from such payment,  Company and
its Subsidiaries may redeem the Subordinated Debentures and the New Subordinated
Indebtedness,  (iii) Company and its  Subsidiaries  may redeem  outstanding  HCI
Exchangeable  Stock by the issuance of Company  common stock and pay accrued and
unpaid dividends on outstanding HCI Exchangeable  Stock and (iv) Company and its
Subsidiaries  may  make  Restricted  Junior  Payments  if the  proceeds  of such
payments are used to cure an Event of Default or Potential  Event of Default and
no Event of Default or Potential Event of Default will result from the making of
such payment.

6.6      Financial Covenants.

                  A.       Minimum Consolidated Net Worth.  Company shall not 
permit Consolidated Net Worth at any time to be less than $500,000,000.


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<PAGE>

                  B. Leverage  Ratio.  Company shall not permit the ratio of (i)
Consolidated  Total  Debt  to  (ii)  the  sum of  Consolidated  Net  Worth  plus
Consolidated Total Debt at any time to exceed 0.50 to 1.00.

                  C. Interest Coverage Ratio. Company shall not permit the ratio
of Consolidated EBITDA to Consolidated Interest Expense at the end of any fiscal
quarter after  December 31, 1997 for the four fiscal  quarter  period then ended
(or three quarter fiscal period, in the case of the quarter ending September 30,
1998) to be less than 3.50 to 1.00.

6.7      Restriction on Fundamental Changes; Asset Sales; Certain Asset 
Transfers.

                  A.  Company  shall  not,  and  shall  not  permit  any  of its
Subsidiaries  to,  enter into any  transaction  of merger or  consolidation,  or
liquidate,   wind-up  or  dissolve   itself  (or  suffer  any   liquidation   or
dissolution),  or convey, sell, lease, sub-lease,  transfer or otherwise dispose
of, in one transaction or a series of transactions,  all or any substantial part
of its  business,  property  or fixed  assets,  whether  now owned or  hereafter
acquired,  or acquire by  purchase or  otherwise  all or  substantially  all the
business,  property or fixed assets of, or stock or other evidence of beneficial
ownership of, any Person, except:

                  (i) any Subsidiary of Company may be merged,  consolidated  or
                  amalgamated with or into any Borrower or any Subsidiary of any
                  Borrower, or be liquidated,  wound up or dissolved,  or all or
                  any part of its business,  property or assets may be conveyed,
                  sold,  leased,  transferred  or otherwise  disposed of, in one
                  transaction  or a series of  transactions,  to any Borrower or
                  any Subsidiary of any Borrower;  provided that, in the case of
                  such  a  merger,   consolidation  or  amalgamation   with  any
                  Borrower,  such Borrower  shall be the continuing or surviving
                  corporation and provided further that immediately after giving
                  effect  to such  merger,  consolidation  or  amalgamation,  no
                  Potential  Event of  Default  or Event of  Default  shall have
                  occurred and be continuing;

                  (ii)     [Reserved.]

                  (iii) subject to subsection 6.10, Company and its Subsidiaries
                  may sell or otherwise  dispose of assets in transactions  that
                  do not constitute Asset Sales;

                  (iv)  Company  and its  Subsidiaries  may  make  Asset  Sales;
                  provided that the consideration received for such assets shall
                  be in an  amount  at  least  equal to the  fair  market  value
                  thereof  and that such Asset  Sales do not involve the sale or
                  other   disposition,   in  one  transaction  or  a  series  of
                  transactions,  of all or any substantial part of the business,
                  property or fixed assets of the Company and its  Subsidiaries;
                  and  provided,  further,  that after any such  Asset  Sales no
                  Potential  Event of  Default  or Event of  Default  shall have
                  occurred and be continuing; and

                  (v) Company and its  Subsidiaries  may acquire  Securities  or
                  assets of another Person, including existing Subsidiaries,  or
                  create  additional  Subsidiaries;  provided

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<PAGE>

                  that after giving effect to such acquisition,  Company and its
                  Subsidiaries  will be in  compliance  with all  covenants  set
                  forth in Sections 5 and 6.

                  B.  Company  shall  not,  and  shall  not  permit  any  of its
Subsidiaries  to,  convey,  sell,  lease,  sub-lease,  or transfer any assets to
Lachlan  Resources,  N.L except in the  ordinary  course of  business  and on an
arms-length basis.

6.8      Transactions with Shareholders and Affiliates.

                  Except as set forth in Schedule  6.8,  Company  shall not, and
shall not permit any of its Subsidiaries to, directly or indirectly,  enter into
or permit to exist any transaction (including, without limitation, the purchase,
sale,  lease or exchange of any property or the  rendering of any service)  with
any  holder of 5% or more of any class of equity  Securities  of Company or with
any Affiliate of Company or of any such holder, on terms that are less favorable
to  Company  or that  Subsidiary,  as the case may be,  than those that might be
obtained  at the time  from  Persons  who are not such a  holder  or  Affiliate;
provided that the foregoing  restriction  shall not apply to (i) any transaction
between Company and any of its  wholly-owned  Subsidiaries or between any of its
wholly-owned  Subsidiaries or (ii) reasonable and customary fees paid to members
of the Boards of Directors of Company and its Subsidiaries.

6.9      Disposal of Material Subsidiary Stock.

                  Except for any  disposition  or sale of capital stock or other
equity  Securities of any of its Material  Subsidiaries  in compliance  with the
provisions of  subsections  6.7(i) and (iv), and the issuance and any redemption
of HCI Exchangeable Stock permitted by subsection 6.5, Company shall not:

                  (i) directly or indirectly sell,  assign,  pledge or otherwise
                  encumber  or dispose  of any shares of capital  stock or other
                  equity Securities of any of its Material Subsidiaries,  except
                  to qualify directors if required by applicable law; or

                  (ii) permit any of its Subsidiaries  directly or indirectly to
                  sell,  assign,  pledge or otherwise encumber or dispose of any
                  shares of capital  stock or other equity  Securities of any of
                  its Material Subsidiaries (including such Subsidiary),  except
                  to  Company,  another  Subsidiary  of  Company,  or to qualify
                  directors if required by applicable law;


provided,  however,  that nothing contained in this Agreement shall (a) prior to
the Prime Acquisition Date,  prohibit or otherwise limit the ability of Prime to
sell  securities  issued by it,  (b) permit the  capital  stock of any  Borrower
(other than 10% of the  Canadian  Borrower)  to be sold or  disposed  of, or (c)
prohibit  Investments  by venturers in Joint  Ventures  permitted by  subsection
6.3(ix).


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<PAGE>

6.10     Conduct of Business.

                  From and after the  Effective  Date,  Company  shall not,  and
shall not permit any of its  Subsidiaries  to, engage in any business other than
the businesses  engaged in by Company and its Subsidiaries on the Effective Date
and similar or related businesses.

6.11     Prepayments and Amendments to Subordinated Indebtedness.

                  Company   shall   not,   and  shall  not  permit  any  of  its
Subsidiaries  to,  amend or  otherwise  change  the  terms  of any  Subordinated
Debentures or New Subordinated Indebtedness, or make any payment consistent with
an  amendment  thereof or change  thereto,  if the effect of such  amendment  or
change is to increase the interest rate on such  Subordinated  Debentures or New
Subordinated  Indebtedness,  change  (to  earlier  dates)  any dates  upon which
payments of principal  or interest are due thereon,  change any event of default
or  condition  to an  event of  default  with  respect  thereto  (other  than to
eliminate  any such event of  default),  change the  redemption,  prepayment  or
defeasance provisions thereof,  change the subordination  provisions thereof (or
of any  guaranty  thereof),  or change any  collateral  therefor  (other than to
release such collateral), or if the effect of such amendment or change, together
with all other  amendments  or  changes  made,  is to  increase  materially  the
obligations of the obligor  thereunder or to confer any additional rights on the
holders of such Subordinated  Debentures or New Subordinated  Indebtedness (or a
trustee  or other  representative  on their  behalf)  which  would be adverse to
Company,  any  Borrower or Lenders  except as permitted  pursuant to  subsection
6.5(iii).

Section 7.        EVENTS OF DEFAULT

                  IF any of the  following  conditions  or  events  ("Events  of
Default") shall occur:




7.1      Failure to Make Payments When Due.

                  (i) Failure to pay any  installment  of  principal of any Loan
when due, whether at stated maturity,  by acceleration,  by notice of prepayment
or  otherwise;  (ii)  failure to pay when due any amount  payable to any Issuing
Lender  in  reimbursement  of any  drawing  under any  Letter  of Credit  issued
pursuant  to  subsection  2.7;  (iii)  failure  to pay  when  due  any  Bankers'
Acceptance  created  pursuant to subsection 2.8 at maturity;  or (iv) failure to
pay any interest on any Loan or any fee or any other Obligation within five days
after the date due; or



7.2      Default in Other Agreements.

                  (i) Failure of Company or any of its  Subsidiaries to pay when
due  (a)  any  principal  of  or  interest  on  any  Indebtedness   (other  than
Indebtedness referred to in subsection 7.1) in an individual principal amount of
$5,000,000 or more or (b) any Contingent  Obligation in an

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<PAGE>

individual  principal or face amount of $5,000,000 or more or notional principal
amount of  $20,000,000  or more, in each case beyond the end of any grace period
provided  therefor;  or (ii) the  occurrence  of any event  specified in (a) any
evidence of any Indebtedness in an individual  principal amount of $5,000,000 or
more or any Contingent  Obligation in an individual  principal or face amount of
$5,000,000 or more or notional  principal  amount of $20,000,000 or more, or (b)
any loan  agreement,  mortgage,  indenture or other  agreement  relating to such
Indebtedness  or  Contingent  Obligation(s),  in each case if the effect of such
event is to cause a default that would cause, or to permit the holder or holders
of that Indebtedness or Contingent Obligation(s) (or a trustee on behalf of such
holder or holders) to cause,  that  Indebtedness or Contingent  Obligation(s) to
become or be declared due and payable prior to its stated maturity or the stated
maturity of any underlying obligation, as the case may be; or


7.3      Breach of Certain Covenants.

                  Failure  of Company  or any  Borrower,  as the case may be, to
perform or comply with any term or condition contained in subsection 2.4, 2.5 or
5.2 or Section 6 of this Agreement; or

7.4      Breach of Warranty.

                  Any representation, warranty, certification or other statement
made by  Company  or any of its  Subsidiaries  in any  Loan  Document  or in any
statement or certificate at any time given by Company or any of its Subsidiaries
in writing  pursuant  hereto or thereto or in  connection  herewith or therewith
shall be false in any material respect on the date as of which made; or

7.5      Other Defaults Under Loan Documents.

                  Company or any Borrower,  as the case may be, shall default in
the  performance  of or compliance  with any term contained in this Agreement or
any of the other Loan  Documents,  other than any such term  referred  to in any
other  subsection  of this  Section  7, and such  default  shall  not have  been
remedied or waived within 30 days after the earlier of (i) a Responsible Officer
of Company or any  Borrower  becoming  aware of such  default or (ii) receipt by
Company or any Borrower of notice from any Agent or any Lender of such  default;
or

7.6      Involuntary Bankruptcy; Appointment of Receiver, etc.

                  (i) A court having  jurisdiction in the premises shall enter a
                  decree or order for relief in respect of Company, any Borrower
                  or any of  Company's  Subsidiaries  (other  than  Subsidiaries
                  operating  outside of the United States,  Canada and Australia
                  and not  constituting  Material  Subsidiaries  ("Minor Foreign
                  Subsidiaries"))  in an  involuntary  case under the Bankruptcy
                  Code or under any other applicable  bankruptcy,  insolvency or
                  similar law now or hereafter in effect,  which decree or order
                  is not stayed;  or any other  similar  relief shall be granted
                  under any applicable federal or state law and not stayed; or


                                       98
<PAGE>

                  (ii) an involuntary  case shall be commenced  against Company,
                  any  Borrower  or any of  Company's  Subsidiaries  (other than
                  Minor Foreign Subsidiaries) under the Bankruptcy Code or under
                  any other applicable bankruptcy, insolvency or similar law now
                  or hereafter in effect; or a decree or order of a court having
                  jurisdiction   in  the  premises  for  the  appointment  of  a
                  receiver, administrator,  liquidator,  sequestrator,  trustee,
                  custodian or other officer having similar powers over Company,
                  any  Borrower  or any of  Company's  Subsidiaries  (other than
                  Minor Foreign Subsidiaries), or over all or a substantial part
                  of its property,  shall have been entered; or there shall have
                  occurred the involuntary  appointment of an interim  receiver,
                  administrator,  trustee or other  custodian  of  Company,  any
                  Borrower or any of  Company's  Subsidiaries  (other than Minor
                  Foreign  Subsidiaries)  for all or a  substantial  part of its
                  property;  or a warrant of  attachment,  execution  or similar
                  process shall have been issued against any substantial part of
                  the  property of  Company,  any  Borrower or any of  Company's
                  Subsidiaries (other than Minor Foreign Subsidiaries),  and any
                  such event described in this clause (ii) shall continue for 60
                  days unless dismissed, bonded or discharged; or

7.7      Voluntary Bankruptcy; Appointment of Receiver, etc.

                  (i) Company,  any  Borrower or any of  Company's  Subsidiaries
                  (other than Minor  Foreign  Subsidiaries)  shall have an order
                  for relief  entered with respect to it or commence a voluntary
                  case under the Bankruptcy  Code or under any other  applicable
                  bankruptcy,  insolvency  or similar  law now or  hereafter  in
                  effect,  or shall  consent to the entry of an order for relief
                  in an involuntary case, or to the conversion of an involuntary
                  case to a voluntary case, under any such law, or shall consent
                  to the  appointment  of or taking  possession  by a  receiver,
                  administrator,  trustee  or  other  custodian  for  all  or  a
                  substantial part of its property;  or Company, any Borrower or
                  any  of  Company's  Subsidiaries  (other  than  Minor  Foreign
                  Subsidiaries)  shall make a general assignment for the benefit
                  of creditors; or

                  (ii)  Company,  any Borrower or any of Company's  Subsidiaries
                  (other  than Minor  Foreign  Subsidiaries)  shall be unable or
                  shall  fail,  or shall  admit in  writing  its  inability,  to
                  generally pay its debts as such debts become due; or the Board
                  of  Directors  of Company,  any  Borrower or any of  Company's
                  Subsidiaries  (other than Minor Foreign  Subsidiaries) (or any
                  committee  thereof)  shall adopt any  resolution  or otherwise
                  authorize any action to approve any of the actions referred to
                  in clause (i) above or this clause (ii); or

7.8      Judgments and Attachments.

                  Any money  judgment,  writ or warrant of attachment or similar
process  involving (i) in any individual  case an amount in excess of $5,000,000
or (ii) in the  aggregate  at any time an amount in  excess of  $10,000,000  (in
either  case not  adequately  covered  by  insurance  as to which a solvent  and
unaffiliated  insurance  company has acknowledged  coverage) shall be entered or
filed against Company, any Borrower or any Material Subsidiaries or any of their
respective   assets  (or  

                                       99
<PAGE>


shall be entered against any of Company's other  Subsidiaries and Company or any
Material  Subsidiary  shall be or  become  liable  therefor)  and  shall  remain
undischarged, unvacated, unbonded or unstayed for a period of 60 days (or in any
event later than five days prior to the date of any proposed  sale  thereunder);
or


7.9      Dissolution.

                  Except as permitted by subsection 6.7, any order,  judgment or
decree shall be entered against Company, any Borrower or any Material Subsidiary
decreeing the  dissolution or split up of Company,  any Borrower or any Material
Subsidiary and such order shall remain  undischarged or unstayed for a period in
excess of 30 days; or

7.10     Employee Benefit Plans.

                  There shall occur one or more ERISA Events which results in or
would  reasonably  be expected to result in  liability  of Company or any of its
ERISA  Affiliates  in an  individual  amount in excess of  $10,000,000  or in an
aggregate amount in excess of $20,000,000 during the term of this Agreement;  or
there  shall  exist an amount of  unfunded  benefit  liabilities  (as defined in
Section 4001(a)(18) of ERISA),  individually or in the aggregate for all Pension
Plans (excluding for purposes of such computation any Pension Plans with respect
to which  assets  exceed  benefit  liabilities)  as set forth in the most recent
actuarial report prepared for such Pension Plans, which exceeds $40,000,000; or

7.11     Change in Control of Borrowers.

                  Company  shall fail to own all of the  issued and  outstanding
capital stock of U.S. Borrower,  or U.S. Borrower shall fail to own at least 90%
of the issued and outstanding capital stock of Canadian Borrower (other than HCI
Exchangeable Stock), or Company and U.S. Borrower shall fail to collectively own
all of the issued and outstanding capital stock of Australian Borrower; or


7.12     Invalidity of Guaranty

                  The Company  Guaranty  contained in subsection 8.1 or the U.S.
Borrower  Guaranty  contained in subsection  8.2 for any reason,  other than the
satisfaction in full of all  Obligations,  ceases to be in full force and effect
(other than in  accordance  with its terms) or is declared null and void, or any
Borrower  contests the validity or enforceability of any Loan Document or denies
that it has any further liability,  including without limitation with respect to
future advances by Lenders,  under any Loan Document to which it gives notice to
such effect:


THEN (i) upon the occurrence and during the  continuance of any Event of Default
described  in the  foregoing  subsections  7.6 or 7.7  each  of (w)  the  unpaid
principal  amount of and accrued  interest on the Loans,  (x) an amount equal to
the  maximum  amount  which may at any time be drawn under all Letters of Credit
then  outstanding  (whether  or not any  beneficiary  under any 

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<PAGE>

Letter of Credit  shall have  presented,  or shall be  entitled  at such time to
present,  the drafts or other  documents  required  to draw under such Letter of
Credit),  (y) an amount  equal to the Face  Amount of all  outstanding  Bankers'
Acceptances,   and  (z)  all  other  Obligations  shall   automatically   become
immediately  due and  payable,  without  presentment,  demand,  protest or other
requirements  of any kind, all of which are hereby  expressly  waived by Company
and each  Borrower  and the  obligation  of each  Lender to make any  Loan,  the
obligation  of each Issuing  Lender to issue any Letter of Credit  hereunder and
the  obligation  of  each  Canadian  Lender  to  create  or  purchase   Bankers'
Acceptances  hereunder shall thereupon  terminate,  and (ii) upon the occurrence
and during the continuation of any other Event of Default,  Administrative Agent
shall,  upon the written  request of  Requisite  Lenders,  by written  notice to
Company and each  Borrower,  declare all of the Loans to be, and an amount equal
to the  amounts  described  in clauses (w) through (z) above to be, and the same
shall forthwith become, due and payable, together with accrued interest thereon,
and the  obligation  of each  Lender to make any Loan,  the  obligation  of each
Issuing  Lender to issue any Letter of Credit  hereunder  and the  obligation of
each Canadian Lender to create or purchase Bankers' Acceptances  hereunder shall
thereupon terminate; provided that the foregoing shall not affect in any way the
obligations  of Lenders to purchase from each Issuing Lender  participations  in
the unreimbursed  amount of any drawings under any Letters of Credit as provided
in subsection 2.7 or to purchase the  participations  provided for in subsection
2.1E or 2.7.

                  So long as any Letter of Credit shall remain outstanding,  any
amounts  described  in clause (x) above with  respect to such  Letter of Credit,
when received by the applicable Issuing Lender,  shall be held by the applicable
Issuing Lender pursuant to such  documentation as the applicable  Issuing Lender
shall request,  as cash collateral for the obligation of the applicable Borrower
to reimburse  the  applicable  Issuing  Lender in the event of any drawing under
such Letter of Credit,  and so much of such funds  shall at all times  remain on
deposit as cash  collateral  as  aforesaid  as shall  equal the  maximum  amount
available  at any time for drawing  under all  Letters of Credit  (the  "Maximum
Available Amount"); provided that, in the event of cancellation or expiration of
any Letter of Credit or any  reduction  in the  Maximum  Available  Amount,  the
applicable  Issuing  Lender  shall  apply the  difference  between  the  Maximum
Available Amount immediately prior to such cancellation, expiration or reduction
and  the  Maximum  Available  Amount  immediately  after  such  cancellation  or
reduction,  first,  to the payment in full of the outstanding  Obligations,  and
second, to Company or the applicable Borrower or to such other Person who may be
lawfully entitled to receive such funds or as a court of competent  jurisdiction
may direct.

                  Any amounts  described in clause (y) above,  when  received by
Canadian Administrative Agent, shall be held by Canadian Administrative Agent in
a collateral  account over which Canadian  Administrative  Agent shall have sole
dominion and control upon terms that are customary to cash  collateral  accounts
maintained  with  Canadian  Administrative  Agent,  as cash  collateral  for the
obligation of Canadian  Borrower to pay the amount of such Bankers'  Acceptances
at maturity,  and at the  maturity of each such  Bankers'  Acceptance,  Canadian
Administrative  Agent shall apply such amounts held pursuant to the terms of the
collateral  account  agreement to the payment thereof.  Canadian Borrower hereby
grants Canadian  Administrative Agent a security interest in any such collateral
account and all funds on deposit therein.


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<PAGE>

                  At any time that an Event of  Default  is  continuing  and the
principal of any Gold Loan has been declared to be immediately  due and payable,
each U.S.  Lender  shall be  entitled,  for and on behalf of U.S.  Borrower,  to
purchase in  accordance  with its normal  procedures  a number of Ounces of Gold
equal to the number of Ounces of Gold then  comprising  such Gold  Loan,  and to
apply the Gold so purchased to pay such Gold Loan.  The all-in costs to any U.S.
Lender of purchasing such Gold,  provided that any costs incurred are reasonable
in the  circumstances,  shall be  deemed  to be a U.S.  Base  Rate  Loan to U.S.
Borrower.  A certificate  of a U.S.  Lender as to any such all-in costs shall be
prima facie evidence of the costs to such U.S. Lender of making such purchase.

Section 8.  GUARANTIES OF COMPANY AND U.S. BORROWER OF
            OBLIGATIONS

                  In order to induce Lenders to enter into this Agreement and to
make the Loans to  Borrowers  hereunder  and to issue  Letters of Credit for the
account of Borrowers  hereunder and, in the case of Canadian Lender,  create and
purchase Bankers'  Acceptances,  each of Company and U.S. Borrower hereby agrees
as follows:

8.1      Guaranty by Company

                  A. Guaranty.  As  consideration  for Lenders agreeing to enter
into this  Agreement and to extend the Overall  Commitments  hereunder,  Company
hereby  unconditionally and irrevocably  guarantees,  as primary obligor and not
merely as a surety,  and jointly and severally with U.S.  Borrower as it relates
to the Obligations of Canadian  Borrower and Australian  Borrowers,  the due and
punctual payment when due (whether by required prepayment,  declaration,  demand
or otherwise)  (including amounts that would become due but for the operation of
the  automatic  stay under  Section  362(a) of the  Bankruptcy  Code,  11 U.S.C.
ss.362(a)  or  operation  of any such  stay  under  applicable  Canadian  and/or
Australian law) of all Obligations of Borrowers (including,  without limitation,
interest  which,  but for the filing of a petition in bankruptcy with respect to
U.S.  Borrower,  or a similar  action with  respect to Canadian  Borrower or any
Australian  Borrower,  would accrue on such  Obligations).  For purposes of this
Section 8, the  obligations of Company under this subsection 8.1 are referred to
as this "Company Guaranty."

         B.       Terms of Company Guaranty

                  Company  agrees that the  Obligations  of any  Borrower may be
extended or renewed,  and the Loans repaid and  reborrowed  in whole or in part,
without  notice or further  assent from it, and that it will  remain  bound upon
this Company Guaranty notwithstanding any extension, renewal or other alteration
of any such Obligation or repayment and reborrowing of the Loans.

                  Company  waives  presentation  of, demand of, payment from and
protest of any  Obligation of any Borrower and also waives notice of protest for
nonpayment.  The obligations of Company under this Company Guaranty shall not be
affected by, and Company  hereby  waives its rights (to the extent  permitted by
law) in connection with:

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<PAGE>

                  (a) the failure of any Agent or any Lender to assert any claim
                  or  demand or to  enforce  any  right or  remedy  against  any
                  Borrower or Company under the  provisions of this Agreement or
                  any other agreement or otherwise,

                  (b)      any extension or renewal of any provision thereof,

                  (c) any rescission,  waiver,  amendment or modification of any
                  of the terms or provisions of this Agreement or any instrument
                  executed pursuant hereto,

                  (d)      the release of any security held by any Agent or any
                  Lender for the Obligations of any Borrower,

                  (e) the  failure  of any Agent or any Lender to  exercise  any
                  right or remedy against any other guarantor of the Obligations
                  of any Borrower,

                  (f) any Agent or any Lender  taking and  holding  security  or
                  collateral for the payment of this Company Guaranty, any other
                  guaranties  of the  Obligations  or other  liabilities  of any
                  Borrower   and  the   Obligations   guarantied   hereby,   and
                  exchanging, enforcing, waiving and releasing any such security
                  or collateral,

                  (g) any Agent or any  Lender  applying  any such  security  or
                  collateral  and  directing the order or manner of sale thereof
                  as such Agent or such Lender in its discretion may determine,

                  (h) any Agent or any Lender settling, releasing, compromising,
                  collecting or otherwise  liquidating  the  Obligations and any
                  security or  collateral  therefor in any manner  determined by
                  such Agent or such Lender, or

                  (i) any  defenses  or  benefits  that may be  derived  from or
                  afforded  by law which  limit the  liability  of or  exonerate
                  guarantors  or sureties,  or which may conflict with the terms
                  of this guaranty, including without limitation, the provisions
                  of California  Civil Code Sections  2809,  2810,  2819,  2839,
                  2845, 2846, 2849, 2850, 2899 and 3433.

                  Without  limiting the generality of the foregoing or any other
provision of this Company Guaranty,  Company hereby waives any rights,  defenses
and benefits  which might  otherwise be  available to Company  under  California
Civil Code Sections 2787 to 2855, inclusive, and any successor sections. Company
acknowledges and agrees that all waivers of defenses arising from any impairment
of   Company's   rights  of   subrogation,   reimbursement,   contribution   and
indemnification  and  waivers  of any  other  rights,  privileges,  defenses  or
protections available to Company by reasons of Sections 2787 to 2855, inclusive,
of the  California  Civil Code are  intended by Company to be  effective  to the
maximum extent  permitted by Section 2856 of the California Civil Code and other
applicable law.

                  Company further agrees that this Company Guaranty  constitutes
a guaranty  of payment  when due and not of  collection  and waives any right to
require  that any resort be had by 

                                      103
<PAGE>

any Lender,  any Agent or any other Person to any  security  held for payment of
the  Obligations  of any  Borrower or to any  balance of any deposit  account or
credit on the books of any Lender, any Agent or any other Person in favor of any
Borrower or any other Person.

                  The  obligations of Company under this Company  Guaranty shall
not be subject to any reduction,  limitation,  impairment or termination for any
reason, including,  without limitation, any claim of waiver, release, surrender,
alteration  or  compromise,  and shall not be subject to any  defense or setoff,
counterclaim,  recoupment or termination whatsoever by reason of the invalidity,
illegality or  unenforceability  of the  Obligations,  discharge of any Borrower
from the Obligations in a bankruptcy or similar proceeding or otherwise. Without
limiting the generality of the foregoing,  the obligations of Company under this
Company  Guaranty  shall not be discharged or impaired or otherwise  affected by
the  failure  of any Agent or any  Lender  to  assert  any claim or demand or to
enforce  any  remedy  under  this  Agreement,  any Loan  Document  or any  other
agreement,  by any  waiver or  modification  of any  provision  thereof,  by any
default,  failure or delay,  willful or  otherwise,  in the  performance  of the
Obligations  of any Borrower,  or by any other act or thing or omission or delay
to do any other act or thing  that may or might in any  manner or to any  extent
vary the risk of Company or would otherwise operate as a discharge of Company as
a  matter  of law or  equity  other  than  indefeasible  payment  in full of all
Obligations.

                  Any Agent and any Lender may, at their election,  foreclose on
any  security  held by such  Agent or such  Lender  by one or more  judicial  or
nonjudicial sales, or exercise any other right or remedy any Agent or any Lender
may have against any Borrower or any security without  affecting or impairing in
any way the liability of Company  hereunder except to the extent the Obligations
have been  indefeasibly  paid.  Company  waives any defense  arising out of such
election by any Agent or any  Lender,  even  though  such  election  operates to
impair or extinguish any right of reimbursement or subrogation or other right or
remedy of Company against any Borrower or any security, so long as such Agent or
such Lender act in a commercially reasonable manner.

                  Company  further  agrees  that  this  Company  Guaranty  shall
continue to be  effective or be  reinstated,  as the case may be, if at any time
payment,  or any part thereof,  of principal of or interest on any Obligation of
any  Borrower is  rescinded  or must  otherwise  be restored by any Agent or any
Lender upon the bankruptcy or reorganization of any Borrower or otherwise.

                  Company  further  agrees,  in furtherance of the foregoing and
not in  limitation  of any other  right that any Agent or any Lender may have at
law or in equity  against  Company  by virtue  hereof,  upon the  failure of any
Borrower  to pay any of its  Obligations  when and as the same shall  become due
(whether by required prepayment, declaration, demand or otherwise), Company will
forthwith pay, or cause to be paid, in cash, to  Administrative  Agent an amount
equal to the sum of the unpaid principal amount of such Obligations, accrued and
unpaid  interest on such  Obligations  and all other unpaid  Obligations of such
Borrower to any Agent or any Lender.

                  Company  hereby   irrevocably   agrees  to  waive,  until  the
Obligations  have been paid in full and the Commitments  shall have  terminated,
any exercise of any right of subrogation,  contribution,  indemnity or otherwise
against  any  Borrower  that  may  arise  out of or be  caused  by 

                                      104
<PAGE>

this Company  Guaranty,  all rights  and/or  claims which may arise  against any
Borrower  by reason of this  Company  Guaranty,  any right to enforce any remedy
that any Agent or any Lender now has or may hereafter  have against any Borrower
and any  benefit  of,  and any right to  participate  in,  any  security  now or
hereafter held by any Agent or any Lender.

                   Any  Indebtedness  of any of Company's  Subsidiaries  held by
Company is hereby  subordinated  in right of payment to the  Obligations  on the
terms of this paragraph.  Upon the occurrence and during the  continuation of an
Event of Default,  no distribution of assets in respect of any such Indebtedness
(including  any  payment  of  principal,  interest  or fees  or any  repurchase,
redemption or setoff of such Indebtedness  against other  Indebtedness  owing to
Company or payment received as a result of other Indebtedness being subordinated
to such Indebtedness) may be made until indefeasible  payment in full in cash of
all  Obligations.   If,   notwithstanding  the  preceding  sentence,   any  such
distribution  of assets  shall be  collected  or received  by Company  after the
occurrence and during the continuation of an Event of Default, such distribution
of assets shall be paid over to Administrative  Agent for the benefit of Lenders
to be held as collateral and then or thereafter credited and applied against the
Obligations  but without  impairing  or limiting in any manner the  liability of
Company under any other provision of this Section 8.

                  In  addition  to any rights  now or  hereafter  granted  under
applicable law and not by way of limitation of any such rights, upon any failure
of any Borrower to pay its Obligations when due (whether by required prepayment,
declaration, demand or otherwise) and consequent acceleration of the Obligations
pursuant  to  Section  7,  any  Agent  and  any  Lender,  upon  the  consent  of
Administrative  Agent and Requisite Lenders,  is hereby authorized by Company at
any time or from time to time, without notice to Company or to any other Person,
any such  notice  being  hereby  expressly  waived to the  extent  permitted  by
applicable  law, to set off and to appropriate and to apply any and all deposits
(general or special,  including,  but not limited to, Indebtedness  evidenced by
certificates of deposit,  whether matured or unmatured,  but not including trust
accounts)  and any other  Indebtedness  at any time  owing by such Agent or such
Lender to or for the credit or the account of Company  against and on account of
the  obligations  and  liabilities of Company to such Agent or such Lender under
this Company Guaranty,  including,  but not limited to, all such obligations and
liabilities with respect to all claims of any nature or description  arising out
of or connected  with this  Agreement,  this Company  Guaranty or the Letters of
Credit or Bankers' Acceptances or any of the other Loan Documents,  irrespective
of  whether  or not such  Agent or such  Lender or  Administrative  Agent,  with
respect to any Obligation owed under the Letters of Credit, Bankers' Acceptances
or this Agreement, shall have made any demand hereunder.

8.2      Guaranty by U.S. Borrower

                  A. Guaranty.  As  consideration  for Lenders agreeing to enter
into this  Agreement  and to extend  the  Overall  Commitments  hereunder,  U.S.
Borrower hereby unconditionally and irrevocably guarantees, as a primary obligor
and not merely as a surety, and jointly and severally with Company as it relates
to the Obligations of Canadian  Borrower and Australian  Borrowers,  the due and
punctual payment when due (whether by required prepayment,  declaration,  demand
or otherwise)  (including amounts that would become due but for the

                                      105
<PAGE>

operation of the automatic stay under Section 362(a) of the Bankruptcy  Code, 11
U.S.C.  ss.362(a) or operation of any such stay under applicable Canadian and/or
Australian law) of all Obligations of Canadian Borrower and Australian Borrowers
(including, without limitation, interest which, but for the filing of a petition
in  bankruptcy  or a similar  action with  respect to  Canadian  Borrower or any
Australian  Borrower,  would accrue on such  Obligations).  For purposes of this
Section  8, the  obligations  of U.S.  Borrower  under this  subsection  8.2 are
referred to as this "U.S. Borrower Guaranty."

         B.       Terms of U.S. Borrower Guaranty

                  U.S. Borrower agrees that the Obligations of Canadian Borrower
and  Australian  Borrowers may be extended or renewed,  and the Loans repaid and
reborrowed in whole or in part,  without  notice or further  assent from it, and
that it will remain bound upon this U.S. Borrower Guaranty  notwithstanding  any
extension,  renewal or other  alteration of any such Obligation or repayment and
reborrowing of the Loans.

                  U.S. Borrower waives  presentation of, demand of, payment from
and protest of any Obligation of Canadian  Borrower or any  Australian  Borrower
and also  waives  notice of protest  for  nonpayment.  The  obligations  of U.S.
Borrower  under this U.S.  Borrower  Guaranty shall not be affected by, and U.S.
Borrower hereby waives its rights (to the extent permitted by law) in connection
with:

                  (a) the failure of any Agent or any Lender to assert any claim
                  or demand or to enforce any right or remedy  against  Canadian
                  Borrower,  any Australian  Borrower or U.S. Borrower under the
                  provisions  of  this  Agreement  or  any  other  agreement  or
                  otherwise,

                  (b)      any extension or renewal of any provision thereof,

                  (c) any rescission,  waiver,  amendment or modification of any
                  of the terms or provisions of this Agreement or any instrument
                  executed pursuant hereto, (d) the release of any security held
                  by any Agent or any Lender  for the  Obligations  of  Canadian
                  Borrower or any Australian Borrower,

                  (e) the  failure  of any Agent or any Lender to  exercise  any
                  right or remedy against any other guarantor of the Obligations
                  of Canadian Borrower or any Australian Borrower,

                  (f) any Agent or any Lender  taking and  holding  security  or
                  collateral for the payment of this U.S. Borrower Guaranty, any
                  other  guaranties of the  Obligations or other  liabilities of
                  Canadian   Borrower  or  any   Australian   Borrower  and  the
                  Obligations  guarantied  hereby,  and  exchanging,  enforcing,
                  waiving and releasing any such security or collateral,

                                    106
<PAGE>

                  (g) any Agent or any  Lender  applying  any such  security  or
                  collateral  and  directing the order or manner of sale thereof
                  as such Agent or such Lender in its discretion may determine,

                  (h) any Agent or any Lender settling, releasing, compromising,
                  collecting  or  otherwise   liquidating   the  Obligations  of
                  Canadian Borrower or any Australian  Borrower and any security
                  or collateral  therefor in any manner determined by such Agent
                  or such Lender, or

                  (i) any  defenses  or  benefits  that may be  derived  from or
                  afforded  by law which  limit the  liability  of or  exonerate
                  guarantors  or sureties,  or which may conflict with the terms
                  of this guaranty, including without limitation, the provisions
                  of California  Civil Code Sections  2809,  2810,  2819,  2839,
                  2845, 2846, 2849, 2850, 2899 and 3433.

                  Without  limiting the generality of the foregoing or any other
provision  of this U.S.  Borrower  Guaranty,  U.S.  Borrower  hereby  waives any
rights,  defenses  and  benefits  which might  otherwise  be  available  to U.S.
Borrower under California Civil Code Sections 2787 to 2855,  inclusive,  and any
successor  sections.  U.S. Borrower  acknowledges and agrees that all waivers of
defenses arising from any impairment of U.S.  Borrower's  rights of subrogation,
reimbursement, contribution and indemnification and waivers of any other rights,
privileges,  defenses or  protections  available to U.S.  Borrower by reasons of
Sections 2787 to 2855,  inclusive,  of the California Civil Code are intended by
U.S. Borrower to be effective to the maximum extent permitted by Section 2856 of
the California Civil Code and other applicable law.

                  U.S.  Borrower further agrees that this U.S. Borrower Guaranty
constitutes a guaranty of payment when due and not of collection  and waives any
right to require  that any resort be had by any  Lender,  any Agent or any other
Person to any security held for payment of the Obligations of Canadian  Borrower
or any Australian Borrower or to any balance of any deposit account or credit on
the books of any  Lender,  any Agent or any  other  Person in favor of  Canadian
Borrower or any Australian Borrower or any other Person.

                  The  obligations  of U.S.  Borrower  under this U.S.  Borrower
Guaranty  shall not be  subject  to any  reduction,  limitation,  impairment  or
termination for any reason, including,  without limitation, any claim of waiver,
release,  surrender,  alteration or compromise,  and shall not be subject to any
defense or setoff, counterclaim,  recoupment or termination whatsoever by reason
of the invalidity, illegality or unenforceability of the Obligations,  discharge
of Canadian  Borrower  or any  Australian  Borrower  from the  Obligations  in a
bankruptcy or similar  proceeding or otherwise.  Without limiting the generality
of the  foregoing,  the  obligations of U.S.  Borrower under this U.S.  Borrower
Guaranty  shall not be  discharged  or  impaired  or  otherwise  affected by the
failure  of any Agent or any  Lender to assert any claim or demand or to enforce
any remedy under this Agreement,  any Loan Document or any other  agreement,  by
any waiver or modification of any provision thereof, by any default,  failure or
delay,  willful or otherwise,  in the performance of the Obligations of Canadian
Borrower or any Australian Borrower, or by any other act or thing or omission or
delay to do any  other  act or thing  that may or might in any  manner or to any
extent 

                                      107
<PAGE>

vary the risk of U.S. Borrower or would otherwise operate as a discharge of U.S.
Borrower as a matter of law or equity other than indefeasible payment in full of
all Obligations.

                  Any Agent and any Lender may, at their election,  foreclose on
any  security  held by such  Agent or such  Lender  by one or more  judicial  or
nonjudicial sales, or exercise any other right or remedy any Agent or any Lender
may have against  Canadian  Borrower or any Australian  Borrower or any security
without  affecting  or  impairing  in any way  the  liability  of U.S.  Borrower
hereunder  except  to the  extent  the  Obligations  of  Canadian  Borrower  and
Australian  Borrowers have been  indefeasibly  paid.  U.S.  Borrower  waives any
defense  arising out of such  election  by any Agent or any Lender,  even though
such election  operates to impair or extinguish  any right of  reimbursement  or
subrogation or other right or remedy of U.S.  Borrower against Canadian Borrower
or any Australian Borrower or any security,  so long as any Agent or such Lender
act in a commercially reasonable manner.

                  U.S.  Borrower further agrees that this U.S. Borrower Guaranty
shall continue to be effective or be  reinstated,  as the case may be, if at any
time payment, or any part thereof, of principal of or interest on any Obligation
of Canadian  Borrower or any Australian  Borrower is rescinded or must otherwise
be restored by any Agent or any Lender upon the bankruptcy or  reorganization of
Canadian Borrower or any Australian Borrower or otherwise.

                  U.S.  Borrower further agrees, in furtherance of the foregoing
and not in  limitation  of any other right that any Agent or any Lender may have
at law or in equity  against  Company  by virtue  hereof,  upon the  failure  of
Canadian Borrower or any Australian  Borrower to pay any of its Obligations when
and as the same shall become due (whether by required  prepayment,  declaration,
demand or otherwise),  U.S. Borrower will forthwith pay, or cause to be paid, in
cash, to Administrative Agent an amount equal to the sum of the unpaid principal
amount of such Obligations,  accrued and unpaid interest on such Obligations and
all other unpaid  Obligations of Canadian  Borrower and Australian  Borrowers to
any Agent or any Lender.

                  U.S. Borrower hereby irrevocably waives, until the Obligations
have been paid in full and the Commitments  shall have terminated,  any right of
subrogation,  contribution,  indemnity or otherwise against Canadian Borrower or
any Australian Borrower that may arise out of or be caused by this U.S. Borrower
Guaranty,  all rights and/or claims which may arise against Canadian Borrower or
any Australian  Borrower by reason of this U.S. Borrower Guaranty,  any right to
enforce  any remedy that any Agent or any Lender now has or may  hereafter  have
against Canadian Borrower or any Australian Borrower and any benefit of, and any
right to participate  in, any security now or hereafter held by any Agent or any
Lender.

                  Any Indebtedness of Company or any of its Subsidiaries held by
U.S.  Borrower is hereby  subordinated in right of payment to the Obligations on
the terms of this paragraph.  Upon the occurrence and during the continuation of
an  Event  of  Default,  no  distribution  of  assets  in  respect  of any  such
Indebtedness  (including  any  payment  of  principal,  interest  or fees or any
repurchase, redemption or setoff of such Indebtedness against other Indebtedness
owing to U.S.  Borrower or payment  received  as a result of other  Indebtedness
being subordinated to such Indebtedness) may be made until indefeasible  payment
in full in cash of all Obligations.  If, 


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notwithstanding the preceding sentence, any such distribution of assets shall be
collected  or  received by U.S.  Borrower  after the  occurrence  and during the
continuation of an Event of Default,  such  distribution of assets shall be paid
over to Administrative Agent for the benefit of Lenders to be held as collateral
and then or thereafter  credited and applied against the Obligations but without
impairing  or limiting in any manner the  liability of U.S.  Borrower  under any
other provision of this Section 8.

                  In  addition  to any rights  now or  hereafter  granted  under
applicable law and not by way of limitation of any such rights, upon any failure
of Canadian Borrower or any Australian  Borrower to pay its Obligations when due
(whether  by  required  prepayment,   declaration,   demand  or  otherwise)  and
consequent  acceleration of the Obligations pursuant to Section 7, any Agent and
any Lender,  upon the consent of Administrative  Agent and Requisite Lenders, is
hereby  authorized  by U.S.  Borrower at any time or from time to time,  without
notice to U.S.  Borrower or to any other  Person,  any such notice  being hereby
expressly  waived to the extent  permitted by applicable  law, to set off and to
appropriate  and to apply any and all deposits  (general or special,  including,
but not limited to, Indebtedness  evidenced by certificates of deposit,  whether
matured  or  unmatured,   but  not  including  trust  accounts)  and  any  other
Indebtedness at any time owing by such Agent or such Lender to or for the credit
or the account of U.S.  Borrower  against and on account of the  obligations and
liabilities  of U.S.  Borrower  to such  Agent or such  Lender  under  this U.S.
Borrower  Guaranty,  including,  but not  limited to, all such  obligations  and
liabilities with respect to all claims of any nature or description  arising out
of or connected with this Agreement,  this U.S. Borrower Guaranty or the Letters
of  Credit  or  Bankers'  Acceptances  or  any  of  the  other  Loan  Documents,
irrespective  of  whether  or not such  Agent or such  Lender or  Administrative
Agent, with respect to any Obligation owed under the Letters of Credit, Bankers'
Acceptances or this Agreement, shall have made any demand hereunder.

Section 9.  AGENTS

9.1      Appointment.

                  Chase is hereby  appointed  Administrative  Agent  under  this
Agreement  and under the other Loan  Documents by each  Lender,  Chase Canada is
hereby appointed  Canadian  Administrative  Agent under this Agreement and under
the other Loan Documents by each Lender,  Chase Securities  Australia Limited is
hereby appointed Australian  Administrative Agent under this Agreement and under
the other Loan  Documents by each Lender and Deutsche  Bank is hereby  appointed
Documentation  Agent under this  Agreement and under the other Loan Documents by
each Lender.  Each Lender hereby  authorizes  each Agent to act as its agents in
accordance with the terms of this Agreement and the other Loan  Documents.  Each
Agent agrees to act upon the express conditions  contained in this Agreement and
the other Loan Documents,  as applicable.  Except as expressly set forth in this
Section 9, the provisions of this Section 9 are solely for the benefit of Agents
and Lenders,  and neither  Company nor any  Borrower  shall have any rights as a
third  party  beneficiary  of any of the  provisions  hereof,  but  Company  and
Borrowers shall have the rights expressly  granted to them in subsection 9.6. In
performing its functions and duties under this  Agreement,  each Agent shall act
solely as an agent of  Lenders  and

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does not assume and shall not be deemed to have assumed any  obligation  towards
or relationship of agency or trust with or for Company or any Borrower or any of
Company's Subsidiaries.

9.2      Powers; General Immunity.

                  A. Duties Specified.  Each Lender irrevocably  authorizes each
Agent to take such action on such  Lender's  behalf and to exercise  such powers
under this  Agreement  and under the other Loan  Documents  as are  specifically
delegated  to such Agent by the terms  hereof and  thereof,  together  with such
powers as are reasonably  incidental  thereto.  Each Agent shall have only those
duties and  responsibilities  that are expressly specified in this Agreement and
the other Loan  Documents  and each such  Agent may  perform  such  duties by or
through  its  agents  or  employees.  No Agent  shall  have,  by  reason of this
Agreement  or any of the other  Loan  Documents,  a  fiduciary  relationship  in
respect of any Lender;  and nothing in this  Agreement  or any of the other Loan
Documents,  express or implied,  is intended to or shall be so  construed  as to
impose upon such Agent any  obligations  in respect of this  Agreement or any of
the other Loan Documents except as expressly set forth herein or therein.

                  B. No  Responsibility  for Certain Matters.  No Agent shall be
responsible  to  any  Lender  for  the  execution,  effectiveness,  genuineness,
validity, enforceability, collectibility or sufficiency of this Agreement or any
other  Loan  Document  or  for  any  representations,  warranties,  recitals  or
statements made herein or therein or made in any written or oral statement or in
any financial or other statements,  instruments,  reports or certificates or any
other documents  furnished or made available by any Agent to Lenders or by or on
behalf of Company or  Borrowers to such Agent or any Lender in  connection  with
the  Loan  Documents  and  the  transactions  contemplated  thereby  or for  the
financial  condition or business  affairs of Company,  any Borrower or any other
Person  liable  for the  payment  of any  Obligations,  nor  shall  any Agent be
required to ascertain or inquire as to the  performance  or observance of any of
the terms, conditions,  provisions,  covenants or agreements contained in any of
the Loan  Documents  or as to the use of the  proceeds  of the Loans or Bankers'
Acceptances  or the use of Letters of Credit or as to the  existence or possible
existence  of any Event of  Default  or  Potential  Event of  Default.  Anything
contained in this Agreement to the contrary notwithstanding, no Agent shall have
any liability  arising from  confirmations of the amount of outstanding Loans or
the  Canadian  Letter of Credit  Usage,  the U.S.  Letter of Credit  Usage,  the
Australian  Letter  of  Credit  Usage,  the BA  Usage or the  component  amounts
thereof.

                  C. Exculpatory Provisions.  No Agent and none of its officers,
directors,  employees  or agents shall be liable to Lenders for any action taken
or omitted by such  Agent  hereunder  or in  connection  herewith  except to the
extent caused by its or their gross negligence or willful misconduct, as finally
determined  by a court of  competent  jurisdiction.  If any Agent shall  request
instructions  from  Lenders  with  respect to any act or action  (including  the
failure to take an action) in connection with this Agreement or any of the other
Loan Documents,  such Agent shall be entitled to refrain from such act or taking
such action  unless and until such Agent shall have received  instructions  from
Requisite  Lenders or all Lenders,  as the case may be. Without prejudice to the
generality of the foregoing, (i) each Agent shall be entitled to rely, and shall
be fully protected in relying,  upon any  communication,  instrument or document
believed to be 


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genuine  and  correct  and to have been  signed or sent by the proper  person or
persons,  and shall be  entitled  to rely and shall be  protected  in relying on
opinions  and  judgments  of  attorneys  (who may be  attorneys  for Company and
Borrower   and   Company's   Subsidiaries),   accountants,   experts  and  other
professional advisors selected by any of them; and (ii) no Lender shall have any
right of action whatsoever against any Agent as a result of such Agent acting or
(where so instructed)  refraining from acting under this Agreement or any of the
other Loan Documents in accordance with the instructions of Requisite Lenders or
all  Lenders,  as the case may be. Each Agent shall be entitled to refrain  from
exercising any power,  discretion or authority vested in it under this Agreement
or any of the  other  Loan  Documents  unless  and  until  it has  obtained  the
instructions of Requisite Lenders or all Lenders, as the case may be.

                  D.  Agents  Entitled  to Act as  Lenders.  The  agency  hereby
created  shall in no way  impair or affect  any of the  rights and powers of, or
impose any duties or obligations upon, any Agent in its individual capacity as a
Lender under this  Agreement.  With respect to its  participation  in the Loans,
Letters  of Credit and  Bankers'  Acceptances,  each  Agent  shall have the same
rights and powers under this  Agreement as any other Lender and may exercise the
same as though it were not performing  the duties and functions  delegated to it
hereunder,  and the term "Lender" or "Lenders" or any similar term shall, unless
the context clearly  otherwise  indicates,  include each Agent in its individual
capacity.  Each Agent and each of its Affiliates may accept  deposits from, lend
money to and generally engage in any kind of banking,  trust, financial advisory
or other business with Company,  any Borrower or any of Company's  Affiliates as
if it were not performing the duties specified  herein,  and may accept fees and
other  consideration  from Company and Borrowers for services in connection with
this Agreement and otherwise without having to account for the same to Lenders.

9.3      Representations and Warranties; No Responsibility For Appraisal of
Creditworthiness.

                  Each Lender  represents  and warrants that it has made its own
independent  investigation  of the  financial  condition and affairs of Company,
each Borrower and Company's  Subsidiaries  in connection  with the making of the
Loans  hereunder  and the  issuance  of  Letters  of Credit  hereunder  and such
Lender's purchasing of participations in such Letters of Credit and, in the case
of each Canadian Lender, the creation and purchase of Bankers' Acceptances,  and
that  it  has  made  and  shall  continue  to  make  its  own  appraisal  of the
creditworthiness of Company, each Borrower and Company's Subsidiaries.  No Agent
shall  have any duty or  responsibility,  either  initially  or on a  continuing
basis, to make any such investigation or any such appraisal on behalf of Lenders
or to provide  any  Lender  with any credit or other  information  with  respect
thereto,  whether coming into its  possession  before the making of the Loans or
the  issuance of the Letters of Credit or the  creation and purchase of Bankers'
Acceptances  or at any time or times  thereafter,  and no Agent  shall  have any
responsibility  with  respect  to the  accuracy  of or the  completeness  of any
information provided to Lenders. 

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9.4 Right to Indemnity.

                  The  Lenders  of each  Lending  Unit in  proportion  to  their
Lending Unit's Pro Rata Share,  severally with the Lenders of each other Lending
Unit agree to indemnify each Agent (and their  respective  directors,  officers,
employees and agents), to the extent that such Agent (or any of their respective
directors,  officers,  employees and agents)  shall not have been  reimbursed by
Company or  Borrowers,  for and  against any and all  liabilities,  obligations,
losses,  damages,   penalties,   actions,   judgments,  suits,  costs,  expenses
(including, without limitation, counsel fees and disbursements) or disbursements
of any kind or  nature  whatsoever  which  may be  imposed  on,  incurred  by or
asserted against such Agent (or their respective directors,  officers, employees
and agents) in performing  its duties  hereunder or under this  Agreement or the
other Loan  Documents  or  otherwise  in its  capacity  as such Agent in any way
relating  to or  arising  out of this  Agreement  or the other  Loan  Documents;
provided  that no Lender  shall be liable for any  portion of such  liabilities,
obligations,  losses,  damages,  penalties,  actions,  judgments,  suits, costs,
expenses or  disbursements  resulting from such Agent's (or any such director's,
officer's,  employee's or agent's) gross  negligence or willful  misconduct,  as
finally  determined  by a court  of  competent  jurisdiction.  If any  indemnity
furnished to any Agent for any purpose shall,  in the opinion of such Agent,  be
insufficient or become  impaired,  such Agent may call for additional  indemnity
and  cease,  or not  commence,  to do the acts  indemnified  against  until such
additional  indemnity is furnished but shall not include any losses  suffered by
an Agent under subsection  2.1C(iv) or otherwise as a result of another Lender's
default hereunder.

9.5      Registered Persons Treated as Owners.

                  Each Agent may deem and treat the Persons listed as Lenders in
the  Register  as the owners of the  corresponding  Loans or  participations  in
Letters of Credit or Bankers' Acceptances listed therein for all purposes hereof
unless and until an  Assignment  and  Acceptance  effecting  the  assignment  or
transfer thereof shall have been accepted by  Administrative  Agent and recorded
in the  Register as provided in  subsection  10.1B(ii)  of this  Agreement.  Any
request,  authority  or consent of any Person  who,  at the time of making  such
request or giving  such  authority  or consent,  is listed in the  Register as a
Lender shall be conclusive and binding on any subsequent  holder,  transferee or
assignee  of the  corresponding  Loan or  participation  in Letters of Credit or
Bankers' Acceptance.

9.6      Successor Agents.

                  Any  Agent may  resign  at any time by  giving 30 days'  prior
written notice thereof to Lenders,  Company and Borrowers, and such Agent may be
removed  at any time  with or  without  cause  by an  instrument  or  concurrent
instruments  in  writing  delivered  to  Company,   Borrowers,  such  Agent  and
Administrative  Agent as the case may be, and signed by Requisite Lenders.  Upon
any such notice of resignation or any such removal, Requisite Lenders shall have
the right, upon five Business Days' notice to Company and Borrowers,  to appoint
a successor  Agent;  provided  that if such  proposed  successor  Agent is not a
Lender,  Company and Borrowers shall have the right to approve such  appointment
(which  approval  may  not  be  unreasonably  withheld  or  delayed).  Upon  the
acceptance of any appointment as an Agent hereunder by a 

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successor  Agent,  that successor  Agent shall  thereupon  succeed to and become
vested with all the rights,  powers,  privileges  and duties of the  retiring or
removed  Agent and the retiring or removed  Agent shall be  discharged  from its
duties and  obligations  under this  Agreement.  After any  retiring  or removed
Agent's  resignation  or removal  hereunder as an Agent,  the provisions of this
subsection  9.6 shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was such an Agent under this Agreement.


Section 10.  MISCELLANEOUS


10.1  Assignments of and  Participations  in  Commitments,  Loans and Letters of
Credit.

                  A.  General.  The Lenders in each  Lending Unit shall have the
right at any time to (i) sell,  assign,  transfer or  negotiate  to any Eligible
Assignee and its  Affiliates  which,  subject to the  provisions  of  subsection
2.1(A)(iv) and subsection 2.1E, has (a) a Canadian Lending Office for borrowings
and  payments  relating  to Canadian  Loans and  Bankers'  Acceptances,  if such
Lending Unit has a Canadian  Commitment,  (b) an Australian  Lending  Office for
borrowings and payments  relating to Australian  Loans, if such Lending Unit has
an Australian  Commitment,  and (c) a U.S.  Lending  Office for  borrowings  and
payments  relating  to  U.S.  Loans,  and  may  have a  Canadian  Commitment  or
Australian  Commitment even if such Lending Unit does not have such  Commitments
or (ii) sell  participations  to any  Person  in, all or any part of any Loan or
Loans  made  by it or its  Overall  Commitments  or its  Letters  of  Credit  or
participations therein, or any other interest herein or in any other Obligations
owed to it; provided that no such assignment or participation shall, without the
consent of Company  and  Borrowers,  require  Company or any  Borrower to file a
registration  statement with the Securities and Exchange  Commission or apply to
qualify  such  assignment  or  participation  under the  securities  laws of any
jurisdiction;  and  provided,  further  that  for  greater  certainty,  Bankers'
Acceptances  purchased  by a  Canadian  Lender  may be held or sold by it in its
absolute discretion as provided in subsection 2.8E. Except as otherwise provided
in this  subsection  10.1,  no Lender  shall,  as between any  Borrower and such
Lender, be relieved of any of its obligations hereunder as a result of any sale,
assignment,  transfer or negotiation of, or any granting of  participations  in,
all or any part of the  Loans,  the  Overall  Commitments,  Letters of Credit or
participations  therein or Bankers' Acceptances or the other Obligations owed to
such Lender.

         B.       Assignments.

                  (i) Amounts and Terms of Assignments. Each Loan, Commitment or
                  other  Obligation to be assigned  pursuant to subsection 10.1A
                  may (a) be  assigned  in any amount  (of a constant  and not a
                  varying  percentage) to another Lender,  or to an Affiliate of
                  the  assigning  Lender or another  Lender,  with the giving of
                  notice to Company,  Borrowers and Administrative  Agent or (b)
                  be  assigned  in an amount  (of a  constant  and not a varying
                  percentage) of not less than $5,000,000 (or such lesser amount
                  as shall constitute the aggregate amount of all Loans, Overall
                  Commitments,  Letters of Credit or participations therein, and
                  other  Obligations  of the  assigning  Lender)  to  any  other
                  Eligible  Assignee  with the  giving  of  notice  to  Company,

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                  Borrowers  and  Agents  and in the case of  assignment  to any
                  other  Eligible   Assignee,   with  the  consent  of  Company,
                  Borrowers and Administrative Agent for an assignment made by a
                  Lender other than  Administrative  Agent, and with the consent
                  of  Company  and   Borrowers   for  an   assignment   made  by
                  Administrative Agent, which consent of Company,  Borrowers and
                  Administrative Agent shall not be unreasonably  withheld,  and
                  which consent of Company and  Borrowers  shall not be required
                  upon the occurrence and during the  continuance of an Event of
                  Default;  provided  that all such  assignments  by any  Lender
                  shall  be  permitted  only  if the  Canadian  Lender,  if any,
                  Australian  Lender,  if any,  and U.S.  Lender of each Lending
                  Unit  simultaneously  assign the same proportionate  shares of
                  their outstanding Loans,  participations in Letters of Credit,
                  and Overall  Commitments to assignees  that will  respectively
                  constitute the Canadian Lender, Australian Lender and the U.S.
                  Lender of a Lending Unit for the  purposes of this  Agreement.
                  To the extent of any such assignment in accordance with either
                  clause  (a)  or (b)  above,  the  assigning  Lender  shall  be
                  relieved of its obligations with respect to its Loans, Overall
                  Commitments,  Letters of Credit or  participations  therein or
                  other  Obligations or the portion thereof so assigned provided
                  that the  assigning  Lender  shall  continue to have rights of
                  indemnity under  subsections  10.2, 10.3 and 10.7. The parties
                  to  each  such   assignment   shall  execute  and  deliver  to
                  Administrative  Agent, for its acceptance and recording in the
                  Register,  an  Assignment  and  Acceptance,  together  with  a
                  processing   and   recordation   fee  of   $3,500,   and  such
                  certificates,  documents  or  other  evidence,  if  any,  with
                  respect to United  States  federal,  Canadian  and  Australian
                  income  tax  withholding  matters as the  assignee  under such
                  Assignment  and  Acceptance  may be  required  to  deliver  to
                  Administrative Agent pursuant to subsection  10.7B(iii).  Upon
                  such execution,  delivery and  acceptance,  from and after the
                  effective  date specified in such  Assignment and  Acceptance,
                  (y) the  assignee  thereunder  shall be a party hereto and, to
                  the extent that  rights and  obligations  hereunder  have been
                  assigned  to it pursuant to such  Assignment  and  Acceptance,
                  shall have the rights and  obligations of a Lender  hereunder,
                  and (z) the assigning Lender  thereunder  shall, to the extent
                  that rights and obligations hereunder have been assigned by it
                  pursuant to such  Assignment  and  Acceptance,  relinquish its
                  rights  and  be  released  from  its  obligations  under  this
                  Agreement  (and, in the case of an Assignment  and  Acceptance
                  covering all or the remaining portion of an assigning Lender's
                  rights and obligations under this Agreement, such Lender shall
                  cease to be a party hereto). The Overall Commitments hereunder
                  shall be modified to reflect the  Commitment  of such assignee
                  and any remaining  Commitment of such assigning Lender and, if
                  any such  assignment  occurs after the issuance of a Note or a
                  Grid Gold  Acknowledgement  to the assigning Lender hereunder,
                  if requested  pursuant to subsection  2.1E, new Notes and Grid
                  Gold  Acknowledgements  shall, upon surrender of the assigning
                  Lender's Notes or Grid Gold Acknowledgements, be issued to the
                  assignee and to the  assigning  Lender,  substantially  in the
                  forms of Exhibit  IV-A,  Exhibit IV-B,  Exhibit IV-C,  Exhibit
                  IV-D or  Exhibit V annexed  hereto,  as the case may be,  with
                  appropriate insertions, to reflect the new Overall Commitments
                  of the assignee and the assigning Lender.

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                  (ii)  Acceptance  by  Administrative  Agent;   Recordation  in
                  Register.  Upon its receipt of an  Assignment  and  Acceptance
                  executed by an assigning  Lender and an assignee  representing
                  that it is an Eligible  Assignee  meeting the  requirements of
                  subsection 10.1A, together with the processing and recordation
                  fee referred to in subsection  10.1B(i) and any  certificates,
                  documents  or other  evidence  with  respect to United  States
                  federal,   Canadian  and  Australian  income  tax  withholding
                  matters  that such  assignee  may be  required  to  deliver to
                  Administrative   Agent  pursuant  to  subsection   10.7B(iii),
                  Administrative  Agent shall, if such Assignment and Acceptance
                  has been completed and is in substantially the form of Exhibit
                  X-A, Exhibit X-B, or Exhibit X-C annexed hereto, as applicable
                  and  if  Administrative  Agent,  Company  and  Borrowers  have
                  consented to the assignment evidenced thereby (in each case to
                  the extent  such  consent is required  pursuant to  subsection
                  10.1B(i)),  (a)  accept  such  Assignment  and  Acceptance  by
                  executing a  counterpart  thereof as provided  therein  (which
                  acceptance    shall   evidence   any   required   consent   of
                  Administrative  Agent  to such  assignment),  (b)  record  the
                  information  contained  therein in the Register,  and (c) give
                  prompt notice thereof to Company, Borrowers and the Applicable
                  Administrative  Agent.  Administrative  Agent shall maintain a
                  copy  of  each  Assignment  and  Acceptance  delivered  to and
                  accepted by it as provided in this subsection 10.1B(ii).

                  C. Participations. The holder of any participation, other than
an Affiliate of the Lender granting such participation, shall not be entitled to
require such Lender to take or omit to take any action  hereunder  except action
directly affecting (i) the extension of the regularly  scheduled maturity of any
portion of the  principal  amount of or interest  on any Loan or any  commitment
fees  allocated  to such  participation,  (ii) the  release  of  Company or U.S.
Borrower  from its  obligations  under  Section  8 or (iii) a  reduction  of the
principal  amount of or the rate of interest payable on any Loan, a reduction in
the Face  Amount,  amount of  discount  or fee on any  Bankers'  Acceptance,  or
payments  due in repayment  of draws under  Letters of Credit  allocated to such
participation,  and all amounts  payable by any  Borrower  or Company  hereunder
shall be determined as if such Lender had not sold such  participation.  Company
and each  Borrower  hereby  acknowledges  and agrees that,  only for purposes of
subsections  2.6D, 10.5 and 10.7, any  participation  will give rise to a direct
obligation of Borrowers and Company to the participant and the participant shall
be considered to be a "Lender";  provided that no participant  shall be entitled
to receive  any greater  amount  pursuant  to  subsection  2.6D or 10.7 than the
transferor  Lender would have been  entitled to receive in respect of the amount
of the participation  effected by such transferor Lender to such participant had
no such participation occurred. Company, Borrowers, Agents and the other Lenders
shall continue to deal solely with such Lender in connection  with such Lender's
rights and obligations under the Loan Documents.

                  D.  Information.  Each  Lender  may  furnish  any  information
concerning  Company and its  Subsidiaries  in the possession of that Lender from
time to time to assignees and participants  (including prospective assignees and
participants), subject to subsection 10.21.

                  E. Federal Reserve Bank. Nothing in this subsection 10.1 shall
prevent or prohibit any Lender from pledging its rights (but not its obligations
to make Loans and to issue or  

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<PAGE>


participate in Letters of Credit or to create and purchase Bankers' Acceptances)
under this  Agreement  and/or its  Loans,  participations  in Letters of Credit,
Bankers' Acceptances and/or Notes hereunder to a Federal Reserve Bank.


         F.       The Register.

                  (i)  Administrative  Agent and the  Applicable  Administrative
                  Agent shall maintain,  at its Lending  Office,  a register for
                  the  recordation of the names and addresses of Lenders and the
                  Commitment  and  Loans of each  Lender  from time to time (the
                  "Register").  Borrowers,  Agents  and  Lenders  may treat each
                  Person  whose name is  recorded  in the  Register  as a Lender
                  hereunder  for all  purposes of this  Agreement.  The Register
                  shall be available for  inspection  by Company,  any Borrower,
                  any Agent or any Lender at any  reasonable  time and from time
                  to time upon reasonable prior notice.

                  (ii)  Administrative  Agent and the Applicable  Administrative
                  Agent shall  record in the  Register  the  Commitment  and the
                  Loans from time to time of each Lender and each  repayment  or
                  prepayment in respect of the principal  amount of the Loans of
                  each Lender.  Any such  recordation  shall be  conclusive  and
                  binding on Company and each  Lender,  absent  manifest  error;
                  provided  that  failure to make any such  recordation,  or any
                  error in such  recordation,  shall not affect  any  Borrower's
                  Obligations in respect of the applicable Loans.

                  (iii)  Each  Lender  may  record  on  its   internal   records
                  (including,  without limitation, any promissory note described
                  in  subsection  2.1E)  the  amount of each Loan made by it and
                  each payment in respect thereof; provided that in the event of
                  any  inconsistency  between  the  Register  and  any  Lender's
                  records, the recordations in the Register shall govern, absent
                  manifest error.

                  At the request of Company,  Administrative  Agent will provide
                  to Company not more than once a month, a copy of the Register.

         G.       Stamp Taxes and Other Duties, Expenses.

                  Notwithstanding   any  other  provisions  of  this  Agreement,
Company and  Borrowers  shall have no liability  to pay stamp taxes,  duties and
other costs,  taxes,  fees,  charges or other  expenses which may be assessed or
incurred  at the time of, and as a result of, any  assignment  or  participation
made pursuant to this subsection 10.1.

10.2     Expenses.

                  Whether or not the transactions  contemplated  hereby shall be
consummated,  Company and Borrowers  jointly and severally agree to pay promptly
(i) all the actual and reasonable  costs and expenses of preparation of the Loan
Documents;  (ii) all the costs of furnishing all opinions by counsel for Company
or  any  Borrower  (including,   without  limitation,  any  opinions  reasonably
requested by Lenders as to any legal matters arising hereunder) and of

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Company's or any Borrower's  performance  of and compliance  with all agreements
and conditions on its part to be performed or complied with under this Agreement
and the other Loan  Documents  including,  without  limitation,  with respect to
confirming compliance with environmental and insurance  requirements;  (iii) the
reasonable fees,  expenses and disbursements of counsel to any Agent or Arranger
in connection with the negotiation, preparation, execution and administration of
the Loan  Documents,  the Letters of Credit,  the Bankers'  Acceptances  and the
Loans and any consents,  amendments,  waivers or other  modifications  hereto or
thereto and any other documents or matters requested by Company or any Borrower;
(iv) all other actual and reasonable costs and expenses incurred by any Agent or
Arranger in connection  with the  negotiation,  preparation and execution of the
Loan Documents and the  transactions  contemplated  hereby and thereby;  and (v)
after the occurrence  and during the  continuation  of an Event of Default,  all
costs and expenses,  including  reasonable  attorneys' fees,  excluding in-house
counsel, and costs of settlement, incurred by any Agent, Arranger and Lenders in
enforcing any  Obligations  of or in collecting any payments due from Company or
any Borrower hereunder or under the other Loan Documents by reason of such Event
of Default or in connection with any refinancing or  restructuring of the credit
arrangements  provided  under this  Agreement in the nature of a  "work-out"  or
pursuant to any insolvency or bankruptcy proceedings.


10.3     Indemnity.

                  In addition to the payment of expenses  pursuant to subsection
10.2, whether or not the transactions  contemplated hereby shall be consummated,
Company and Borrowers jointly and severally agree to defend,  indemnify, pay and
hold harmless  each Agent,  Arranger and Lenders,  and the officers,  directors,
employees,  counsel,  agents and affiliates of such Agent,  Arranger and Lenders
(collectively  called  the  "Indemnitees")  from and  against  any and all other
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
claims,  costs,  expenses  and  disbursements  of any kind or nature  whatsoever
(including, without limitation, the reasonable fees and disbursements of counsel
for such  Indemnitees in connection with any  investigative,  administrative  or
judicial  proceeding  commenced or threatened by any Person,  whether or not any
such  Indemnitee  shall be designated as a party or a potential  party thereto),
whether  based  on any  federal,  state  or  foreign  laws,  statutes,  rules or
regulations  (including,  without  limitation,  securities and commercial  laws,
statutes,  rules or  regulations  and  Environmental  Laws),  on  common  law or
equitable  cause or on contract or otherwise,  that may be imposed on,  incurred
by, or  asserted  against  any such  Indemnitee,  in any manner  relating  to or
arising out of this  Agreement or the other Loan  Documents or the  transactions
contemplated  hereby  or  thereby  (including,   without  limitation,   Lenders'
agreement  to make  the  Loans  or  create  and  purchase  Bankers'  Acceptances
hereunder  or the use or  intended  use of the  proceeds  of any of the Loans or
Bankers' Acceptances or the issuance of Letters of Credit hereunder and Lenders'
agreement to purchase  participations therein as provided for herein, or the use
or intended  use of the Letters of Credit) or the  statements  contained  in any
commitment  letter  delivered  by any  Lender to Company  or any  Borrower  with
respect thereto  (collectively called the "Indemnified  Liabilities");  provided
that  neither  Company  nor  any  Borrower  shall  have  any  obligation  to any
Indemnitee  hereunder with respect to any Indemnified  Liabilities to the extent
such  Indemnified  Liabilities  arise  from  the  gross  negligence  or  willful
misconduct  of that  Indemnitee  as finally  determined  by a court of competent
jurisdiction; provided further, that, subject to the hold 


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harmless  provisions of this subsection 10.3, Company shall be subrogated to all
rights  that any such  Indemnitee  may have in  respect of any person or persons
whose acts or failure  to act  resulted  in the  indemnified  liability  and the
Indemnitee  shall,  upon  receipt of  payment  for all  Indemnified  Liabilities
payable to such  Indemnitee,  assign to Company the rights with  respect to such
Indemnified  Liabilities  such Indemnitee may have against any person or persons
whose acts or failure to act resulted in the indemnified liability; and provided
still further that any exercise of rights of subrogation shall be withheld until
payment of all of the related  Indemnified  Liabilities.  To the extent that the
undertaking  to  defend,  indemnify,  pay and  hold  harmless  set  forth in the
preceding  sentence may be  unenforceable  because it is violative of any law or
public policy,  Company and each Borrower shall  contribute the maximum  portion
that it is permitted to pay and satisfy under  applicable law to the payment and
satisfaction of all Indemnified  Liabilities  incurred by the Indemnitees or any
of them, subject however to the limitations  contained in the last clause of the
preceding sentence.

10.4     Set Off.

                  In  addition  to any rights  now or  hereafter  granted  under
applicable  law  and not by way of  limitation  of any  such  rights,  upon  the
occurrence  of any  Event of  Default  each  Agent  and each  Lender  is  hereby
authorized  by  Company  and each  Borrower  at any  time or from  time to time,
without  notice to Company or such  Borrower  or to any other  Person,  any such
notice being hereby expressly waived, to set off and to appropriate and to apply
any and all  deposits  (general  or  special,  including,  but not  limited  to,
Indebtedness evidenced by certificates of deposit, whether matured or unmatured,
but not including trust accounts) and any other Indebtedness at any time held or
owing by such  Agent or such  Lender  to or for the  credit  or the  account  of
Company  or such  Borrower,  as the case may be,  against  and on account of the
obligations and liabilities then due and payable of Company or such Borrower, as
the case may be, to such  Agent or such  Lender  under this  Agreement,  and any
Notes, any Grid Gold Acknowledgements,  any Letters of Credit and participations
therein, and any Bankers' Acceptances, including, but not limited to, all claims
of any nature or description  arising out of or connected  with this  Agreement,
the  Notes,  the  Grid  Gold   Acknowledgements,   the  Letters  of  Credit  and
participations  therein,  any Bankers'  Acceptances  or any other Loan Document,
irrespective  of whether or not such  Agent or such  Lender  shall have made any
demand hereunder.

10.5     Ratable Sharing.

                  Subject to the provisions of subsection  2.1E,  Lenders hereby
agree among themselves that if any of them shall,  whether by voluntary payment,
by realization  upon  security,  through the exercise of any right of set-off or
banker's  lien, by  counterclaim  or cross action or by the  enforcement  of any
right  under  the  Loan  Documents  or  under  Letters  of  Credit  or  Bankers'
Acceptances or otherwise, or as adequate protection of a deposit treated as cash
collateral  under  the  Bankruptcy  Code,  receive  payment  or  reduction  of a
proportion of the aggregate  amount of  Obligations of any Borrower then due and
owing to that Lender (collectively,  the "Aggregate Amounts Due" to such Lender)
which is greater than the proportion  received by any other Lender in respect of
the Aggregate Amounts Due of such Borrower to such other Lender, then the Lender
receiving such proportionately  greater payment shall (i) notify  Administrative
Agent and each  

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other  Lender of the  receipt of such  payment  and (ii) apply a portion of such
payment to purchase  participations  (which it shall be deemed to have purchased
from each  seller of a  participation  simultaneously  upon the  receipt by such
seller of its  portion of such  payment)  in the  Aggregate  Amounts Due of such
Borrower to the other Lenders so that all such  recoveries of Aggregate  Amounts
Due shall be shared by all Lenders in proportion to the Aggregate Amounts Due of
such  Borrower  to them;  provided  that if all or part of such  proportionately
greater payment received by such purchasing Lender is thereafter  recovered from
such Lender upon the bankruptcy or  reorganization  of Company,  any Borrower or
otherwise,  those  purchases shall be rescinded and the purchase prices paid for
such  participations  shall be returned to such purchasing Lender ratably to the
extent  of such  recovery,  but  without  interest.  Company  and each  Borrower
expressly consents to the foregoing  arrangement and agrees that any holder of a
participation  so purchased  may  exercise any and all rights of banker's  lien,
set-off or  counterclaim  with respect to any and all monies owing by Company or
such  Borrower to that holder  with  respect  thereto as fully as if that holder
were owed the amount of the participation held by that holder.

10.6     Amendments and Waivers.

                  No  amendment,  modification,  termination  or  waiver  of any
provision  of this  Agreement  or of the Notes or  consent to any  departure  by
Company or any Borrower  therefrom,  shall in any event be effective without the
written   concurrence  of  Requisite  Lenders;   provided  that  any  amendment,
modification,  termination  or waiver of or with  respect to:  increases  in the
amount of the Overall Commitments or any Lending Unit's Commitments or decreases
in the principal amount of the Loans or, interest accrued thereon; each Canadian
Lender's Pro Rata Share,  Australian  Lender's Pro Rata Share, U.S. Lender's Pro
Rata Share,  or each  Lender's Pro Rata Share;  the  definitions  of  "Requisite
Lenders,"  "Bankers'  Acceptances  Purchase Price" (to the extent such change in
definition  results in an  increase  of such  purchase  price)  and  "Commitment
Termination Date"; any provision expressly requiring the approval or concurrence
of all Lenders;  the scheduled final maturity dates of the Loans or the maturity
dates of any Bankers'  Acceptances;  the dates on which interest or any fees are
payable;  decreases in the interest  rates borne by the Loans;  decreases in the
amount or type of any fee on any Bankers' Acceptances;  decreases of any amounts
payable in respect of the Letters of Credit pursuant to subsections  2.7E(i) and
(ii) or in the amount of any fees payable to all Lenders hereunder;  the maximum
duration  of Interest  Periods,  the  provisions  of Section 8 or any release of
Company or U.S.  Borrower  from its  guaranty  obligations  thereunder;  and the
provisions  contained  in  subsection  7.1 and  this  subsection  10.6  shall be
effective  only if evidenced by a writing signed by or on behalf of all Lenders.
In addition,  (i) any amendment,  modification,  termination or waiver of any of
the provisions  contained in Section 3 shall be effective only if evidenced by a
writing signed by or on behalf of  Administrative  Agent and Requisite  Lenders,
(ii) no amendment,  modification,  termination or waiver of any provision of any
Note,  Bankers'  Acceptance  or Grid  Gold  Acknowledgement  shall be  effective
without the written  concurrence of the holder of that Note, Bankers' Acceptance
or Grid Gold Acknowledgement, and (iii) no amendment, modification,  termination
or waiver of any  provision  of  Section  9 or of any  other  provision  of this
Agreement  expressly requiring the approval or concurrence of any Agent shall be
effective without the written  concurrence of such Agent.  Administrative  Agent
may,  but shall have no  obligation  to,  with the  concurrence  of any  Lender,
execute amendments, modifications, waivers or consents on 



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behalf of that  Lender.  Any waiver or consent  shall be  effective  only in the
specific instance and for the specific purpose for which it was given. No notice
to or demand on Company or any Borrower in any case shall entitle Company or any
Borrower  to any  other  or  further  notice  or  demand  in  similar  or  other
circumstances.  Any  amendment,  modification,  termination,  waiver or  consent
effected in  accordance  with this  subsection  10.6 shall be binding  upon each
Lender at the time outstanding,  each future Lender and, if signed by Company or
any Borrower, on Company and such Borrower, as the case may be.

10.7     Increased Costs; Taxes; Capital Adequacy.

                  A.  Compensation  for Increased Costs and Taxes. If any Lender
shall determine (which  determination shall, absent manifest error, be final and
conclusive  and  binding  upon all  parties  hereto)  that any  law,  treaty  or
governmental  rule,  regulation  or  order,  or  any  change  therein  or in the
interpretation,   administration   or   application   thereof   (including   the
introduction of any new law, treaty or governmental rule,  regulation or order),
or any  determination of a court or governmental  authority in each case that is
adopted  after  the  Effective  Date or  compliance  by  such  Lender  with  any
guideline,  request or directive  issued or made after the Effective Date by any
central bank or other governmental or  quasi-governmental  authority (whether or
not having the force of law):

                  (i)  subjects  such  Lender  (or its  Lending  Office)  to any
                  additional Tax (other than any Excluded Taxes) with respect to
                  this  Agreement  or any of the  Loans,  Letters  of Credit (or
                  participations  therein), any risk participations purchased or
                  sold pursuant to subsection  2.1E or Bankers'  Acceptances  or
                  any of its  obligations  hereunder,  or  changes  the basis of
                  taxation of payments to such Lender (or its Lending Office) of
                  any Obligation (except for changes in Excluded Taxes);

                  (ii)  imposes,   modifies  or  holds  applicable  any  reserve
                  (including   without   limitation  any  marginal,   emergency,
                  supplemental,  special  or other  reserve),  special  deposit,
                  compulsory loan, FDIC insurance or similar requirement against
                  assets held by, or deposits or other liabilities in or for the
                  account of, or advances or loans by, or other credit  extended
                  by, or any other  acquisition  of funds by, any office of such
                  Lender (other than any such reserve or other requirements with
                  respect to  Eurodollar  Rate Loans that are  reflected  in the
                  definition of Adjusted Eurodollar Rate); or

                  (iii) imposes any other  condition on or affecting such Lender
                  (or  its  applicable   Lending   Office)  or  its  obligations
                  hereunder  or the London  interbank  market,  precious  metals
                  market,  bankers'  acceptances  market  or bills  of  exchange
                  market;


and the result of any of the foregoing is to increase the cost to such Lender of
agreeing  to  make,  making  or  maintaining   Loans,   Letters  of  Credit  (or
participations  therein)  or  Bankers'  Acceptances  hereunder  or to reduce any
amount  received  or  receivable  by such Lender (or its  Lending  Office)  with
respect thereto;  then, in any such case, Borrowers and Company shall be jointly
and severally  obligated to promptly pay to such Lender, upon written demand and
receipt 

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<PAGE>

of the written  notice  referred  to below,  such  additional  amount or
amounts  (in the  form  of an  increased  rate  of,  or a  different  method  of
calculating,  interest or otherwise as such Lender in its sole discretion  shall
determine) as may be necessary to compensate  such Lender on an after-tax  basis
for any such  increased  cost or  reduction  in amounts  received or  receivable
hereunder.  Such Lender shall deliver to Company and Borrowers a written notice,
setting  forth in reasonable  detail the basis for  calculating  the  additional
amounts owed to such Lender under this subsection  10.7A,  which statement shall
be conclusive and binding upon all parties hereto absent manifest error.

                  Notwithstanding anything contained in this subsection 10.7A or
subsection  10.7B,  if any Lender is unable to make any Loans in the  applicable
currency or in Gold and such inability is not due to circumstances  described in
subsection 2.6A or 2.6B or any other similar circumstances, then any withholding
taxes or any other costs directly resulting from such inability shall be for the
account of such Lender.

         B.       Withholding of Taxes.

                  (i)  Payments  to Be Free  and  Clear.  All  sums  payable  by
                  Borrowers and Company under this  Agreement and the other Loan
                  Documents  to such Lender  shall be paid free and clear of and
                  without any deduction or withholding on account of any Covered
                  Tax  imposed,  levied,  collected,  withheld or assessed by or
                  within the United  States of America,  Australia  or Canada or
                  any  political  subdivision  in or of  the  United  States  of
                  America,  Australia or Canada or any other  jurisdiction  from
                  which a  payment  is made by or on behalf  of  Company  or any
                  Borrower or by any  federation  or  organization  of which the
                  United  States  of  America,  Australia  or Canada or any such
                  jurisdiction is a member at the time of payment.

                  (ii)  Withholding  in respect of  Payments.  If  Company,  any
                  Borrower  or any other  Person is  required by law to make any
                  deduction  or  withholding  on account of any Covered Tax from
                  any sum paid or payable by  Company  or such  Borrower  to any
                  Agent, Arranger or any Lender under any of the Loan Documents:

                          (a) Company and Borrowers shall notify  Administrative
                 Agent  of any  such  requirement  or  any  change  in any  such
                 requirement as soon as Company or any Borrower becomes aware of
                 it;

                          (b)  Company  or such  Borrower,  as the  case may be,
                 shall  pay any  such  Covered  Tax  before  the  date on  which
                 penalties  attach  thereto,  such  payment  to be made  (if the
                 liability  to pay is imposed on Company or such  Borrower)  for
                 its own account or (if that liability is imposed on such Agent,
                 Arranger or such  Lender,  as the case may be) on behalf of and
                 in the name of such Agent, Arranger or such Lender;

                          (c) the sum  payable by Company  or such  Borrower  in
                 respect of which the relevant deduction, withholding or payment
                 is  required  shall be  increased  to the extent  necessary  to
                 ensure that, after the making of that deduction, withholding or


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                 payment,  such Agent,  Arranger or such Lender, as the case may
                 be,  receives  on the due  date  and  retains  (free  from  any
                 liability  in respect  of any such  deduction,  withholding  or
                 payment) a net sum equal to what it would have  received and so
                 retained  had no such  deduction,  withholding  or  payment  in
                 respect of Covered Taxes been required or made; and

                          (d) within 30 days after  paying any sum from which it
                 is required by law to make any  deduction or  withholding,  and
                 within 30 days  after the due date of  payment of any Tax which
                 it is  required  by  clause  (b)  above  to  pay,  Company  and
                 Borrowers  shall  deliver  to  Administrative   Agent  evidence
                 reasonably  satisfactory to the other affected  parties of such
                 deduction, withholding or payment and of the remittance thereof
                 to the relevant taxing or other authority;

           (iii) U.S. Tax Certificates.  Each Lender that is organized under the
         laws of any  jurisdiction  other than the United States or any state or
         other  political  subdivision  thereof shall deliver to  Administrative
         Agent for transmission to U.S.  Borrower,  on or prior to the Effective
         Date (in the case of each Lender listed on the signature  pages hereof)
         or on the date of the Assignment  and  Acceptance  pursuant to which it
         becomes a Lender (in the case of each other Lender),  and at such other
         times  as may be  necessary  in the  determination  of  Company  or any
         Borrower or  Administrative  Agent (each in the reasonable  exercise of
         its  discretion),  such  certificates,  documents  or  other  evidence,
         properly  and  accurately  completed  and duly  executed by such Lender
         (including,  without limitation,  Internal Revenue Service Form 1001 or
         Form 4224 or any other  certificate or statement of exemption  required
         by Treasury  Regulations  Section 1.1441-4(a) or Section 1.1441-6(c) or
         any successor  thereto) to establish that such Lender is not subject to
         deduction or  withholding  of United  States  federal  income tax under
         Section  1441 or 1442 of the Internal  Revenue  Code or  otherwise  (or
         under any  comparable  provisions  of any  successor  statute) and each
         Lender shall deliver to  Administrative  Agent for  transmission to the
         relevant  Borrower  or  Borrowers  any  such  additional  certificates,
         documents  or  other  evidence  as may at  such  time  be  required  by
         applicable  United States,  Australian or Canadian  federal or state or
         provincial law if required to establish that such Lender is not subject
         to deduction or withholding under United States, Australian or Canadian
         tax laws with  respect to any  payments  to such  Lender of  principal,
         interest,  fees  or  other  amounts  payable  under  any  of  the  Loan
         Documents.  Neither  Company nor any Borrower  shall be required to pay
         any additional amount to any such Lender under clause (c) of subsection
         10.7B(ii) if such Lender shall have failed to satisfy the  requirements
         of the  immediately  preceding  sentence;  provided that if such Lender
         shall have  satisfied  such  requirements  on or prior to the Effective
         Date (in the case of each Lender listed on the signature  pages hereof)
         or on the date of the Assignment  and  Acceptance  pursuant to which it
         became a Lender  (in the case of each  other  Lender),  nothing in this
         subsection  10.7B(iii)  shall  relieve  Company or any  Borrower of any
         obligation  to pay any  additional  amounts  pursuant  to clause (c) of
         subsection  10.7B(ii)  in the event that,  as a result of any change in
         applicable  law after the Effective  Date or the date of the applicable
         Assignment and Acceptance, as the case may be, such Lender is no longer
         properly entitled to deliver certificates,  documents or other evidence
         at a  subsequent  date  establishing  the fact that such  

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         Lender is not subject to withholding as described in the immediately
         preceding sentence.

                  C.  Capital  Adequacy  Adjustment.  If any  Lender  shall have
determined  in  good  faith  that  the  adoption,  effectiveness,   phase-in  or
applicability (excluding any adoption, effectiveness,  phase-in or applicability
published as of the Effective Date and currently scheduled to take effect) after
the Effective  Date of any law, rule or  regulation  (or any provision  thereof)
regarding  capital adequacy,  or any change therein or in the  interpretation or
administration  thereof after the Effective Date by any governmental  authority,
central  bank  or  comparable   agency  charged  with  the   interpretation   or
administration  thereof,  or compliance by any Lender (or its applicable lending
office) with any  guideline,  request or directive  regarding  capital  adequacy
(whether  or not  having the force of law) of any such  governmental  authority,
central bank or comparable  agency, has or would have the effect of reducing the
rate of return on the capital of such Lender or any corporation controlling such
Lender as a  consequence  of,  or with  reference  to,  such  Lender's  Loans or
Commitment  or  Letters  of  Credit  or   participations   therein  or  Bankers'
Acceptances  or other  obligations  hereunder  to a level  below that which such
Lender  or such  controlling  corporation  could  have  achieved  but  for  such
adoption, effectiveness,  phase-in, applicability,  change or compliance (taking
into  consideration the policies of such Lender or such controlling  corporation
with regard to capital  adequacy),  then from time to time,  within ten Business
Days  after  written  demand  by such  Lender  (with a copy  of such  demand  to
Administrative  Agent),  Company  and  Borrowers  shall pay to such  Lender such
additional  amount or amounts as will compensate such Lender or such controlling
corporation for such reduction.

10.8     Lenders' Obligation to Mitigate; Replacement of Lender.

                  Each Lender agrees that, as promptly as practicable  after the
officer  of such  Lender  responsible  for  administering  the Loans  under this
Agreement  becomes  aware of the  occurrence  of an event or the  existence of a
condition that would cause such Lender to become an Affected  Lender as provided
in subsection  2.6C or that would entitle such Lender to receive  payments under
subsection  10.7A or 10.7C,  it will, to the extent not  inconsistent  with such
Lender's internal policies, use reasonable efforts (i) to make, fund or maintain
the Commitment of such Lender or the affected  Loans or Bankers'  Acceptances of
such Lender through another lending office of such Lender,  or (ii) to take such
other  measures as such Lender may deem  reasonable,  if as a result thereof the
circumstances which would cause such Lender to be an Affected Lender as provided
in subsection  2.6C would cease to exist or the  additional  amounts which would
otherwise be required to be paid to such Lender pursuant to subsection  10.7A or
10.7C would be  materially  reduced and if, as  determined by such Lender in its
sole discretion,  the making, funding or maintaining of such Commitment or Loans
or Bankers'  Acceptances through such other lending office or in accordance with
such other measures,  as the case may be, would not otherwise  adversely  affect
such  Commitment  or Loans or  Bankers'  Acceptances  or the  interests  of such
Lender;  provided  that such Lender will not be  obligated to utilize such other
lending office pursuant to this  subsection  10.8 unless  Borrowers agree to pay
all reasonable  expenses incurred by such Lender in utilizing such other lending
office. A certificate as to the amount of any such expenses payable by Borrowers
pursuant to this subsection  10.8 (setting forth in reasonable  detail 


                                      123
<PAGE>


the basis for  requesting  such  amount)  submitted  by such Lender to Borrowers
shall be conclusive absent manifest or demonstrable error.

                  If any  Lender  becomes  entitled  to receive  payments  under
subsection  10.7A or 10.7C,  Borrowers  have the right at any time to treat such
Lender as an Affected  Lender and to substitute  one or more Eligible  Assignees
for such Lender as provided in subsection 2.6C.

10.9     Independence of Covenants.

                  All covenants  hereunder shall be given independent  effect so
that  if a  particular  action  or  condition  is not  permitted  by any of such
covenants,  the fact that it would be  permitted  by an  exception  to, or would
otherwise be within the  limitations  of,  another  covenant shall not avoid the
occurrence  of an Event of Default or Potential  Event of Default if such action
is taken or condition exists.

10.10    Notices.

                  Unless otherwise  specifically  provided herein, any notice or
other communication herein required or permitted to be given shall be in writing
and may be  personally  served,  telecopied,  telexed or sent by United  States,
Australian or Canadian mail or courier  service and shall be deemed to have been
given when delivered in person or by courier  service,  upon receipt of telecopy
or telex if delivered or received on a Business Day or on the first Business Day
after  delivery  or  receipt if  delivered  or  received  on a day that is not a
Business Day. For the purposes hereof, the address of each party hereto shall be
as set forth under such party's name on the signature  pages hereof or (i) as to
Company,  any Borrower,  any Agent and Arranger,  such other address as shall be
designated  by such Person in a written  notice  delivered to the other  parties
hereto  and  (ii) as to each  other  party,  such  other  address  as  shall  be
designated by such party in a written notice delivered to Administrative Agent.

10.11    Survival of Representations, Warranties and Agreements.

                  A. All representations, warranties and agreements made herein,
shall survive the execution  and delivery of this  Agreement,  the making of the
Loans  hereunder,  the  issuance of the Letters of Credit and the  creation  and
purchase of Bankers' Acceptances.

                  B.  Notwithstanding  anything in this  Agreement or implied by
law to the contrary,  the agreements of Company set forth in  subsections  2.6D,
10.2,  10.3, 10.4, 10.7, 10.13 and 10.24 and the agreements of Lenders set forth
in subsections 9.2C, 9.4, 10.4, 10.5,  10.7B(iii),  and 10.24 shall survive, but
this Agreement  shall otherwise  terminate,  upon the termination of the Overall
Commitments,  payment of all Obligations (other than contingent amounts pursuant
to subsections  2.1E,  2.6D, 10.2, 10.3, 10.7 and 10.24 not at such time claimed
or due and payable),  the  cancellation  or expiration of the Letters of Credit,
the cancellation or maturity of all Bankers'  Acceptances and the  reimbursement
of any amounts drawn thereunder;  provided that this Agreement shall continue to
be effective or be  reinstated,  as the case may be, if at any time payment,  or
any part thereof,  of any  Obligation is rescinded or must otherwise be restored
by any 


                                      124
<PAGE>

Agent or any Lender  upon the  bankruptcy  or  reorganization  of Company or any
Borrower or otherwise.


10.12    Failure or Indulgence Not Waiver; Remedies Cumulative.

                  No failure or delay on the part of any Lender in the  exercise
of any power,  right or  privilege  hereunder or under a Loan,  Note,  Letter of
Credit or Bankers' Acceptances shall impair such power, right or privilege or be
construed to be a waiver of any default or acquiescence  therein,  nor shall any
single or partial exercise of any such power,  right or privilege preclude other
or further  exercise  thereof or of any other  power,  right or  privilege.  All
rights and remedies  existing under this  Agreement,  the Notes,  the Letters of
Credit, the Bankers' Acceptances and the other Loan Documents are cumulative to,
and not exclusive of, any rights or remedies otherwise available.

10.13    Marshalling; Payments Set Aside.

                  Neither any Agent,  Arranger nor any Lender shall be under any
obligation to marshal any assets in favor of Company,  any Borrower or any other
party or against or in payment of any or all of the  Obligations.  To the extent
that Company or any Borrower makes a payment or payments to any Agent,  Arranger
or Lenders,  or any Agent or Lenders enforce any security  interests or exercise
their  rights of setoff,  and such  payment or payments or the  proceeds of such
enforcement or setoff or any part thereof are subsequently invalidated, declared
to be fraudulent or  preferential,  set aside and/or  required to be repaid to a
trustee,  receiver or any other party under any bankruptcy  law, any other state
or federal law, common law or any equitable  cause,  then, to the extent of such
recovery,  the obligation or part thereof  originally  intended to be satisfied,
and all Liens, rights and remedies therefor or related thereto, shall be revived
and  continued  in full force and effect as if such  payment or payments had not
been made or such enforcement or setoff had not occurred.

10.14    Severability.

                  In case any provision in or obligation  under this  Agreement,
the Notes, the Bankers'  Acceptances or the Grid Gold  Acknowledgments  shall be
invalid,  illegal or unenforceable in any jurisdiction,  the validity,  legality
and  enforceability  of the  remaining  provisions  or  obligations,  or of such
provision  or  obligation  in any  other  jurisdiction,  shall not in any way be
affected or impaired thereby.

10.15    Obligations Several; Independent Nature of Lenders' Rights.

                  The obligations of Lenders hereunder are several and no Lender
shall be  responsible  for the  obligations  or  Commitment  of any other Lender
hereunder. Nothing contained herein or in any other Loan Document, and no action
taken by  Lenders  pursuant  hereto or  thereto,  shall be deemed to  constitute
Lenders as a partnership,  an association,  a joint venture or any other kind of
entity.  The amounts  payable at any time  hereunder  to each Lender  shall be a
separate  and  independent  debt,  and each  Lender  shall  be,  subject  to the
limitations on the right to terminate  Commitments  and accelerate  outstandings
contained in Section 7,  entitled to protect and enforce


                                      125
<PAGE>


its rights  arising out of this  Agreement and it shall not be necessary for any
other  Lender to be joined as an  additional  party in any  proceeding  for such
purpose.

10.16    Headings.

                  Section and subsection headings in this Agreement are included
herein for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.

10.17    Applicable Law.

                  THIS AGREEMENT AND THE NOTES AND THE LEGAL RELATIONS AMONG THE
PARTIES  SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE
WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK. EACH LETTER OF CREDIT SHALL BE
GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OR
RULES  DESIGNATED  IN SUCH  LETTER  OF  CREDIT,  OR IF NO SUCH LAWS OR RULES ARE
DESIGNATED,  THE UNIFORM  CUSTOMS AND PRACTICES FOR  DOCUMENTARY  CREDITS (1993)
REVISION,  INTERNATIONAL CHAMBER OF COMMERCE,  PUBLICATION NO. 500 (THE "UNIFORM
CUSTOMS")  AND, AS TO MATTERS NOT GOVERNED BY THE UNIFORM  CUSTOMS,  THE LAWS OF
THE STATE OF NEW YORK. EACH BANKERS'  ACCEPTANCE SHALL BE GOVERNED BY, AND SHALL
BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF CANADA.

10.18    Successors and Assigns.

                  This  Agreement  shall be binding upon the parties  hereto and
their  respective  successors  and assigns and shall inure to the benefit of the
parties hereto and the  successors and assigns of Agents,  Arranger and Lenders.
The terms and  provisions  of this  Agreement  shall inure to the benefit of any
assignee or transferee of any of the  Obligations,  and in the event of any such
transfer or assignment the rights and privileges  herein  conferred upon Agents,
Arranger  and  Lenders  shall  automatically  extend  to and be  vested  in such
transferee or assignee,  all subject to the terms and conditions hereof. Neither
Company's nor any Borrower's  rights or  obligations  hereunder nor any interest
therein may be  assigned or  delegated  by Company or any  Borrower  without the
prior written consent of all Lenders.  Lenders' rights of assignment are subject
to subsection 10.1.

10.19    Consent to Jurisdiction and Service of Process.

                  ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY PARTY ARISING OUT
OF OR RELATING TO THIS  AGREEMENT OR ANY OTHER LOAN  DOCUMENT OR ANY  OBLIGATION
MAY BE BROUGHT IN ANY STATE OR FEDERAL  COURT OF COMPETENT  JURISDICTION  IN THE
STATE OF NEW YORK,  AND BY EXECUTION AND DELIVERY OF THIS  AGREEMENT  EACH PARTY
ACCEPTS  FOR  ITSELF  AND IN  CONNECTION  WITH  ITS  PROPERTIES,  GENERALLY  AND

                                      126
<PAGE>


UNCONDITIONALLY,  THE  NONEXCLUSIVE  JURISDICTION  OF THE  AFORESAID  COURTS AND
WAIVES ANY DEFENSE OF FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO BE BOUND BY
ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT, SUCH OTHER LOAN
DOCUMENT OR SUCH OBLIGATION.  Company and each Borrower  designates and appoints
CT  Corporation  System,  and such other Persons as may hereafter be selected by
Company and each Borrower  irrevocably  agreeing in writing to so serve,  as its
agent to receive on its behalf service of all process in any such proceedings in
any such court,  such  service  being  hereby  acknowledged  by Company and each
Borrower to be effective  and binding  service in every  respect.  A copy of any
such  process  so served  shall be mailed by  registered  mail to Company at its
address as  provided  in  subsection  10.10;  provided  that,  unless  otherwise
provided by  applicable  law, any failure to mail such copy shall not affect the
validity of service of such  process.  If any agent  appointed by Company or any
Borrower refuses to accept service,  Company and each Borrower hereby agree that
service of process  sufficient for personal  jurisdiction  in any action against
Company or any Borrower may be made by  registered  or  certified  mail,  return
receipt  requested,  to Company at its address as provided in subsection  10.10,
and Company and each  Borrower  hereby  acknowledge  that such service  shall be
effective and binding in every respect if timely received.  Nothing herein shall
affect the right to serve process in any other manner  permitted by law or shall
limit  the  right of any  party to bring  proceedings  against  any party in the
courts of any other jurisdiction.

10.20    Waiver of Jury Trial.

                  EACH OF THE PARTIES TO THIS  AGREEMENT  HEREBY AGREES TO WAIVE
ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR  ARISING  OUT OF THIS  AGREEMENT  OR ANY OF THE OTHER LOAN  DOCUMENTS  OR ANY
DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR
THE  LENDER/BORROWER  RELATIONSHIP THAT IS BEING ESTABLISHED.  The scope of this
waiver is intended to be  all-encompassing  of any and all disputes  that may be
filed in any court and that  relate to the subject  matter of this  transaction,
including,  without  limitation,  contract claims,  tort claims,  breach of duty
claims  and all  other  common  law and  statutory  claims.  Each  party  hereto
acknowledges that this waiver is a material  inducement to enter into a business
relationship,  that each has already relied on this waiver in entering into this
Agreement,  and that each will  continue to rely on this waiver in their related
future  dealings.  Each party hereto further warrants and represents that it has
reviewed  this  waiver  with  its  legal  counsel  and  that  it  knowingly  and
voluntarily  waives  its jury trial  rights  following  consultation  with legal
counsel. THIS WAIVER IS IRREVOCABLE,  MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT  AMENDMENTS,
RENEWALS,  SUPPLEMENTS  OR  MODIFICATIONS  TO THIS AGREEMENT OR ANY OF THE OTHER
LOAN  DOCUMENTS  OR TO  ANY  OTHER  DOCUMENTS  OR  AGREEMENTS  RELATING  TO  THE
OBLIGATIONS.  In the  event  of  litigation,  this  Agreement  may be filed as a
written consent to a trial by the court.


                                      127
<PAGE>

10.21    Confidentiality.

                  Each Lender  shall hold all  non-public  information  obtained
pursuant to the  requirements  of this  Agreement  which has been  identified as
confidential  by  Company  or any  Borrower  in  accordance  with such  Lender's
customary  procedures  for handling  its own  confidential  information  of this
nature  and in  accordance  with  safe and  sound  banking  practices,  it being
understood  and agreed by Company and  Borrowers  that Lenders may disclose such
information (i) to their  accountants and legal counsel in connection with their
ongoing review of the credit  extended under this Agreement and (ii) to any bona
fide or prospective  assignee,  transferee or participant in connection with the
contemplated  assignment  or  transfer  by such  Lender of any  Loans,  Bankers'
Acceptances, participations in Letters of Credit or any participation therein or
as required  (provided  that in each case of disclosure  under (i) and (ii), the
disclosing  party shall  advise  such  persons of the  non-public  nature of the
information  and secure  from such  persons in advance of  disclosure  that such
persons  will treat the  information  as  confidential  in  accordance  with its
customary  procedures  for  handling  confidential  information,  subject to the
disclosure   provisions   herein),   (iii)  to  any   governmental   agency   or
representative  thereof upon its reasonable  request,  or (iv) pursuant to legal
process  (provided  that in the  case of  disclosure  under  (iii)  (other  than
regulatory  reviews in the ordinary course of business) and (iv), the disclosing
party shall  advise  Company  (unless  such  disclosure  is  prohibited  by such
governmental  agency or legal  process) of such  intended  disclosure as soon as
possible in advance if feasible and otherwise as soon as possible thereafter and
shall cooperate with Company,  at Company's expense, in any reasonable effort by
Company to prevent  disclosure of such  information);  provided that in no event
shall any Lender be obligated or required to return any  materials  furnished by
Company or any of its Subsidiaries.

10.22    Entire Agreement.

                  This  Agreement,  taken  together  with all of the other  Loan
Documents  and all  certificates  and other  documents  delivered  by Company to
Administrative Agent and Lenders pursuant to the Loan Documents, and any letters
among Company,  Borrowers,  any Agent and/or Arranger relating to fees, embodies
the entire  agreement and  supersedes  all prior  agreements,  written and oral,
relating to the subject matter hereof.

10.23    Counterparts; Effectiveness.

                  This  Agreement  and  any  amendments,  waivers,  consents  or
supplements  hereto or in  connection  herewith may be executed in any number of
counterparts and by different parties hereto in separate  counterparts,  each of
which when so executed and delivered  shall be deemed an original,  but all such
counterparts  together  shall  constitute  but  one  and  the  same  instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single  counterpart so that all signature pages are physically  attached to
the same document. This Agreement shall become effective upon the execution of a
counterpart  hereof by each of the  parties  hereto and  receipt by Company  and
Administrative Agent of written or telephonic notification of such execution and
authorization of delivery thereof.


                                      128
<PAGE>


10.24    Judgment Currency.

                  If for the purposes of obtaining a judgment in any court it is
necessary to convert a sum due hereunder or under any other Loan Document in any
currency (the "Original Currency") into another currency (the "Other Currency"),
the parties hereto agree, to the fullest extent that they may effectively do so,
that the rate of exchange used shall be the rate of exchange used in calculating
Dollar Equivalents on the Business Day preceding that on which final judgment is
given.  The obligation of Company and each Borrower in respect of any sum due in
the Original  Currency from it to any Agent or any Lender hereunder or under any
other Loan Document shall,  notwithstanding  any judgment in any Other Currency,
be discharged  only to the extent that on the Business Day following  receipt by
such  Agent  or such  Lender  of any  sum  adjudged  to be so due in such  Other
Currency  such  Agent or such  Lender  may in  accordance  with  normal  banking
procedures  purchase  the Original  Currency  with such Other  Currency;  if the
amount of the Original Currency so purchased is less than the sum originally due
to such Lender in the  Original  Currency,  Company and  Borrowers  agree,  as a
separate  obligation and  notwithstanding  any such judgment,  to indemnify such
Agent or such  Lender  against  such  loss,  and if the  amount of the  Original
Currency  so  purchased  exceeds  the sum  originally  due to any  Lender in the
Original  Currency,  such Agent or such Lender agrees to remit to Company or the
applicable Borrower, as the case may be, such excess.

10.25    Change in Control.

                  A. If  individuals  who on the Effective  Date were members of
the  board of  directors  of  Company  (together  with any new  directors  whose
election to such board of  directors  or whose  nomination  for  election by the
shareholders  of Company was  approved by a vote of a majority of the  directors
then still in office who were either  directors on the  Effective  Date or whose
election or nomination  for election was  previously so approved)  cease for any
reason to constitute a majority of such board of directors then in office; or if
a  "Change  of  Control"  as  defined  in the  indenture  pursuant  to which the
Subordinated  Debentures or pursuant to which the New Subordinated  Indebtedness
will be issued shall have occurred;  or if any Person or any two or more Persons
acting in concert shall have acquired  beneficial  ownership (within the meaning
of Rule 13d-3 of the Securities and Exchange Commission under the Exchange Act),
directly  or  indirectly,   of  Securities  of  Company  (or  other   Securities
convertible  into  such  Securities)  representing  30% or more of the  combined
voting power of all  Securities  of Company  entitled to vote in the election of
directors, there shall be deemed to have occurred a "Company Change of Control."

                  B. If a Change  of  Control  shall  occur,  automatically  and
without any notice to Company and Borrowers,  the Overall  Commitments,  and all
Commitments  and  obligations  of Lenders  hereunder  shall  terminate,  and two
Business Days  thereafter,  all  Obligations  under this Agreement  shall become
payable in full,  including  any amounts that may be due pursuant to  subsection
2.6D.  Failure to pay all  Obligations on the date due and failure to secure the
cancellation of all Letters of Credit and Bankers'  Acceptances then outstanding
shall constitute an Event of Default


                                      129


<PAGE>


                  IN WITNESS  WHEREOF,  the  parties  hereto  have  caused  this
Agreement  to be duly  executed  and  delivered  by  their  respective  officers
thereunto duly authorized as of the date first written above.

                                           Company:

                                           HOMESTAKE MINING COMPANY


                                           By:     ____________________________
                                           Title:  ____________________________

                                           Notice Address:

                                                   Homestake Mining Company
                                                   650 California Street
                                                   San Francisco, California 
                                                   94108-2788
                                                   Attn: Treasurer
                                                   Fax: (415) 397-5038



                                           U.S. Borrower:

                                           HOMESTAKE MINING COMPANY OF 
                                           CALIFORNIA


                                           By:     ___________________________
                                           Title:  ___________________________

                                           Notice Address:

                                                    Homestake Mining Company of
                                                    California
                                                    650 California Street
                                                    San Francisco, California 
                                                    94108-2788
                                                    Attn: Treasurer
                                                    Fax: (415) 397-5038



<PAGE>



                                           Canadian Borrower:

                                           HOMESTAKE CANADA INC.


                                           By:     ____________________________

                                           Titel:  ____________________________
                                           
                                           Notice Address:

                                                   Homestake Canada Inc.
                                                   c/o Homestake Mining Company
                                                   650 California Street
                                                   San Francisco, California 
                                                   94108-2788
                                                   Attn:  Treasurer
                                                   Fax:  (415) 397-5038


                                           Australian Borrowers:

                                           HOMESTAKE GOLD OF AUSTRALIA LIMITED


                                           By:     ____________________________
                                           Title:  ____________________________

                                           Notice Address:

                                                   Homestake Gold of Australia 
                                                     Limited
                                                   c/o Homestake Mining Company
                                                   650 California Street
                                                   San Francisco, California  
                                                     94108-2788
                                                   Attn:  Treasurer
                                                   Fax:  (415) 397-5038




<PAGE>


                                           PLUTONIC RESOURCES LIMITED

                                           By:     ____________________________
                                           Title:  ____________________________

                                           Notice Address:

                                                   Plutonic Resources Limited
                                                   c/o Homestake Mining Company
                                                   650 California Street
                                                   San Francisco, California  
                                                     94108-2788
                                                   Attn:  Treasurer
                                                   Fax:  (415) 397-5038


<PAGE>


                                           LENDERS:

                                           THE CHASE MANHATTAN BANK, 
                                           individually, as a U.S. Lender, as 
                                           an Issuing Lender,
                                           and as Administrative Agent

                                           By:     ____________________________
                                           Title:  ____________________________

                                           Notice Address:

                                                   The Chase Manhattan Bank
                                                   270 Park Avenue
                                                   New York, NY 10017
                                                   Attention: James Ramage
                                                   Fax: (212) 270-4724

                                           With copies to

                                                   Loan Services Group
                                                   1 Chase Manhattan Plaza
                                                   New York, NY 10081




<PAGE>



                                           THE CHASE  MANHATTAN  BANK OF CANADA,
                                           individually,  as a Canadian  Lender,
                                           as an Issuing Lender, and as Canadian
                                           Administrative Agent


                                           By:     ____________________________
                                           Title:  ____________________________

                                           Notice Address:

                                                   The Chase Manhattan Bank of 
                                                     Canada
                                                   100 King Street West, Suite
                                                     6900
                                                   Toronto, Ontario
                                                   M5X 1A4
                                                   Canada


<PAGE>



                                           CHASE SECURITIES AUSTRALIA LIMITED,
                                           as Australian Administrative Agent


                                           By:     ____________________________
                                           Title:  ____________________________

                                           Notice Address:

                                           Level 35, AAP Centre
                                           259 George Street
                                           Sydney 2000, Australia



<PAGE>



                                           THE CHASE MANHATTAN BANK, as an
                                           Australian Lender


                                           By:     ____________________________
                                           Title:  ____________________________

                                           Notice Address:

                                           Level 35, AAP Centre
                                           259 George Street
                                           Sydney 2000, Australia




<PAGE>



                                           ARRANGER:

                                           CHASE SECURITIES INC., as Arranger


                                           By:     ____________________________
                                           Title:  ____________________________





<PAGE>


                                           CREDIT SUISSE FIRST BOSTON, as a
                                           U.S. Lender


                                           By:     ____________________________
                                           Title:  ____________________________

                                           By:     ____________________________
                                           Title:  ____________________________

                                           Notice Address:

                                                   Credit Suisse First Boston
                                                   11 Madison Avenue, 20th Floor
                                                   New York, NY 10010-3692
                                                   Attention: J. Scott Karro
                                                   Fax: (212) 325-8314


<PAGE>


                                           CREDIT SUISSE FIRST BOSTON, as an 
                                             Australian Lender


                                           By:     ____________________________
                                           Title:  ____________________________

                                           By:     ____________________________
                                           Title:  ____________________________

                                           Notice Address:

                                                   Credit Suisse First Boston
                                                   101 Collins Street
                                                   Melbourne, Victoria 3000
                                                   Australia
                                                   Attention:  Michael Tierney
                                                   Tel:  3 9653 3434
                                                   Fax:  3 9653 3444


<PAGE>


                                           CREDIT SUISSE FIRST BOSTON CANADA,
                                             as a Canadian Lender


                                           By:     ____________________________
                                           Title:  ____________________________

                                           By:     ____________________________
                                           Title:  ____________________________

                                           Notice Address:

                                                   Credit Suisse First Boston 
                                                     Canada
                                                   525 University Avenue
                                                   Toronto, Ontario  M5G 2K6
                                                   Attention:  Alain Daoust
                                                   Tel:  (416) 351-3663
                                                   Fax:  (416) 351-3671


<PAGE>



                                           UBS AG, STAMFORD BRANCH, as a U.S. 
                                             Lender


                                           By:     ___________________________
                                           Title:  ___________________________

                                           By:     ___________________________
                                           Title:  ___________________________

                                           Notice Address:

                                           UBS AG, Stamford Branch
                                           677 Washington Blvd., 8N
                                           Stanford, CT 06901
                                           Attention: Dan Nolan
                                           Fax: (203) 719-4176

<PAGE>



                                           UBS AG, STAMFORD BRANCH, as a 
                                             Canadian Lender


                                           By:     ___________________________
                                           Title:  ___________________________

                                           By:     ___________________________
                                           Title:  ___________________________

                                           Notice Address:

                                                   UBS AG, Stamford Branch
                                                   677 Washington Blvd., 8N
                                                   Stanford, CT 06901
                                                   Attention: Dan Nolan
                                                   Fax: (203) 719-4176

<PAGE>



                                           UBS AG, STAMFORD BRANCH, as an 
                                             Australian Lender


                                           By:     ___________________________
                                           Title:  ___________________________

                                           By:     ___________________________
                                           Title:  ___________________________

                                           Notice Address:

                                                   UBS AG, Stamford Branch
                                                   677 Washington Blvd., 8N
                                                   Stanford, CT 06901
                                                   Attention: Dan Nolan
                                                   Fax: (203) 719-4176


<PAGE>


                                           DEUTSCHE BANK AG, New York Branch 
                                           and/or Cayman Islands Branch,as a 
                                           U.S. Lender


                                           By:     ___________________________
                                           Title:  ___________________________

                                           Notice Address:

                                                   Deutsche Bank N.A.
                                                   31 West 52nd Street
                                                   New York, NY 10019
                                                   Attention: John Calvert
                                                   Fax: (212) 469-3632


<PAGE>



                                           DEUTSCHE BANK AG,  ARBN 064 165 162, 
                                           as an Australian Lender


                                           By:     ___________________________
                                           Title:  ___________________________

                                           Notice Address:

                                                   Deutsche Bank Sydney
                                                   Level 18, 225 George Street
                                                   Sydney Australia
                                                   Attention: Peter Field
                                                   Fax: 612-9252-2364


<PAGE>


                                           DEUTSCHE BANK CANADA, as a Canadian 
                                             Lender


                                           By:     ____________________________
                                           Title:  ____________________________

                                           Notice Address:

                                                   Deutsche Bank Canada
                                                   222 Bay Street, Suite 1200
                                                   Toronto, Ontario M5K 1H6
                                                   Canada
                                                   Attention: Rod O'Hara
                                                   Fax: (416) 682-8444


<PAGE>



                                           REPUBLIC NATIONAL BANK OF NEW YORK,
                                           as a U.S. Lender


                                           By:     ____________________________
                                           Title:  ____________________________

                                           By:     ____________________________
                                           Title:  ____________________________

                                           Notice Address:

                                                   Republic National Bank of New
                                                     York
                                                   452 Fifth Avenue
                                                   New York, NY 10018
                                                   Attention: Jeffrey Roth
                                                   Fax: (212) 525-6581


<PAGE>



                                           REPUBLIC NATIONAL BANK OF NEW YORK 
                                           (CANADA), as a Canadian Lender


                                           By:     ____________________________
                                           Title:  ____________________________

                                           By:     ____________________________
                                           Title:  ____________________________

                                           Notice Address:

                                                   Republic National Bank
                                                   150 Bloor Street West Suite
                                                   M100
                                                   Toronto, Ontario M5S 2Y5
                                                   Attention: Anthony Matrundola
                                                   Fax: (416) 968-7669


<PAGE>



                                           REPUBLIC MASE AUSTRALIA LIMITED, as 
                                           an Australian Lender


                                           By:     ____________________________
                                           Title:  ____________________________

                                           Notice Address:

                                                   Republic Mase Australia 
                                                     Limited
                                                   Level 6, AMP Centre
                                                   50 Bridge Street
                                                   Sydney, NSW 2000, Australia
                                                   Attention: Anthony Wallace
                                                   Fax: 61-2-235-0950


<PAGE>



                                           NM ROTHSCHILD & SONS LIMITED, as a
                                             U.S. Lender


                                           By:     ____________________________
                                           Title:  ____________________________

                                           By:     ____________________________
                                           Title:  ____________________________

                                           Notice Address:

                                                   NM Rothschild & Sons Limited
                                                   New Court
                                                   St. Swithin's Lane
                                                   London
                                                   EC4P 4DU
                                                   Attention: Ian Harding
                                                   Fax: 0171-280-5139


<PAGE>


                                           NM ROTHSCHILD & SONS LIMITED, as a
                                             Canadian Lender


                                           By:     ___________________________
                                           Title:  ___________________________

                                           By:     ___________________________
                                           Title:  ___________________________

                                           Notice Address:

                                                   NM Rothschild & Sons Limited
                                                   New Court
                                                   St. Swithin's Lane
                                                   London
                                                   EC4P 4DU
                                                   Attention: Ian Harding
                                                   Fax: 0171-280-5139



<PAGE>



                                           MELLON BANK, N.A., as a U.S. Lender


                                           By:     ___________________________
                                           Title:  ___________________________

                                           Notice Address:

                                           Mellon Bank, N.A.
                                                   400 S. Hope Street, 5th Floor
                                                   Los Angeles, CA 90071-2806
                                                   Attention: Lawrence Ivey
                                                   Fax: (213) 629-0492


<PAGE>


                                           MELLON BANK CANADA, as a Canadian 
                                           Lender


                                           By:     ___________________________
                                           Title:  ___________________________

                                           Notice Address:

                                                   Mellon Bank Canada
                                                   77 King Street West, Suite 
                                                     3200
                                                   Toronto, Ontario M5K 1K2
                                                   Attention: Ed McGrath
                                                   Fax: (416) 860-2409


<PAGE>


                                           THE BANK OF NOVA SCOTIA, as a U.S. 
                                             Lender


                                           By:     ___________________________
                                           Title:  ___________________________

                                           Notice Address:

                                                   The Bank of Nova Scotia
                                                   44 King Street West, 16th
                                                     Floor
                                                   Toronto, Ontario
                                                   Canada M5H 1H1
                                                   Attention: Michael Eddy
                                                   Fax: (416) 866-2010


<PAGE>


                                           THE BANK OF NOVA SCOTIA, as a 
                                             Canadian Lender


                                           By:     ___________________________
                                           Title:  ___________________________

                                           Notice Address:

                                                   The Bank of Nova Scotia
                                                   44 King Street West, 16th 
                                                   Floor
                                                   Toronto, Ontario
                                                   Canada M5H 1H1
                                                   Attention: Michael Eddy
                                                   Fax: (416) 866-2010


<PAGE>


                                           BANKERS TRUST COMPANY, as a U.S.
                                           Lender


                                           By:     ___________________________
                                           Title:  ___________________________

                                           Notice Address:

                                                   Bankers Trust Company
                                                   130 Liberty Street, 14th 
                                                   Floor
                                                   New York, New York 10006
                                                   Attention: Varig Patel
                                                   Fax: (212) 250-8693


<PAGE>


                                           BT BANK OF CANADA, as a Canadian 
                                           Lender


                                           By:     ____________________________
                                           Title:  ____________________________

                                           Notice Address:


                                                   BT Bank of Canada
                                                   17/F North Tower
                                                   Royal Bank Plaza
                                                   200 Bay Street
                                                   Toronto, Ontario
                                                   Canada  M5J 2J2
                                                   Attention:  Marcellus Leung
                                                   Fax:  (416) 865-9931





<PAGE>


                                           BANKERS TRUST AUSTRALIA LIMITED, as 
                                           an Australian Lender


                                           By:     ____________________________
                                           Title:  ____________________________

                                           Notice Address:

                                                   The Chifley Tower
                                                   2 Chifley Square
                                                   Sydney, N.S.W. 2000 Australia
                                                   Attention: Stephen Land




<PAGE>


                                           SOCIETE GENERALE, as a U.S. Lender


                                           By:     ____________________________
                                           Title:  ____________________________

                                           Notice Address:

                                                   Societe Generale
                                                   2029 Century Park East, 
                                                     Suite 2900
                                                   Los Angeles, CA 90067
                                                   Attention: Blaine Shaun
                                                   Fax: (310) 551-1537


<PAGE>


                                           SOCIETE GENERALE, as a Canadian 
                                           Lender


                                           By:     ____________________________
                                           Title:  ____________________________

                                           Notice Address:

                                                   Societe Generale
                                                   2029 Century Park East, 
                                                   Suite 2900
                                                   Los Angeles, CA 90067
                                                   Attention: Blaine Shaun
                                                   Fax: (310)551-1537


<PAGE>



                                           DRESDNER BANK AG Australian Branch,
                                           as an Australian Lender


                                           By:     ____________________________
                                           Title:  ____________________________

                                           By:     ____________________________
                                           Title:  ____________________________


                                           Notice Address:
                                                   Dresdner Bank, A.G.
                                                   Level 20, 2 Market Street
                                                   Sydney, Australia NSW 2000
                                                   Attention: Anthony Hawke
                                                   Fax: 61-2-92862068


<PAGE>


                                           DRESDNER BANK AG New York and Grand 
                                           Cayman Islands Branches, as a U.S. 
                                           Lender


                                           By:     ____________________________
                                           Title:  ____________________________

                                           By:     ____________________________
                                           Title:  ____________________________

                                           Notice Address:

                                                   Dresdner Bank AG
                                                   75 Wall Street, 25th Floor
                                                   New York, NY 10005
                                                   Attention: Doug Sherrod
                                                   Fax: (212) 429-2192


<PAGE>


                                           CIBC, INC., as a U.S. Lender


                                           By:     ___________________________
                                           Title:  ___________________________

                                           Notice Address:

                                                   CIBC, Inc.
                                                   425 Lexington , 8th Floor
                                                   New York, NY 10017
                                                   Attention: Howard Palmer
                                                   Fax: (212) 856-3761


<PAGE>


                                           CANADIAN IMPERIAL BANK OF COMMERCE, 
                                           as a Canadian Lender


                                           By:     ____________________________
                                           Title:  ____________________________

                                           By:     ____________________________
                                           Title:  ____________________________

                                           Notice Address:

                                                   Canadian Imperial Bank of
                                                   Commerce
                                                   161 Bay Street, 7th Floor
                                                   Toronto, Ontario M5J 2S8
                                                   Canada
                                                   Attention: Rob McCrossan
                                                   Fax: (416) 594-8537


<PAGE>


                                           SOCIETE GENERALE AUSTRALIA LIMITED,
                                           as an Australian Lender


                                           By:     ____________________________
                                           Title:  ____________________________

                                           By:     ____________________________
                                           Title:  ____________________________



                                           Notice Address:

                                                   Societe Generale Australia 
                                                   Limited
                                                   350 George Street
                                                   Sydney, NSW 2000
                                                   Australia
                                                   Attention: Charles Loxton
                                                   Fax: (612) 9235-3941


<PAGE>


                                           AUSTRALIAN AND NEW ZEALAND BANKING 
                                           GROUP LIMITED, as a U.S. Lender and 
                                           an Australian Lender


                                           By:     ____________________________
                                           Title:  ____________________________

                                           Notice Address:

                                                   Australian and New Zealand
                                                   Banking Group Limited
                                                   1177 Avenue of the Americas, 
                                                   6th Floor
                                                   New York, New York 10036
                                                   Attention:  Stephen
                                                   Christenson
                                                   Fax:  (212) 801-9131



<PAGE>


                                           ANZ INVESTMENT BANKING, as a U.S.
                                           and Australian Lender


                                           By:     ____________________________
                                           Title:  ____________________________

                                           Notice Address:

                                                   ANZ Investment Bank
                                                   1177 Avenue of the Americas,
                                                   6th Floor
                                                   New York, NY 10036
                                                   Attention: Barbara Paxton



<PAGE>


                                           CITICORP USA, INC., as a U.S. Lender


                                           By:     ____________________________
                                           Title:  ____________________________

                                           Notice Address:

                                                   Citibank, N.A.
                                                   399 Park Avenue
                                                   4th Floor, Zone 1
                                                   New York, NY 10043
                                                   Attention: Raymond Dunning
                                                   Fax: 212-832-9857



<PAGE>


                                           CITIBANK CANADA, as a Canadian Lender


                                           By:     ____________________________
                                           Title:  ____________________________

                                           Notice Address:

                                                   Citibank Place
                                                   123 Front Street West, 
                                                   Suite 1900
                                                   Toronto, Ontario M5J 2M3
                                                   Attention: Margaret Gillies
                                                   Fax: 416-947-5650



<PAGE>


                                           CITIBANK, N.A., as an Australian
                                           Lender


                                           By:     ___________________________
                                           Title:  ___________________________

                                           Notice Address:

                                                   Level 26, 101 Collins Street
                                                   Melbourne 3000
                                                   Victoria, Australia
                                                   Attention: Dale Murphy
                                                   Fax: 613-9653-7301


<PAGE>

                                    EXHIBIT I

                           FORM OF NOTICE OF BORROWING



                  Pursuant to that certain Amended and Restated Credit Agreement
dated as of July , 1998 (said Credit Agreement,  as it may be amended,  modified
or  supplemented  from time to time,  being the  "Credit  Agreement",  the terms
defined  therein and not otherwise  defined  herein being used herein as therein
defined),  by  and  among  Homestake  Mining  Company,  a  Delaware  corporation
("Company"),  Homestake Mining Company of California,  a California  corporation
("U.S.  Borrower"),  Homestake  Canada Inc., an Ontario  corporation  ("Canadian
Borrower"),  Homestake Gold of Australia Limited, a South Australia  corporation
("HGAL"), Plutonic Resources Limited, a New South Wales corporation ("Plutonic";
and collectively with HGAL, "Australian Borrowers"),  the financial institutions
listed therein as Lenders  ("Lenders"),  The Chase Manhattan Bank of Canada,  as
Canadian  Administrative  Agent for Lenders ("Canadian  Administrative  Agent"),
Chase  Securities  Australia  Limited,  as Australian  Administrative  Agent for
Lenders ("Australian  Administrative Agent"), Chase Securities Inc., as Arranger
for Lenders ("Arranger"), Deutsche Bank A.G., as Documentation Agent for Lenders
("Documentation  Agent"),  and The Chase Manhattan Bank, as Administrative Agent
for  Lenders  ("Administrative  Agent"),  this  represents  the request of [U.S.
Borrower/Canadian    Borrower/HGAL/Plutonic]    (hereinafter   the   "Applicable
Borrower")  to  borrow  on   _____________,   ____  (the  "Funding  Date")  from
[U.S./Canadian/Australian] Lenders, in accordance with their applicable Pro Rata
Shares,  Loans in the amount of  [$/Cdn.$/A.$____________/____  Ounces of Gold],
which Loans  shall be [U.S.  Base  Rate/U.S.  Base Rate  (Canada)/Canadian  Base
Rate/Eurodollar Rate/Bank Bill Swap Rate/Gold] Loans.

                  [This  further  represents  U.S.  Borrower's  request that the
amount of the Gold Loan hereby  requested be converted into Dollars based on the
Price of Gold in effect the second Business Day preceding the Funding  Date/Gold
constituting such Loan be delivered to U.S.  Borrower].  [If the Gold Loan is to
be funded in Gold, U.S.  Borrower hereby requests that the interest on such Gold
Loan be payable in [Gold][Dollars]  based on the [average of the daily values of
such Loan, in Dollar  Equivalents/the  Price of Gold on the second  Business Day
preceding the Funding Date.]

                  [The initial Interest Period for such Loans is requested to be
a [one/two/three/six month][30/60/90/180 day] period.]

                  The  proceeds  of  such  Loans  are  to be  deposited  in  the
Applicable      Borrower's      [account     at      Administrative      Agent's
[Canadian/U.S./Australian] Lending Office/bullion account maintained with
_________________, at its office located at ___________________].


                  The  undersigned  officer/director/Authorized  Signor,  to the
best of his or her knowledge, and the Applicable Borrower certify that:



                                      I-1
<PAGE>


                  (i) The representations and warranties contained in the Credit
                  Agreement and the other Loan  Documents are true,  correct and
                  complete in all material respects on and as of the date hereof
                  to the  same  extent  as  though  made  on and as of the  date
                  hereof,  except to the  extent  that  changes in the facts and
                  conditions on which such  representations  and warranties were
                  based are required or permitted under the Credit Agreement;

                  (ii) No event has occurred and is  continuing  or would result
                  from the  consummation  of the borrowing  contemplated  hereby
                  that would constitute an Event of Default or a Potential Event
                  of Default;

                  (iii) The  Company and each  Borrower  have  performed  in all
                  material  respects all agreements and satisfied all conditions
                  which the Credit  Agreement and other Loan  Documents  provide
                  shall be  performed  or  satisfied by it on or before the date
                  hereof;

                  (iv) There is no pending  or, to the  knowledge  of Company or
                  any  Borrower,   threatened,  any  action,  suit,  proceeding,
                  governmental investigation or arbitration against or affecting
                  Company or any of its  Subsidiaries or any property of Company
                  or  any  of  its   Subsidiaries  and  there  has  occurred  no
                  development in any such action, suit, proceeding, governmental
                  investigation  or  arbitration  that, in either  event,  would
                  reasonably  be  expected  to have a Material  Adverse  Effect,
                  unless disclosed to and consented to by Requisite Lenders; and
                  no injunction or other  restraining  order has been issued and
                  no hearing to cause an injunction or other  restraining  order
                  to be issued is pending or noticed with respect to any action,
                  suit or proceeding  seeking to enjoin or otherwise prevent the
                  consummation of, or to recover any damages or obtain relief as
                  a result  of,  the  transactions  contemplated  by the  Credit
                  Agreement  or the making of Loans,  the issuance of Letters of
                  Credit or the creation  and  purchase of Bankers'  Acceptances
                  thereunder;

                  (v)      No Company Change of Control has occurred; and


                  (vi) After giving effect to the proposed  Loan,  the Borrowers
                  are in compliance with each of the clauses (a) through (k) set
                  forth in subsection 2.1A.



DATED: ____________________                [HOMESTAKE MINING COMPANY OF 
                                            CALIFORNIA/HOMESTAKE CANADA
                                            INC./HOMESTAKE GOLD OF AUSTRALIA 
                                            LIMITED/PLUTONIC RESOURCES LIMITED]


                                               By: __________________________
                                               Title: ________________________


                                      I-2
<PAGE>

                                     

                                   EXHIBIT II

                    FORM OF NOTICE OF CONVERSION/CONTINUATION



                  Pursuant to that certain Amended and Restated Credit Agreement
dated as of July , 1998 (said Credit Agreement,  as it may be amended,  modified
or  supplemented  from time to time,  being the  "Credit  Agreement",  the terms
defined  therein and not otherwise  defined  herein being used herein as therein
defined),  by  and  among  Homestake  Mining  Company,  a  Delaware  corporation
("Company"),  Homestake Mining Company of California,  a California  corporation
("U.S.  Borrower"),  Homestake  Canada Inc., an Ontario  corporation  ("Canadian
Borrower"),  Homestake Gold of Australia Limited, a South Australia  corporation
("HGAL"), Plutonic Resources Limited, a New South Wales corporation ("Plutonic";
and collectively with HGAL, "Australian Borrowers"),  the financial institutions
listed therein as Lenders  ("Lenders"),  The Chase Manhattan Bank of Canada,  as
Canadian  Administrative  Agent for Lenders ("Canadian  Administrative  Agent"),
Chase  Securities  Australia  Limited,  as Australian  Administrative  Agent for
Lenders ("Australian  Administrative Agent"), Chase Securities Inc., as Arranger
for Lenders ("Arranger"), Deutsche Bank A.G., as Documentation Agent for Lenders
("Documentation  Agent"),  and The Chase Manhattan Bank, as Administrative Agent
for Lenders ("Administrative Agent"), this represents [U.S.  Borrower's/Canadian
Borrower's/HGAL's/Plutonic's]  request to [Select A or B: [A: convert $_________
in principal amount of presently outstanding Loans that are [U.S. Base/U.S. Base
(Canada)/Canadian   Base/Eurodollar]   Rate  Loans  to  [U.S.   Base/U.S.   Base
(Canada)/Canadian  Base/Eurodollar]  Rate  Loans  on  ____________,  ____.  [The
initial  Interest  Period for such  Eurodollar  Rate Loans is  requested to be a
[one/two/three/six]  month period.]] [B: continue as [Eurodollar/Gold/Bank  Bill
Swap] Rate Loans  [$_________/________Ounces]  in principal  amount of presently
outstanding Loans with a final Interest Payment Date of ____________,  ____. The
Interest Period for such  [Eurodollar/Gold/Bank Bill Swap] Rate Loans commencing
on such final  Interest  Payment Date is  requested  to be a  [one/two/three/six
month]  [30/60/90/180  day]  period.]  U.S.  Borrower  hereby  requests that the
Interest on such Gold Loan be payable in [Gold]  [Dollars] based on the [average
of the daily values of such Loan, in Dollar Equivalents/the Price of Gold on the
second  Business  Day  preceding  the first day of the  Interest  Period  hereby
requested].]

                  [For  Conversions to Eurodollar Rate Loans or Continuations of
Eurodollar/Gold/Bank  Bill Swap Rate Loans (other than continuations of Loans by
Australian  Borrower) Only: The  undersigned  officer,  director,  or Authorized
Signor  to  the  best  of  his or her  knowledge,  and  [U.S.  Borrower/Canadian
Borrower/HGAL/Plutonic]  certify that no Event of Default or Potential  Event of
Default has occurred and is continuing under the Credit Agreement.]

                                      II-1
<PAGE>




DATED: ____________________                [HOMESTAKE MINING COMPANY OF 
                                            CALIFORNIA/HOMESTAKE CANADA INC./
                                            HOMESTAKE GOLD OF AUSTRALIA LIMITED/
                                            PLUTONIC RESOURCES LIMITED]


                                               By: __________________________
                                               Title: ________________________



                                      II-2
<PAGE>


 
                                  EXHIBIT III-A
                                 [FORM OF DRAFT]

BANKERS' ACCEPTANCE                        Due _______________ 19__
ACCEPTATION BANCAIRE              Echeant le

NO. B.A. IL.0000
                                                   _____________, Canada

                                                   ____________________ 19__


On/Le  ___________________  19__ without grace,  for value received,  pay to the
order of the undersigned drawer the sum of/sans jours de grace et contra valeur,
payez a l'ordre du tireur  soussigne  la somme de  ____________________  dollars
($_____________)

To/A - [Name of Lender]
        ___________, Canada

                                                   HOMESTAKE CANADA INC.


                                                   Per:
                                                   par:_______________________
                                                       Authorized signature
                                                       Signature Autorisee

                              [FORM OF ACCEPTANCE]
                                ACCEPTED/ACCEPTE

date/le________________________________________________19__
       Payable at [INSERT LOCATION]/payable a ________

[Name of Lender]

Per:
par:____________________
    Authorized signature
    Signature Autorisee

Per:
par:____________________
    Authorized Signature
    Signature Autorisee

                                     III-A-1

<PAGE>


 
                                  EXHIBIT III-B

                            [FORM OF DRAWING NOTICE]


                                              ------------, -----



The Chase Manhattan Bank, as Administrative Agent
         Attention: _____________________________

and

The Chase Manhattan Bank of Canada, as Canadian Administrative Agent
         Attention: _____________________________


Ladies and Gentlemen:


                  Pursuant to that certain Amended and Restated Credit Agreement
dated as of July , 1998 (said Credit Agreement,  as it may be amended,  modified
or  supplemented  from time to time,  being the  "Credit  Agreement,"  the terms
defined  therein and not otherwise  defined  herein being used herein as therein
defined),  by  and  among  Homestake  Mining  Company,  a  Delaware  corporation
("Company"),  Homestake Mining Company of California,  a California corporation,
Homestake Canada Inc., an Ontario corporation ("Canadian  Borrower"),  Homestake
Gold of Australia  Limited,  a South Australia  corporation,  Plutonic Resources
Limited,  a New South  Wales  corporation,  the  financial  institutions  listed
therein  as  Lenders,   The  Chase   Manhattan  Bank  of  Canada,   as  Canadian
Administrative  Agent  for  Lenders,  Chase  Securities  Australia  Limited,  as
Australian  Administrative Agent for Lenders, Chase Securities Inc., as Arranger
for  Lenders,   Deutsche   Bank  A.G.,  as   Documentation   Agent  for  Lenders
("Documentation  Agent"),  The Chase Manhattan Bank, as Administrative Agent for
Lenders,   the  undersigned   Canadian  Borrower's  notice,  given  pursuant  to
subsection 2.8B of the Credit  Agreement,  requesting a Drawing under the Credit
Agreement on the date, in the amount and having the term set forth below:


                  1.       The Drawing Date, which is a Business Day, is
                  ___________, _____;

                  2.       The aggregate Face Amount of Drafts to be accepted
                  is Cdn. $_______________; and

                  3. The  maturity  date for such Drafts is  ___________,  ____,
                  which   represents   a  term  to  maturity  of   approximately
                  [30/60/90/180] days.


                                     III-B-1


<PAGE>

                  The undersigned officers, to the best of their knowledge,  and
the undersigned Canadian Borrower and Company, each hereby certifies that:

                  (i) The representations and warranties contained in the Credit
                  Agreement and the other Loan Documents (which  representations
                  and  warranties in the case of any Canadian  Borrower shall be
                  limited to such Canadian  Borrower and its  Subsidiaries)  are
                  true,  correct and complete in all material respects on and as
                  of the date hereof to the same extent as though made on and as
                  of the date  hereof,  except to the extent that changes in the
                  facts  and  conditions  on  which  such   representations  and
                  warranties  were based are  required  or  permitted  under the
                  Credit Agreement;

                  (ii) No event has occurred and is  continuing  or would result
                  from the consummation of the drawing  contemplated hereby that
                  would  constitute an Event of Default or a Potential  Event of
                  Default;

                  (iii) The  Company and each  Borrower  have  performed  in all
                  material  respects all agreements and satisfied all conditions
                  which the Credit  Agreement and other Loan  Documents  provide
                  shall be  performed  or  satisfied by it on or before the date
                  hereof;

                  (iv) There is no pending  or, to the  knowledge  of Company or
                  any   Borrower,    threatened,   action,   suit,   proceeding,
                  governmental investigation or arbitration against or affecting
                  Company or any of its  Subsidiaries or any property of Company
                  or  any  of  its   Subsidiaries  and  there  has  occurred  no
                  development in any such action, suit, proceeding, governmental
                  investigation  or  arbitration  that, in either  event,  would
                  reasonably  be  expected  to have a Material  Adverse  Effect,
                  unless disclosed to and consented to by Requisite Lenders; and
                  no  injunction  or other  restraining  order to be  issued  is
                  pending  or  noticed  with  respect  to any  action,  suit  or
                  proceeding   seeking  to  enjoin  or  otherwise   prevent  the
                  consummation of, or to recover any damages to obtain relief as
                  a result  of,  the  transactions  contemplated  by the  Credit
                  Agreement  or the making of Loans,  the issuance of Letters of
                  Credit or the creation  and  purchase of Bankers'  Acceptances
                  thereunder;

                  (v)      No Company Change of Control has occurred;

                  (vi) After giving  effect to the proposed  Drawing,  the Total
                  Utilization  of  Commitments   does  not  exceed  the  Overall
                  Commitment  then in effect and the Canadian  Commitment  Usage
                  does not exceed the Canadian Allocation then in effect.

                                    III-B-2
<PAGE>


                                                     HOMESTAKE CANADA INC.



                                                   By ________________________
                                                       Name:__________________
                                                       Title:_________________


Acknowledged and consented to as of the date hereof.

HOMESTAKE MINING COMPANY



By __________________________
    Name:_____________________
    Title:____________________



                                    III-B-3
<PAGE>



                                  EXHIBIT IV-A

                                  FORM OF NOTE

                              HOMESTAKE CANADA INC.

                         PROMISSORY NOTE DUE JULY , 2003

$1                                                                          2
                                                                            3

                  FOR  VALUE  RECEIVED,   HOMESTAKE   CANADA  INC.,  an  Ontario
corporation  ("Canadian  Borrower"),  promises  to pay to the  order of [NAME OF
LENDER] ("Payee"),  on or before July , 2003, the lesser of (x) 4 ($[1]) and (y)
the unpaid principal  amount of all advances made by Payee to Canadian  Borrower
as Loans under the Credit Agreement referred to below.

                  Canadian  Borrower also promises to pay interest on the unpaid
principal  amount hereof,  from the date hereof until paid in full, at the rates
and at the times which shall be determined in accordance  with the provisions of
that certain  Amended and Restated  Credit  Agreement dated as of July , 1998 by
and among Homestake  Mining Company,  a Delaware  corporation,  Homestake Mining
Company of  California,  a California  corporation,  Homestake  Canada Inc.,  an
Ontario  corporation,  Homestake Gold of Australia  Limited,  a South  Australia
corporation,  Plutonic Resources  Limited,  a New South Wales  corporation,  the
financial  institutions  listed therein as Lenders,  The Chase Manhattan Bank of
Canada, as Canadian Administrative Agent for Lenders, Chase Securities Australia
Limited, as Australian  Administrative Agent for Lenders,  Chase Securities Inc.
as Arranger for Lenders,  Deutsche Bank A.G., as Documentation Agent for Lenders
("Documentation  Agent"),  and The Chase Manhattan Bank, as Administrative Agent
for  Lenders  (said  Credit  Agreement,  as it may be amended,  supplemented  or
otherwise  modified from time to time, being the "Credit  Agreement",  the terms
defined  therein and not otherwise  defined  herein being used herein as therein
defined).

                  This Note is one of Canadian  Borrower's  "Notes" which in the
aggregate  may  evidence  up to  $430,000,000  principal  amount of Loans and is
issued  pursuant to and  entitled to the  benefits of the Credit  Agreement,  to
which  reference is hereby made for a more  complete  statement of the terms and
conditions  under  which  the  Loans  evidenced  hereby  were made and are to be
repaid.

                  All payments of principal and interest in respect of this Note
shall be made in the same currency (which shall be Dollars or Canadian  Dollars)
as the Loans in respect of


                                     IV-A-1

<PAGE>


which such payments are being made, in same day funds,  without defense,  setoff
or counterclaim, free of any restriction or condition, and shall be delivered to
Canadian  Administrative  Agent at the Canadian  Administrative  Agent's Lending
Office at such times as are provided for in the Credit Agreement. Until notified
in  writing  of  the  transfer  of  this  Note,   Canadian  Borrower,   Canadian
Administrative  Agent, and Administrative Agent shall be entitled to deem Payee,
or such  Person  who has been so  identified  by the  transferor  in  writing to
Canadian Borrower,  Canadian  Administrative  Agent, and Administrative Agent as
the holder of this Note, as the owner and holder of this Note. Each of Payee and
any subsequent holder of this Note agrees, by its acceptance hereof, that before
disposing of this Note or any part hereof it will make a notation  hereon of all
Loans  evidenced  by  this  Note  and all  principal  payments  previously  made
hereunder  and of the date to which  interest  hereon has been  paid;  provided,
however,  that the failure to make a notation  of any payment  made on this Note
shall not  limit or  otherwise  affect  the  obligations  of  Canadian  Borrower
hereunder with respect to payments of principal of or interest on this Note.

                  Whenever any payment on this Note shall be stated to be due on
a day  which  is not a  Business  Day,  such  payment  shall be made on the next
succeeding  Business Day, but not later than July , 2003,  and such extension of
time shall be  included  in the  computation  of the payment of interest on this
Note.

                  This Note is subject to mandatory prepayment and to prepayment
at the option of Canadian  Borrower as provided in subsection 2.4A of the Credit
Agreement.

                  THE CREDIT  AGREEMENT  AND THIS NOTE SHALL BE GOVERNED BY, AND
SHALL BE CONSTRUED  AND ENFORCED IN  ACCORDANCE  WITH,  THE INTERNAL LAWS OF THE
STATE OF NEW YORK.

                  Upon the occurrence of an Event of Default, the unpaid balance
of the  principal  amount of this Note,  together  with all  accrued  and unpaid
interest  thereon,  may become, or may be declared to be, due and payable in the
manner,  upon  the  conditions  and  with  the  effect  provided  in the  Credit
Agreement.

                  The terms of this Note are  subject to  amendment  only in the
manner provided in the Credit Agreement.

                  This Note is subject to restrictions on transfer or assignment
as provided in subsections 10.1 and 10.18 of the Credit Agreement.

                  No reference  herein to the Credit  Agreement and no provision
of this Note or the Credit  Agreement  shall alter or impair the  obligations of
Canadian Borrower, which are absolute and unconditional, to pay the principal of
and  interest on this Note at the place,  at the  respective  times,  and in the
currency herein prescribed.

                  Canadian  Borrower  promises  to pay all costs  and  expenses,
including reasonable  attorneys' fees, all as provided in subsection 10.2 of the
Credit  Agreement,  incurred in the  collection  and  enforcement  of this Note.
Canadian Borrower and any


                                     IV-A-2
<PAGE>


endorsers of this Note hereby  consent to renewals and  extensions of time at or
after  the  maturity  hereof,   without  notice,  and  hereby  waive  diligence,
presentment,  protest,  demand and notice of every kind and,  to the full extent
permitted by law, the right to plead any statute of  limitations as a defense to
any demand hereunder.

                  IN WITNESS WHEREOF,  Canadian Borrower has caused this Note to
be duly executed and delivered by its officer  thereunto  duly  authorized as of
the date and at the place first written above.

                                                        HOMESTAKE CANADA INC.


                                                        By: __________________
                                                        Title: _______________



                                     IV-A-3
<PAGE>


                                  TRANSACTIONS
                                       ON
                                      NOTE





                                    Amount of Loan         Amount of           
              Type of Loan            This Date         Principal Paid      
   Date      Made This Date                                This Date            







Outstanding
Principal Balance       Notation
This Date               Made By





                                     IV-A-4
<PAGE>


 
                                  EXHIBIT IV-B

                                  FORM OF NOTE

                       HOMESTAKE GOLD OF AUSTRALIA LIMITED

                         PROMISSORY NOTE DUE JULY , 2003

$5                                                                          6
                                                                            7

                  FOR VALUE  RECEIVED,  HOMESTAKE GOLD OF AUSTRALIA  LIMITED,  a
South  Australia  corporation  ("HGAL"),  hereby promises to pay to the order of
[NAME OF LENDER] ("Payee"), on or before July , 2003, the lesser of (x) 8 ($[1])
and (y) the unpaid  principal  amount of all  advances  made by Payee to HGAL as
Loans under the Credit Agreement referred to below.

                  HGAL also  promises to pay  interest  on the unpaid  principal
amount hereof,  from the date hereof until paid in full, at the rates and at the
times  which shall be  determined  in  accordance  with the  provisions  of that
certain  Amended and Restated  Credit  Agreement  dated as of July , 1998 by and
among Homestake Mining Company, a Delaware corporation, Homestake Mining Company
of  California,  a California  corporation,  Homestake  Canada Inc.,  an Ontario
corporation, Homestake Gold of Australia Limited, a South Australia corporation,
Plutonic  Resources  Limited,  a New  South  Wales  corporation,  the  financial
institutions  listed therein as Lenders,  The Chase Manhattan Bank of Canada, as
Canadian  Administrative Agent for Lenders,  Chase Securities Australia Limited,
as  Australian  Administrative  Agent for  Lenders,  Chase  Securities  Inc.  as
Arranger for Lenders,  Deutsche  Bank A.G., as  Documentation  Agent for Lenders
("Documentation  Agent"),  and The Chase Manhattan Bank, as Administrative Agent
for  Lenders  (said  Credit  Agreement,  as it may be amended,  supplemented  or
otherwise  modified from time to time, being the "Credit  Agreement",  the terms
defined  therein and not otherwise  defined  herein being used herein as therein
defined).

                  This Note is one of HGAL's  "Notes" which in the aggregate may
evidence up to $430,000,000  principal amount of Loans and is issued pursuant to
and  entitled to the  benefits of the Credit  Agreement,  to which  reference is
hereby made for a more  complete  statement  of the terms and  conditions  under
which the Loans evidenced hereby were made and are to be repaid.

                  All payments of principal and interest in respect of this Note
shall  be made in the  same  currency  (which  shall be  Dollars  or  Australian
Dollars) as the Loans in respect of


                                    IV-B-1

<PAGE>


which such payments are being made, in same day funds,  without defense,  setoff
or counterclaim, free of any restriction or condition, and shall be delivered to
Australian  Administrative  Agent at Australian  Administrative  Agent's Lending
Office at such times as are provided for in the Credit Agreement. Until notified
in writing of the transfer of this Note, HGAL, Australian  Administrative Agent,
and Administrative Agent shall be entitled to deem Payee, or such Person who has
been  so   identified  by  the   transferor  in  writing  to  HGAL,   Australian
Administrative  Agent, and  Administrative  Agent as the holder of this Note, as
the owner and holder of this Note.  Each of Payee and any  subsequent  holder of
this Note agrees, by its acceptance  hereof,  that before disposing of this Note
or any part hereof it will make a notation hereon of all Loans evidenced by this
Note and all principal  payments  previously  made  hereunder and of the date to
which interest hereon has been paid; provided, however, that the failure to make
a notation of any payment made on this Note shall not limit or otherwise  affect
the  obligations  of HGAL  hereunder with respect to payments of principal of or
interest on this Note.

                  Whenever any payment on this Note shall be stated to be due on
a day  which  is not a  Business  Day,  such  payment  shall be made on the next
succeeding  Business Day, but not later than July , 2003,  and such extension of
time shall be  included  in the  computation  of the payment of interest on this
Note.

                  This Note is subject to mandatory prepayment and to prepayment
at the option of HGAL as provided in subsection 2.4A of the Credit Agreement.

                  THE CREDIT  AGREEMENT  AND THIS NOTE SHALL BE GOVERNED BY, AND
SHALL BE CONSTRUED  AND ENFORCED IN  ACCORDANCE  WITH,  THE INTERNAL LAWS OF THE
STATE OF NEW YORK.

                  Upon the occurrence of an Event of Default, the unpaid balance
of the  principal  amount of this Note,  together  with all  accrued  and unpaid
interest  thereon,  may become, or may be declared to be, due and payable in the
manner,  upon  the  conditions  and  with  the  effect  provided  in the  Credit
Agreement.

                  The terms of this Note are  subject to  amendment  only in the
manner provided in the Credit Agreement.

                  This Note is subject to restrictions on transfer or assignment
as provided in subsections 10.1 and 10.18 of the Credit Agreement.

                  No reference  herein to the Credit  Agreement and no provision
of this Note or the Credit  Agreement  shall alter or impair the  obligations of
HGAL, which are absolute and unconditional, to pay the principal of and interest
on this Note at the place, at the respective  times,  and in the currency herein
prescribed.

                  HGAL  promises  to  pay  all  costs  and  expenses,  including
reasonable  attorneys'  fees,  all as provided in subsection  10.2 of the Credit
Agreement, incurred in the collection and enforcement of this Note. HGAL and any
endorsers of this Note hereby consent to

                                  IV-B-2


<PAGE>


renewals and extensions of time at or after the maturity hereof, without notice,
and hereby waive  diligence,  presentment,  protest,  demand and notice of every
kind and, to the full extent permitted by law, the right to plead any statute of
limitations as a defense to any demand hereunder.

                  IN  WITNESS  WHEREOF,  HGAL has  caused  this  Note to be duly
executed and delivered by its officer  thereunto duly  authorized as of the date
and at the place first written above.

                                           HOMESTAKE GOLD OF AUSTRALIA LIMITED


                                           By: __________________________
                                           Title: ________________________



                                  IV-B-3

<PAGE>


                                  TRANSACTIONS
                                       ON
                                      NOTE





                                    Amount of Loan         Amount of          
              Type of Loan Made     Made This Date      Principal Paid      
   Date           This Date                                This Date            





 Outstanding
Principal Balance       Notation
This Date               Made By






                                     IV-B-4
<PAGE>


                                  EXHIBIT IV-C

                                  FORM OF NOTE



                           PLUTONIC RESOURCES LIMITED

                        PROMISSORY NOTE DUE JULY , 2003

$13                                                                        14
                                                                           15

     FOR  VALUE  RECEIVED,   PLUTONIC  RESOURCES  LIMITED,  a  New  South  Wales
corporation  ("Plutonic"),  hereby  promises  to pay to the  order  of  [NAME OF
LENDER] ("Payee"), on or before July , 2003, the lesser of (x) 16 ($[1]) and (y)
the unpaid  principal  amount of all advances made by Payee to Plutonic as Loans
under the Credit Agreement referred to below.


     Plutonic  also  promises  to pay  interest on the unpaid  principal  amount
hereof,  from the date hereof until paid in full,  at the rates and at the times
which shall be  determined  in  accordance  with the  provisions of that certain
Amended  and  Restated  Credit  Agreement  dated as of July , 1998 by and  among
Homestake Mining Company,  a Delaware  corporation,  Homestake Mining Company of
California,  a  California  corporation,   Homestake  Canada  Inc.,  an  Ontario
corporation, Homestake Gold of Australia Limited, a South Australia corporation,
Plutonic  Resources  Limited,  a New  South  Wales  corporation,  the  financial
institutions  listed therein as Lenders,  The Chase Manhattan Bank of Canada, as
Canadian  Administrative Agent for Lenders,  Chase Securities Australia Limited,
as  Australian  Administrative  Agent for  Lenders,  Chase  Securities  Inc.  as
Arranger for Lenders,  Deutsche  Bank A.G., as  Documentation  Agent for Lenders
("Documentation  Agent"),  and The Chase Manhattan Bank, as Administrative Agent
for  Lenders  (said  Credit  Agreement,  as it may be amended,  supplemented  or
otherwise  modified from time to time, being the "Credit  Agreement",  the terms
defined  therein and not otherwise  defined  herein being used herein as therein
defined).

     This Note is one of Plutonic's  "Notes" which in the aggregate may evidence
up to  $430,000,000  principal  amount of Loans and is  issued  pursuant  to and
entitled to the benefits of the Credit  Agreement,  to which reference is hereby
made for a more complete  statement of the terms and conditions  under which the
Loans evidenced hereby were made and are to be repaid.

     All  payments of  principal  and  interest in respect of this Note shall be
made in the same currency (which shall be Dollars or Australian  Dollars) as the
Loans in respect of



                                     
<PAGE>


which such payments are being made, in same day funds,  without defense,  setoff
or counterclaim, free of any restriction or condition, and shall be delivered to
Australian  Administrative  Agent at Australian  Administrative  Agent's Lending
Office at such times as are provided for in the Credit Agreement. Until notified
in writing of the  transfer of this Note,  Plutonic,  Australian  Administrative
Agent, and Administrative  Agent shall be entitled to deem Payee, or such Person
who has been so identified by the transferor in writing to Plutonic,  Australian
Administrative  Agent, and  Administrative  Agent as the holder of this Note, as
the owner and holder of this Note.  Each of Payee and any  subsequent  holder of
this Note agrees, by its acceptance  hereof,  that before disposing of this Note
or any part hereof it will make a notation hereon of all Loans evidenced by this
Note and all principal  payments  previously  made  hereunder and of the date to
which interest hereon has been paid; provided, however, that the failure to make
a notation of any payment made on this Note shall not limit or otherwise  affect
the  obligations of Plutonic  hereunder with respect to payments of principal of
or interest on this Note.

     Whenever  any payment on this Note shall be stated to be due on a day which
is not a  Business  Day,  such  payment  shall  be made on the  next  succeeding
Business Day, but not later than July , 2003,  and such  extension of time shall
be included in the computation of the payment of interest on this Note.

     This Note is subject  to  mandatory  prepayment  and to  prepayment  at the
option of Plutonic as provided in subsection 2.4A of the Credit Agreement.

     THE  CREDIT  AGREEMENT  AND THIS NOTE  SHALL BE  GOVERNED  BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW
YORK.

     Upon the  occurrence  of an Event of  Default,  the  unpaid  balance of the
principal  amount of this Note,  together  with all accrued and unpaid  interest
thereon,  may  become,  or may be declared to be, due and payable in the manner,
upon the conditions and with the effect provided in the Credit Agreement.

                  The terms of this Note are  subject to  amendment  only in the
manner provided in the Credit Agreement.

     This Note is subject to  restrictions on transfer or assignment as provided
in subsections 10.1 and 10.18 of the Credit Agreement.

     No reference  herein to the Credit  Agreement and no provision of this Note
or the Credit Agreement shall alter or impair the obligations of Plutonic, which
are absolute  and  unconditional,  to pay the  principal of and interest on this
Note  at the  place,  at the  respective  times,  and  in  the  currency  herein
prescribed.

     Plutonic  promises  to pay all costs  and  expenses,  including  reasonable
attorneys'  fees,  all as provided in subsection  10.2 of the Credit  Agreement,
incurred  in the  collection  and  enforcement  of this Note.  Plutonic  and any
endorsers of this Note hereby


                                     IV-C-4
<PAGE>


consent to renewals  and  extensions  of time at or after the  maturity  hereof,
without notice,  and hereby waive diligence,  presentment,  protest,  demand and
notice of every kind and,  to the full  extent  permitted  by law,  the right to
plead any statute of limitations as a defense to any demand hereunder.

     IN WITNESS  WHEREOF,  Plutonic has caused this Note to be duly executed and
delivered by its officer  thereunto  duly  authorized  as of the date and at the
place first written above.


                                                  PLUTONIC RESOURCES LIMITED


                                                   By:_____________________

                                                   Title:__________________



                                     IV-C-4


<PAGE>


                                  TRANSACTIONS
                                       ON
                                      NOTE







                                    Amount of Loan         Amount of          
              Type of Loan Made    Made  This Date      Principal Paid      
   Date           This Date                                This Date            




 Outstanding
Principal Balance       Notation
This Date               Made By





                                     IV-C-4
<PAGE>



                                  EXHIBIT IV-D

                                  FORM OF NOTE

                     HOMESTAKE MINING COMPANY OF CALIFORNIA

                         PROMISSORY NOTE DUE JULY , 2003

$17                                                                      18
                                                                         19

                  FOR VALUE RECEIVED,  HOMESTAKE MINING COMPANY OF CALIFORNIA, a
California corporation ("U.S. Borrower"),  promises to pay to the order of [NAME
OF LENDER] ("Payee"),  on or before July , 2003, the lesser of (x) 20 ($[1]) and
(y) the unpaid principal  amount of all advances made by Payee to U.S.  Borrower
as Loans under the Credit Agreement referred to below.

                  U.S.  Borrower  also  promises  to pay  interest on the unpaid
principal  amount hereof,  from the date hereof until paid in full, at the rates
and at the times which shall be determined in accordance  with the provisions of
that certain  Amended and Restated  Credit  Agreement dated as of July , 1998 by
and among Homestake  Mining Company,  a Delaware  corporation,  Homestake Mining
Company of  California,  a California  corporation,  Homestake  Canada Inc.,  an
Ontario  corporation,  Homestake Gold of Australia  Limited,  a South  Australia
corporation,  Plutonic Resources  Limited,  a New South Wales  corporation,  the
financial  institutions  listed therein as Lenders,  The Chase Manhattan Bank of
Canada, as Canadian Administrative Agent for Lenders, Chase Securities Australia
Limited, as Australian  Administrative Agent for Lenders,  Chase Securities Inc.
as Arranger for Lenders,  Deutsche Bank A.G., as Documentation Agent for Lenders
("Documentation  Agent"),  and The Chase Manhattan Bank, as Administrative Agent
for  Lenders  (said  Credit  Agreement,  as it may be amended,  supplemented  or
otherwise  modified from time to time, being the "Credit  Agreement",  the terms
defined  therein and not otherwise  defined  herein being used herein as therein
defined).

                  This  Note  is one of U.S.  Borrower's  "Notes"  which  in the
aggregate  may  evidence  up to  $430,000,000  principal  amount of Loans and is
issued  pursuant to and  entitled to the  benefits of the Credit  Agreement,  to
which  reference is hereby made for a more  complete  statement of the terms and
conditions  under  which  the  Loans  evidenced  hereby  were made and are to be
repaid.

                  All payments of principal and interest in respect of this Note
shall  be  made in  Dollars  in same  day  funds,  without  defense,  setoff  or
counterclaim, free of any restriction or


                                     IV-D-1

<PAGE>



condition,  and shall be delivered  to  Administrative  Agent at  Administrative
Agent's  U.S.  Lending  Office  at such  times  as are  provided  in the  Credit
Agreement. Until notified in writing of the transfer of this Note, U.S. Borrower
and Administrative Agent shall be entitled to deem Payee, or such Person who has
been  so  identified  by  the  transferor  in  writing  to  U.S.   Borrower  and
Administrative Agent as the holder of this Note, as the owner and holder of this
Note.  Each of Payee  and any  subsequent  holder of this  Note  agrees,  by its
acceptance hereof, that before disposing of this Note or any part hereof it will
make a notation  hereon of all Loans  evidenced  by this Note and all  principal
payments  previously made hereunder and of the date to which interest hereon has
been paid; provided, however, that the failure to make a notation of any payment
made on this Note shall not limit or otherwise  affect the  obligations  of U.S.
Borrower  hereunder with respect to payments of principal of or interest on this
Note.

                  Whenever any payment on this Note shall be stated to be due on
a day  which  is not a  Business  Day,  such  payment  shall be made on the next
succeeding  Business Day, but not later than July , 2003,  and such extension of
time shall be  included  in the  computation  of the payment of interest on this
Note.

                  This Note is subject to mandatory prepayment and to prepayment
at the option of U.S.  Borrower  as provided  in  subsection  2.4A of the Credit
Agreement.

                  THE CREDIT  AGREEMENT  AND THIS NOTE SHALL BE GOVERNED BY, AND
SHALL BE CONSTRUED  AND ENFORCED IN  ACCORDANCE  WITH,  THE INTERNAL LAWS OF THE
STATE OF NEW YORK.

                  Upon the occurrence of an Event of Default, the unpaid balance
of the  principal  amount of this Note,  together  with all  accrued  and unpaid
interest  thereon,  may become, or may be declared to be, due and payable in the
manner,  upon  the  conditions  and  with  the  effect  provided  in the  Credit
Agreement.

                  The terms of this Note are  subject to  amendment  only in the
manner provided in the Credit Agreement.

                  This Note is subject to restrictions on transfer or assignment
as provided in subsections 10.1 and 10.18 of the Credit Agreement.

                  No reference  herein to the Credit  Agreement and no provision
of this Note or the Credit  Agreement  shall alter or impair the  obligations of
U.S. Borrower, which are absolute and unconditional, to pay the principal of and
interest on this Note at the place, at the respective times, and in the currency
herein prescribed.

                  U.S. Borrower promises to pay all costs and expenses,
including reasonable  attorneys' fees, all as provided in subsection 10.2 of the
Credit Agreement,  incurred in the collection and enforcement of this Note. U.S.
Borrower  and  any  endorsers  of this  Note  hereby  consent  to  renewals  and
extensions of time at or after the maturity hereof,  without notice,  and hereby
waive diligence, presentment, protest, demand and notice of every kind


                                     IV-D-2
<PAGE>



and,  to the full  extent  permitted  by law,  the right to plead any statute of
limitations as a defense to any demand hereunder.

                  IN WITNESS WHEREOF,  U.S.  Borrower has caused this Note to be
duly executed and delivered by its officer  thereunto duly  authorized as of the
date and at the place first written above.

                                               HOMESTAKE MINING COMPANY OF 
                                               CALIFORNIA


                                               By: __________________________
                                               Title: ________________________


                                     IV-D-3
<PAGE>



                                  TRANSACTIONS
                                       ON
                                      NOTE





                                    Amount of Loan         Amount of           
              Type of Loan Made    Made  This Date      Principal Paid     
   Date           This Date                                This Date            



      Outstanding
Principal Balance                 Notation
      This Date                   Made By







                                     IV-D-4
<PAGE>



                                    EXHIBIT V

                        FORM OF GRID GOLD ACKNOWLEDGEMENT

                     HOMESTAKE MINING COMPANY OF CALIFORNIA

                     CREDIT GOLD OBLIGATION DUE JULY , 2003

                                                                            21
                                                                            22

                  FOR VALUE RECEIVED,  HOMESTAKE MINING COMPANY OF CALIFORNIA, a
California corporation ("U.S. Borrower"),  promises to pay to the order of [NAME
OF LENDER]  ("Payee"),  on or before  July , 2003,  the number of Ounces of Gold
advanced  from time to time by Payee to  Borrower as Gold Loans under the Credit
Agreement referred to below.


                  U.S.  Borrower  also  promises  to pay  interest on the unpaid
principal  amount hereof,  from the date hereof until paid in full, at the rates
and at the times which shall be determined in accordance  with the provisions of
that certain  Amended and Restated  Credit  Agreement dated as of July , 1998 by
and among Homestake  Mining Company,  a Delaware  corporation,  Homestake Mining
Company of  California,  a California  corporation,  Homestake  Canada Inc.,  an
Ontario  corporation,  Homestake Gold of Australia  Limited,  a South  Australia
corporation,  Plutonic Resources  Limited,  a New South Wales  corporation,  the
financial  institutions  listed therein as Lenders,  The Chase Manhattan Bank of
Canada, as Canadian Administrative Agent for Lenders, Chase Securities Australia
Limited, as Australian Administrative Agent for Lenders, Chase Securities Inc. ,
as Arranger for Lenders,  Deutsche Bank A.G., as Documentation Agent for Lenders
("Documentation  Agent"),  and The Chase Manhattan Bank, as Administrative Agent
for  Lenders  (said  Credit  Agreement,  as it may be amended,  supplemented  or
otherwise  modified from time to time, being the "Credit  Agreement",  the terms
defined  therein and not otherwise  defined  herein being used herein as therein
defined).


                  This Grid Gold Acknowledgement (this "Acknowledgement") is one
of U.S.  Borrower's  "Grid Gold  Acknowledgements"  which in the  aggregate  may
evidence up to 750,000 Ounces of Gold and is issued  pursuant to and entitled to
the benefits of the Credit  Agreement,  to which  reference is hereby made for a
more complete  statement of the terms and conditions  under which the Gold Loans
evidenced hereby were made and are to be repaid.

                  All  payments  of  principal  and  interest in respect of this
Acknowledgement  shall be made in accordance  with the  provisions of the Credit
Agreement,  in Gold or in Dollars, in same day funds, without defense, setoff or
counterclaim, free of any restriction or


                                      V-1
<PAGE>


condition,  and shall be delivered,  if paid in Dollars,  to the  Administrative
Agent's Lending Office or, if paid in Gold,  Administrative Agent's account with
J.P.  Morgan,  London,  England,  or such  other  bullion  depository  as may be
designated by Administrative  Agent from time to time, before 12:00 Noon (London
time) on the day  specified  for  payment.  Until  notified  in  writing  of the
transfer of this  Acknowledgement,  U.S. Borrower and Administrative Agent shall
be  entitled to deem Payee,  or such  Person who has been so  identified  by the
transferor in writing to U.S. Borrower and Administrative Agent as the holder of
this  Acknowledgement,  as the owner and holder of this Acknowledgment.  Each of
Payee  and  any  subsequent  holder  of  this  Acknowledgement  agrees,  by  its
acceptance  hereof,  that before disposing of this  Acknowledgement  or any part
hereof  it  will  make  a  notation  hereon  of  all  Loans  evidenced  by  this
Acknowledgement  and all principal payments previously made hereunder and of the
date to which interest hereon has been paid; provided, however, that the failure
to make a notation of any payment made on this  Acknowledgement  shall not limit
or otherwise affect the obligations of U.S.  Borrower  hereunder with respect to
payments of principal of or interest on this Acknowledgement.

                  Unless Administrative Agent receives notice from U.S. Borrower
within seven Business Days of U.S.  Borrower's receipt of any Gold, the quantity
and  quality  of the Gold so  received  shall be  deemed  to be as set  forth in
Administrative Agent's delivery order. If there is any discrepancy in the amount
or quality of Gold actually  Delivered,  the amount of such difference  shall be
settled in Dollars  (based on the Dollar  Equivalent  on the date of Delivery of
the Gold  required to be advanced  hereunder  and the Gold  actually  Delivered)
promptly after the Delivery  thereof.  U.S.  Borrower  assumes all risk of loss,
theft or detention of or damage to any Gold  Delivered  hereunder  from the date
U.S.  Borrower  receives  Delivery  of such Gold until the date of its return by
Delivery to Administrative Agent.

                  Whenever any payment on this  Acknowledgement  shall be stated
to be due on a day which is not a Business  Day,  such payment  shall be made on
the next  succeeding  Business  Day,  but not  later  than  July , 2003 and such
extension  of time  shall be  included  in the  computation  of the  payment  of
interest on this Acknowledgement.

                  This Acknowledgement is subject to mandatory prepayment and to
prepayment at the option of U.S.  Borrower as provided in subsection 2.4A of the
Credit Agreement.

                  THE  CREDIT  AGREEMENT  AND  THIS  ACKNOWLEDGEMENT   SHALL  BE
GOVERNED  BY, AND SHALL BE  CONSTRUED  AND  ENFORCED  IN  ACCORDANCE  WITH,  THE
INTERNAL LAWS OF THE STATE OF NEW YORK.

                  Upon the occurrence of an Event of Default, the unpaid balance
of the principal amount of this  Acknowledgement,  together with all accrued and
unpaid interest  thereon,  may become, or may be declared to be, due and payable
in the manner,  upon the conditions  and with the effect  provided in the Credit
Agreement.


                                      V-2
<PAGE>


                  The terms of this  Acknowledgement  are  subject to  amendment
only in the manner provided in the Credit Agreement.

                  This Acknowledgement is subject to restrictions on transfer or
assignment as provided in subsections 10.1 and 10.18 of the Credit Agreement.

                  No reference  herein to the Credit  Agreement and no provision
of this  Acknowledgement  or the  Credit  Agreement  shall  alter or impair  the
obligations of U.S. Borrower,  which are absolute and unconditional,  to pay the
principal  of  and  interest  on  this  Acknowledgement  at  the  place,  at the
respective times, and in the currency herein prescribed.

                  U.S.   Borrower  promises  to  pay  all  costs  and  expenses,
including reasonable  attorneys' fees, all as provided in subsection 10.2 of the
Credit   Agreement,   incurred  in  the  collection  and   enforcement  of  this
Acknowledgement.  U.S. Borrower and any endorsers of this Acknowledgement hereby
consent to renewals  and  extensions  of time at or after the  maturity  hereof,
without notice,  and hereby waive diligence,  presentment,  protest,  demand and
notice of every kind and,  to the full  extent  permitted  by law,  the right to
plead any statute of limitations as a defense to any demand hereunder.

                  IN  WITNESS   WHEREOF,   U.S.   Borrower   has   caused   this
Acknowledgement  to be duly executed and delivered by its officer thereunto duly
authorized as of the date and at the place first written above.

                                          HOMESTAKE MINING COMPANY OF CALIFORNIA


                                          By: __________________________
                                          Title: ________________________

                                      V-3
<PAGE>


                                  TRANSACTIONS
                                       ON
                            GRID GOLD ACKNOWLEDGEMENT





                                    Amount of Loan         Amount of           
              Type of Loan Made    Made  This Date      Principal Paid      
   Date           This Date                                This Date            





   Outstanding
Principal Balance       Notation
This Date                Made By






                                      V-4
<PAGE>

                                   EXHIBIT VI

                         FORM OF COMPLIANCE CERTIFICATE


THE UNDERSIGNED HEREBY CERTIFY THAT:


                  (1) We are the duly  elected  [President/Vice  President]  and
                  [Chief  Financial  Officer/Treasurer/Controller]  of  each  of
                  Homestake Mining Company, a Delaware corporation  ("Company"),
                  Homestake   Mining   Company  of   California,   a  California
                  corporation  ("U.S.  Borrower") and Homestake  Canada Inc., an
                  Ontario       corporation        ("Canadian        Borrower"),
                  [Directors/Secretary/Authorized  Signor] of Homestake  Gold of
                  Australia Limited, a South Australia corporation ("HGAL"), and
                  [Directors/Secretary/Authorized  Signor] of Plutonic Resources
                  Limited,  a  New  South  Wales  corporation  ("Plutonic";  and
                  collectively with HGAL, "Australian Borrowers");

                  (2) We have  reviewed  the terms of that  certain  Amended and
                  Restated Credit Agreement dated as of July , 1998 (said Credit
                  Agreement, as it may be amended, modified or supplemented from
                  time to time, being the "Credit Agreement",  the terms defined
                  therein  and  not  otherwise   defined  in  this   Certificate
                  (including  Attachment  No. 1 annexed  hereto  and made a part
                  hereof) being used in this Certificate as therein defined), by
                  and among  Homestake  Mining Company,  a Delaware  corporation
                  ("Company"),   Homestake  Mining  Company  of  California,   a
                  California  corporation  ("U.S.  Borrower"),  Homestake Canada
                  Inc., an Ontario corporation ("Canadian Borrower"),  Homestake
                  Gold  of  Australia  Limited,  a South  Australia  corporation
                  ("HGAL"),  Plutonic  Resources  Limited,  a  New  South  Wales
                  corporation   ("Plutonic";   and   collectively   with   HGAL,
                  "Australian  Borrowers"),  the financial  institutions  listed
                  therein as Lenders  ("Lenders"),  The Chase  Manhattan Bank of
                  Canada,   as   Canadian   Administrative   Agent  for  Lenders
                  ("Canadian  Administrative Agent"), Chase Securities Australia
                  Limited,  as  Australian   Administrative  Agent  for  Lenders
                  ("Australian Administrative Agent"), Chase Securities Inc., as
                  Arranger  for Lenders  ("Arranger"),  Deutsche  Bank A.G.,  as
                  Documentation Agent for Lenders  ("Documentation  Agent"), and
                  The Chase Manhattan Bank, as Administrative  Agent for Lenders
                  ("Administrative  Agent"), and we have made, or have caused to
                  be made under our supervision,  a review in reasonable  detail
                  of the transactions and condition of Company,  U.S.  Borrower,
                  Canadian  Borrower,  HGAL and  Plutonic  and their  respective
                  Subsidiaries  during  the  accounting  period  covered  by the
                  attached financial statements;

                  (3) The  examination  described in paragraph (2) above did not
                  disclose,  and we have no knowledge  of, the  existence of any
                  condition or event which


                                      VI-1
<PAGE>


                  constitutes an Event of Default or Potential  Event of Default
                  during or at the end of the  accounting  period covered by the
                  attached  financial  statements  or as of  the  date  of  this
                  Certificate[, except as set forth below];

                  [Set  forth   [below]  [in  a  separate   attachment  to  this
Certificate] are all exceptions to paragraph (3) above listing,  in detail,  the
nature of the condition or event, the period during which it has existed and the
action which Company, U.S. Borrower, Canadian Borrower, HGAL and/or Plutonic has
taken,  is taking,  or proposes to take with  respect to each such  condition or
event:

[                                                                           ]

                  (4)      Company, U.S. Borrower, Canadian Borrower, HGAL, and 
                  Plutonic are in compliance with the  restrictions  contained
                  in  subsections  6.1  through  6.11 of the Credit  Agreement
                  [except  that   [describe   any   instances   where  not  in
                  compliance]]; and

                  (5) There have been no changes to the  Subsidiaries of Company
                  and the Borrowers identified in Schedule 4.1 during the period
                  covered by this Compliance  Certificate [except that [describe
                  changes to Schedule 4.1]].

                  The foregoing  certifications,  together with the computations
set forth in  Attachment  No. 1 annexed  hereto  and made a part  hereof and the
financial statements delivered with this Certificate in support hereof, are made
and delivered this  __________  day of  __________,  ____ pursuant to subsection
5.1(iii) of the Credit Agreement.

                                                   HOMESTAKE MINING COMPANY


                                                   By: ________________________
                                                   Title: _____________________


                                                   By: ________________________
                                                   Title: _____________________


                                                   HOMESTAKE MINING COMPANY OF
                                                   CALIFORNIA


                                                   By: ________________________
                                                   Title: _____________________


                                                   By: ________________________
                                                   Title: _____________________


                                      VI-2
<PAGE>






                                                   HOMESTAKE CANADA INC.


                                                   By: ________________________
                                                   Title: _____________________


                                                   By: ________________________
                                                   Title: _____________________



                                                   HOMESTAKE GOLD OF AUSTRALIA
                                                   LIMITED


                                                   By: ________________________
                                                   Title: _____________________


                                                   By: ________________________
                                                   Title: _____________________


                                                   PLUTONIC RESOURCES LIMITED


                                                   By: ________________________
                                                   Title: _____________________


                                                   By: ________________________
                                                   Title: _____________________


                                      VI-3

<PAGE>


                                ATTACHMENT NO. 1
                            TO COMPLIANCE CERTIFICATE


                  This Attachment No. 1 is attached to and made a part of a 
Compliance Certificate dated as of ____________, ____ and pertains to the period
from  ____________,  ____ to ____________,  ____.  Subsection  references herein
relate to subsections of the Credit 955910098Agreement.

<TABLE>
<CAPTION>
A.       Indebtedness:

<S>      <C>              <C>                                                            <C>

         1.               Aggregate principal amount of
                          Indebtedness of Agua de la Falda
                          S.A., Lachlan Resources N.L and
                          Prime to Company or any other
                          subsidiary of Company
                          under subsection 6.1(iii):                                     $_____________

         2.               Maximum aggregate principal amount of
                          Indebtedness of Agua de la Falda S.A., Lachlan 
                          Resources N.L. and Prime to Company
                          or any other Subsidiary of Company (prior to Prime
                          Acquisition Date) permitted under
                          subsection 6.1(iii):                                           $50,000,000


         3.               Nonrecourse Debt of (a) Prime (prior to Prime
                          Acquisition Date), Australian Borrowers, 
                          Canadian Borrower and any
                          Subsidiary of Company (other than
                          U.S. Borrower) to the extent such Indebtedness
                          is secured solely by Liens on assets and
                          properties owned on the Effective Date that
                          are undeveloped,
                          and (b) U.S. Borrower secured solely by Liens
                          on assets and properties owned on the
                          Effective Date that are undeveloped
                          permitted under subsection 6.1(viii):                          $_____________


         4.               Maximum amount of Non-Recourse Debt
                          Indebtedness permitted under
                          subsection 6.1(viii):                                          $500,000,000

         5.               Additional Indebtedness of Subsidiaries
                          of Borrowers permitted under
                          subsection 6.1(ix)(a):                                         $______________


                                      VI-4
<PAGE>

<CAPTION>
<S>      <C>              <C>                                                            <C>
         6.               Maximum amount of additional Indebtedness
                          of Subsidiaries of Borrowers permitted
                          under subsection 6.1(ix)(a):                                   $50,000,000

         7.               Additional Indebtedness of Borrowers
                          permitted under subsection 6.1(ix)(b):                         $______________

         8.               Maximum amount of additional Indebtedness of Borrowers
                          permitted under subsection 6.1(ix)(b):                         $170,000,000 less
                                                                                         the amount listed in
B.       Liens:

         1.               Indebtedness secured by Purchase Money Security
                          Interests permitted under subsection 6.2(iii):                 $_____________

         2.               Maximum amount of Indebtedness secured by
                          Purchase Money Security Interests permitted
                          under subsection 6.2(iii):                                     $100,000,000


C.       Investments:

         1.               Investments (other than Investments described
                          in Schedule 6.3) Company and its
                          Subsidiaries are permitted to continue
                          to own under subsection 6.3(iv):                               $_____________

         2.               Maximum  aggregate  amount of all Investments  (other
                          than  Investments  described in Schedule 6.3) Company
                          and its Subsidiaries are permitted
                          to continue to own under subsection 6.3(iv):                   $20,000,000

         3.               Investments  acquired in connection  with Asset Sales
                          permitted under
                          subsection 6.3(vi):                                            $_____________

         4.               Maximum   aggregate  amount  of  all  Investments  in
                          connection with Asset Sales permitted under
                          subsection 6.3(vi):                                            $100,000,000



                                      VI-5
<PAGE>

<CAPTION>

D.       Contingent Obligations:

<S>      <C>              <C>                                                            <C> 
         1.               Aggregate notional principal amount of
                          Interest Rate Protection Agreements
                          permitted under subsection 6.4(ii):                            $_____________

         2.               Maximum  notional  principal  amount of Interest Rate
                          Protection Agreements permitted
                          under subsection 6.4(ii):                                      $100,000,000

         3.               Aggregate  amount   guarantied  by  Company  and  its
                          Subsidiaries  under  guaranties of any obligations of
                          Company's  Subsidiaries  (including  Joint  Ventures)
                          permitted under subsection 6.4(iv):                            $_____________

         4.               Maximum aggregate amount permitted
                          to be guaranteed under subsection 6.4(iv):                     $200,000,000

         5.               Aggregate amount outstanding
                          under standby letters of credit and
                          surety bonds securing Indebtedness or
                          Contingent Obligations of Company and its
                          Subsidiaries permitted under subsection 6.4(viii)(b):          $____________

         6.               Maximum amount of aggregate liability
                          under all such standby letters of credit and
                          surety bonds under subsection 6.4(viii)(b):                    $100,000,000

E.       Minimum Consolidated Net Worth (as of __________, ____)

         1.               Company's current Consolidated Net Worth:                      $_____________

         2.                Minimum  Consolidated  Net Worth  required  under the
                           Credit Agreement:
                                                                                         $500,000,000

F.       Maximum Leverage Ratio (as of __________, _____)

         1.               Consolidated Total Debt:                                       $_____________

         2.               Consolidated Net Worth:                                        $_____________

         3.               Ratio of F.1 to F.1 + F.2:                                     _____ to 1.00


                                      VI-6
<PAGE>

<CAPTION>
<S>      <C>              <C>                                                            <C> 
         4.               Maximum Leverage Ratio permitted
                          under subsection 6.6B:                                         0.50 to 1.00

G.       Interest Coverage Ratio (as of __________, _____)

         1.               Consolidated Net Income                                        $_____________

         2.               Consolidated Interest Expense                                  $_____________


         3.               Total depreciation and amortization expense                                              $_____________

         4.               Total Non-Cash Writedowns other than writedowns
                          that constitute recognition of future cash expenditures
                          reflected in Consolidated Net Income after December
                          31, 1997                                                       $_____________

         5.               Consolidated EBITDA                                            $_____________
                          (sum of G.1 through G.4)

         6.               Consolidated Interest Expense                                  $_____________

         7.               Ratio of G.5 to G.6                                            _____ to 1.00

         8.               Minimum Coverage Ratio permitted
                          under subsection 6.6C                                          3.50 to 1.00


</TABLE>

                                      VI-7
<PAGE>


                                  EXHIBIT VII-A

              FORM OF OPINION OF THELEN, MARRIN, JOHNSON & BRIDGES




                                    VII-A-1
<PAGE>





                                                                July __, 1998


The Chase Manhattan Bank of Canada,
  as Canadian Administrative Agent
150 King Street West 16th Floor
Box 68
Toronto Ontario
Canada MSH 1J9

         and

Chase Securities Australia Limited,
  as Australian Administrative Agent
Level 35 AAP Center
259 George Street
Sydney NSW Australia 2000

         and

Chase Securities Inc.,
  as Arranger
270 Park Avenue
New York, NY 10017

         and

The Chase Manhattan Bank,
  as Administrative Agent
1 Chase Manhattan Plaza
New York, NY 10081

         and

and the Lenders Listed
on Schedule I Hereto

                  Re: Credit  Agreement dated July , 1998 among Homestake Mining
                  Company,  Homestake  Mining Company of  California,  Homestake
                  Canada Inc.,  Homestake  Gold of Australia  Limited,  Plutonic
                  Resources  Limited,  the  Lenders  named  therein,  The  Chase
                  Manhattan Bank of Canada,  as Canadian  Administrative  Agent,
                  Chase   Securities    Australia    Limited,    as   Australian
                  Administrative Agent, Chase Securities Inc., as Arranger,  and
                  The Chase Manhattan Bank, as Administrative Agent




                                    VII-A-2
<PAGE>




Ladies and Gentlemen:

                  We have acted as special New York counsel to Homestake  Mining
Company,  a Delaware  corporation (the  "Company"),  Homestake Mining Company of
California,  a California  corporation (the "U.S.  Borrower"),  Homestake Canada
Inc.,  an Ontario  corporation  (the  "Canadian  Borrower"),  Homestake  Gold of
Australia  Limited,  a  South  Australia  corporation  ("HGAL"),   and  Plutonic
Resources  Limited   ("Plutonic",   and  collectively  with  HGAL,   "Australian
Borrowers")  in  connection  with  the  execution  and  delivery  of the  Credit
Agreement  dated as July , 1998,  among  the  Company,  the U.S.  Borrower,  the
Canadian  Borrower,  the Australian  Borrowers,  the Lenders named therein,  The
Chase  Manhattan  Bank  of  Canada,  as  Canadian  Administrative  Agent,  Chase
Securities  Australia  Limited,  as  Australian   Administrative   Agent,  Chase
Securities  Inc., as Arranger,  and The Chase Manhattan Bank, as  Administrative
Agent (the "Credit Agreement"),  and certain transactions  relating thereto. All
terms used herein that are defined in the Credit  Agreement  have the respective
meanings  specified in the Credit  Agreement.  This letter is being delivered to
you in  satisfaction of the condition set forth in subsection 3.1E of the Credit
Agreement  and with the  understanding  that you are  entering  into the  Credit
Agreement in reliance on the opinions expressed herein.

                  In  our  capacity  as  such  counsel,  we  have  examined  the
originals,  or copies  identified to our  satisfaction as being true copies,  of
such records, documents or other instruments as in our judgment are necessary or
appropriate to enable us to render the opinions  expressed below. These records,
documents and instruments include the following:

                  (a)      The Certificates or Articles of Incorporation of the
                           Company and the U.S. Borrower;

                  (b)      The By-Laws of the Company and the U.S. Borrower;

                  (c)      Certain records of proceedings and actions of the 
                           Board of Directors of the Company and the U.S.
                           Borrower;

                  (d)      The Credit Agreement and the Exhibits and Schedules 
                           annexed thereto;

                  (e)      The Notes and Grid Gold Acknowledgements; and

                  (f)      The forms of Drafts.

                  We have relied with respect to certain factual  matters,  upon
the  certificates  of  certain  officers  of each of the  Company  and the  U.S.
Borrower,  copies of which are being  delivered  to you  herewith,  and upon the
representations and warranties of the Company and the Borrowers contained in the
Credit Agreement.


                                    VII-A-3
<PAGE>


                  We have  also  been  furnished  with,  and have  relied  upon,
evidence or advice  satisfactory  to us from the offices of the  Secretaries  of
State of  California  and  Delaware  as  appropriate,  with  respect to the good
standing of the Company or the U.S. Borrower.  In addition, we have obtained and
relied upon such  certificates  and assurances from public  officials as we have
deemed necessary, desirable or appropriate to render the opinions herein.

                  We  have  assumed  the  genuineness  and  authenticity  of all
documents  submitted to us as originals  and the  conformity to originals of all
documents submitted to us as copies,  drafts or forms. In making our examination
of documents executed or to be executed by Persons other than the Company or the
U.S.  Borrower we have assumed that such other  Persons had or have the power to
enter into and perform all obligations  thereunder and have also assumed the due
authorization  by all  requisite  action  and  execution  and  delivery  of such
documents  by such  Persons  and the  validity  and  binding  effect  thereof in
relation to such Persons.

                  We have  investigated such questions of law for the purpose of
rendering  this  opinion  as  we  have  deemed  necessary,   including,  without
limitation,  Regulations  G, T, U and X of the Board of Governors of the Federal
Reserve  System.  We  are  opining  herein  as to  the  effect  on  the  subject
transaction  of only the  federal  laws of the  United  States,  the laws of the
States of New York and California and the general  corporate law of the State of
Delaware.

                  On the basis of the foregoing,  and in reliance  thereon,  and
subject to the  limitations,  qualifications  and exceptions set forth below, we
are of the opinion that:

                  1. Each of the Company and the U.S.  Borrower is a corporation
duly  incorporated,  validly existing and in good standing under the laws of its
jurisdiction  of  incorporation  and  has  all  requisite  corporate  power  and
authority to own and operate its properties and to execute,  deliver and perform
the Credit  Agreement and, in the case of the U.S.  Borrower,  the Notes and the
Grid  Gold  Acknowledgements  and to  carry  out the  transactions  contemplated
thereby.

                  2. The  execution,  delivery  and  performance  of the  Credit
Agreement by each of the Company and the U.S. Borrower have been duly authorized
by all necessary  corporate  action on the part of the Company or such Borrower,
as the case may be. The issuance of the Notes and the Grid Gold Acknowledgements
by the U.S. Borrower has been duly authorized by all necessary  corporate action
on the part of such Borrower.

                  3.  Assuming  the due  execution  and  delivery  of the Credit
Agreement by the Company and each Borrower, the Credit Agreement constitutes the
legally  valid  and  binding   obligation  of  the  Company  and  each  Borrower
enforceable  against the Company and each Borrower in accordance with its terms.
Assuming the due issuance of the Notes, Grid Gold  Acknowledgements and Bankers'
Acceptances by each Borrower,  each of the Notes, Grid Gold Acknowledgements and
Bankers' Acceptances constitutes the legally valid and binding obligation of the
Borrower issuing the same  enforceable  against such Borrower in accordance with
its terms.



                                    VII-A-4
<PAGE>


                  4. It is not  necessary in  connection  with the execution and
delivery of the Credit Agreement by the Company or the Borrowers or the issuance
of the  Notes,  Grid  Gold  Acknowledgements  and  Bankers'  Acceptances  by the
Borrowers  to  register  the  Credit   Agreement,   the  Notes,  the  Grid  Gold
Acknowledgements or the Bankers' Acceptances under the Securities Act of 1933 or
to qualify an indenture in respect of the Notes under the Trust Indenture Act of
1939, as amended.

                  5. None of the execution and delivery of the Credit  Agreement
by the  Company  and  the  Borrowers,  the  issuance  of the  Notes,  Grid  Gold
Acknowledgements or Bankers'  Acceptances by the Borrowers,  the consummation of
the transactions  contemplated by the Credit  Agreement,  or the compliance with
the terms and conditions  thereof by the Company or the  Borrowers,  as the case
may be, conflicts with,  results in a breach or a violation of, or constitutes a
default under, any of the terms, conditions or provisions of (y) the Certificate
or Articles of Incorporation or By-Laws of the Company or the U.S. Borrower,  or
(z) any present  United States  federal or New York statute,  rule or regulation
that is binding on the Company or any Borrower.

                  6.  No  governmental   consents,   approvals,   registrations,
declarations  or filings  are  required to be obtained or made by the Company or
any  Borrower  in  connection  with the  execution  and  delivery  of the Credit
Agreement   or,  in  the  case  of  the   Borrowers,   the   Notes,   Grid  Gold
Acknowledgements or Bankers' Acceptances except as have already been obtained.

                  7. The making of the Loans and the application of the proceeds
thereof as provided in the Credit  Agreement  do not violate or require  filings
under  Regulation G, T, U or X of the Board of Governors of the Federal  Reserve
System.

                  8. All  Obligations of Company under the Credit  Agreement are
within the  definition of "Senior  Debt" in the indenture  pursuant to which the
Subordinated Debentures have been issued.

                  Our opinion as to enforceability of the Credit Agreement,  the
Notes, Grid Gold  Acknowledgements  and Bankers' Acceptances is qualified by and
subject to:

                  (a)   limitations    imposed   by   bankruptcy,    insolvency,
                  reorganization,  moratorium  or similar  laws  relating  to or
                  affecting the enforcement of creditors' rights generally,  and
                  laws   relating  to  fraudulent   transfers  or   conveyances,
                  preferences and equitable subordination;

                  (b)   general   principles   of  equity,   including   without
                  limitation,  concepts  of  materiality,  reasonableness,  good
                  faith and fair  dealing  and the  possible  unavailability  of
                  specific  performance  or  injunctive  relief  (regardless  of
                  whether such  enforceability  is considered in a proceeding in
                  equity or at law);

                  (c) the qualification that certain remedial  provisions of the
                  Credit Agreement may be unenforceable in whole or in part, but
                  such document


                                    VII-A-5
<PAGE>


                  contains adequate provisions for practical realization of the 
                  benefits purported to be created thereby;

                  (d)  the  unenforceability   under  certain  circumstances  of
                  provisions  purporting  to release or exculpate any party from
                  liability for its acts or omissions, or purporting to impose a
                  duty upon any party to  indemnify  any  other  party  when any
                  claimed  damages  result from the gross  negligence or willful
                  misconduct of the party seeking such indemnity;

                  (e)  the  unenforceability   under  certain  circumstances  of
                  waivers,  and provisions  imposing  liquidated  damages,  late
                  payment charges or forfeitures, if such amounts are determined
                  to be penalties in light of the actual damages incurred;

                  (f) the  qualification  that any money judgment  rendered by a
                  court in the State of New York or  California  will be payable
                  in United States dollars.

                  This opinion is being delivered upon the express  instructions
of each of the Company and the  Borrowers  to the Agents,  the  Arranger and the
Lenders and their permitted  assignees and  participants and is solely for their
benefit in  connection  with the above  transactions.  This  opinion  may not be
relied upon for any other purpose,  or relied upon by any other person,  firm or
corporation  for any  purpose,  without  our prior  written  consent;  provided,
however,  that each of the  Agents,  the  Arranger  and the  Lenders,  and their
permitted  assigns  and  participants,  may  provide  this  opinion  (i) to bank
examiners  and  other  regulatory  authorities  should  they  so  request  or in
connection with their normal  examinations,  (ii) to its respective  independent
auditors and attorneys, (iii) pursuant to order or legal process of any court or
governmental  agency,  (iv) in connection with any action to which it is a party
arising out of the transactions  contemplated by the Credit Agreement, or (v) to
prospective  assignees of, or participants  in, all or any portion of its Loans,
Bankers' Acceptances,  participations in Letters of Credit or Overall Commitment
under the Credit Agreement.


Very truly yours,




                                    VII-A-6
<PAGE>


                                   SCHEDULE I




                                    VII-A-7
<PAGE>


                                  EXHIBIT VII-B

                       FORM OF OPINION OF WAYNE KIRK, ESQ.


                                                              July __, 1998


The Chase Manhattan Bank of Canada,
  as Canadian Administrative Agent
150 King Street West 16th Floor
Box 68
Toronto Ontario
Canada MSH 1J9

         and

Chase Securities Australia Limited,
  as Australian Administrative Agent
Level 35 AAP Center
259 George Street
Sydney NSW Australia 2000

         and

Chase Securities Inc.,
  as Arranger
270 Park Avenue
New York, NY 10017

         and

The Chase Manhattan Bank,
  as Administrative Agent
1 Chase Manhattan Plaza
New York, NY 10081

and the Lenders Listed on Schedule I Hereto

               Re: Credit  Agreement  dated July , 1998 among  Homestake  Mining
               Company, Homestake Mining Company of California, Homestake Canada
               Inc.,  Homestake Gold of Australia  Limited,  Plutonic  Resources
               Limited.  the Lenders named therein,  The Chase Manhattan Bank of
               Canada,  as  Canadian   Administrative  Agent,  Chase  Securities
               Australia  Limited,  as Australian  Administrative  Agent,  Chase
               Securities  Inc., as Arranger,  and The Chase  Manhattan Bank, as
               Administrative Agent



                                    VII-B-1
<PAGE>


Ladies and Gentlemen:

                  I have  acted  as  counsel  to  Homestake  Mining  Company,  a
Delaware corporation (the "Company"),  Homestake Mining Company of California, a
California corporation (the "U.S. Borrower"),  Homestake Canada Inc., an Ontario
corporation (the "Canadian  Borrower"),  Homestake Gold of Australia  Limited, a
South  Australia   corporation   ("HGAL"),   and  Plutonic   Resources   Limited
("Plutonic";  and  collectively  with  HGAL,  the  "Australian  Borrowers"  and,
together with the U.S. Borrower and the Canadian Borrower, the "Borrowers"),  in
connection with the execution and delivery of the Credit Agreement dated as July
, 1998,  among the  Company,  the U.S.  Borrower,  the  Canadian  Borrower,  the
Australian  Borrower,  the Lenders named  therein,  The Chase  Manhattan Bank of
Canada, as Canadian Administrative Agent, Chase Securities Australia Limited, as
Australian  Administrative  Agent,  Chase Securities Inc., as Arranger,  and The
Chase  Manhattan Bank, as  Administrative  Agent (the "Credit  Agreement"),  and
certain transactions relating thereto. All terms used herein that are defined in
the  Credit  Agreement  have the  respective  meanings  specified  in the Credit
Agreement.  This  letter  is  being  delivered  to  you in  satisfaction  of the
condition  set forth in  subsection  3.1E of the Credit  Agreement  and with the
understanding that you are entering into the Credit Agreement in reliance on the
opinions expressed herein.

                  In  my  capacity  as  Vice  President,   General  Counsel  and
Corporate Secretary of the Company and counsel to the Company and the Borrowers,
I have  personally  supervised  the actions of the Company and the  Borrowers in
connection  with  the  authorization,  execution  and  delivery  of  the  Credit
Agreement  and the Exhibits and Schedules  thereto,  the Notes and the Grid Gold
Acknowledgements.  In my capacity as counsel to the Company and the Borrowers, I
have examined the originals,  or copies  identified to my  satisfaction as being
true copies,  of such records,  documents or other instruments as in my judgment
are  necessary  or  appropriate  to enable me to render the  opinions  expressed
below. These records, documents and instruments include the following:

                  (a)   The  Certificates or Articles of  Incorporation  and the
                        Articles  of  Association  of  the  Company,   the  U.S.
                        Borrower,  the  Canadian  Borrower  and  the  Australian
                        Borrowers;

                  (b)   The  By-Laws  of the  Company,  the U.S.  Borrower,  the
                        Canadian Borrower and the Australian Borrowers;

                  (c)   Certain  records of proceedings and actions of the Board
                        of  Directors  of the Company,  the U.S.  Borrower,  the
                        Canadian Borrower and the Australian Borrowers;

                  (d)   The Credit  Agreement  and the  Exhibits  and  Schedules
                        annexed thereto;

                  (e)   The Notes and Grid Gold Acknowledgements;




                                    VII-B-2
<PAGE>
                  (f)   The form of Drafts; and

                  (g)   The  material  indentures,   mortgages,   contracts  and
                        agreements of the Company and the  Borrowers  identified
                        in the Opinion Certificates referred to below.

                  I  have  been  furnished  with,  and  have  relied  upon,  the
certificates of certain officers of each of the Company, the U.S. Borrower,  the
Canadian  Borrower,  HGAL,  and Plutonic  (each an "Opinion  Certificate")  with
respect to certain factual  matters,  copies of which are being delivered to you
herewith.  Attached  to such  Opinion  Certificates  are,  among  other  things,
listings certified by the Persons executing such Opinion  Certificates to be all
of the  indentures,  mortgages,  deeds of trust,  material  pledge and  security
agreements,  bank loans,  credit  agreements  and other  material  evidences  of
indebtedness of the Company, the U.S. Borrower, the Canadian Borrower, HGAL, and
Plutonic  (collectively,  the "Debt  Agreements") and listings  certified by the
Persons executing such Opinion Certificates to be all of the other agreements by
which the Company, the U.S. Borrower,  the Canadian Borrower,  HGAL, or Plutonic
is or will be, after the execution of the documents  referred to herein, a party
or by which the Company,  the U.S.  Borrower,  the Canadian  Borrower,  HGAL, or
Plutonic or any of their  respective  properties are bound or affected and which
are  certified to be material to the  business,  operations or properties of the
Company,  the  U.S.  Borrower,   the  Canadian  Borrower  ,  HGAL,  or  Plutonic
(collectively,  the "Material Agreements"). I have no reason to believe that the
Agents,  the  Arranger or the  Lenders  and I are not  entitled to rely upon the
certificates and the representations and warranties referred to above.

                  I have  also  been  furnished  with,  and  have  relied  upon,
evidence or advice  satisfactory  to me from the offices of the  Secretaries  of
State of  California  and Delaware  and the Ministry of Consumer and  Commercial
Relations of Ontario, [need entity for Australian certification] as appropriate,
with respect to the good standing or corporate  status of the Company,  the U.S.
Borrower,  the Canadian  Borrower,  HGAL,  and  Plutonic.  In  addition,  I have
obtained  and relied upon such other  certificates  and  assurances  from public
officials as I have deemed  necessary,  desirable or  appropriate  to render the
opinions herein, copies of which have been delivered to Administrative Agent.

                  I  have  assumed  the  genuineness  and  authenticity  of  all
documents  submitted to me as originals  and the  conformity to originals of all
documents  submitted to me as copies,  drafts or forms. In making my examination
of documents  executed or to be executed by Persons other than the Company,  the
U.S. Borrower, the Canadian Borrower or the Australian Borrowers, I have assumed
that such  other  Persons  had or have the power to enter into and  perform  all
obligations  thereunder  and have  also  assumed  the due  authorization  by all
requisite  action and execution  and delivery of such  documents by such Persons
and the validity and binding effect thereof in relation to such Persons.

                  I have  investigated  such questions of law for the purpose of
rendering  this  opinion  as  I  have  deemed  necessary,   including,   without
limitation,  Regulations  G, T, U and X of the Board of Governors of the Federal
Reserve System. I am opining herein as to the effect on the subject  transaction
of the federal laws of the United  States,  the laws of the State of  California
and, in respect  only of the general  corporation  law, the laws of the State of
Delaware.


                                    VII-B-3
<PAGE>


                  On the basis of the foregoing,  and in reliance  thereon,  and
subject to the limitations,  qualifications and exceptions set forth below, I am
of the opinion that:

                  1. Each of the Company and the Borrowers is a corporation duly
incorporated,  validly  existing  and in good  standing  under  the  laws of its
jurisdiction  of  incorporation  and  has  all  requisite  corporate  power  and
authority to own and operate its  properties and to carry on its business as now
conducted, to execute, deliver and perform the Credit Agreement and, in the case
of the Borrowers,  the Notes,  the Grid Gold  Acknowledgements  and the Bankers'
Acceptances, and to carry out the transactions contemplated thereby.

                  2. Each of the  Company  and the  Borrowers  has not failed to
qualify to do business as a foreign  corporation  in any state or province where
the  consequence  of failure to be so  qualified  would have a material  adverse
effect on the Company's or any Borrower's business, operations or properties.

                  3. The  execution,  delivery  and  performance  of the  Credit
Agreement by each of the Company and the Borrowers have been duly  authorized by
all necessary corporate action on the part of the Company and the Borrowers. The
issuance  of  the  Notes,  the  Grid  Gold  Acknowledgements  and  the  Bankers'
Acceptances by each Borrower has been duly authorized by all necessary corporate
action on the part of such Borrower.

                  4. The Credit  Agreement  has been duly executed and delivered
by the Company and each Borrower.  The Notes and Grid Gold Acknowledgements have
been duly issued by the Borrowers.

                  5. It is not  necessary in  connection  with the execution and
delivery of the Credit Agreement by the Company or the Borrowers or the issuance
of the Notes, the Grid Gold Acknowledgements and the Bankers' Acceptances by the
Borrowers  to  register  the  Credit   Agreement,   the  Notes,  the  Grid  Gold
Acknowledgements or the Bankers' Acceptances under the Securities Act of 1933 or
to qualify an indenture in respect of the Notes under the Trust Indenture Act of
1939, as amended.

                  6. None of the execution and delivery of the Credit  Agreement
by the  Company  and  the  Borrowers,  the  issuance  of the  Notes,  Grid  Gold
Acknowledgements and Bankers' Acceptances by the Borrowers,  the consummation of
the transactions  contemplated by the Credit  Agreement,  or the compliance with
the terms and conditions  thereof by the Company or the  Borrowers,  as the case
may  be,  (A)  conflicts  with,  results  in a  breach  or a  violation  of,  or
constitutes a default under,  any of the terms,  conditions or provisions of (w)
the Certificate or Articles of Incorporation, Articles of Association or By-Laws
of the Company or the Borrowers,  (x) any Debt Agreement or Material  Agreement,
(y) any order, writ,  judgment or decree to which, to my knowledge,  the Company
or any Borrower is a party or by which, to my knowledge, any of their respective
properties  or assets  are bound and which is  material  to the  Company  or any
Borrower,  or (z) any present United States federal or California statute,  rule
or regulation that is binding on the Company or any Borrower, or


                                    VII-B-4
<PAGE>


(B) results in the creation of any Lien upon any of the  properties or assets of
the Company or any Borrower under any agreement referred to in clause (x) above.

                  7. To my  knowledge,  there is no action,  suit or  proceeding
pending or threatened against or affecting the Company or any Borrower at law or
in equity before any court,  arbitrator or  administrative  or governmental body
(a) in which an order has been entered preventing the making of any of the Loans
or other  extensions  of credit under the Credit  Agreement,  or (b) that could,
either  individually or in the aggregate,  have a material adverse effect on the
ability of the  Company or any  Borrower to perform  its  obligations  under the
Credit  Agreement  or, in the case of any  Borrower,  the  Notes,  the Grid Gold
Acknowledgements  or the  Bankers'  Acceptances  to  which  it is a party or the
financial  condition of the Company and its  Subsidiaries,  taken as a whole, or
any Borrower.

                  8.  Neither  the Company  nor any  Borrower is an  "investment
company" or a company  "controlled" by an "investment company" as such terms are
defined  in the  Investment  Company  Act of 1940,  as  amended,  or  subject to
regulation under the Public Utility Holding Company Act of 1935, as amended, the
Federal Power Act, as amended,  the Interstate  Commerce Act, as amended, or any
federal  or  state  statute  or   regulation   limiting  its  ability  to  incur
Indebtedness  with  respect to money  borrowed or to create  Liens on any of its
properties or assets to secure such Indebtedness.

                  9.  No  United  States  federal  or  California   governmental
consents, approvals,  registrations,  declarations or filings are required to be
obtained or made by the Company or any Borrower in connection with the execution
and  delivery  of the Credit  Agreement  or, in the case of the  Borrowers,  the
Notes, Grid Gold Acknowledgements or Bankers' Acceptances except as have already
been obtained.

                  10.  The  making  of the  Loans  and  the  application  of the
proceeds  thereof as provided in the Credit  Agreement do not violate or require
filings  under  Regulation G, T, U or X of the Board of Governors of the Federal
Reserve System.

                  11. All Obligations of Company under the Credit  Agreement are
within the  definition of "Senior  Debt" in the indenture  pursuant to which the
Subordinated Debentures have been issued.

                  This opinion is being delivered upon the express  instructions
of each of the Company and the  Borrowers  to the Agents,  the  Arranger and the
Lenders, and their permitted assignees and participants, and is solely for their
benefit in  connection  with the above  transactions.  This  opinion  may not be
relied upon for any other purpose,  or relied upon by any other person,  firm or
corporation for any purpose, without prior written consent;  provided,  however,
that each of the Agents,  the  Arranger  and the  Lenders,  and their  permitted
assignees and  participants,  may provide this opinion (i) to bank examiners and
other regulatory  authorities should they so request or in connection with their
normal examinations,  (ii) to its respective independent auditors and attorneys,
(iii)  pursuant to order or legal process of any court or  governmental  agency,
(iv) in  connection  with any action to which it is a party  arising  out of the
transactions contemplated by the Credit Agreement, or (v) to prospective



                                    VII-B-5
<PAGE>


assignees  of, or  participants  in, all or any  portion of its Loans,  Bankers'
Acceptances, participations in Letters of Credit or Overall Commitment under the
Credit Agreement.


Very truly yours,



                                    VII-B-6
<PAGE>


                                   SCHEDULE I




                                    VII-B-7

<PAGE>
                                EXHIBIT VIII-A

                   FORM OF OPINION OF OSLER, HOSKIN & HARCOURT



                                                                 July __, 1998

The Chase Manhattan Bank of Canada,
  as Canadian Administrative Agent
150 King Street West 16th Floor
Box 68
Toronto Ontario MSH 1J9 Canada

         and

Chase Securities Australia Limited,
  as Australian Administrative Agent
Level 35 AAP Center
259 George Street
Sydney NSW Australia 2000

         and

Chase Securities Inc.,
  as Arranger
270 Park Avenue
New York, NY 10017

         and

The Chase Manhattan Bank,
  as Administrative Agent
1 Chase Manhattan Plaza
New York, NY 10081

and the Lenders Listed on Schedule I Hereto

                  Re: Credit  Agreement  dated as of July , 1998 among Homestake
                  Mining  Company,   Homestake  Mining  Company  of  California,
                  Homestake  Canada Inc.,  Homestake Gold of Australia  Limited,
                  Plutonic  Resources  Limited the Lenders  named  therein,  The
                  Chase  Manhattan  Bank of Canada,  as Canadian  Administrative
                  Agent,  Chase  Securities  Australia  Limited,  as  Australian
                  Administrative Agent, Chase Securities Inc., as Arranger,  and
                  The Chase Manhattan Bank, as Administrative Agent (the "Credit
                  Agreement")



                                    VIII-A-1
<PAGE>


Dear Sirs/Mesdames:

                  We have acted as  Canadian  counsel to  Homestake  Canada Inc.
(the "Canadian  Borrower") in connection  with the execution and delivery of the
above-noted  Credit Agreement and certain  transactions  relating  thereto.  All
terms used herein that are defined in the Credit  Agreement  have the respective
meanings  specified in the Credit  Agreement.  This letter is being delivered to
you in  satisfaction of the condition set forth in subsection 3.1E of the Credit
Agreement  and with the  understanding  that you are  entering  into the  Credit
Agreement in reliance on the opinions expressed herein.

                  In  our  capacity  as  such  counsel,  we  have  examined  the
originals,  or copies  identified to our  satisfaction as being true copies,  of
such records, documents or other instruments as in our judgment are necessary or
appropriate to enable us to render the opinions  expressed below. These records,
documents and instruments include the following:

                  (a)   The Re-stated  Articles of Incorporation  and amendments
                        thereto (collectively,  the "Articles of Incorporation")
                        of the Canadian Borrower;

                  (b)   The By-Laws of the Canadian Borrower;

                  (c)   Certain  records of proceedings and actions of the Board
                        of Directors of the Canadian Borrower;

                  (d)   The Credit  Agreement  and the  Exhibits  and  Schedules
                        annexed thereto;

                  (e)   The Notes and Grid Gold Acknowledgements; and

                  (f)   The form of Drafts.

                  We  have  been  furnished   with,  and  have  relied  upon,  a
certificate of incumbency of the Canadian  Borrower  setting forth the directors
and  officers  of  the  Canadian   Borrower  and  certain  of  their  respective
signatures.

                  We have also been furnished  with, and have relied upon,  such
certificates  from public  officials as we have deemed  necessary,  desirable or
appropriate to render the opinions herein.

                  We  have  assumed  the  genuineness  and  authenticity  of all
documents  submitted to us as originals  and the  conformity to originals of all
documents submitted to us as copies,  drafts or forms. In making our examination
of  documents  executed  or to be executed  by Persons  other than the  Canadian
Borrower we have assumed that such other  Persons had or have the power to enter
into and perform all their respective  obligations thereunder (including without
limitation the legal capacity of all such Persons who are  individuals) and have
also assumed the due  authorization  by all  requisite  action and execution and
delivery of such  documents by such Persons and the validity and binding  effect
thereof in relation to such Persons.


                                    VIII-A-2
<PAGE>


                  We have  investigated such questions of law for the purpose of
rendering this opinion as we have deemed necessary.  We are solicitors qualified
to carry on the  practice  of law in the  Province  of Ontario and we express no
opinion as to any laws, or any matters governed by any laws, other than the laws
of the  Province  of Ontario and the federal  laws of Canada  applicable  in the
Province of Ontario.

                  On  the   basis  of  the   foregoing   and   subject   to  the
qualifications set forth below, we are of the opinion that:

                  1. The Canadian  Borrower is a corporation  duly  incorporated
and validly  existing  under the laws of the Province of Ontario and has all the
powers of a natural person including all requisite corporate power and authority
(i) to own and lease its properties and assets; (ii) to carry on its business as
presently  conducted;  and (iii) to  execute,  deliver  and  perform  the Credit
Agreement, the Notes issued by the Canadian Borrower (the "Canadian Notes"), the
Grid Gold  Acknowledgements  issued by the Canadian Borrower (the "Canadian Grid
Gold  Acknowledgements")  and all Bankers'  Acceptances  sold by it from time to
time and to carry out the transactions contemplated thereby.

                  2. The Canadian Borrower is registered as an  extra-provincial
corporation in the Province of British Columbia.

                  3. The  execution,  delivery  and  performance  of the  Credit
Agreement  and the  issuance  of the  Canadian  Notes,  the  Canadian  Grid Gold
Acknowledgements  and from time to time  Banker's  Acceptances  by the  Canadian
Borrower have been duly authorized by all necessary corporate action on the part
of the Canadian Borrower,  and the Credit Agreement,  the Canadian Notes and the
Canadian Grid Gold Acknowledgements have been duly executed and delivered by the
Canadian Borrower.

                  4. (a) The choice of the law of the State of New York, without
giving  effect to the conflicts of laws rules  thereof,  as the governing law of
the  Credit   Agreement,   the   Canadian   Notes,   the   Canadian   Grid  Gold
Acknowledgements and the Bankers' Acceptances is a valid and effective choice of
law under the laws of the Province of Ontario.

                           (b)  In proceedings brought before a court of 
competent  jurisdiction in the Province of Ontario, the laws of the State of New
York would,  to the extent  specifically  pleaded and proved with respect to the
Credit Agreement, the Canadian Notes, the Canadian Grid Gold Acknowledgements or
the Bankers' Acceptances as a fact by expert evidence, be recognized and applied
by such court to all issues which are to be determined  in accordance  with such
laws, except that in any such proceedings,  such court (i) will apply those laws
of the Province of Ontario which it  characterizes  as  procedural  and will not
apply  those  laws of the  State  of New  York as such  court  characterizes  as
procedural;  and (ii) will not apply those laws of the State of New York which a
court of the Province of Ontario would  characterize as revenue,  expropriatory,
penal or similar laws or the  application  of which would be  inconsistent  with
public policy, as such term is applied by such court.

                                    VIII-A-3
<PAGE>


                           (c)  No provision of the Credit Agreement, the
Canadian  Notes,  the  Canadian  Grid  Gold  Acknowledgements  or  the  Bankers'
Acceptances is inconsistent  with public policy,  as such term is applied by the
courts of the Province of Ontario.

                           (d) The  submission  in the Credit  Agreement  by the
Canadian Borrower to the
non-exclusive jurisdiction of the courts of the State of New York is binding and
enforceable against the Canadian Borrower.

                  5. None of the execution and delivery of the Credit  Agreement
by the Canadian Borrower,  the issuance of the Canadian Notes, the Canadian Grid
Gold Acknowledgements and the Bankers' Acceptances by the Canadian Borrower, the
consummation of the transactions  contemplated by the Credit  Agreement,  or the
compliance  with the terms  and  conditions  thereof  by the  Canadian  Borrower
conflicts with,  results in a breach or a violation of, or constitutes a default
under,  any  of  the  terms,   conditions  or  provisions  of  the  Articles  of
Incorporation  or By-Laws of the  Canadian  Borrower,  or any  statute,  rule or
regulation  of the  Province  of Ontario  or the  federal  government  of Canada
applicable therein that is binding on the Canadian Borrower.

                  6. We have not  been  retained  by the  Canadian  Borrower  in
connection with any action,  suit or proceeding pending or presently  threatened
against or affecting the Canadian Borrower at law or in equity before any court,
arbitrator or administrative or governmental body.

                  7. No consent, approval,  registration,  declaration or filing
of the  Province  of  Ontario or the  federal  government  of Canada  applicable
therein  are  required  to be  obtained  or made  by the  Canadian  Borrower  in
connection with the execution, delivery and performance by the Canadian Borrower
or the enforceability against the Canadian Borrower of the Credit Agreement, the
Notes, the Grid Gold Acknowledgements or the Bankers' Acceptances.

                  8. In any  bankruptcy  proceeding  under  the  Bankruptcy  and
Insolvency  Act (Canada),  the  obligation  of payment of the Canadian  Borrower
under  the  Credit  Agreement,  the  Canadian  Notes,  the  Canadian  Grid  Gold
Acknowledgement and the outstanding Bankers' Acceptances will rank at least pari
passu with the claims of all other creditors of the Canadian  Borrower which are
not secured or preferred  creditors of the Canadian  Borrower within the meaning
of that statute or which are not otherwise entitled to priority by statute.

                  9. The  Canadian  Borrower is not  entitled to claim  immunity
from legal process of the  enforcement  of any judgement of a court of competent
jurisdiction, whether generally or in relation to any specific assets.

                  10. A final and conclusive  judgement in personam granted by a
court of competent  jurisdiction  in the State of New York may be enforced in an
Ontario  court by an action  or  counterclaim  for the  amount  due  under  such
judgement, provided that:



                                    VIII-A-4
<PAGE>


         (a)      the  judgement  was obtained  after proper  service of process
                  under New York law in connection  with the action in which the
                  jurisdiction was obtained;

         (b)      the New York court acted within its jurisdiction under New 
                  York law;

         (c)      the  judgement  is  final  and  conclusive,  and  no  stay  of
                  execution has been ordered by the New York law;

         (d)      the  judgement  is not  impeachable  as  void or  voidable  or
                  otherwise ineffective under New York law;

         (e)      the judgement was not obtained by fraud or any manner contrary
                  to the  rules  of  natural  justice,  the  judgement  and  the
                  enforcement  thereof are not  inconsistent  with public policy
                  (as such term is applied by the Ontario court);

         (f)      the  judgement  is for a fixed sum of money which is not to be
                  determined  at a  future  time,  and  the  enforcement  of the
                  judgement  in the  Province  of Ontario  does not  constitute,
                  directly or indirectly,  the enforcement of laws characterized
                  by  the   applicable   Ontario  court  as  being  of  revenue,
                  expropriatory, penal, or public law nature;

         (g)      no new  admissible  evidence  relevant to the action which was
                  the subject  matter of the  judgement is  discovered or arises
                  prior  to the  enforcement  of the  judgement  by the  Ontario
                  court;

         (h)      the action to enforce the  judgment is  commenced  against the
                  judgement  debtor in the Ontario  court within the  applicable
                  limitation period; and

         (i)    the Ontario court may give judgement in Canadian currency only.

                  This opinion is being delivered upon the express  instructions
of the  Canadian  Borrower  to the  Agents,  Arranger  and the Lenders and their
permitted  assignees  and  participants  and is  solely  for  their  benefit  in
connection with the above transactions.  This opinion may not be relied upon for
any other purpose,  or relied upon by any other person,  firm or corporation for
any purpose, without our prior written consent; provided,  however, that each of
the  Agents,  Arranger  and  the  Lenders  and  their  permitted  assignees  and
participants may provide this opinion (i) to bank examiners and other regulatory
authorities   should  they  so  request  or  in  connection  with  their  normal
examinations,  (ii) to its respective independent auditors and attorneys,  (iii)
pursuant to order or legal process of any court or governmental  agency or other
binding statutory requirement, (iv) in connection with any action to which it is
a party arising out of the transactions contemplated by the Credit Agreement, or
(v) to prospective assignees of, or participants in, all or any portion of its


                                    VIII-A-5
<PAGE>


Loans,  Bankers'  Acceptances,  participations  in  Letters or Credit or Overall
Commitment under the Credit Agreement.


Yours very truly,






                                    VIII-A-6
<PAGE>


                                   SCHEDULE I




                                    VIII-A-7
<PAGE>



                                 EXHIBIT VIII-B

                   FORM OF OPINION OF MALLESONS STEPHEN JAQUES

                                                               July __, 1998



The Chase Manhattan Bank of Canada,
  as Canadian Administrative Agent
150 King Street West 16th Floor
Box 68
Toronto Ontario MSH 1J9 Canada

         and

Chase Securities Australia Limited,
  as Australian Administrative Agent
Level 35 AAP Center
259 George Street
Sydney NSW Australia 2000

         and

Chase Securities Inc.,
  as Arranger
270 Park Avenue
New York, NY 10017

         and

The Chase Manhattan Bank,
  as Administrative Agent
1 Chase Manhattan Plaza
New York, NY 10081

and the Lenders Listed on Schedule I Hereto

         Re: Credit  Agreement  dated as of July , 1998 among  Homestake  Mining
         Company, Homestake Mining Company of California, Homestake Canada Inc.,
         Homestake Gold of Australia Limited,  Plutonic  Resources Limited,  the
         Lenders named therein,  The Chase Manhattan Bank of Canada, as Canadian
         Administrative Agent, Chase Securities Australia Limited, as Australian
         Administrative Agent, Chase Securities Inc., as Arranger, and The Chase
         Manhattan Bank, as Administrative Agent (the "Credit Agreement")


                                    VIII-B-1
<PAGE>


Ladies and Gentlemen:

                  We have  acted as  Australian  counsel  to  Homestake  Gold of
Australia  Limited  ("HGAL") and Plutonic  Resources  Limited  ("Plutonic";  and
collectively with HGAL, "Australian Borrowers") in connection with the execution
and  delivery of the  above-noted  Credit  Agreement  and  certain  transactions
relating thereto. All terms used herein that are defined in the Credit Agreement
have the respective  meanings specified in the Credit Agreement.  This letter is
being  delivered to you in satisfaction of the condition set forth in subsection
3.1E of the Credit  Agreement and with the  understanding  that you are entering
into the Credit Agreement in reliance on the opinions expressed herein.

                  In  our  capacity  as  such  counsel,  we  have  examined  the
originals,  or copies  identified to our  satisfaction as being true copies,  of
such records, documents or other instruments as in our judgment are necessary or
appropriate to enable us to render the opinions  expressed below. These records,
documents and instruments include the following:

                  (a)   The  Certificates  of  Incorporation  of the  Australian
                        Borrowers;


                  (b)   The  Memoranda  and  Articles  of   Association  of  the
                        Australian Borrowers;

                  (c)   Certain  records of proceedings and actions of the Board
                        of Directors of the Australian Borrowers;

                  (d)   The Credit  Agreement  and the  Exhibits  and  Schedules
                        annexed thereto; and

                  (e)   The Notes and Grid Gold Acknowledgements.

                  We  have  been   furnished   with,   and  have  relied   upon,
certificates  of  incumbency  of the  Australian  Borrowers  setting  forth  the
directors and officers of the Australian  Borrowers authorized to sign documents
in connection with the Credit Agreement and their respective signatures.

                  We have conducted a search of the Australian  Borrowers at the
Australian  Securities Commission on [insert date] and relied on the correctness
of the results of that search.

                  We  have  assumed  the  genuineness  and  authenticity  of all
documents  submitted to us as originals  and the  conformity to originals of all
documents submitted to us as copies,  drafts or forms. In making our examination
of  documents  executed or to be executed by Persons  other than the  Australian
Borrowers we have assumed that such other Persons had or have the power to enter
into and perform all obligations  thereunder  (including  without limitation the
legal  capacity of all such Persons who are  individuals)  and have also assumed
the due authorization by all requisite action and execution and delivery of such
documents  by such  Persons  and the  validity  and  binding  effect  thereof in
relation to such Persons.


                                    VIII-B-2
<PAGE>


                  We have  investigated such questions of law for the purpose of
rendering  this  opinion  as we  have  deemed  necessary.  We  are  [solicitors]
qualified to carry on the practice of law in the  Commonwealth  of Australia and
we express no opinion as to any laws, or any matters governed by any laws, other
than the laws of the Commonwealth of Australia and its States and Territories.

                  On the basis of the foregoing,  and in reliance  thereon,  and
subject to the  limitations,  qualifications  and exceptions set forth below, we
are of the opinion that:

                  1. The Australian Borrowers are corporations duly incorporated
and validly  existing  under the laws of the  Commonwealth  of Australia and its
States and Territories and has all the powers of a natural person  including all
requisite  corporate  power and authority (i) to own and lease their  properties
and assets;  (ii) to carry on its  business;  and (iii) to execute,  deliver and
perform the Credit Agreement,  the Notes and the Grid Gold  Acknowledgements and
to carry out the transactions contemplated thereby.

                  2. The  execution,  delivery  and  performance  of the  Credit
Agreement  and the issuance of the Notes and the Grid Gold  Acknowledgements  by
the Australian  Borrowers have been duly  authorized by all necessary  corporate
action on the part of the Australian Borrowers and have been validly executed by
the Australian Borrowers.

                  3.  The  Credit  Agreement,   the  Notes  and  the  Grid  Gold
Acknowledgements   constitute   valid  and  legally   binding  and   enforceable
obligations  of the  Australian  Borrowers in accordance  with their  respective
terms.


                  4. (a) The choice of the law of the State of New York, without
giving  effect to the conflicts of laws rules  thereof,  as the governing law of
the Credit Agreement,  the Notes and the Grid Gold  Acknowledgements  is a valid
and effective  choice of law under the laws of the Commonwealth of Australia and
its States and Territories.


                     (b)      In  proceedings  brought  before a court of 
competent  jurisdiction in the Commonwealth of Australia,  the laws of the State
of New York would,  to the extent  specifically  pleaded and proved as a fact by
expert  evidence,  be recognized  and applied by such court to all issues which,
under the conflicts of laws rules of the  Commonwealth  of Australia,  are to be
determined  in accordance  with the proper or governing law of contract,  except
that in any such  proceedings,  [such  court (i) will  apply  those  laws of the
Commonwealth  of Australia  which it  characterizes  as procedural  and will not
apply  those  laws of the  State  of New  York as such  court  characterizes  as
procedural;  (ii) will not  apply  those  laws of the State of New York  which a
court  of  the   Commonwealth  of  Australia  would   characterize  as  revenue,
expropriatory,  penal or  similar  laws or the  application  of  which  would be
inconsistent  with public  policy,  as such term is applied by such  court;  and
(iii) may only give judgment in Australian dollars.]



                                    VIII-B-3
<PAGE>



                    (c)  No  provision  of  the  Credit  Agreement,  the  Notes
or the Grid Gold  Acknowledgements  is inconsistent  with public policy, as such
term is applied by the courts of the Commonwealth of Australia.


                    (d) The submission in the Credit Agreement by the Australian
Borrowers to the  non-exclusive  jurisdiction  of the courts of the State of New
York is legal, valid and binding.

                  5. None of the execution and delivery of the Credit  Agreement
by the  Australian  Borrowers,  the  issuance  of the  Notes  and the Grid  Gold
Acknowledgements   by  the  Australian   Borrowers,   the  consummation  of  the
transactions  contemplated by the Credit  Agreement,  or the compliance with the
terms and conditions thereof by the Australian Borrowers conflicts with, results
in a breach or a violation of, or constitutes a default under, any of the terms,
conditions or provisions  of the  Memoranda and Articles of  Association  of the
Australian Borrowers,  or any statute, rule or regulation of the Commonwealth of
Australia  and its States  and  Territories  that is  binding on the  Australian
Borrower.

                  6. We have not been  retained by the  Australian  Borrowers in
connection with any action,  suit or proceeding pending or threatened against or
affecting  the  Australian  Borrowers  at law or in  equity  before  any  court,
arbitrator or administrative or governmental body.

                  7. No federal  Australian  governmental  consents,  approvals,
registrations,  declarations  or filings are  required to be obtained or made by
the  Australian  Borrowers  in  connection  with  the  execution,   delivery  or
performance of the Australian Borrowers' obligations under the Credit Agreement,
the Notes or the Grid Gold  Acknowledgements  in order to ensure  the  legality,
enforceability or admissibility of the documents or for any reason whatsoever.

                  8. No ad valorem stamp duty or similar documentary tax or duty
in or of any  State  or  Territory  of the  Commonwealth  of  Australia  will be
applicable  with respect to the execution and delivery of the Credit  Agreement,
the  Notes  or  the  Grid  Gold  Acknowledgements  and  the  performance  by the
Australian Borrowers of its obligations under those documents.

                  9. The monetary  obligations of the Australian Borrowers under
the Credit  Agreement,  the Notes and the Grid Gold  Acknowledgements  rank pari
passu with all other  unsecured,  unsubordinated  indebtedness of the Australian
Borrowers, other than obligations preferred by law.

                  10.  Based only on searches  referred to above,  no winding up
orders have been made or resolutions passed for the winding up of the Australian
Borrowers.


                                    VIII-B-4
<PAGE>


                  11. The Australian  Borrowers does not enjoy any immunity from
suit  in  the  Courts  of the  Commonwealth  of  Australia  or  its  States  and
Territories and its assets are not exempt from execution.


                  This opinion is being delivered upon the express  instructions
of the  Australian  Borrowers to the Agents,  Arranger and the Lenders and their
permitted  assignees  and  participants  and is  solely  for  their  benefit  in
connection with the above transactions.  This opinion may not be relied upon for
any other purpose,  or relied upon by any other person,  firm or corporation for
any purpose, without our prior written consent; provided,  however, that each of
the  Agents,  Arranger  and  the  Lenders  and  their  permitted  assignees  and
participants may provide this opinion (i) to bank examiners and other regulatory
authorities   should  they  so  request  or  in  connection  with  their  normal
examinations,  (ii) to its respective independent auditors and attorneys,  (iii)
pursuant to order or legal process of any court or governmental  agency, (iv) in
connection  with  any  action  to  which  it  is a  party  arising  out  of  the
transactions  contemplated  by the  Credit  Agreement,  or  (v)  to  prospective
assignees  of, or  participants  in, all or any  portion of its Loans,  Bankers'
Acceptances, participations in Letters or Credit or Overall Commitment under the
Credit Agreement.


Yours very truly,



                                    VIII-B-5
<PAGE>


                                   SCHEDULE I






                                    VIII-B-6
<PAGE>



                                   EXHIBIT IX


                    FORM OF OPINION OF O'MELVENY & MYERS LLP
                               [O'M&M Letterhead]


                                      July
                                      -----
                                     1 9 9 8



149,000-004

The Chase Manhattan Bank of Canada,
  as Canadian Administrative Agent
150 King Street West 16th Floor
Box 68
Toronto Ontario
MSH 1J9 Canada

                                             and

Chase Securities Australia Limited,
  as Australian Administrative Agent
Level 35 AAP Center
259 George Street
Sydney NSW Australia 2000

                                             and



The Chase Manhattan Bank
  as Administrative Agent
270 Park Avenue
New York, NY 10017


                                            and


Deutsche Bank A.G.
  as Documentation Agent
31 West 52nd Street
New York, NY  10019



                                      IX-1
<PAGE>




and the Lenders Listed
on Schedule I Hereto

                  Re: Credit  Agreement  dated as of July , 1998 among Homestake
                  Mining  Company,   Homestake  Mining  Company  of  California,
                  Homestake  Canada Inc.,  Homestake Gold of Australia  Limited,
                  Plutonic  Resources  Limited,  the Lenders named therein,  The
                  Chase  Manhattan  Bank of Canada,  as Canadian  Administrative
                  Agent,  Chase  Securities  Australia  Limited,  as  Australian
                  Administrative  Agent,  Chase  Securities  Inc.,  as Arranger,
                  Deutsche  Bank  A.G.  as  Documentation  Agent  and The  Chase
                  Manhattan Bank, as Administrative Agent


Ladies and Gentlemen:

                  We have  acted as  counsel  to The Chase  Manhattan  Bank,  as
Administrative Agent (in such capacity,  "Administrative  Agent"), in connection
with the preparation  and delivery of that certain Credit  Agreement dated as of
July 14,  1998 (the  "Credit  Agreement")  among  Homestake  Mining  Company,  a
Delaware  corporation  ("Company"),  Homestake  Mining Company of California,  a
California  corporation  ("U.S.  Borrower"),  Homestake  Canada Inc., an Ontario
corporation ("Canadian Borrower"),  Homestake Gold of Australia Limited, a South
Australia  corporation  ("HGAL"),  Plutonic Resources Limited, a New South Wales
corporation ("Plutonic"; and collectively with HGAL, "Australian Borrowers") the
financial institutions listed therein as the Lenders (collectively,  "Lenders"),
the Agents named therein (including the  Administrative  Agent) and the Arranger
named therein and in  connection  with the  preparation  and delivery of certain
related documents.

                  We   have    participated   in   various    conferences   with
representatives of the Company, U.S. Borrower, Canadian Borrower, and Australian
Borrowers and with your representatives and Blake,  Cassels & Graydon,  Canadian
counsel for the Agents, and Mallesons Stephen Jaques, Australian counsel for the
Agents,  during  which  the  Credit  Agreement  and  related  matters  have been
discussed,  and we have also participated in the meeting held on the date hereof
incident to the occurrence of the Effective Date under the Credit Agreement.

                  We have  reviewed  the forms of the Credit  Agreement  and the
exhibits  thereto,  including the promissory  notes delivered by U.S.  Borrower,
Canadian Borrower,  HGAL, and Plutonic, which forms are annexed thereto, and the
U.S. Grid Gold Acknowledgement,  which form is annexed thereto, and the opinions
of Wayne Kirk, Esq., General Counsel of Company,  Thelen, Reid & Priest, special
New York counsel to Company and  Borrowers,  Osler,  Hoskin & Harcourt,  special
Canadian counsel to Canadian  Borrower,  and Mallesons  Stephen Jaques,  special
Australian counsel to Australian Borrowers (collectively,  the "Opinions"),  and
the officers' certificates and other documents delivered on the Effective Date.


                                      IX-2
<PAGE>


                  We  have  assumed  the  genuineness  of  all  signatures,  the
authenticity of all documents submitted to us as originals or copies and the due
authority of all persons  executing  the same,  and we have relied as to factual
matters on the documents that we have reviewed.

                  Based on and subject to the  foregoing,  we are of the opinion
that the Credit Agreement  constitutes the legally valid and binding  obligation
of the  Company  and the  Borrowers,  enforceable  against  the  Company and the
Borrowers in accordance with its terms,  except as may be limited by bankruptcy,
insolvency, reorganization,  moratorium or similar laws relating to or affecting
creditors'  rights  generally   (including,   without   limitation,   fraudulent
conveyance  laws)  and by  general  principles  of  equity,  including,  without
limitation, concepts of materiality, reasonableness, good faith and fair dealing
and the possible  unavailability of specific  performance or injunctive  relief,
regardless of whether considered in a proceeding in equity or at law.

                  Our   opinion   in   the   preceding   paragraph   as  to  the
enforceability of the Credit Agreement is subject to:

                  (i)             public  policy  considerations,   statutes  or
                                  court decisions that may limit the rights of a
                                  party to obtain  indemnification  against  its
                                  own gross  negligence,  willful  misconduct or
                                  unlawful conduct;

                 (ii)             the     unenforceability     under     certain
                                  circumstances  of broadly  or  vaguely  stated
                                  waivers or  waivers  of rights  granted by law
                                  where the waivers are against public policy or
                                  prohibited by law;

                 (iii)            the     unenforceability     under     certain
                                  circumstances  of  provisions  appointing  one
                                  party  as  attorney-in-fact   for  an  adverse
                                  party;

                 (iv)             the unenforceability under certain 
                                  circumstances of choice of law provisions; and

                 (v)              the     unenforceability     under     certain
                                  circumstances  of rights of set-off granted to
                                  a Lender in  respect  of  amounts  owing by an
                                  Affiliate  of such  Lender or with  respect to
                                  loans  in  which   participations   have  been
                                  granted  purported  to be provided  for in the
                                  Credit Agreement.

                  We express no  opinion as to the effect of  non-compliance  by
you with any state or federal laws or regulations applicable to the transactions
contemplated by the Credit Agreement because of the nature of your business.

                  We advise you that  provisions of the Credit  Agreement  which
provide  for  jurisdiction  of the  courts of New York may not be binding on the
courts in the forum(s) selected or excluded.


                                      IX-3
<PAGE>


                  In addition, although we have not independently considered all
of the matters  covered by the Opinions to the extent  necessary to enable us to
express the  conclusions  therein  stated,  we believe that the Opinions and the
officers'  certificates  and other  documents  delivered in connection  with the
execution and delivery of, and as conditions to the effectiveness of, the Credit
Agreement  are  substantially  responsive  to the  requirements  of  the  Credit
Agreement.

                  The law  covered by this  opinion  is  limited to the  present
federal  law of the United  States and the present law of the State of New York.
We express no  opinion as to the laws of any other  jurisdiction  and no opinion
regarding the statutes,  administrative  decisions,  rules or regulations of any
county,  municipality or special political subdivision or other local authority.
We  express  no  opinion   concerning   federal  or  state  securities  laws  or
regulations.


                  This   opinion  is   furnished   by  us  as  counsel  for  the
Administrative  Agent and may be relied upon by you only in connection  with the
Credit Agreement. It may not be used or relied upon by you for any other purpose
or by any other person for any purpose  whatsoever  without in each instance our
prior  written  consent.  You may,  however,  deliver a copy of this  opinion to
permitted   assignees  under  the  Credit  Agreement  in  connection  with  such
assignment,  and such assignees may rely on this opinion as if it were addressed
and had been delivered to them on the date hereof.




                                                   Respectfully submitted,




                                      IX-4
<PAGE>

                                   EXHIBIT X-A

                        FORM OF ASSIGNMENT AND ACCEPTANCE
                                (CANADIAN LENDER)

                            ASSIGNMENT AND ACCEPTANCE


                  This ASSIGNMENT AND ACCEPTANCE (this  "Agreement") is dated as
of  ____________,  ____  and  entered  into  by and  between  [NAME  OF  LENDER]
("Assignor") and _____________________ ("Assignee").

                                    RECITALS


                  WHEREAS,  Assignor has entered  into that certain  Amended and
Restated Credit Agreement dated as of July , 1998 (said Credit Agreement,  as it
may be amended,  supplemented or otherwise modified from time to time, being the
"Credit  Agreement",  the terms defined therein and not otherwise defined herein
being used herein as therein defined) with Homestake Mining Company,  a Delaware
corporation  ("Company"),  Homestake Mining Company of California,  a California
corporation  ("U.S.  Borrower"),  Homestake Canada Inc., an Ontario  corporation
("Canadian  Borrower"),  Homestake Gold of Australia  Limited, a South Australia
corporation ("HGAL"),  Plutonic Resources Limited, a New South Wales corporation
("Plutonic";  and collectively with HGAL, "Australian Borrowers"), the financial
institutions listed therein as Lenders ("Lenders"),  The Chase Manhattan Bank of
Canada, as Canadian  Administrative Agent for Lenders ("Canadian  Administrative
Agent"), Chase Securities Australia Limited, as Australian  Administrative Agent
for Lenders  ("Australian  Administrative  Agent"),  Chase  Securities  Inc., as
Arranger for Lenders  ("Arranger"),  Deutsche Bank A.G., as Documentation  Agent
for  Lenders   ("Documentation   Agent"),  and  The  Chase  Manhattan  Bank,  as
Administrative Agent for Lenders ("Administrative Agent");

                  WHEREAS,  Assignor  is a  Canadian  Lender  under  the  Credit
Agreement and Assignee will, upon giving effect to this Agreement, likewise be a
Canadian Lender;

                  WHEREAS,  Assignor has a Commitment under the Credit Agreement
pursuant to which  Assignor is required  (i) to make Loans to Canadian  Borrower
pursuant  to  subsection  2.1A(i)  of the  Credit  Agreement;  (ii) to  purchase
participations  in Canadian Letters of Credit pursuant to subsection 2.7D of the
Credit  Agreement  (any  such  participations  in any  such  Letters  of  Credit
outstanding  as of the date hereof  being the  "Assignor  Participations");  and
(iii) to create and accept Bankers'  Acceptances  pursuant to subsection 2.8A of
the Credit Agreement.

                  [WHEREAS,  Assignor has issued  certain  outstanding  Canadian
Letters of Credit (the "Assignor  Letters of Credit") pursuant to subsection 3.3
of the Credit Agreement;][INSERT IF THE CHASE MANHATTAN BANK OF CANADA IS


                                     X-A-1
<PAGE>


ASSIGNOR AND CANADIAN LETTERS OF CREDIT ARE OUTSTANDING TO CANADIAN BORROWER]

                  WHEREAS, Assignor desires to assign to Assignee its rights and
obligations as a Canadian  Lender under the Credit  Agreement and the other Loan
Documents  with respect to all or a portion of Assignor's  Canadian  Commitment,
including its  commitment  to create and accept  Bankers'  Acceptances,  and any
Canadian Loans and Bankers' Acceptances or Assignor  Participations  outstanding
thereunder [and to sell to Assignee a participation  in the Assignor  Letters of
Credit (the "Assignee  Participation") equal to the participation required to be
purchased  therein  pursuant to subsection  2.7D of the Credit  Agreement],  and
Assignee  has  agreed to  assume  the  obligations  of  Assignor  under the Loan
Documents  to the extent of the  rights  and  obligations  so  assigned  [and to
purchase the Assignee Participation]; and

                  [WHEREAS,  Assignor is also the  [U.S./Australian]  Lender for
its  Lending  Unit,  and  Assignor is  concurrently  herewith  entering  into an
Assignment and Acceptance  with [Name of Assignee or Assignee's  U.S./Australian
affiliate] (the  "[U.S./Australian]  Assignee") whereby Assignor is assigning to
the  [U.S./Australian]  Assignee that portion of its rights and obligations with
respect to its [U.S./Australian] Commitment which corresponds to the Percentage,
as defined below;]

                  [WHEREAS, Assignor's Lending Unit consists of the Assignor and
[Name of U.S./Australian Lender of Assignor's Lending Unit] ("Assignor's Lending
Unit Affiliate"), and Assignor's Lending Unit Affiliate is concurrently herewith
entering into an Assignment and Acceptance  with [Name of Assignee or Assignee's
U.S./Australian affiliate] (the "[U.S./Australian] Assignee") whereby Assignor's
Lending  Unit  Affiliate is assigning  to the  [U.S./Australian]  Assignee  that
portion of its  rights and  obligations  with  respect to its  [U.S./Australian]
Commitment which corresponds to the Percentage, as defined below;]

                  NOW,  THEREFORE,  in  consideration  of the  premises  and the
agreements, provisions and covenants herein contained, the parties hereto hereby
agree as follows:

                  SECTION 1.  Assignment and Assumption.

                  (a) Assignor  hereby  assigns to Assignee,  effective upon the
receipt  of the  consideration  set  forth in  Section  1(c) and  Administrative
Agent's receipt of any processing and recordation fee required under  subsection
10.1B of the Credit  Agreement,  without  recourse,  representation  or warranty
(except as expressly  set forth  herein),  an  undivided  _____%  interest  (the
"Percentage")  in all of Assignor's  rights and  obligations as a Lender arising
under the Credit  Agreement and the other Loan Documents  relating to Assignor's
Canadian  Commitment,  including its  commitment  to create and accept  Bankers'
Acceptances,  and any  Canadian  Loans and  Bankers'  Acceptances  and  Assignor
Participations  outstanding  thereunder  [and  concurrently  therewith  sells to
Assignee, without recourse,  representation or warranty (except as expressly set
forth herein), the Assignee Participation].


                                     X-A-2
<PAGE>


                  (b) Assignee  hereby  assumes from  Assignor,  and Assignor is
hereby  expressly  and  absolutely  released  from,  the  Percentage  of  all of
Assignor's  obligations  arising under the Loan Documents relating to Assignor's
Canadian  Commitment,  including its  commitment  to create and accept  Bankers'
Acceptances,  and any  Canadian  Loans and  Bankers'  Acceptances  and  Assignor
Participations  outstanding  thereunder,  including without  limitation all such
obligations with respect to any Canadian Loans to be made and any participations
in Canadian Letters of Credit to be purchased,  pursuant to the Credit Agreement
[, and Assignee hereby purchases from Assignor the Assignee Participation].

                  (c)  Notwithstanding  any  provisions of this Agreement to the
contrary, each of the Assignor and Assignee hereby acknowledges and confirms its
understanding  and  agreement  that the  Canadian  Commitments  of the  Canadian
Lenders  under  the  Credit  Agreement  may from  time to time be  increased  or
decreased by the  Borrowers in  accordance  with  subsection  2.1A of the Credit
Agreement through changes in the Canadian  Allocation or the addition of Lenders
with Canadian Commitments,  provided that the Canadian Allocation may not at any
time exceed the aggregate amount of the Overall  Commitment of all Lending Units
then  in  effect.  Each of the  Assignor  and  Assignee  acknowledges  that  the
Percentage  interest  in the  Canadian  Commitment  being  assigned  and assumed
hereunder equals the Assignee's  Canadian Lender Pro Rata Share, as set forth on
Annex II attached  hereto,  of the Overall  Commitment as in effect on and after
the date upon which this Agreement becomes effective.

                  (d) Assignor  hereby  represents  and warrants  that as of the
effective  date of this Agreement the  respective  amounts of unpaid  principal,
accrued but unpaid interest,  accrued but unpaid fees, and discounts and BA Fees
relating to Bankers' Acceptances, in each case with respect to the Percentage of
Assignor's  rights under the Credit  Agreement  relating to Assignor's  Canadian
Commitment  and  Canadian   Allocation  and  any  Canadian  Loans  and  Bankers'
Acceptances and Assignor Participations outstanding thereunder [and with respect
to the Assignee  Participation]  are as set forth on Annex I attached hereto. In
consideration  of  Assignor's  assignment,  Assignee  hereby  agrees  to  pay to
Assignor,   on  the  effective  date  of  this   Agreement,   the  amount(s)  of
$_________________ [and  Cdn.$_______________] in immediately available funds by
wire transfer to Assignor's office at ________________________________________.

                  (e) Assignor and Assignee  hereby agree that Annex II attached
hereto sets forth the amount of the Canadian Commitment and Canadian Allocation,
any Canadian Loans and Bankers'  Acceptances and  participations  by Assignee in
any Canadian Letters of Credit outstanding under the Commitment and the Canadian
Lender Pro Rata Share of Assignee  after  giving  effect to the  assignment  and
assumption [and the sale and purchase] described above.

                  (f)  Assignor  and  Assignee  hereby  agree that,  upon giving
effect to the assignment and  assumption  [and the sale and purchase]  described
above,  Assignee shall be a party to the Credit  Agreement as a Canadian  Lender
thereunder,  and shall  have all of the rights  and  obligations  under the Loan
Documents of, and shall be deemed to have made all of


                                     X-A-3
<PAGE>


the covenants and agreements contained in the Loan Documents made by, a Canadian
Lender having the Canadian Commitment and Canadian  Allocation,  the outstanding
Canadian   Loans,   the   outstanding   Bankers'   Acceptances,   the  aggregate
participation in outstanding  Canadian Letters of Credit and the Canadian Lender
Pro Rata Share of Assignee as  reflected on Annex II attached  hereto.  Assignee
hereby  acknowledges  and agrees that the agreement set forth in this subsection
1(f)  is  expressly  made  for  the  benefit  of  Company,  Borrowers,  Canadian
Administrative  Agent,  Administrative Agent, Assignor and the other Lenders and
their respective successors and permitted assigns.

                  (g) Assignor and Assignee hereby acknowledge and confirm their
understanding  and  intent  that (i)  this  Agreement  shall  effect  [(A)]  the
assignment  by Assignor  and the  assumption  by Assignee of the  Percentage  of
Assignor's rights and obligations with respect to Assignor's Canadian Commitment
and Canadian Allocation,  including its commitment to create and accept Bankers'
Acceptances,  and any  Canadian  Loans and  Bankers'  Acceptances  and  Assignor
Participations  outstanding  thereunder and all rights and obligations under the
Loan  Documents  with  respect  thereto  [and (B) the sale by  Assignor  and the
purchase by Assignee of the Assignee Participation],  (ii) any other assignments
by  Assignor  of a  portion  of its  rights  and  obligations  with  respect  to
Assignor's Canadian Commitment and Canadian Allocation, including its commitment
to create and accept Bankers'  Acceptances,  and any Canadian Loans and Bankers'
Acceptances or Assignor  Participations  outstanding thereunder [, and any other
sales by Assignor of  participations  in the Assignor  Letters of Credit,] shall
have no effect on the Canadian Commitment and Canadian Allocation, including its
commitment to create and accept Bankers'  Acceptances,  the outstanding Canadian
Loans, the outstanding Bankers' Acceptances,  or the aggregate  participation in
outstanding  Canadian  Letters  of Credit or  Canadian  Lender Pro Rata Share of
Assignee  set forth on Annex II  attached  hereto,  and (iii) from and after the
effective date of this Agreement,  Administrative  Agent shall make all payments
under the Credit Agreement in respect of the Percentage interest assigned hereby
[and the Assignee  Participation]  (including without limitation all payments of
principal and accrued but unpaid  interest and  commitment  and letter of credit
fees with  respect  thereto) to  Assignee,  whether such amounts (in the case of
such  interest  and  fees)  have  accrued  prior to the  effective  date of this
Agreement or subsequent thereto.

                SECTION 2.  Certain Representations, Warranties and Agreements.

                  (a) Assignor  represents and warrants that it is the legal and
beneficial owner of the Percentage  interest being assigned by it hereunder [and
of the Assignee  Participation]  and that such  interest  [is] [and the Assignee
Participation are] free and clear of any adverse claim.

                  (b)  Assignor  shall not be  responsible  to Assignee  for the
execution, effectiveness, genuineness, validity, enforceability,  collectibility
or  sufficiency  of any of  the  Loan  Documents  or  for  any  representations,
warranties,  recitals or statements  made therein or made in any written or oral
statement  or in any  financial  or other  statements,  instruments,  reports or
certificates or any other documents furnished or made by Assignor to Assignee or


                                     X-A-4
<PAGE>


by or on behalf of Company or any Borrower to Assignor or Assignee in connection
with the Loan  Documents and the  transactions  contemplated  thereby or for the
financial  condition  or business  affairs of the Company or any Borrower or any
other Person liable for the payment of any  Obligations,  nor shall  Assignor be
required to ascertain or inquire as to the  performance  or observance of any of
the terms, conditions,  provisions,  covenants or agreements contained in any of
the Loan  Documents  or as to the use of the proceeds of the Loans or the use of
the Letters of Credit or the use of Bankers'  Acceptances or as to the existence
or possible existence of any Event of Default or Potential Event of Default.

                  (c) Assignee  represents  and warrants  that it is an Eligible
Assignee;  that it has  experience  and expertise in the making of loans such as
the Loans; that it has acquired its Percentage  interest for its own account and
not with any present  intention of selling all or any portion of such  interest;
and that it has received, reviewed and approved copies of all Loan Documents.

                  (d) Assignee  represents and warrants that it has made its own
independent  investigation of the financial condition and affairs of Company and
each of the Borrowers and their  respective  Subsidiaries in connection with the
assignment  evidenced by this  Agreement and that it has made and shall continue
to  make  its own  appraisal  of the  creditworthiness  of the  Company  and the
Borrowers. Assignor shall not have any duty or responsibility,  either initially
or on a continuing  basis, to make any such  investigation or any such appraisal
on  behalf  of  Assignee  or to  provide  Assignee  with  any  credit  or  other
information with respect thereto,  whether coming into its possession before the
making of the initial  Loans or at any time or times  thereafter,  and  Assignor
shall  not  have any  responsibility  with  respect  to the  accuracy  of or the
completeness of any information provided to Assignee.

                  (e) Each party to this  Agreement  represents  and warrants to
the other party  hereto that it has full power and  authority to enter into this
Agreement  and to perform  its  obligations  hereunder  in  accordance  with the
provisions  hereof,  that this Agreement has been duly authorized,  executed and
delivered by such party and that this Agreement  constitutes a legal,  valid and
binding obligation of such party,  enforceable  against such party in accordance
with  its  terms,   except  as  enforceability  may  be  limited  by  applicable
bankruptcy,  insolvency,  reorganization,   moratorium  or  other  similar  laws
affecting creditors' rights generally and by general principles of equity.

                  SECTION 3.  Miscellaneous.

                  (a) Each party to this  Agreement  hereby  agrees from time to
time, upon request of the other party hereto,  to take such  additional  actions
and to execute and deliver such  additional  documents and  instruments  as such
other party may reasonably  request to effect the transactions  contemplated by,
and to carry out the intent of, this Agreement.

                  (b) Neither this Agreement nor any term hereof may be changed,
waived,  discharged or terminated,  except by an instrument in writing signed by
the  party  against  whom  enforcement  of such  change,  waiver,  discharge  or
termination is sought.


                                     X-A-5
<PAGE>


                  (c) Unless otherwise  specifically provided herein, any notice
or other  communication  herein  required or  permitted  to be given shall be in
writing  and may be  personally  served,  telecopied,  telexed or sent by United
States mail or Canadian mail or courier service and shall be deemed to have been
given when delivered in person or by courier  service,  upon receipt of telecopy
or telex,  or four Business  Days after  depositing it in the United States mail
(or five Business Days after depositing it in the Canadian mail),  registered or
certified, with postage prepaid and properly addressed; provided that notices to
Administrative  Agent shall not be effective  until  received.  For the purposes
hereof,  the  address  of each  party  hereto  shall be as set forth  under such
party's name on the  signature  page hereof or, as to either  party,  such other
address as shall be  designated by such party in a written  notice  delivered to
the other party hereto. In addition, the address of Assignee set forth below its
name on the signature  page hereof shall serve as the initial  notice address of
Assignee for purposes of subsection 10.11 of the Credit Agreement.

                  (d) This  Agreement  shall  not  effect an  assignment  of any
rights or obligations  relating to the U.S. Commitment or Australian  Commitment
of  any  Lender.   Assignor  and  Assignee  acknowledge  and  confirm  (i)  that
concurrently   herewith  U.S.  Assignee  is  entering  into  an  Assignment  and
Acceptance with the U.S. Lender of Assignor's Lending Unit whereby U.S. Assignee
shall be assigned and assume all rights and  obligations  of Assignor's  Lending
Unit with respect to that portion of such Lending Unit's U.S.  Commitment  which
corresponds to the Percentage  hereunder,  and (ii) that  concurrently  herewith
Australian  Assignee is entering  into an  Assignment  and  Acceptance  with the
Australian  Lender  of  Assignor's  Lending  Unit,  if any,  whereby  Australian
Assignee  shall be assigned and assume all rights and  obligations of Assignor's
Lending  Unit,  if any,  with  respect to that  portion of such  Lending  Unit's
Australian  Commitment,  if any, which corresponds to the Percentage  hereunder.
Assignee agrees that U.S.  Assignee shall for all purposes be the U.S. Lender of
Assignee's  Lending Unit and that  Australian  Assignee,  if any,  shall for all
purposes be the Australian  Lender of Assignee's  Lending Unit, if any, and that
the  Commitment of such Lending Unit shall equal the  Assignee's  Pro Rata Share
(as set forth on Annex 1 annexed hereto) of the aggregate Overall  Commitment of
all Lending Units as in effect at any time on and after the date this  Amendment
becomes effective.

                  (e)  The  parties   hereto   acknowledge   the  provisions  of
subsection  2.2F of the  Credit  Agreement  relating  to  disclosure  under  the
Interest Act (Canada) and agree that the  provisions  thereof shall apply to the
disclosure and  calculation of nominal and effective  rates of interest  payable
hereunder as if such provisions were set forth herein.

                  (f)  In  case  any  provision  in  or  obligation  under  this
Agreement shall be invalid,  illegal or unenforceable in any  jurisdiction,  the
validity,   legality  and   enforceability   of  the  remaining   provisions  or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.

                  (g)  THIS  AGREEMENT  SHALL  BE  GOVERNED  BY,  AND  SHALL  BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW
YORK.


                                     X-A-6
<PAGE>


                  (h) This  Agreement  shall be binding upon, and shall inure to
the benefit of, the parties hereto and their respective successors and assigns.

                  (i) This Agreement may be executed in one or more counterparts
and by different parties hereto in separate counterparts,  each of which when so
executed and delivered  shall be deemed an original,  but all such  counterparts
together shall constitute but one and the same  instrument;  signature pages may
be  detached  from  multiple  separate  counterparts  and  attached  to a single
counterpart  so that all  signature  pages are  physically  attached to the same
document.

                  (j) This Agreement  shall become  effective upon the execution
of a counterpart  hereof by each of Assignor and Assignee and the execution of a
counterpart hereof by Company and Borrowers (as evidence of their consent hereto
in  accordance   with   subsection   10.1B(i)  of  the  Credit   Agreement)  and
Administrative  Agent (as evidence of its acceptance  hereof in accordance  with
subsection  10.1B(ii)  of the Credit  Agreement)  and the  receipt by  Assignor,
Assignee, Canadian Administrative Agent and Administrative Agent of originals or
telecopies of such counterparts and authorization of delivery thereof.

                  (k)  Assignee  hereby  appoints  The Chase  Manhattan  Bank of
Canada, as Canadian Administrative Agent, Chase Securities Australia Limited, as
Australian  Administrative  Agent, Chase Securities Inc., as Arranger,  Deutsche
Bank  A.G.,  as   Documentation   Agent  and  The  Chase   Manhattan   Bank,  as
Administrative  Agent,  under the Credit Agreement and the other Loan Documents,
to exercise  such powers as are  specified in Section 9 of the Credit  Agreement
and  to be  entitled  to  such  protections  and  indemnities  as  are  afforded
thereunder.

                  [(l) Assignee  hereby  agrees to deliver to Canadian  Borrower
upon request such  certificates,  documents or other evidence as may be required
from  time to  time,  properly  completed  and duly  executed  by  Assignee,  to
establish the basis for any  applicable  exemption  from or a reduction of Taxes
with  respect  to  any  payment  to  Assignee  of  principal,   interest,  fees,
commissions,  or any other  amount  payable  under  this  Agreement,  the Credit
Agreement or otherwise in respect of the Canadian Loans.] [INSERT IF ASSIGNEE IS
ORGANIZED UNDER THE LAWS OF ANY  JURISDICTION  OTHER THAN CANADA OR ANY PROVINCE
THEREOF OR IS NOT RESIDENT IN CANADA.]

                  (m) Each of the parties to this  Agreement  hereby  waives its
rights to a jury trial of any claim or cause of action based upon or arising out
of this  Agreement or any dealings  between  them  relating to the  transactions
contemplated by this Agreement.




                  [Remainder of page intentionally left blank]


                                     X-A-7
<PAGE>

                 IN WITNESS  WHEREOF,  the  parties  hereto  have  caused  this
Agreement  to be duly  executed  and  delivered  by  their  respective  officers
thereunto duly authorized as of the date first written above.

[NAME OF ASSIGNOR]                                 [NAME OF ASSIGNEE]


By:                                                By:

Title:                                             Title:


Notice Address:                                    Notice Address:

===========================                        ===========================
---------------------------                        ---------------------------



Consented to in accordance with                   Accepted in accordance with
subsection 10.1B(i) of the Credit                 subsection 10.1B(ii) of the
Agreement                                         Credit Agreement

HOMESTAKE MINING COMPANY                          THE CHASE MANHATTAN BANK,
                                                  as Administrative Agent

By:                                               By:

Title:                                            Title:


HOMESTAKE MINING COMPANY
OF CALIFORNIA



By:
Title:

HOMESTAKE CANADA INC.


By:
Title:

HOMESTAKE GOLD OF AUSTRALIA LIMITED


By:
Title:



<PAGE>


PLUTONIC RESOURCES LIMITED



By:
Title:





Receipt Acknowledged:


THE CHASE MANHATTAN BANK OF CANADA,
as Canadian Administrative Agent



By:
Title:



<PAGE>


                                     ANNEX I


                               AMOUNTS OUTSTANDING



    Outstanding Principal Amount:

             Loans:
               Dollar Loans:           $_________
               Canadian Dollar Loans:  $_________


             Total:                                               $_________

    Accrued But Unpaid Interest:                                  $_________

    Accrued But Unpaid Fees:                                      $_________

   Total Principal, Interest and Fees:                            $_________

   Outstanding Bankers' Acceptance Face Amount:                   $_________

   Discount:                                                      $_________

   BA Fees:                                                       $_________



<PAGE>


                                    ANNEX II


                    ASSIGNEE'S CANADIAN COMMITMENT, CANADIAN
                     ALLOCATION, OUTSTANDING CANADIAN LOANS,
                           AGGREGATE PARTICIPATION IN
                   OUTSTANDING CANADIAN LETTERS OF CREDIT AND
                         PRO RATA SHARE AFTER ASSIGNMENT




Canadian Commitment:

         Current Canadian Allocation               $_________
         Aggregate Overall Commitment              $_________
         Canadian Lender Pro Rata Share              _____%
         Current Canadian
           Commitment                              $_________


Outstanding Loans:

         Dollar Loans                              $_________
         Canadian Dollar Loans                     $_________

Outstanding Bankers' Acceptance Face Amount:       $_________

Aggregate participation in outstanding Canadian Letters of Credit:
         Dollar Letters of Credit                  $_________
         Canadian Dollar Letters of Credit         $_________
Pro Rata Share                                       ______%



<PAGE>



                                   EXHIBIT X-B

                        FORM OF ASSIGNMENT AND ACCEPTANCE
                                  (U.S. LENDER)

                            ASSIGNMENT AND ACCEPTANCE


                  This ASSIGNMENT AND ACCEPTANCE (this  "Agreement") is dated as
of  ____________,  ____  and  entered  into  by and  between  [NAME  OF  LENDER]
("Assignor") and _____________________ ("Assignee").

                                    RECITALS

                  WHEREAS,  Assignor has entered  into that certain  Amended and
Restated Credit Agreement dated as of July , 1998 (said Credit Agreement,  as it
may be amended,  supplemented or otherwise modified to the date hereof and as it
may hereafter be amended,  supplemented or otherwise modified from time to time,
being the  "Credit  Agreement",  the terms  defined  therein  and not  otherwise
defined  herein  being used herein as therein  defined)  with  Homestake  Mining
Company,  a  Delaware  corporation  ("Company"),  Homestake  Mining  Company  of
California, a California corporation ("U.S.  Borrower"),  Homestake Canada Inc.,
an  Ontario  corporation  ("Canadian  Borrower"),  Homestake  Gold of  Australia
Limited, a South Australia corporation  ("HGAL"),  Plutonic Resources Limited, a
New South Wales corporation ("Plutonic"; and collectively with HGAL, "Australian
Borrowers"),  the financial  institutions listed therein as Lenders ("Lenders"),
The Chase Manhattan Bank of Canada, as Canadian Administrative Agent for Lenders
("Canadian  Administrative  Agent"),  Chase  Securities  Australia  Limited,  as
Australian Administrative Agent for Lenders ("Australian Administrative Agent"),
Chase Securities Inc., as Arranger for Lenders ("Arranger"), Deutsche Bank A.G.,
as  Documentation  Agent  for  Lenders  ("Documentation  Agent"),  and The Chase
Manhattan Bank, as Administrative Agent for Lenders ("Administrative Agent");

                  WHEREAS, Assignor is a U.S. Lender under the Credit Agreement
and Assignee will, upon giving effect to this Agreement, likewise be a U.S. 
Lender;

                  WHEREAS,  Assignor has a Commitment under the Credit Agreement
pursuant  to which  Assignor  is  required  (i) to make  Loans to U.S.  Borrower
pursuant to subsection  2.1A(iii) of the Credit Agreement;  and (ii) to purchase
participations  in U.S.  Letters of Credit  pursuant to  subsection  2.7D of the
Credit  Agreement  (any  such  participations  in any  such  Letters  of  Credit
outstanding as of the date hereof being the "Assignor Participations");

                  [WHEREAS, Assignor has issued certain outstanding U.S. Letters
of Credit (the "Assignor  Letters of Credit")  pursuant to subsection 3.3 of the
Credit  Agreement;]  [INSERT IF THE CHASE  MANHATTAN  BANK IS ASSIGNOR  AND U.S.
LETTERS OF CREDIT ARE OUTSTANDING TO U.S. BORROWER]



                                     X-B-1
<PAGE>


                  WHEREAS, Assignor desires to assign to Assignee its rights and
obligations  as a U.S.  Lender  under the  Credit  Agreement  and the other Loan
Documents with respect to all or a portion of Assignor's U.S. Commitment and any
U.S. Loans or Assignor  Participations  outstanding  thereunder  [and to sell to
Assignee  a  participation  in the  Assignor  Letters of Credit  (the  "Assignee
Participation")  equal to the  participation  required to be  purchased  therein
pursuant to subsection 2.7D of the Credit Agreement], and Assignee has agreed to
assume the obligations of Assignor under the Loan Documents to the extent of the
rights and obligations so assigned [and to purchase the Assignee Participation];
and

                  [WHEREAS,  Assignor is also the  [Canadian/Australian]  Lender
for its Lending Unit, and Assignor is,  concurrently  herewith  entering into an
Assignment   and    Acceptance    with   [Name   of   Assignee   or   Assignee's
Canadian/Australian  affiliate] (the  "[Canadian/Australian]  Assignee") whereby
Assignor is assigning to the [Canadian/Australian]  Assignee that portion of its
rights and  obligations  with  respect to its  [Canadian/Australian]  Commitment
which corresponds to the Percentage, as defined below;]

                  [WHEREAS, Assignor's Lending Unit consists of the Assignor and
[Name of  Canadian/Australian  Lender of Assignor's  Lending Unit]  ("Assignor's
Lending Unit Affiliate"),  and Assignor's Lending Unit Affiliate is concurrently
herewith  entering into an Assignment and  Acceptance  with [Name of Assignee or
Assignee's Canadian/Australian affiliate] (the "[Canadian/Australian] Assignee")
whereby    Assignor's    Lending   Unit    Affiliate   is   assigning   to   the
[Canadian/Australian]  Assignee that portion of its rights and obligations  with
respect  to  its  [Canadian/Australian]  Commitment  which  corresponds  to  the
Percentage, as defined below;]

                  NOW,  THEREFORE,  in  consideration  of the  premises  and the
agreements, provisions and covenants herein contained, the parties hereto hereby
agree as follows:

                  SECTION 1.  Assignment and Assumption.

                  (a) Assignor  hereby  assigns to Assignee,  effective upon the
receipt  of the  consideration  set  forth in  Section  1(c) and  Administrative
Agent's receipt of any processing and recordation fee required under  subsection
10.1B of the Credit  Agreement,  without  recourse,  representation  or warranty
(except as expressly  set forth  herein),  an  undivided  _____%  interest  (the
"Percentage")  in all of Assignor's  rights and  obligations as a Lender arising
under the Credit  Agreement and the other Loan Documents  relating to Assignor's
U.S.  Commitment  and any U.S.  Loans and  Assignor  Participations  outstanding
thereunder  [and  concurrently  therewith sells to Assignee,  without  recourse,
representation or warranty (except as expressly set forth herein),  the Assignee
Participation].

                  (b) Assignee  hereby  assumes from  Assignor,  and Assignor is
hereby  expressly  and  absolutely  released  from,  the  Percentage  of  all of
Assignor's  obligations  arising under the Loan Documents relating to Assignor's
U.S.  Commitment  and any U.S.  Loans and  Assignor  Participations  outstanding
thereunder,  including  without  limitation all such obligations with respect to
any U.S. Loans to be made and any participations in U.S. Letters


                                     X-B-2
<PAGE>


of Credit to be  purchased,  pursuant to the Credit  Agreement  [, and  Assignee
hereby purchases from Assignor the Assignee Participation].

                  (c)  Notwithstanding  any  provisions of this Agreement to the
contrary, each of the Assignor and Assignee hereby acknowledges and confirms its
understanding and agreement that the U.S.  Commitments of the U.S. Lenders under
the Credit  Agreement  may from time to time be  increased  or  decreased by the
Borrowers in accordance  with subsection  2.1A of the Credit  Agreement  through
changes in the U.S. Allocation, provided that the U.S. Allocation may not at any
time exceed the aggregate amount of the Overall  Commitment of all Lending Units
then  in  effect.  Each of the  Assignor  and  Assignee  acknowledges  that  the
Percentage  interest in the U.S. Commitment being assigned and assumed hereunder
equals  the  Assignee's  U.S.  Lender Pro Rata  Share,  as set forth on Annex II
attached hereto, of the U.S.  Allocation of the Overall  Commitment as in effect
on and after the date upon which this Agreement becomes effective.

                  (d) Assignor  hereby  represents  and warrants  that as of the
effective  date of this Agreement the  respective  amounts of unpaid  principal,
accrued but unpaid  interest  and  accrued  but unpaid fees with  respect to the
Percentage  of  Assignor's  rights  under  the  Credit  Agreement   relating  to
Assignor's U.S.  Commitment and U.S.  Allocation and any U.S. Loans and Assignor
Participations   outstanding  thereunder  [and  with  respect  to  the  Assignee
Participation]  are as set forth on Annex I attached hereto. In consideration of
Assignor assignment, Assignee hereby agrees to pay to Assignor, on the effective
date  of  this  Agreement,  the  amount  of  $_________________  in  immediately
available funds by wire transfer to Assignor's office at
-----------------------------------------------------------.

                  (e) Assignor and Assignee  hereby agree that Annex II attached
hereto sets forth the amount of the U.S.  Commitment  and U.S.  Allocation,  any
U.S.  Loans  and  participations  by  Assignee  in any U.S.  Letters  of  Credit
outstanding  under the Commitment and the U.S. Lender Pro Rata Share of Assignee
after giving effect to the assignment and assumption [and the sale and purchase]
described above.

                  (f)  Assignor  and  Assignee  hereby  agree that,  upon giving
effect to the assignment and  assumption  [and the sale and purchase]  described
above,  Assignee  shall  be a party to the  Credit  Agreement  as a U.S.  Lender
thereunder,  and shall  have all of the rights  and  obligations  under the Loan
Documents  of,  and  shall  be  deemed  to have  made all of the  covenants  and
agreements  contained in the Loan  Documents  made by, a U.S.  Lender having the
U.S. Commitment and U.S.  Allocation,  the outstanding U.S. Loans, the aggregate
participation in outstanding U.S. Letters of Credit and the U.S. Lender Pro Rata
Share of Assignee as  reflected  on Annex II attached  hereto.  Assignee  hereby
acknowledges  and agrees that the agreement set forth in this subsection 1(f) is
expressly  made for the benefit of  Company,  Borrowers,  Administrative  Agent,
Assignor and the other  Lenders and their  respective  successors  and permitted
assigns.

                  (g) Assignor and Assignee hereby acknowledge and confirm their
understanding  and  intent  that (i)  this  Agreement  shall  effect  [(A)]  the
assignment by Assignor


                                     X-B-3
<PAGE>


and the  assumption  by  Assignee of the  Percentage  of  Assignor's  rights and
obligations with respect to Assignor's U.S.  Commitment and U.S.  Allocation and
any U.S. Loans and Assignor Participations outstanding thereunder and all rights
and obligations  under the Loan Documents with respect thereto [and (B) the sale
by Assignor and the purchase by Assignee of the  Assignee  Participation],  (ii)
any other  assignments  by Assignor  of a portion of its rights and  obligations
with respect to Assignor's  U.S.  Commitment  and U.S.  Allocation  and any U.S.
Loans or Assignor  Participations  outstanding thereunder [, and any other sales
by Assignor of  participations in the Assignor Letters of Credit,] shall have no
effect  on  U.S.   Commitment,   the  outstanding   U.S.  Loans,  the  aggregate
participation  in  outstanding  U.S.  Letters of Credit or U.S.  Lender Pro Rata
Share of  Assignee  set forth on Annex II  attached  hereto,  and (iii) from and
after the effective date of this Agreement,  Administrative Agent shall make all
payments  under the  Credit  Agreement  in respect  of the  Percentage  interest
assigned hereby [and the Assignee  Participation]  (including without limitation
all payments of principal  and accrued but unpaid  interest and  commitment  and
letter of credit fees with respect  thereto) to  Assignee,  whether such amounts
(in the case of such interest and fees) have accrued prior to the effective date
of this Agreement or subsequent thereto.

                SECTION 2.  Certain Representations, Warranties and Agreements.

                  (a) Assignor  represents and warrants that it is the legal and
beneficial owner of the Percentage  interest being assigned by it hereunder [and
of the Assignee  Participation]  and that such  interest  [is] [and the Assignee
Participation are] free and clear of any adverse claim.

                  (b)  Assignor  shall not be  responsible  to Assignee  for the
execution, effectiveness, genuineness, validity, enforceability,  collectibility
or  sufficiency  of any of  the  Loan  Documents  or  for  any  representations,
warranties,  recitals or statements  made therein or made in any written or oral
statement  or in any  financial  or other  statements,  instruments,  reports or
certificates or any other documents furnished or made by Assignor to Assignee or
by or on behalf of Company or any Borrower to Assignor or Assignee in connection
with the Loan  Documents and the  transactions  contemplated  thereby or for the
financial  condition  or business  affairs of the Company or any Borrower or any
other Person liable for the payment of any  Obligations,  nor shall  Assignor be
required to ascertain or inquire as to the  performance  or observance of any of
the terms, conditions,  provisions,  covenants or agreements contained in any of
the Loan  Documents  or as to the use of the proceeds of the Loans or the use of
the Letters of Credit or as to the existence or possible  existence of any Event
of Default or Potential Event of Default.

                  (c) Assignee  represents  and warrants  that it is an Eligible
Assignee;  that it has  experience  and expertise in the making of loans such as
the Loans; that it has acquired its Percentage  interest for its own account and
not with any present  intention of selling all or any portion of such  interest;
and that it has received, reviewed and approved copies of all Loan Documents.

                  (d) Assignee  represents and warrants that it has made its own
independent  investigation of the financial condition and affairs of Company and
each of the Borrowers


                                     X-B-4
<PAGE>


and their respective Subsidiaries in connection with the assignment evidenced by
this Agreement and that it has made and shall continue to make its own appraisal
of the  creditworthiness  of the Company and the  Borrowers.  Assignor shall not
have any duty or  responsibility,  either initially or on a continuing basis, to
make any such  investigation  or any such  appraisal on behalf of Assignee or to
provide  Assignee  with any credit or other  information  with respect  thereto,
whether coming into its possession  before the making of the initial Loans or at
any time or times  thereafter,  and Assignor  shall not have any  responsibility
with respect to the accuracy of or the completeness of any information  provided
to Assignee.

                  (e) Each party to this  Agreement  represents  and warrants to
the other party  hereto that it has full power and  authority to enter into this
Agreement  and to perform  its  obligations  hereunder  in  accordance  with the
provisions  hereof,  that this Agreement has been duly authorized,  executed and
delivered by such party and that this Agreement  constitutes a legal,  valid and
binding obligation of such party,  enforceable  against such party in accordance
with  its  terms,   except  as  enforceability  may  be  limited  by  applicable
bankruptcy,  insolvency,  reorganization,   moratorium  or  other  similar  laws
affecting creditors' rights generally and by general principles of equity.

                  SECTION 3.  Miscellaneous.

                  (a) Each party to this  Agreement  hereby  agrees from time to
time, upon request of the other party hereto,  to take such  additional  actions
and to execute and deliver such  additional  documents and  instruments  as such
other party may reasonably  request to effect the transactions  contemplated by,
and to carry out the intent of, this Agreement.

                  (b) Neither this Agreement nor any term hereof may be changed,
waived,  discharged or terminated,  except by an instrument in writing signed by
the  party  against  whom  enforcement  of such  change,  waiver,  discharge  or
termination is sought.

                  (c) Unless otherwise  specifically provided herein, any notice
or other  communication  herein  required or  permitted  to be given shall be in
writing  and may be  personally  served,  telecopied,  telexed or sent by United
States  mail or  courier  service  and shall be deemed to have been  given  when
delivered in person or by courier service, upon receipt of telecopy or telex, or
four Business Days after depositing it in the United States mail,  registered or
certified, with postage prepaid and properly addressed; provided that notices to
Administrative  Agent shall not be effective  until  received.  For the purposes
hereof,  the  address  of each  party  hereto  shall be as set forth  under such
party's name on the  signature  page hereof or, as to either  party,  such other
address as shall be  designated by such party in a written  notice  delivered to
the other party hereto. In addition, the address of Assignee set forth below its
name on the signature  page hereof shall serve as the initial  notice address of
Assignee for purposes of subsection 10.11 of the Credit Agreement.

                  (d) This  Agreement  shall  not  effect an  assignment  of any
rights  or  obligations  relating  to  the  Canadian  Commitment  or  Australian
Commitment of any Lender. Assignor and Assignee acknowledge and confirm (i) that
concurrently  herewith,  Canadian  Assignee is entering into an  Assignment  and
Acceptance with the Canadian Lender of


                                     X-B-5
<PAGE>


Assignor's  Lending Unit whereby Canadian  Assignee shall be assigned and assume
all rights and  obligations  of  Assignor's  Lending  Unit with  respect to that
portion of such Lending  Unit's  Canadian  Commitment  which  corresponds to the
Percentage hereunder,  and (ii) that concurrently herewith,  Australian Assignee
is entering into an Assignment  and  Acceptance  with the  Australian  Lender of
Assignor's Lending Unit, if any, whereby  Australian  Assignee shall be assigned
and assume all rights and  obligations of Assignor's  Lending Unit, if any, with
respect to that  portion of such  Lending  Unit's  Australian  Commitment  which
corresponds to the Percentage hereunder. Assignee agrees that Canadian Assignee,
if any,  shall for all purposes be the  Canadian  Lender of  Assignee's  Lending
Unit,  Australian  Assignee shall for all purposes be the  Australian  Lender of
Assignee's  Lending Unit,  if any, and that the  Commitment of such Lending Unit
shall  equal  the  Assignee's  Pro Rata  Share  (as set forth on Annex 1 annexed
hereto) of the aggregate Overall Commitment of all Lending Units as in effect at
any time on and after the date this Amendment becomes effective.

                  (e)  In  case  any  provision  in  or  obligation  under  this
Agreement shall be invalid,  illegal or unenforceable in any  jurisdiction,  the
validity,   legality  and   enforceability   of  the  remaining   provisions  or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.

                  (f)  THIS  AGREEMENT  SHALL  BE  GOVERNED  BY,  AND  SHALL  BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW
YORK.

                  (g) This  Agreement  shall be binding upon, and shall inure to
the benefit of, the parties hereto and their respective successors and assigns.

                  (h) This Agreement may be executed in one or more counterparts
and by different parties hereto in separate counterparts,  each of which when so
executed and delivered  shall be deemed an original,  but all such  counterparts
together shall constitute but one and the same  instrument;  signature pages may
be  detached  from  multiple  separate  counterparts  and  attached  to a single
counterpart  so that all  signature  pages are  physically  attached to the same
document.

                  (i) This Agreement  shall become  effective upon the execution
of a counterpart  hereof by each of Assignor and Assignee and the execution of a
counterpart hereof by Company and Borrowers (as evidence of their consent hereto
in  accordance   with   subsection   10.1B(i)  of  the  Credit   Agreement)  and
Administrative  Agent (as evidence of its acceptance  hereof in accordance  with
subsection  10.1B(ii)  of the Credit  Agreement),  and the receipt by  Assignor,
Assignee  and   Administrative   Agent  of  originals  or   telecopies  of  such
counterparts and authorization of delivery thereof.

                  (j)  Assignee  hereby  appoints  The Chase  Manhattan  Bank of
Canada, as Canadian Administrative Agent, Chase Securities Australia Limited, as
Australian  Administrative  Agent, Chase Securities Inc., as Arranger,  Deutsche
Bank  A.G.,  as   Documentation   Agent,   and  The  Chase   Manhattan  Bank  as
Administrative  Agent,  under the Credit Agreement and the other Loan Documents,
to exercise such powers as are specified in


                                     X-B-6
<PAGE>


Section 9 of the Credit  Agreement  and to be entitled to such  protections  and
indemnities as are afforded thereunder.

                  [(k) Assignee  hereby agrees to deliver to U.S.  Borrower such
certificates, documents or other evidence, properly and accurately completed and
duly  executed by Assignee  (including,  without  limitation,  Internal  Revenue
Service  Form  1001 or Form  4224  or any  other  certificate  or  statement  of
exemption  required  by  Treasury  Regulations  Section  1.1441-4(a)  or Section
1.1441-6(c) or any successor  thereto) to establish that Assignee is not subject
to deduction or  withholding  of United States  federal income tax under Section
1441 or 1442 of the Internal  Revenue Code or otherwise (or under any comparable
provisions of any successor  statute).]  [INSERT IF ASSIGNEE IS ORGANIZED  UNDER
THE LAWS OF ANY  JURISDICTION  OTHER THAN THE UNITED STATES OR ANY STATE THEREOF
OR IS NOT RESIDENT IN THE UNITED STATES.]

                  (l) Each of the parties to this  Agreement  hereby  waives its
rights to a jury trial of any claim or cause of action based upon or arising out
of this  Agreement or any dealings  between  them  relating to the  transactions
contemplated by this Agreement.




                  [Remainder of page intentionally left blank]

                                     X-B-7
<PAGE>

                  IN WITNESS  WHEREOF,  the  parties  hereto  have  caused  this
Agreement  to be duly  executed  and  delivered  by  their  respective  officers
thereunto duly authorized as of the date first written above.

[NAME OF ASSIGNOR]                                 [NAME OF ASSIGNEE]


By:                                                By:

Title:                                             Title:


Notice Address:                                    Notice Address:

===========================                        ===========================
---------------------------                        ---------------------------



Consented to in accordance with                    Accepted in accordance with 
subsection 10.1B(i) of                             subsection 10.1B(ii) of the
the Credit Agreement                               Credit Agreement

HOMESTAKE MINING COMPANY                           THE CHASE MANHATTAN BANK, 
                                                   as Administrative Agent


By:                                                By:

Title:                                             Title:



HOMESTAKE MINING COMPANY
OF CALIFORNIA


By:
Title:


HOMESTAKE CANADA INC.


By:
Title:

HOMESTAKE GOLD OF AUSTRALIA LIMITED


By:
Title:

PLUTONIC RESOURCES LIMITED



By:
Title:




<PAGE>


                                     ANNEX I


                               AMOUNTS OUTSTANDING



Outstanding Principal Amount:

    Loans:
    Dollar Loans:   $_________
    Gold Loans:     _____Ounces
    (interest to be paid in [Gold][Dollars
    based on [a Price of Gold equal to
    $____ per Ounce/Average daily value, in
    Dollar Equivalents]]).

 Total:                                                        $_________

Accrued But Unpaid Interest:                                   $_________

Accrued But Unpaid Fees:                                       $_________

Total Principal, Interest and Fees:                            $_________




<PAGE>


                                    ANNEX II


                                   ASSIGNEE'S
                              U.S. COMMITMENT, U.S.
                             ALLOCATION, OUTSTANDING
                       U.S. LOANS, AGGREGATE PARTICIPATION
                    IN OUTSTANDING U.S. LETTERS OF CREDIT AND
                         PRO RATA SHARE AFTER ASSIGNMENT





U.S. Commitment:

         Current U.S. Allocation                   $_________
         Aggregate Overall Commitment              $_________
         U.S. Lender Pro Rata Share                     _____%
         Current U.S. Commitment                   $_________

Outstanding Loans:

         Dollar Loans                              $_________
         Gold Loans                                    ______Ounces

Aggregate participation in
outstanding U.S. Letters of Credit:                $_________

Pro Rata Share                                         ______%



<PAGE>
                                 EXHIBIT X-C

                        FORM OF ASSIGNMENT AND ACCEPTANCE
                               (AUSTRALIAN LENDER)

                            ASSIGNMENT AND ACCEPTANCE


                  This ASSIGNMENT AND ACCEPTANCE (this  "Agreement") is dated as
of  ____________,  ____  and  entered  into  by and  between  [NAME  OF  LENDER]
("Assignor") and _____________________ ("Assignee").

                                    RECITALS

   
                  WHEREAS,  Assignor has entered  into that certain  Amended and
Restated Credit Agreement dated as of July , 1998 (said Credit Agreement,  as it
may be amended,  supplemented or otherwise modified from time to time, being the
"Credit  Agreement",  the terms defined therein and not otherwise defined herein
being used herein as therein defined) with Homestake Mining Company,  a Delaware
corporation  ("Company"),  Homestake Mining Company of California,  a California
corporation  ("U.S.  Borrower"),  Homestake Canada Inc., an Ontario  corporation
("Canadian  Borrower"),  Homestake Gold of Australia  Limited, a South Australia
corporation ("HGAL"),  Plutonic Resources Limited, a New South Wales corporation
("Plutonic";  and collectively with HGAL, "Australian Borrowers"), the financial
institutions listed therein as Lenders ("Lenders"),  The Chase Manhattan Bank of
Canada, as Canadian  Administrative Agent for Lenders ("Canadian  Administrative
Agent"), Chase Securities Australia Limited, as Australian  Administrative Agent
for Lenders  ("Australian  Administrative  Agent"),  Chase  Securities  Inc., as
Arranger for Lenders  ("Arranger"),  Deutsche Bank A.G., as Documentation  Agent
for  Lenders   ("Documentation   Agent"),  and  The  Chase  Manhattan  Bank,  as
Administrative Agent for Lenders ("Administrative Agent");
    

                  WHEREAS,  Assignor is an  Australian  Lender  under the Credit
Agreement and Assignee will, upon giving effect to this  Agreement,  likewise be
an Australian Lender;

                  WHEREAS,  Assignor has a Commitment under the Credit Agreement
pursuant to which Assignor is required (i) to make Loans to Australian Borrowers
pursuant to subsection  2.1A(ii) of the Credit  Agreement;  and (ii) to purchase
participations  in Australian  Letters of Credit  pursuant to subsection 2.7D of
the Credit  Agreement  (any such  participations  in any such  Letters of Credit
outstanding as of the date hereof being the "Assignor Participations");

                  WHEREAS,  Assignor has issued certain  outstanding  Australian
Letters of Credit (the "Assignor  Letters of Credit") pursuant to subsection 3.3
of the Credit  Agreement;  [INSERT IF THE CHASE  MANHATTAN  BANK IS ASSIGNOR AND
AUSTRALIAN LETTERS OF CREDIT ARE OUTSTANDING TO AUSTRALIAN BORROWERS];


                                     X-C-1
<PAGE>


                  WHEREAS, Assignor desires to assign to Assignee its rights and
obligations  as an  Australian  Lender under the Credit  Agreement and the other
Loan  Documents  with  respect  to all or a  portion  of  Assignor's  Australian
Commitment  and any  Australian  Loans or  Assignor  Participations  outstanding
thereunder [and to sell to Assignee a participation  in the Assignor  Letters of
Credit (the "Assignee  Participation") equal to the participation required to be
purchased  therein  pursuant to subsection  2.7D of the Credit  Agreement],  and
Assignee  has  agreed to  assume  the  obligations  of  Assignor  under the Loan
Documents  to the extent of the  rights  and  obligations  so  assigned  [and to
purchase the Assignee Participation]; and

                  [WHEREAS,  Assignor  is both  the  Australian  Lender  and the
[U.S./Canadian]  Lender for its Lending  Unit,  and  Assignor  is,  concurrently
herewith  entering into an Assignment and  Acceptance  with [Name of Assignee or
Assignee's  U.S./Canadian  affiliate] (the  "[U.S./Canadian]  Assignee") whereby
Assignor is assigning to the [U.S./Canadian] Assignee that portion of its rights
and obligations with respect to its [U.S./Canadian] Commitment which corresponds
to the Percentage, as defined below;]

                  [WHEREAS, Assignor's Lending Unit consists of the Assignor and
[Name of U.S./Canadian  Lender of Assignor's Lending Unit] ("Assignor's  Lending
Unit Affiliate"), and Assignor's Lending Unit Affiliate is concurrently herewith
entering into an Assignment and Acceptance  with [Name of Assignee or Assignee's
U.S./Canadian  affiliate] (the  "[U.S./Canadian]  Assignee")  whereby Assignor's
Lending Unit Affiliate is assigning to the [U.S./Canadian] Assignee that portion
of its rights and  obligations  with respect to its  [U.S./Canadian]  Commitment
which corresponds to the Percentage, as defined below;]

                  NOW,  THEREFORE,  in  consideration  of the  premises  and the
agreements, provisions and covenants herein contained, the parties hereto hereby
agree as follows:

                  SECTION 1.  Assignment and Assumption.

                  (a) Assignor  hereby  assigns to Assignee,  effective upon the
receipt  of the  consideration  set  forth in  Section  1(c) and  Administrative
Agent's receipt of any processing and recordation fee required under  subsection
10.1B of the Credit  Agreement,  without  recourse,  representation  or warranty
(except as expressly  set forth  herein),  an  undivided  _____%  interest  (the
"Percentage")  in all of Assignor's  rights and  obligations as a Lender arising
under the Credit  Agreement and the other Loan Documents  relating to Assignor's
Australian  Commitment  and any  Australian  Loans and  Assignor  Participations
outstanding  thereunder [and concurrently  therewith sells to Assignee,  without
recourse, representation or warranty (except as expressly set forth herein), the
Assignee Participation].

                  (b) Assignee  hereby  assumes from  Assignor,  and Assignor is
hereby  expressly  and  absolutely  released  from,  the  Percentage  of  all of
Assignor's  obligations  arising under the Loan Documents relating to Assignor's
Australian  Commitment  and any  Australian  Loans and  Assignor  Participations
outstanding  thereunder,  including without limitation all such obligations with
respect to any Australian Loans to be made and any  participations in Australian
Letters  of Credit to be  purchased,  pursuant  to the Credit  Agreement  [, and
Assignee hereby purchases from Assignor the Assignee Participation].


                                     X-C-2
<PAGE>


                  (c)  Notwithstanding  any  provisions of this Agreement to the
contrary, each of the Assignor and Assignee hereby acknowledges and confirms its
understanding  and agreement that the  Australian  Commitments of the Australian
Lenders  under  the  Credit  Agreement  may from  time to time be  increased  or
decreased by the  Borrowers in  accordance  with  subsection  2.1A of the Credit
Agreement  through  changes in the  Australian  Allocation  or the  addition  of
Lenders with Australian Commitments, provided that the Australian Allocation may
not at any time exceed the  aggregate  amount of the Overall  Commitment  of all
Lending  Units then in effect.  Each of the Assignor  and Assignee  acknowledges
that the  Percentage  interest in the Australian  Commitment  being assigned and
assumed hereunder equals the Assignee's Australian Lender Pro Rata Share, as set
forth on Annex II attached hereto,  of the Australian  Allocation of the Overall
Commitment as in effect on and after the date upon which this Agreement  becomes
effective.

                  (d) Assignor  hereby  represents  and warrants  that as of the
effective  date of this Agreement the  respective  amounts of unpaid  principal,
accrued but unpaid  interest  and  accrued  but unpaid fees with  respect to the
Percentage  of  Assignor's  rights  under  the  Credit  Agreement   relating  to
Assignor's  Australian  Commitment and Australian  Allocation and any Australian
Loans and Assignor  Participations  outstanding  thereunder [and with respect to
the  Assignee  Participation]  are as set forth on Annex I attached  hereto.  In
consideration  of  Assignor's  assignment,  Assignee  hereby  agrees  to  pay to
Assignor,   on  the   effective   date  of  this   Agreement,   the   amount  of
$_________________ in immediately available funds by wire transfer to Assignor's
office at ___________________________________________________________.

                  (e) Assignor and Assignee  hereby agree that Annex II attached
hereto  sets  forth  the  amount of the  Australian  Commitment  and  Australian
Allocation,  any  Australian  Loans,  and  participations  by  Assignee  in  any
Australian Letters of Credit outstanding under the Commitment and the Australian
Lender Pro Rata Share of Assignee  after  giving  effect to the  assignment  and
assumption [and the sale and purchase] described above.

                  (f)  Assignor  and  Assignee  hereby  agree that,  upon giving
effect to the assignment and  assumption  [and the sale and purchase]  described
above, Assignee shall be a party to the Credit Agreement as an Australian Lender
thereunder,  and shall  have all of the rights  and  obligations  under the Loan
Documents  of,  and  shall  be  deemed  to have  made all of the  covenants  and
agreements  contained in the Loan Documents made by, an Australian Lender having
the Australian Commitment and Australian Allocation,  the outstanding Australian
Loans, the aggregate  participation in outstanding  Australian Letters of Credit
and the  Australian  Lender Pro Rata Share of Assignee as  reflected on Annex II
attached hereto.  Assignee hereby acknowledges and agrees that the agreement set
forth in this  subsection  1(f) is  expressly  made for the  benefit of Company,
Borrowers,  Australian Administrative Agent,  Administrative Agent, Assignor and
the other Lenders and their respective successors and permitted assigns.

                  (g) Assignor and Assignee hereby acknowledge and confirm their
understanding  and  intent  that (i)  this  Agreement  shall  effect  [(A)]  the
assignment by Assignor


                                     X-C-3
<PAGE>



and the  assumption  by  Assignee of the  Percentage  of  Assignor's  rights and
obligations  with respect to Assignor's  Australian  Commitment  and  Australian
Allocation  and any  Australian  Loans and Assignor  Participations  outstanding
thereunder and all rights and obligations  under the Loan Documents with respect
thereto  [and (B) the sale by  Assignor  and the  purchase  by  Assignee  of the
Assignee Participation],  (ii) any other assignments by Assignor of a portion of
its rights and obligations with respect to Assignor's  Australian Commitment and
Australian  Allocation  and any  Australian  Loans  or  Assignor  Participations
outstanding  thereunder [, and any other sales by Assignor of  participations in
the Assignor  Letters of Credit,] shall have no effect on Australian  Commitment
and Australian  Allocation,  the  outstanding  Australian  Loans,  the aggregate
participation in outstanding  Australian  Letters of Credit or Australian Lender
Pro Rata Share of Assignee set forth on Annex II attached hereto, and (iii) from
and after the effective date of this Agreement,  Administrative Agent shall make
all payments under the Credit  Agreement in respect of the  Percentage  interest
assigned hereby [and the Assignee  Participation]  (including without limitation
all payments of principal  and accrued but unpaid  interest and  commitment  and
letter of credit fees with respect  thereto) to  Assignee,  whether such amounts
(in the case of such interest and fees) have accrued prior to the effective date
of this Agreement or subsequent thereto.

                SECTION 2.  Certain Representations, Warranties and Agreements.

                  (a) Assignor  represents and warrants that it is the legal and
beneficial owner of the Percentage  interest being assigned by it hereunder [and
of the Assignee  Participation]  and that such  interest  [is] [and the Assignee
Participation are] free and clear of any adverse claim.

                  (b)  Assignor  shall not be  responsible  to Assignee  for the
execution, effectiveness, genuineness, validity, enforceability,  collectibility
or  sufficiency  of any of  the  Loan  Documents  or  for  any  representations,
warranties,  recitals or statements  made therein or made in any written or oral
statement  or in any  financial  or other  statements,  instruments,  reports or
certificates or any other documents furnished or made by Assignor to Assignee or
by or on behalf of Company or any Borrower to Assignor or Assignee in connection
with the Loan  Documents and the  transactions  contemplated  thereby or for the
financial  condition  or business  affairs of the Company or any Borrower or any
other Person liable for the payment of any  Obligations,  nor shall  Assignor be
required to ascertain or inquire as to the  performance  or observance of any of
the terms, conditions,  provisions,  covenants or agreements contained in any of
the Loan  Documents  or as to the use of the proceeds of the Loans or the use of
the Letters of Credit or as to the existence or possible  existence of any Event
of Default or Potential Event of Default.

                  (c) Assignee  represents  and warrants  that it is an Eligible
Assignee;  that it has  experience  and expertise in the making of loans such as
the Loans; that it has acquired its Percentage  interest for its own account and
not with any present  intention of selling all or any portion of such  interest;
and that it has received, reviewed and approved copies of all Loan Documents.


                                     X-C-4
<PAGE>


                  (d) Assignee  represents and warrants that it has made its own
independent  investigation of the financial condition and affairs of Company and
each of the Borrowers and their  respective  Subsidiaries in connection with the
assignment  evidenced by this  Agreement and that it has made and shall continue
to  make  its own  appraisal  of the  creditworthiness  of the  Company  and the
Borrowers. Assignor shall not have any duty or responsibility,  either initially
or on a continuing  basis, to make any such  investigation or any such appraisal
on  behalf  of  Assignee  or to  provide  Assignee  with  any  credit  or  other
information with respect thereto,  whether coming into its possession before the
making of the initial  Loans or at any time or times  thereafter,  and  Assignor
shall  not  have any  responsibility  with  respect  to the  accuracy  of or the
completeness of any information provided to Assignee.

                  (e) Each party to this  Agreement  represents  and warrants to
the other party  hereto that it has full power and  authority to enter into this
Agreement  and to perform  its  obligations  hereunder  in  accordance  with the
provisions  hereof,  that this Agreement has been duly authorized,  executed and
delivered by such party and that this Agreement  constitutes a legal,  valid and
binding obligation of such party,  enforceable  against such party in accordance
with  its  terms,   except  as  enforceability  may  be  limited  by  applicable
bankruptcy,  insolvency,  reorganization,   moratorium  or  other  similar  laws
affecting creditors' rights generally and by general principles of equity.

                  SECTION 3.  Miscellaneous.

                  (a) Each party to this  Agreement  hereby  agrees from time to
time, upon request of the other party hereto,  to take such  additional  actions
and to execute and deliver such  additional  documents and  instruments  as such
other party may reasonably  request to effect the transactions  contemplated by,
and to carry out the intent of, this Agreement.

                  (b) Neither this Agreement nor any term hereof may be changed,
waived,  discharged or terminated,  except by an instrument in writing signed by
the  party  against  whom  enforcement  of such  change,  waiver,  discharge  or
termination is sought.

                  (c) Unless otherwise  specifically provided herein, any notice
or other  communication  herein  required or  permitted  to be given shall be in
writing  and may be  personally  served,  telecopied,  telexed or sent by United
States mail or  Australian  mail or courier  service and shall be deemed to have
been  given when  delivered  in person or by courier  service,  upon  receipt of
telecopy  or telex,  or four  Business  Days after  depositing  it in the United
States mail (or five Business Days after depositing it in the Australian  mail),
registered or certified,  with postage prepaid and properly addressed;  provided
that notices to Administrative Agent shall not be effective until received.  For
the  purposes  hereof,  the address of each party  hereto  shall be as set forth
under such party's  name on the  signature  page hereof or, as to either  party,
such other  address  as shall be  designated  by such party in a written  notice
delivered to the other party  hereto.  In addition,  the address of Assignee set
forth below its name on the  signature  page  hereof  shall serve as the initial
notice  address of  Assignee  for  purposes  of  subsection  10.11 of the Credit
Agreement.


                                     X-C-5
<PAGE>


                  (d) This  Agreement  shall  not  effect an  assignment  of any
rights or obligations  relating to the U.S. Commitment or Canadian Commitment of
any Lender.  Assignor and Assignee acknowledge and confirm (i) that concurrently
herewith,  U.S.  Assignee is entering into an Assignment and Acceptance with the
U.S. Lender of Assignor's  Lending Unit whereby U.S.  Assignee shall be assigned
and assume all rights and obligations of Assignor's Lending Unit with respect to
that portion of such Lending  Unit's U.S.  Commitment  which  corresponds to the
Percentage hereunder, and (ii) that concurrently herewith,  Canadian Assignee is
entering  into  an  Assignment  and  Acceptance  with  the  Canadian  Lender  of
Assignor's Lending Unit, if any, whereby Canadian Assignee shall be assigned and
assume all rights and  obligations  of  Assignor's  Lending  Unit,  if any, with
respect to that  portion of such Lending  Unit's  Canadian  Commitment,  if any,
which  corresponds  to the  Percentage  hereunder.  Assignee  agrees  that  U.S.
Assignee shall for all purposes be the U.S.  Lender of Assignee's  Lending Unit,
Australian  Assignee  shall  for  all  purposes  be  the  Australian  Lender  of
Assignee's  Lending Unit,  if any, and that the  Commitment of such Lending Unit
shall  equal  the  Assignee's  Pro Rata  Share  (as set forth on Annex 1 annexed
hereto) of the aggregate Overall Commitment of all Lending Units as in effect at
any time on and after the date this Amendment becomes effective.

                  (e)  In  case  any  provision  in  or  obligation  under  this
Agreement shall be invalid,  illegal or unenforceable in any  jurisdiction,  the
validity,   legality  and   enforceability   of  the  remaining   provisions  or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.

                  (f)  THIS  AGREEMENT  SHALL  BE  GOVERNED  BY,  AND  SHALL  BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW
YORK.

                  (g) This  Agreement  shall be binding upon, and shall inure to
the benefit of, the parties hereto and their respective successors and assigns.

                  (h) This Agreement may be executed in one or more counterparts
and by different parties hereto in separate counterparts,  each of which when so
executed and delivered  shall be deemed an original,  but all such  counterparts
together shall constitute but one and the same  instrument;  signature pages may
be  detached  from  multiple  separate  counterparts  and  attached  to a single
counterpart  so that all  signature  pages are  physically  attached to the same
document.

                  (i) This Agreement  shall become  effective upon the execution
of a counterpart  hereof by each of Assignor and Assignee and the execution of a
counterpart hereof by Company and Borrowers (as evidence of their consent hereto
in  accordance   with   subsection   10.1B(i)  of  the  Credit   Agreement)  and
Administrative  Agent (as evidence of its acceptance  hereof in accordance  with
subsection  10.1B(ii)  of the Credit  Agreement),  and the receipt by  Assignor,
Assignee,  Australian Administrative Agent and Administrative Agent of originals
or telecopies of such counterparts and authorization of delivery thereof.


                                     X-C-6
<PAGE>



                  (j)  Assignee  hereby  appoints  The Chase  Manhattan  Bank of
Canada, as Canadian Administrative Agent, Chase Securities Australia Limited, as
Australian  Administrative  Agent, Chase Securities Inc., as Arranger,  Deutsche
Bank  A.G.,  as   Documentation   Agent,   and  The  Chase   Manhattan  Bank  as
Administrative  Agent,  under the Credit Agreement and the other Loan Documents,
to exercise  such powers as are  specified in Section 9 of the Credit  Agreement
and  to be  entitled  to  such  protections  and  indemnities  as  are  afforded
thereunder.

                  [(k)   Assignee   hereby   agrees  to  deliver  to  applicable
Australian Borrower such certificates, documents or other evidence, properly and
accurately  completed and duly executed by Assignee,  to establish the basis for
any  applicable  exemption  from or a  reduction  of Taxes  with  respect to any
payment to Assignee or  principal,  interest,  fees,  commissions,  or any other
amount  payable  under this  Agreement,  the Credit  Agreement  or  otherwise in
respect of the  Australian  Loans.]  [INSERT IF ASSIGNEE IS ORGANIZED  UNDER THE
LAWS OF ANY  JURISDICTION  OTHER THAN  AUSTRALIA OR ANY STATE  THEREOF OR IS NOT
RESIDENT IN AUSTRALIA.]

                  (l) Each of the parties to this  Agreement  hereby  waives its
rights to a jury trial of any claim or cause of action based upon or arising out
of this  Agreement or any dealings  between  them  relating to the  transactions
contemplated by this Agreement.

                  [Remainder of page intentionally left blank]



                                     X-C-7
<PAGE>



                  IN WITNESS  WHEREOF,  the  parties  hereto  have  caused  this
Agreement  to be duly  executed  and  delivered  by  their  respective  officers
thereunto duly authorized as of the date first written above.

[NAME OF ASSIGNOR]                                 [NAME OF ASSIGNEE]


By:                                                By:

Title:                                             Title:


Notice Address:                                    Notice Address:

===========================                        ===========================
---------------------------                        ---------------------------



Consented to in accordance with                    Accepted in accordance with
subsection 10.1B(ii) of                            subsection 10.1B(i)  of
the Credit Agreement                               the Credit Agreement

HOMESTAKE MINING COMPANY                           THE CHASE MANHATTAN BANK, 
                                                   as Administrative Agent


By:                                                By:

Title:                                             Title:



HOMESTAKE MINING COMPANY
OF CALIFORNIA


By:
Title:


HOMESTAKE CANADA INC.


By:
Title:



HOMESTAKE GOLD OF AUSTRALIA LIMITED


By:
Title:


PLUTONIC RESOURCES LIMITED



By:
Title:




Receipt Acknowledged:


CHASE SECURITIES AUSTRALIA LIMITED,
as Australian Administrative Agent



By:
Title:


<PAGE>


                                     ANNEX I


                               [NAME OF BORROWER]

                               AMOUNTS OUTSTANDING

         Outstanding Principal Amount:

                   Loans:
                    Dollar Loans:           $_________
                    Australian Dollar Loans:$_________

                 Total:                                           $_________

         Accrued But Unpaid Interest:                             $_________

         Accrued But Unpaid Fees:                                 $_________

         Total Principal, Interest and Fees:                      $_________



<PAGE>


                                    ANNEX II


                               [NAME OF BORROWER]

                                   ASSIGNEE'S
                             AUSTRALIAN COMMITMENT,
                             AUSTRALIAN ALLOCATION,
                          OUTSTANDING AUSTRALIAN LOANS,
                           AGGREGATE PARTICIPATION IN
                  OUTSTANDING AUSTRALIAN LETTERS OF CREDIT AND
                         PRO RATA SHARE AFTER ASSIGNMENT





Australian Commitment:


         Current Australian Allocation             $_________
         Aggregate Overall Commitment              $_________
         Australian Lender Pro Rata Share          _____%
         Current Australian Commitment             $_________


Outstanding Loans:

         Dollar Loans                              $_________
         Australian Dollar Loans                   $_________

Aggregate participation in
outstanding Australian Letters of Credit:          $_________
outstanding U.S. Letters of Credit                 $_________

Pro Rata Share                                       ______%



<PAGE>


                                   EXHIBIT XI


                 FORM OF NOTICE OF ISSUANCE OF LETTER OF CREDIT

                  Pursuant to that certain Amended and Restated Credit Agreement
dated  as of  July  ,  1998  (said  Credit  Agreement,  as it  may  be  amended,
supplemented or modified from time to time,  being the "Credit  Agreement",  the
terms  defined  therein and not  otherwise  defined  herein being used herein as
therein defined),  by and among Homestake Mining Company, a Delaware corporation
("Company"),  Homestake Mining Company of California,  a California  corporation
("U.S.  Borrower"),  Homestake  Canada Inc., an Ontario  corporation  ("Canadian
Borrower"),  Homestake Gold of Australia Limited, a South Australia  corporation
("HGAL"), Plutonic Resources Limited, a New South Wales corporation ("Plutonic";
and collectively with HGAL, "Australian Borrowers"),  the financial institutions
listed therein as Lenders  ("Lenders"),  The Chase Manhattan Bank of Canada,  as
Canadian  Administrative  Agent for Lenders ("Canadian  Administrative  Agent"),
Chase  Securities  Australia  Limited,  as Australian  Administrative  Agent for
Lenders ("Australian  Administrative Agent"), Chase Securities Inc., as Arranger
for Lenders ("Arranger"), Deutsche Bank A.G., as Documentation Agent for Lenders
("Documentation  Agent"),  and The Chase Manhattan Bank, as Administrative Agent
for Lenders ("Administrative Agent"), this represents [U.S.  Borrower's/Canadian
Borrower's/HGAL's/Plutonic's]  request that [The Chase Manhattan  Bank/The Chase
Manhattan Bank of Canada] issue a Standby Letter of Credit on ___________,  ____
in the face  amount of  _________________  [Dollars/Canadian  Dollars/Australian
Dollars] with an expiration date of ____________,  ____. The beneficiary of such
proposed Letter of Credit shall be [Name of Beneficiary] and such  beneficiary's
address is _________________________ ________________________________.  Attached
hereto is the  verbatim  text of such  proposed  Letter of Credit  and a precise
description  of the  proposed  text of any  certificate  to be presented by such
beneficiary which, if presented by such beneficiary prior to the expiration date
of the Letter of Credit,  would  require  [The Chase  Manhattan  Bank/The  Chase
Manhattan Bank of Canada] to make payment under the Letter of Credit.

                  The undersigned officer, director, or Authorized Signor to the
best    of   his    or    her    knowledge,    and    [U.S.    Borrower/Canadian
Borrower/HGAL/Plutonic] certify that:

                  (i) The representations and warranties contained in the Credit
                  Agreement and the other Loan  Documents are true,  correct and
                  complete in all material respects on and as of the date hereof
                  to the  same  extent  as  though  made  on and as of the  date
                  hereof,  except to the  extent  that  changes in the facts and
                  conditions on which such  representations  and warranties were
                  based are required or permitted under the Credit Agreement;

                  (ii) No event has occurred and is  continuing  or would result
                  from the  consummation  of the borrowing  contemplated  hereby
                  that would constitute an Event of Default or a Potential Event
                  of Default;


                                      XI-1
<PAGE>


                  (iii) The  Company and each  Borrower  have  performed  in all
                  material  respects all agreements and satisfied all conditions
                  which the Credit  Agreement and other Loan  Documents  provide
                  shall be  performed  or  satisfied by it on or before the date
                  hereof;

                  (iv) There is no pending  or, to the  knowledge  of Company or
                  any  Borrower,   threatened,  any  action,  suit,  proceeding,
                  governmental investigation or arbitration against or affecting
                  Company or any of its  Subsidiaries or any property of Company
                  or  any  of  its   Subsidiaries  and  there  has  occurred  no
                  development in any such action, suit, proceeding, governmental
                  investigation  or  arbitration  that, in either  event,  would
                  reasonably  be  expected  to have a Material  Adverse  Effect,
                  unless disclosed to and consented to by Requisite Lenders; and
                  no injunction or other  restraining  order has been issued and
                  no hearing to cause an injunction or other  restraining  order
                  to be issued is pending or noticed with respect to any action,
                  suit or proceeding  seeking to enjoin or otherwise prevent the
                  consummation of, or to recover any damages or obtain relief as
                  a result  of,  the  transactions  contemplated  by the  Credit
                  Agreement  or the making of Loans,  the issuance of Letters of
                  Credit or the creation  and  purchase of Bankers'  Acceptances
                  thereunder;

                  (v)      No Company Change of Control has occurred; and

                  (vi)  After  giving  effect to the  issuance  of the  proposed
Letter of Credit,  the Borrowers are in compliance  with each of the clauses (a)
through (f) set forth in subsection 2.7A(i).

DATED: ____________________                [HOMESTAKE MINING COMPANY OF 
                                           CALIFORNIA/HOMESTAKE CANADA
                                           INC./HOMESTAKE GOLD OF AUSTRALIA 
                                           LIMITED/PLUTONIC RESOURCES LIMITED]

                                           By: __________________________
                                           Title: ________________________



                                      XI-2
<PAGE>

                                   EXHIBIT XII

                        FORM OF SUBORDINATION PROVISIONS


                  All  obligations of [Name of Borrower]  under this  Promissory
Note ("Note") are hereby  subordinated in right of payment to all "Obligations,"
as defined in that certain  Amended and Restated  Credit  Agreement  dated as of
July __,  1998  among  Homestake  Mining  Company,  a Delaware  corporation,  as
Guarantor,  Homestake Mining Company of California, a California corporation, as
U.S. Borrower,  and Homestake Canada Inc., an Ontario  corporation,  as Canadian
Borrower,  Homestake  Gold of  Australia,  an Australian  corporation  ("HGAL"),
Plutonic Resources Limited,  a New South Wales  corporation,  ("Plutonic",  and,
collectively with HGAL "Australian Borrowers"), the financial institutions named
therein  as  lenders,   The  Chase   Manhattan  Bank  of  Canada,   as  Canadian
Administration   Agent,  Chase  Securities   Australia  Limited,  as  Australian
Administrative Agent, Chase Securities Inc., as Arranger, Deutsche Bank A.G., as
Documentation Agent for Lenders ("Documentation Agent"), and The Chase Manhattan
Bank, as Administrative Agent, as that Credit Agreement may be amended, modified
or supplemented from time to time, and any successors,  replacements or renewals
thereof (the "Credit Agreement") on the terms of this paragraph.

                  Upon the occurrence and during the  continuation  of an "Event
of Default" (as defined in the Credit  Agreement),  no distribution of assets in
respect of any such Indebtedness  (including any payment of principal,  interest
or fees or any  repurchase,  redemption  or setoff of such  Note  against  other
indebtedness  owing to [Name of  Borrower]  or payment  received  as a result of
other  indebtedness  being  subordinated to such Indebtedness) may be made until
indefeasible payment in full in cash of all Obligations. If, notwithstanding the
preceding  sentence,  any such  distribution  of assets  shall be  collected  or
received by [Name of Lender] after the occurrence and during the continuation of
an  Event  of  Default,  such  distribution  of  assets  shall  be paid  over to
"Administrative  Agent"  for the  benefit of  "Lenders"  (each as defined in the
Credit  Agreement) to he held as collateral and then or thereafter  credited and
applied against the Obligations but without  impairing or limiting in any manner
the liability of [Name of Borrower] under any provision of the Credit  Agreement
or of [Name of Lender] under this paragraph. The foregoing notwithstanding, such
distribution  may be made if the  proceeds  thereof are used to cure an Event of
Default or Potential Event of Default and No Event of Default or Potential Event
of Default will result from the making of such distribution.

                  [Name of Lender]  shall duly and promptly  take such action as
the  Administrative  Agent may reasonably  request or permit the  Administrative
Agent,  upon the  occurrence of an Event of Default,  (i) to collect on the Note
for the account of the Lenders and to file appropriate claims or proofs of claim
in respect of the Note,  (ii) to vote the claims  represented by the Note in any
insolvency proceeding involving [Name of Borrower], (iii) to execute and deliver
to the  Administrative  Agent such  powers of  attorney,  assignments,  or other
instruments  as it may  reasonably  request in order to enable it to enforce any
and all claims  with  respect  to, and any  security  interests  and other liens
securing payment of, the


                                     XII-1
<PAGE>


Note,  and (iv) to collect  and receive  any and all  payments or  distributions
which may be payable or deliverable upon or with respect to the Note.

         Effective this _____ day of __________, 19__.


                                                   [NAME OF BORROWER]



                                                By: __________________________
                                                Title: _______________________



                                                   [NAME OF LENDER]



                                                By: __________________________
                                                Title: _______________________

                                     XII-2
<PAGE>

                                  EXHIBIT XIII

                          FORM OF NOTICE OF ALLOCATION

                              (To be delivered at least 14 days and no more than
                     60  days  in  advance  and  not to be  effective  prior  to
                     December 1, 1998)

                  Pursuant  to  that  certain   Amended  and   Restated   Credit
Agreement, dated as of July , 1998 (said Credit Agreement, as it may be amended,
modified or  supplemented  from time to time, the "Credit  Agreement," the terms
defined  therein and not otherwise  defined  herein being used herein as therein
defined),  by and among Homestake  Mining Company,  a Delaware  corporation,  as
Guarantor,  Homestake  Mining  Company of California,  a California  corporation
("U.S.  Borrower"),  Homestake  Canada Inc., an Ontario  corporation  ("Canadian
Borrower"),  Homestake  Gold of  Australia  Limited,  an  Australia  corporation
("HGAL"), Plutonic Resources Limited, a New South Wales corporation ("Plutonic",
and collectively  with HGAL,  "Australian  Borrowers"),  (Australian  Borrowers,
together with U.S. Borrower and Canadian Borrower,  "Borrowers"),  the financial
institutions listed therein, as Lenders,  The Chase Manhattan Bank of Canada, as
Canadian Administrative Agent, Chase Securities Australia Limited, as Australian
Administrative Agent, Chase Securities Inc., as Arranger, Deutsche Bank A.G., as
Documentation Agent for Lenders ("Documentation Agent"), and The Chase Manhattan
Bank, as  Administrative  Agent,  this  represents  Borrowers'  request that the
aggregate   amount   of   the   Overall    Commitment,    which   is   currently
$_________________, effective as of _______________ 1, _____ and upon acceptance
of  Administrative  Agent,  be  allocated  among the  Canadian  Allocation,  the
Australian  Allocation  and the  U.S.  Allocation  as set  forth in  Schedule  I
attached  hereto,  such  allocations  to  remain in  effect  until  such time as
Borrowers  deliver a Notice of Allocation  accepted by  Administrative  Agent in
accordance  with the provisions of subsection  2.1A of the Credit  Agreement for
the purpose of changing such allocations.

                  The  undersigned  officers and Borrowers  hereby certify that,
after giving effect to the  allocation  requested  hereby,  (1) such  allocation
maximizes,  to the  greatest  extent  possible,  the  Commitment  of each Lender
available  to each  Borrower,  (2) the  aggregate  Exposure of each Lending Unit
shall not exceed its  commitment,  (3) the Canadian  Allocation for each Lending
Unit may not exceed its Canadian  Commitment and may not be reduced to an amount
that is less than the  outstanding  Canadian  Commitment  Usage of such  Lending
Unit,  (4) the  Australian  Allocation  for each Lending Unit may not exceed its
Australian  Commitment and may not be reduced to an amount that is less than the
outstanding  Australian  Commitment Usage of such Lending Unit, and (5) the U.S.
Allocation for each Lending Unit may not exceed its U.S.  Commitment and may not
be reduced to an amount that is less than the outstanding U.S.  Commitment Usage
of such Lending Unit.


                                     XIII-1
<PAGE>


DATED: ____________________




                                                   HOMESTAKE MINING COMPANY
                                                     OF CALIFORNIA


                                                   By:_________________________
                                                   Name:_______________________
                                                   Title:______________________



                                                   HOMESTAKE CANADA INC.


                                                   By:_________________________
                                                   Name:_______________________
                                                   Title:______________________



                                                   HOMESTAKE GOLD OF AUSTRALIA
                                                   LIMITED


                                                   By:_________________________
                                                   Name:_______________________
                                                   Title:______________________



                                                   PLUTONIC RESOURCES LIMITED


                                                   By:_________________________
                                                   Name:_______________________
                                                   Title:______________________

ACCEPTED:

ADMINISTRATIVE AGENT

By: _______________________




                                     XIII-2





Name: _____________________
Title: ______________________



                                     XIII-3