UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.  20549

FORM 10-K
(Mark One)
X   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [NO FEE REQUIRED]
For the fiscal year ended December 31, 1996

OR

      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from                              to                 
                           .  

Commission file number 0-11226

GOLDEN CYCLE GOLD CORPORATION
(Exact name of registrant as specified in its charter)
      Colorado                                                                 
            84-0630963          
(State of incorporation)                                                       
(I.R.S. Employer                                                         
Identification No.)                            
Suite 209, 2340 Robinson Street,
Colorado Springs, CO                                                           
   80904
(Address of principal executive offices)                               (Zip
Code)
Registrant's telephone number, including area code:   (719) 471-9013

SECURITIES REGISTERED PURSUANT TO SECTION 12 (b) OF THE ACT:  None

SECURITIES REGISTERED PURSUANT TO SECTION 12 (g) OF THE ACT:
       Common Stock, No Par Value  .     
(Title of Class)

Certain information required by Item 8 and 14 (d) has been omitted and will be
filed by amendment.

Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and has been subject to such
filing requirements for the past 90 days.    x Yes            No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (229.405 of this chapter) is not contained herein, and will
not be contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K.  Disclosure contained herein           
Disclosure not contained herein   x

The aggregate market value of the voting stock held by non-affiliates of the
Registrant was approximately  $10,854,000.  This calculation is based on the
average of the bid and asked prices of the common stock on the Pacific Stock
Exchange on March 24, 1997.

The number of shares of the Registrant's Common Stock, outstanding as of March
24, 1997 was 1,870,050.
<PAGE>
DOCUMENTS  INCORPORATED BY REFERENCE:

    Document            Part of the Form 10K into
Definitive Proxy Statement        which the Document is incorporated
to Shareholders              Part III, Items 10, 11, 12 & 13

    This Annual Report on Form 10-K contains certain forward looking
statements.  Actual results could differ materially from those projected in the
forward looking statements as a result of certain factors, described elsewhere
herein, including but not limited to fluctuations in the market price of gold,
uncertainties regarding the ability of the Joint Venture to operate profitably
and uncertainties regarding the Company's activities in the Republic of the
Philippines.

PART I


ITEM 1. BUSINESS

    Golden Cycle Gold Corporation was incorporated under the laws of the State
of Colorado on May 19, 1972 for the purpose of acquiring and developing the
mining properties (the "Mining Properties") of the Golden Cycle Corporation,
located in the Cripple Creek Mining District of Colorado.  Unless the context
otherwise requires, the terms "Registrant" and "Company" mean Golden Cycle Gold
Corporation.

    The primary business of the Company has been its participation in the
Cripple Creek & Victor Gold Mining Company, a joint venture (the "Joint
Venture") with Pikes Peak Mining Company ("Pikes Peak"), a wholly-owned
subsidiary of Independence Mining Company Inc. ("IMC").  IMC is a wholly owned
subsidiary of Minoroco (U.S.A.) Inc.  The Joint Venture engages in gold mining
activity in the Cripple Creek area of Colorado.

    In addition to its Joint Venture activities, the Company is seeking to
participate in gold and copper mining activities in the Republic of the
Philippines.  The Company incorporated Golden Cycle Philippines, Inc. ("GCPI"),
a wholly-owned subsidiary, under the laws of the Philippines on November 12,
1996, and GCPI has recently entered into an agreement with Benguet Corporation,
a Philippine mining company, providing for their joint participation in the
exploration, development and production of mining properties in certain areas
of the Philippines.  See "Description of Philippine Activities" for further
information regarding the proposed activities of GCPI in the Philippines.

    As of December 31, 1996, the Company had a total of 9 employees.
<PAGE>
Description of Mining Joint Venture

    The Company's interest in the Joint Venture was received in exchange for
the Company's rights to gold mining properties in the Cripple Creek Mining
District of Colorado.  The rights and obligations of the parties are covered by
an Amended and Restated Joint Venture Agreement (the "Joint Venture Agreement")
dated and effective January 1, 1991, between Pikes Peak and the Company.  The
Joint Venture engages in gold mining activity in the Cripple Creek area of
Colorado and the Company's participation in the Joint Venture constitutes the
primary business activity of the Registrant.  Pikes Peak serves as the manager
(the "Manager") of the Joint Venture.  The Joint Venture's principal mining
operations are conducted at the Cresson mine, where commercial production was
commenced in the first half of 1995.

            The Joint Venture Agreement defines an Initial Phase that will end
when (i) the Initial Loans (defined below) have been repaid and (ii) Net
Proceeds (defined in the Joint Venture Agreement generally as gross revenues
less costs) in the amount of $58 million have been distributed to the joint
venturers in the proportion of 80% to Pikes Peak and 20% to the Company.  After
the Initial Phase, the Joint Venture will distribute metal in kind in the
proportion of 67% to Pikes Peak and 33% to the Company.  Notwithstanding the
foregoing, the Company will generally be entitled to receive, in each year
during the Initial Phase or until the mining of ore by the Joint Venture ceases
due to the exhaustion of economically recoverable reserves (if that occurs
prior to the end of the Initial Phase), a minimum annual distribution of
$250,000 (each, a "Minimum Annual Distribution").  The first three Minimum
Annual Distributions were not deemed to be a distribution of Net Proceeds to
the Company and will not be applied against the Company's share of any Net
Proceeds.  The Minimum Annual Distributions received on January 15, 1994 and
after constitute an advance on Net Proceeds and will be recouped against future
distributions allocable to the Company.

            The Joint Venture Agreement provides that, during the period from
January 1, 1991 until the end of the Initial Phase, all funds required for
operations and mine development by the Joint Venture will be loaned (the
"Initial Loans") to the Joint Venture by either Pikes Peak or, if such loans
are available at a lower cost than from Pikes Peak, financial institutions. 
Except for the Minimum Annual Distributions, the Initial Loans and interest
thereon must be repaid prior to distributions of Net Proceeds to the Joint
Venturers.  The audited Joint Venture financial statements reported that as of
December 31, 1996, the Joint Venture had $149.3 million in Initial Loans
payable to Pikes Peak.  After the Initial Phase, the Joint Venturers will
contribute funds in proportion to their respective distributive shares.

    The Joint Venture recorded net income of $1.93 million for the year ended
December 31, 1996.  However, prior to 1996, the Joint Venture incurred
substantial losses during each year of operation, including net losses of $3.65
million for the year ended December 31, 1995 and $9.35 million for the year
ended December 31, 1994.  There is no assurance that the Joint Venture will be
able to achieve profitability in any subsequent period or to sustain
profitability for an extended period.  The ability of the Joint Venture to
sustain profitability is dependent upon a number of factors, including without
limitation, the market price of gold, which is volatile and subject to
speculative movement, and the efficiency of the Cresson mining operation.  

    Whether future gold prices and the results of the Joint Venture's
operations will reach and maintain a level necessary to repay the Initial
Loans, complete the Initial Phase, and thereafter generate net income cannot be
assured.  Based on the amount of Initial Loans payable to the Manager and the
uncertainty of future operating revenues, management of the Company believes
that, without a significant and sustained increase in the prevailing market
price for gold, it is unlikely that the Company will receive more than the
Minimum Annual Distribution from the Joint Venture in the foreseeable future.

    Description of  Joint Venture Mining Operations
(The Manager provides the Company with detailed information on the activities
and operations of the Joint Venture.  The following description of the Joint
Venture's operations is derived from information made available by the Manager,
upon whom reliance is placed, together with information independently developed
by the Company.)

    In 1995, the Joint Venture completed construction of the required
infrastructure for the Cresson mine and began mining operations, with the first
Cresson gold pour occurring on February 14, 1995.  During 1995, Phase 1 of the
Cresson leach pad was completed, and the earth work construction necessary to
prepare the ground for the 1996 construction of the Phase 2 expansion of the
Cresson leach pad was finished.

    In 1996, the Joint Venture completed its first full year of Cresson
operations, and   Phase 2 of the Cresson leach pad was completed.  The Manager
reported that for 1996:

     o     Gold ounce production was 5% over budget (175,000 troy ounces versus
166,000
          troy ounces)

     o     Tonnage placed on the leach pad was 15% over budget (9,900,000 tons
versus
          8,600,000 tons)

     o     Cash production costs were 9% under budget ($209 per ounce versus
$227 per
          ounce)

     The Joint Venture's strategy for 1997 is:

     o     Mine the Cresson location throughout the year.
    -  Mine 9,500,000 MM tons of gold ore
    -  Produce 198,000 troy ounces of gold
     o     Wash-down and conduct concurrent reclamation of the Victor leach pad
and
          recover limited quantities of gold from the pad washing solution.
     o     Conduct limited development and exploration drilling within the area
of interest.
     o     Drill and analyze twelve deep (1,500 to 2,000 vertical feet)
exploration targets
          within the area of interest.

    Cresson Project

    The Joint Venture produced 172,149 troy ounces of gold from the Cresson
Project during 1996, and mined 9.8 million tons of gold ore.  The ore mined was
calculated by the Joint Venture to:  average .031 troy ounces of gold per ton; 
contain approximately 243,062 troy ounces of gold; and ultimately recover
approximately 207,415 troy ounces of gold (approximately 71% of the contained
ounces).

    The Joint Venture estimates that, as of December 31, 1996, Cresson ore
containing approximately 408,355 gross contained troy ounces of gold had been
placed on the leach pad and at year end 1996, the leach pad contained
approximately 112,000 troy ounces of recoverable gold.

    Plans:  The Joint Venture's goal for 1997 is to produce 198,000 troy ounces
of gold from the Cresson operation.  Gold production is projected to stabilize
at approximately that level through the estimated 6 year life of the mine,
according to the Joint Venture's revised mine plan.  However, the Company
believes that additional exploration of the Cresson deposit may extend the mine
life.

    During 1997 the Joint Venture plans to mine approximately 9,500,000 tons of
ore from the Cresson mine at a project stripping ratio of about 1.4:1, and an
average project life grade of .0252 troy ounce of gold per ton.

    Although speculative, the Company believes that, based upon its own
analysis, future Cresson exploration may indicate additional gold ore
mineralization at depth, to the south and to the east of the existent Cresson
ore reserve.  Prior to the formation of the Joint Venture, a continuous, drill
indicated, bulk minable gold resource was found by the Company on and below the
Cresson 2,300 level and in the Cresson lateral approximately 1,700 and 2,000
feet, respectively, vertically below the identified Cresson ore reserve.  The
Joint Venture continues to expand the Cresson ore reserve.

    Victor Leach Pad

    During 1996, the Joint Venture recovered 2,461 troy ounces of gold from
processing the now discontinued Victor leach pad.  The leach pad was placed
into a "wash down" status during the second half of the year.  During wash down
the Joint Venture will prepare the leach pad for reclamation by circulating
solution through the leach pad to cleanse it of sodium cyanide.  The Joint
Venture anticipates that modest quantities of gold will continue to be
recovered from processing the reclamation wash-down solution of the Victor
leach pad.  Recovery of gold from the wash solution will continue so long as
economic.  This pad contains ore from two previous open pits, the Ironclad and
Globe Hill pits.  Mining in the Ironclad open pit was completed May 20, 1994,
and mining in the Globe Hill open pit was completed September 20, 1993.  This
leach pad will be completely reclaimed as soon as possible following
certification of its de-toxification through washing.

    Employment

    Employment for the Joint Venture increased to 271 at December 31, 1996, up
from 253 at December 31, 1995.  Pikes Peak provides the work force required by
the Joint Venture, which has no employees.  The additional staff was required
primarily by increased mine production levels.  The Manager's full production
staffing level is projected at 277 for 1997.

            Environment

            The Joint Venture's balance sheet at December 31, 1996 reflects a
total of $7.16 million in accrued reclamation liabilities.  The Joint Venture
has 840 acres under financial warranty as of March 1997 within its mining
permit of 2,027 acres.  IMC has posted a $20.87 million bond on behalf of the
Joint Venture with the Colorado Mined Land Reclamation Board to ensure the
reclamation of mining disturbances.

    Current reclamation projects include:  reclamation of selected exploration
drill sites; de-toxification and reclamation of the Victor leach pad; 
reclamation of the Ironclad and Globe Hill waste rock side walls; continued 
stockpiling of topsoil for future reclamation; complete reclamation of the
"ARM" leach pad and removal of the associated process plant (purchased during
1996); and removal of a detoxified leach pad.

    Governmental Regulation

    Like all mining operations in the U.S., the Joint Venture is subject to a
multitude of environmental laws and regulations promulgated by federal, state
and local governments including, but not limited to the National Environmental
Policy Act ("NEPA"); the Comprehensive Environmental, Response, Compensation
and Liability Act ("CERCLA");  the Clean Air Act, ("CAA"); the Clean Water Act,
("CWA"); the Hazardous Materials Transportation Act, ("HMTA"); and the Toxic
Substances Control Act, ("TSCA").  The Joint Venture's operations are subject
to comprehensive regulation by the U.S. Department of the Interior (Bureau of
Land Management), the U.S. Environmental Protection Agency ("EPA"), the U.S.
Mine Safety and Health Administration ("MSHA") and similar state and local
agencies.  Failure to comply with applicable laws, regulations and permits can
result in injunctive action, damages and civil and criminal penalties.  If the
Joint Venture expands or changes its existing operations or proposes any new
operations, it may be required to obtain additional or amended permits or
authorizations.  In particular, CERCLA, commonly called the "Superfund Act",
contains stringent reporting requirements for the release or disposal of
hazardous substances, with substantial fines for noncompliance.  In addition,
under CERCLA, any party responsible for the release or threatened release of a
hazardous substance into the environment is liable for all clean-up costs. 
These regulations apply throughout the U.S. mining industry and generally
should not have a material adverse effect on the Joint Venture's competitive
position.

    Hazardous wastes from certain mining and mineral processing operations are
temporarily exempt from regulation under the federal Resource Conservation and
Recovery Act ("RCRA").  EPA is currently considering the promulgation of a
special set of rules to regulate mining wastes under RCRA, but those may be
delayed pending anticipated Congressional re-authorization and revision of
RCRA.  The effect of any future regulation on the Joint Venture's operations
cannot be determined until the legislative process is completed and new rules
are issued;  but it is assumed that they will have a significant impact on
operations of all mining companies and increase the costs of those operations.

    Although the Manager expects that compliance with federal, state and local
environmental regulations will continue to require significant future outlays,
it is not possible to say with any certainty what impact such compliance may
have on the Joint Venture's future capital expenditures or earnings.

    Gold Reserves

    During 1996, as part of its determination of the Joint Venture reserves,
the Joint Venture re-computed the district ore deposit reserves.  The ore
reserves are shown in the table below.  The ore reserves were audited by Mine
Development Associates, Inc.  

<TABLE>
Cripple Creek & Victor Gold Mining Company
Gold Ore Reserve Estimate as of December 31, 1996 *

<CAPTION>
                                ORE             ORE         CONTAINED   
RECOVERABLE   WASTE
                               TONS         TENOR          OUNCES             
OUNCES           TONS
                               (000's)        (TROY)                           
            (TROY)            (000's)
                            ________    _________   ____________     
____________    ________
<S>                     <C>                <C>              <C>                
    <C>                     <C>
Cripple Creek
Victor district       89,745          0.0252           2,258,792              
1,964,803         126,380
                            ________    _________   ____________      
____________    ________
</TABLE>
*    These gold reserve figures were estimated based on a $400 per troy ounce
gold price for all district deposits, and are subject to various royalties. 
There can be no assurance, however, that the Joint Venture can earn a profit
when the market price of gold equals or exceeds the gold price used in
estimating those reserves.  During 1996 the average price of gold sold by the
Joint Venture was $386.64 per troy ounce.

**  Recoverability of contained ounces is based on heap leaching and
metallurgical testing.  District recoverability varies by ore type.  The
recoverable ounces shown are based on weight proportion metallurgical averages
for all deposits.

    The above estimates are based upon drill inferred data and are a
combination of "proven" and "probable" reserves.  The classifications of proven
and probable are taken from the Securities and Exchange Commission's Guide 7.
    Proven (Measured) Reserves.  Reserves for which (a) quantity is computed
from dimensions revealed in outcrops, trenches, workings or drill holes;  grade
and/or quality are computed from the results of detailed sampling and (b)  the
sites for inspection, sampling and measurement are spaced so closely and the
geologic character is so well defined that the size, shape, depth and mineral
content of reserves are well established.
    Probable (Indicated) Reserves.  Reserves for which quantity and grade
and/or quality are computed from information similar to that used for proven
(measured) reserves, but the sites for inspection, sampling, and measurement
are farther apart or are other wise less adequately spaced.  The degree of
assurance, although lower than that for proven (measured) reserves, is high
enough to assume continuity between points of observation.
    The ore reserve figures set forth above are estimates and no assurance can
be given that any particular level of recovery of gold from ore reserves will
in fact be realized.

         Exploration 

    During 1996, the Joint Venture completed over 333,000 feet of core and
rotary drilling, of which 25,147 feet were core samples and the remainder was
reverse circulation drilling.  The drilling effort primarily focused on
development drilling in the Cresson project area.  The Joint Venture spent
approximately $413,000 on exploration and $3,979,000 on development drilling. 
    
    The Cresson development drilling program fully replaced 1996 production,
adding 13,921,000 tons of ore and 437,411 contained troy ounces of gold to the
reserves estimate.

    During 1997 the Joint Venture plans to spend approximately $1.0 million on
exploration activities and $2.6 million on development work.

    Gold Production and Sales

    Total production from the Cresson and Victor projects for the year ended
December 31, 1996 was 174,611 troy ounces of gold and 38,273 troy ounces of
silver.  174,617 troy ounces of gold were sold at an average price of
approximately $386.64 per ounce for  approximately $67,514,000.  Silver sales
for the year of 35,126 troy ounces of silver at an average price of $5.27 per
ounce yielded approximately $185,000.  Total revenue from metal sales was
approximately $67,699,000.

    Distribution of Proceeds and Other Financial Aspects

    The Joint Venture made payments of the Minimum Annual Distribution of
$250,000 to the Company on June 13, 1991, January 15, 1992, and January 15 of
each subsequent year, to and including January 15, 1997.  Subsequent payments
of the same amount will be made on January 15th of each year until the
conclusion of the Initial Phase, as defined in the Joint Venture Agreement, or
until the completion of mining.  The payments made on January 15, 1994, 1995,
1996 and 1997 and subsequent annual payments constitute an advance on Net
Proceeds and will be recouped by the Manager against future distributions of
net proceeds.  After recovery by the Manager of these advances, if the
Company's share (20% in the Initial Phase) of Net Proceeds exceeds the Minimum
Annual Distribution, the larger amount will be distributed to the Company.  The
Joint Venture recorded net income of $1.93 million for the year ended December
31, 1996.

    The Company accounts for its investment in the Joint Venture on the equity
method.  Joint Venture distributions in excess of the investment carrying value
are recorded as income.  During 1992, the Company's share of Joint Venture
losses exceeded the remaining carrying value of the investment and,
accordingly, the investment was reduced to zero.  The Company does not record
its share of Joint Venture losses incurred subsequent to the reduction of its
investment balance to zero.  To the extent the Joint Venture is subsequently
profitable, the Company will not record its share of equity income until the
cumulative amount of previously unrecorded Joint Venture losses has been
recouped.

    As a result of the reduction of the Joint Venture investment carrying value
to zero during 1992, the Company did not record its share of Joint Venture
income in 1996 or of the Joint Venture's losses in 1995 and 1994.  The
Company's share of the 1996 Joint Venture net income was $386,000.  The
Company's share of Joint Venture losses was $730,800 and $1,870,000 in 1995 and
1994 respectively.  As of December 31, 1996, the Company's accumulated
unrecorded losses from the Joint Venture are $4,027,858. 

Description of Philippine Activities

    During 1996 Company formed a wholly owned Philippine subsidiary, Golden
Cycle Philippines, Inc. (GCPI), for the purpose of exploring for gold and
gold/copper deposits in the Republic of the Philippines.  This subsidiary has
entered into an exploration and operating agreement with Benguet Corporation
(the "BGA Agreement") covering mineral property acquisition, exploration,
development, permitting, and mining in the eastern Mindanao gold belt.  The
cost of activities undertaken under the BGA Agreement will be shared by GCPI
and Benguet on a 50-50 basis, with all interests acquired owned equally.  GCPI,
as stipulated in the BGA Agreement, will purchase and operate all interests
acquired for the account of the BGA Agreement.  GCPI is in the process of
negotiating for the acquisition of high potential mineral properties in the
areas of interest, subject to the approval of the Boards of Directors of
Benguet and the Company.  Although Benguet and GCPI have identified certain
properties, including properties owned or controlled by Benguet, which they
believe are appropriate for inclusion within the BGA Agreement, there is no
assurance, however, that such properties, or any other properties which GCPI or
Benguet believe are appropriate for inclusion within the BGA Agreement will be
available on acceptable terms.

    GCPI is also conducting negotiations with other parties for mineral
property acquisition in other portions of the Philippines for its own account,
subject to approval of the Company's Board of Directors.

    There is no assurance that any properties or interests therein acquired
pursuant to the BGA Agreement, or which GCPI acquires for its own account, will
contain mineral deposits which can be commercially exploited, or that permits
for mining such deposits can be secured.

ITEM 2.  PROPERTIES: MINING, OIL AND GAS, AND WATER RIGHTS

    Mining Properties  The Joint Venture mining properties consist of owned,
leased and optioned mining claims and other land covering approximately 6,500
acres in and around the Cripple Creek Mining District of Teller County,
Colorado and include most of the principal formerly-producing mines of the
Cripple Creek district.  The majority of the above acreage was contributed by
the Company to the Joint Venture.  Subsequently, the Joint Venture has
purchased, leased and optioned additional acreage.

    The Joint Venture mining properties are situated on the west flank of Pikes
Peak, about 20 air miles west of Colorado Springs and 65 air miles south of
Denver.  The area is accessible by paved highway and supplied by requisite
utilities.  The elevation of the properties averages slightly over 10,000 feet
above sea level.  Snow accumulations are generally light and do not materially
interfere with access to the property.  However, cold weather conditions in the
winter months hamper surface leaching operations.

    To a great extent, the Joint Venture mining properties lie within the
boundary of a geological entity known as a caldera or "volcanic subsidence
basin" (the "Basin").  The Basin is of rudimentary elliptical outline, with its
long axis trending in a northwesterly direction.  It has a length of about
4-1/2 miles and a width of about 2-1/2 miles, covering some 5,000 acres at the
ground surface.  The area of the Basin gradually narrows with depth.  The bulk
of the historical Cripple Creek gold production was from the underground mines
within the Basin, with the major mines located in the southern portion of the
Basin.

    From the inception of production in 1891 until the suspension of operations
in 1960, the Cripple Creek Mining District was the major gold mining district
in the United States.  It is estimated that approximately 21 million ounces of
gold were produced in this period, principally from mines later contributed to
the Joint Venture by Golden Cycle Gold Corporation.  The Joint Venture has
added about 507,000 troy ounces of gold to this total during the period 1985
through 1996.  The Joint Venture mining properties include most of the
principal formerly producing mines in the Cripple Creek district, including the
Ajax, Cresson, Portland, Independence, Vindicator and Golden Cycle.  Because of
the age of many of the mines and the fact that mining operations throughout the
Basin declined and were suspended more than thirty years ago, the existing mine
shafts are unsuitable for current operation without substantial rehabilitation.
 The Joint Venture is not currently operating underground.

    Oil and Gas Properties

    The oil and gas properties of the Company are comprised of approximately
7,300 acres of mineral rights in the Penrose Area of Fremont County, Colorado. 
There is no evidence of successful oil and gas development nearby, with the
exception of the Florence, Colorado area.  Florence was the site of the first
producing wells in Colorado in the 1860's and the area is still producing on a
limited scale today.  Several years ago, interest was shown in leasing very
large acreages of state land about 50 to70 miles east of the Company's land. 
No development of that area is visible at this time.  The oil and gas
properties have no carrying value.

    Water Rights

    The Company is a party to a water purchase agreement signed in February
1992 with the City of Cripple Creek, Colorado.  The agreement calls for the
sale by the Company of up to 1.097 Cubic Feet Per Second (about 794 acre feet)
of a water right owned by the Company.  The agreement calls for a minimum price
of $312,500, based upon a price for the first 125 acre feet transferred at
$2,500 per acre foot, and includes a commitment by the City to buy all
additional acre feet transferred at $1,500 per acre foot.  In accordance with
the agreement, the City initiated the request for transfer in the Water Court
on October 29, 1992.

            Objections to the transfer were filed by the cities of Victor and
Colorado Springs, the Mountain Mutual Water Company, Landau/Lichtenberg and the
Joint Venture.  The City of Cripple Creek has submitted the required well
permits, published a First Amendment to Application for Change of Point of
Diversion, laid the water lines, and has drilled the required wells.  

    In December 1996, the sale of the first 125 acre feet of water for the
minimum price of $312,500 was completed.  Approximately 75% of the purchase
price was paid by the City of Cripple Creek through delivery of a promissory
note bearing interest at the rate of 8%, interest and principal payable in
annual installments through 2001 with the installment calculated on the basis
of a 15 year term, with the balance of the principal payable at the end of
2001.  The sale of all or a portion of the remaining acre feet subject to the
agreement will be completed if, and when the Water Court approves such transfer.

ITEM 3.  LEGAL PROCEEDINGS

    No material legal proceedings to which the Company is a party are pending.  

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

    The Company did not submit any matters to a vote of security holders during
the fourth quarter of 1996.

PART II

ITEM 5.  MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED SECURITY MATTERS

Market Information
    
           The Company's Common Stock has been listed and traded on the Pacific
Stock Exchange since 1987 (except during the period from July 6, 1994 to August
30, 1994, as discussed below), and from July 1, 1983 until June 30, 1992 was
quoted on NASDAQ.  The Company's trading symbol is GCC on the Pacific Exchange.
 The following table shows the high and low bid price per share on the Pacific
Stock Exchange for each calendar quarter since January 1, 1995.

<TABLE>
<CAPTION>
Price Range For:                             HI              LOW
_________________________________    __________        __________ 
<S>                                                                 <C>        
            <C>
Quarter ended December 31, 1995                  12 -3/4                 8 -1/4
Quarter ended September 30, 1995                    9 -1/2                 8
-1/4
Quarter ended June 30, 1995                              8 -3/4                
7 -7/8
Quarter ended March 31, 1995                           9 -3/8                 8
Quarter ended December 31, 1995                     8 -5/8                 8
-1/8
Quarter ended September 30, 1995                     8 -7/8                8
-1/4
Quarter ended June 30, 1995                            10                      
  8 -1/2
Quarter ended March 31, 1995                         10                        
6 -1/4
</TABLE>


    Bid prices are between dealers and do not include mark-ups, mark-downs, or
commissions,  nor do they necessarily represent actual transactions.

    The Pacific Stock Exchange (the "Exchange") suspended trading in the
Company's Common Stock on July 6, 1994 after a decision by the Exchange's
Delisting Committee to delist the Company's equities because the Company's
total assets were below the Exchange's minimum criteria of $1,000,000 to
maintain listing.  On July 11, 1994 the Company obtained a loan of $500,000
which brought its total assets to approximately $1.2 million, and submitted an
appeal to the Exchange, which resulted in the Exchange relisting the Company's
Common Stock on August 30, 1994.  Subsequently, the Exchange informed the
Company that effective January 1995 the asset requirement for the Company to
maintain an equities listing on the Exchange would change from a total asset
based requirement to a net tangible asset requirement of a minimum of $500,000.
 The Company believes that it complies with the Exchange's minimum net tangible
asset maintenance requirement as of December 31, 1996, and expects that it will
continue to comply with that requirement during 1997.

    During the three years ended December 31, 1996, the Company sold a total of
270,000 shares of Common Stock in transactions exempt from the registration
requirements of the Securities Act of 1933, as amended (the "Act"). 
Information relating to each of these transactions is set forth below:

                               Number of Shares
              Name of           Shares      Consideration
Date of Sale            Purchaser      Purchased              Paid     _       
    

May 16, 1996       Midas Fund, Inc.    150,000        $  900,000

May 16, 1996       Bull & Bear           20,000           120,000
              Investors, Ltd.

Dec.  6, 1996      Midas Fund, Inc.    100,000         1,000,000

    In each of the transactions listed above, the consideration paid for the
shares consisted entirely of cash.  Each of the transactions was effected
pursuant to the exemption provided by Section 4 (2) under the Act based on
written representations made to the Company by the respective purchasers, each
of which is registered as an investment company under the Investment Company
Act of 1940.

Holders of the Company's Common Stock
    The number of holders of record of the Company's Common Stock as of March
24, 1997 was 1232.  The number of holders beneficial owners for whom shares are
held in "street name" as of March 24, 1997 is believed to be more than 750.

Dividends
    The Company has not paid any dividends.  The Company does not anticipate
the payment of any dividends in the near future.

ITEM 6.  SELECTED FINANCIAL DATA

<TABLE>
<CAPTION>
                                     1996               1995              1994 
            1993              1992
                 _________     _________     ________     _________    
_________
<S>                           <C>                <C>                <C>        
     <C>                <C>                                
Revenues  (1)          $   250,000     $   250,000    $   250,000    $   
250,000     $    25,000

Other Revenues            346,000            25,000           33,000           
22,000                -
                                                 
Expenses                      452,000          273,000         465,000         
362,000          434,000
                                                 
Share of Mining Joint                                                
Venture losses  (2)              -                      -                     -
                    -              991,000                                     
         
Net Profit (Loss)          144,000              2,000       (182,000)        
(90,000)    (1,400,000)
                                                 
Net Profit (Loss)                                               
     Per Share                      0.08                   -    (3)      
(0.12)             (0.06)             (0.90)
                                                 
Total Assets              2,743,000           548,000      1,033,000         
694,000         702,000
                                                 
Long term obligations       - - - -              - - - -             - - - -   
         - - - -             - - - -
</TABLE>
(1)  Revenues in 1996, 1995, 1994 and 1993 include the Minimum Annual
Distribution.  See Management's Discussion and Analysis below, and Notes 1 and
4 to the financial statements for a description of the accounting for the
Minimum Annual Distribution.

(2)  The Joint Venture recorded net income of $1.93 million for the year ended
December 31, 1996.  The Company has not recorded its share of the Joint Venture
net income for the 1996 period ($386,000), and did not record its share of the
Joint Venture's losses in 1995, 1994 and 1993 ($730,800, $1,870,000 and
$1,707,600 respectively) because its Joint Venture investment balance was
reduced to zero in 1992.  The Company will not record its share of any future
Joint Venture net income until and unless the balance of the Company's
accumulated unrecorded losses from the Joint Venture ($4,027,858 as of December
31, 1996) are recovered.  See Management's Discussion and Analysis below, and
Notes 1 and 4 to the financial statements.

(3)  Less than $.01 per share.

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

 Liquidity and Capital Resources

    The Company's principal mining investment and source of cash flows is its
interest in the Joint Venture.  The Joint Venture engages in gold mining
activity in the Cripple Creek area of Colorado.  The Company's Joint Venture
co-venturer is Pikes Peak, a wholly-owned subsidiary of Independence Mining
Company Inc.  Independence Mining Company Inc. is a wholly owned subsidiary of
Minoroco (U.S.A.). Inc.

    The Company's rights and obligations relating to its Joint Venture interest
are governed by the Joint Venture Agreement.  The Joint Venture is currently
operating in the Initial Phase, as defined.  In accordance with the Joint
Venture Agreement, Pikes Peak manages the Joint Venture and is required to
finance all operations and capital expenditures during the Initial Phase.  See
"Description of Mining Joint Venture" above.

    During 1996, the Company began exploring the possibility of engaging in
gold and copper mining activities in the Republic of the Philippines.  The
Company incorporated Golden Cycle Philippines, Inc. ("GCPI"), a wholly-owned
subsidiary, under the laws of the Philippines on November 10, 1996.  During
1996 the Company expended approximately $47,000 to support GCPI operations, and
an additional $43,600 was used to retain a Philippine consultant, Louisito B.
Albarracin, to assist in the formation of GCPI, and to provide technical
assistance in the initial evaluation of mining opportunities in the
Philippines.  Mr. Albarracin is currently the President and Chief Operating
Officer of GCPI.

    The Company's working capital was $2,333,300 at December 31, 1996 compared
to $350,394 at December 31, 1995.  Cash used in operations was $124,971 in 1996
compared to cash provided by operations of $4,962 during 1995.  The increase in
cash used in operations during 1996 was primarily due to the commencement of
operations in the Philippines.
    
    Working capital increased by approximately $1,983,000 at December 31, 1996
compared to December 31, 1995.  The increase resulted primarily from two
separate sales of the Company's common stock during 1996:  (i) an aggregate of
170,000 shares were sold to two mutual funds which are part of the Bull & Bear
Mutual Fund group for aggregate gross proceeds of $1,020,000 in May 1996, and
(ii) 100,000 shares were sold to one of the same mutual funds for aggregate
gross proceeds of $1,000,000 in December 1996.  The shares are "restricted"
under the federal securities laws, although the Company has registered for
public resale the 170,000 shares sold in May 1996, and has agreed to register
for public resale the 100,000 shares sold in December 1996.  The exercise of
options for an aggregate of 27,000 shares of the Company's common stock by two
Directors of the Company during the year provided an additional $132,000.

    Management believes that the Company's working capital, augmented by the
Minimum Annual Distribution, is adequate to support operations at the current
level for several years, barring unforeseen events.  However, the Company
anticipates that its Philippine subsidiary will begin exploration and
development activities in the Philippines in 1997.  A substantial portion of
existing working capital will be required to fund Philippine operations during
at least the first two years.  During 1997, the Company has budgeted
approximately $240,000 to support GCPI in its search for gold and copper mining
opportunities in the Philippines.  If opportunities to economically expand the
Philippine operations are available and the Company elects to pursue them,
additional working capital may also be required.  There is no assurance that
the Company will be able to obtain such additional capital, if required. 
Furthermore, if such operations are commenced, it is unlikely they would
generate positive cash flow and/or profit for several years.

 Results of Operations

    The Company reported a net income of $144,000 for the year ended December
31, 1996 as compared to a net income of approximately $2,000 for 1995 and a net
loss of $182,000 for 1994.

    The increase in net income in 1996 compared to 1995 was due to a gain of
$268,000 from the sale of certain water rights to the City of Cripple Creek,
higher investment income of approximately $25,000 and other operating revenue
of approximately $28,000 from a consulting engagement in the Philippines.  The
additional revenue generated was partially offset by increased general and
administrative costs incurred in connection with the Company's Philippine
initiative of $91,000, hiring additional personnel in the Colorado Springs
office and providing salary increases for the Company's executive officers
totaling approximately $10,000.

    The achievement of a net income in 1995 compared to a loss in 1994 was the
result of the implementation of stringent cost reduction measures with respect
to general and administrative expenses, resulting in reductions of
approximately $186,000, elimination of interest expense with the liquidation of
a note payable in January 1995, and a $5,000 improvement in investment income
due to higher interest rates in 1995.

    The Company accounts for its investment in the Joint Venture on the equity
method.  Joint Venture distributions in excess of the investment carrying value
are recorded as revenue, as the Company is not required to finance the Joint
Venture's operating losses or capital expenditures.  Correspondingly, the
Company has not recorded its share of Joint Venture income or losses incurred
subsequent to the reduction of its investment balance to zero in 1992.  The
Company will not record its share of equity income until the cumulative amount
of previously unrecorded Joint Venture losses have been recouped.  As of
December 31, 1996, the Company's accumulated unrecorded losses from the Joint
Venture are $4,027,858.

    The Joint Venture recorded net income of $1.93 million for the year ended
December 31, 1996.  The Joint Venture incurred net losses of $3,654,000 and
$9,350,000 in 1995 and 1994, respectively.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
                                            
    The financial statements and supplementary data required by this item are
included herein beginning on page 21.

ITEM 9.  DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
                                      
    None

PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT*

ITEM 11.  EXECUTIVE COMPENSATION*

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT*

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS*

    *Information regarding items 10 through 13 has been omitted from this
report because the Company intends to file, on or before April 30, 1997, a
definitive Proxy Statement pursuant to Regulation 14A, containing the
information required by those items, which information is incorporated herein
by reference.

PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENTS AND REPORTS ON FORM 8-K

Financial Statements                                       Page

Financial Statements of the Registrant:

            Independent Auditors' Report, KPMG Peat Marwick LLP           21

    Consolidated Balance Sheets, December 31, 1996 and 1995     22

    Consolidated Statements of Operations for the Years
      Ended December 31, 1996, 1995 and 1994                    23

    Consolidated Statements of Shareholders' Equity for the Years
      Ended December 31, 1996, 1995 and 1994                    24

    Consolidated Statements of Cash Flows for the Years
      Ended December 31, 1996, 1995 and 1994                    25

    Notes to Consolidated Financial Statements                  26

Financial Statements of  Cripple Creek & Victor Gold
    Mining Company (A Joint Venture):

                        Independent Auditors' Report                           
              32

         Balance Sheets December 31, 1996 and 1995         33

         Statements of Operations for the Years Ended
           December 31, 1996, 1995 and 1994                34

         Statements of Venturers' Equity for the Years Ended
           December 31, 1996, 1995 and 1994                35

         Statements of Cash Flows for the Years Ended
           December 31, 1996, 1995 and 1994                36

         Notes to Financial Statements                     37

Exhibit Index
            3.1.  Articles of Incorporation and By-laws (incorporated by
reference to Exhibit 2 to the Company's Form 10 dated May 19, 1983).

            10.1.  Amended and Restated Joint Venture Agreement between Pikes
Peak Mining Company and the Company dated as of January 1, 1991 (incorporated
by reference to Exhibit 1 to the Company's Current Report on Form 8-K dated
June 17, 1991).

            10.2.  Directors' Stock Option Plan (incorporated by reference to
Appendix B of the Company's Definitive Proxy Statement dated April 13, 1992).*

            10.3  1992 Stock Option Plan (incorporated by reference to Appendix
D of the Company's Definitive Proxy Statement dated April 13, 1992).*

    10.4  Consulting Agreement dated May 31, 1995 with Rex H. Hampton
(incorporated by reference to Exhibit 10.5 to the Company's Annual Report on
Form 10-K for the year ended December 31, 1994).*

    10.5  Agreement with Benguet Corporation, dated January 14, 1997.

    23.1  Consent of  KPMG Peat Marwick LLP, page 85.

*  Constitutes a "management contract or compensatory plan or arrangement"
required to be filed as an exhibit to this Form 10-K pursuant to Item 14 (c).

Reports on Form 8-K
            No reports on Form 8-K were filed during the fourth quarter of 1996.

SIGNATURES


    Pursuant to the requirements of Section 12 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed
on its behalf by the undersigned, thereto duly authorized.

                        GOLDEN CYCLE GOLD CORPORATION


                             By: /s/ Birl W. Worley Jr.            
                                                                            
_________________________________
                                  Birl W. Worley Jr., Director,
                                  President, Chief Executive Officer


                             By: /s/ R. Herbert Hampton
                                                                            
_________________________________
                                  R. Herbert Hampton
                                  Chief Accounting and Financial Officer

Date: March 26, 1997

    Pursuant to the requirements of the Securities Exchange Act of 1934 this
report has been signed below by the following persons on behalf of the
Registrant in the capacities and on the dates indicated:

/s/ Melvin L. Cooper
___________________________________                   March 26, 1997
Melvin L. Cooper, Director                       Date

/s/ Rex H. Hampton
___________________________________              March 26, 1997
Rex H. Hampton, Director                         Date

/s/ John A. Love
___________________________________                   March 26, 1997
John A. Love, Director                      Date

/s/ Frank M. Orrell
___________________________________         March 26, 1997
Frank M. Orrell, Director                        Date

/s/ Alan P. Ploesser
___________________________________                   March 26, 1997            
Alan P. Ploesser, Director                       Date

<PAGE>




                                          Independent Auditors' Report

The Shareholders and Board of Directors
Golden Cycle Gold Corporation

We have audited the accompanying consolidated balance sheets of Golden Cycle
Gold Corporation and subsidiary as of December 31, 1996 and 1995 and the
related consolidated statements of operations, shareholders' equity, and cash
flows for each of the years in the three-year period ended December 31, 1996. 
These consolidated financial statements are the responsibility of the Company's
management.  Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards.  Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement.  An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements.  An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation.  We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Golden Cycle Gold
Corporation and subsidiary as of December 31, 1996 and 1995, and the results of
their operations and their cash flows for each of the years in the three-year
period ended December 31, 1996, in conformity with generally accepted
accounting principles.


                                                                    KPMG Peat
Marwick LLP

Denver, Colorado
March 14, 1997
<PAGE>
<TABLE>GOLDEN CYCLE GOLD CORPORATION

Consolidated Balance Sheets

December 31, 1996 and 1995
<CAPTION>Assets                                                                
                                 1996            1995
_______________________________________                         _________  
_________                 <S>                                                  
                                           <C>                <C>
Current assets:
     Cash and cash equivalents                                                 
     $      36,268            9,840
     Short-term investments (note 2)                                           
      2,305,866        354,118
     Interest receivable and other current assets                              
        9,876               492
                                                                               
                       _________   _________                 Total current
assets                                                                         
2,352,010        364,450

Note receivable from sale of water rights (note 3)                            
242,500               -

Assets held for sale - water rights (note 3)                                   
     132,680       176,907        176,907

Property and equipment, net                                                    
            15,881            7,033

Investment in mining joint venture (note 4)                                    
        -                    -
                                                                               
                       _________   _________                
                                                                               
                     $ 2,743,071        548,390
                                                                               
                      =========   ========

Liabilities and Shareholders' Equity
_______________________________________
Current liabilities -
     accounts payable and accrued liabilities                                $ 
    18,710           14,056

Deferred revenue (note 3)                                                      
                  -               20,000

Shareholders' equity (note 6):
     Common stock, no par value.  Authorized 3,500,000 shares;
          1,573,050 and 1,571,050 shares issued and outstanding       7,054,562
     4,989,737
     Additional paid-in capital                                                
         1,927,736      1,927,736
     Accumulated deficit                                                       
          (6,258,703)   (6,403,139)
     Foreign currency translation adjustment                                   
           766                -
                                                                               
                       _________   _________                
               Total shareholders' equity                                      
          2,724,361        514,334
                                                                               
                       _________   _________                 
                                                                               
                     $  2,743,071        548,390
                                                                               
                      =========   ========

See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
GOLDEN CYCLE GOLD CORPORATION

Consolidated Statements of Operations

Years Ended December 31, 1996, 1995 and 1994
<CAPTION>
                                                                               
          1996              1995          1994
<S>                                                                            
  <C>             <C>            <C>
Revenue
     Distributions from mining joint venture in
          excess of carrying value (note 4)                    $    250,000    
   250,000       250,000
     Other - consulting fees                                                
27,602               -                 -
                                                                               
     _________  _________  _________
                                                                               
       277,602         250,000       250,000
Expenses - general and administrative                           451,608        
270,828       456,572
                                                                               
     _________  _________  _________
          Operating loss                                                    
(174,006)       (20,828)     (206,572)

Other income (expense):
     Interest and other income                                            
49,849           25,319        19,979
     Gain on sale of assets                                                
268,593               -             13,221
     Interest expense                                                          
       -              (2,210)       (9,018)
                                                                               
     _________  _________  _________
                                                                               
         318,442         23,109         24,182
                                                                               
     _________  _________  _________
          Net income (loss)                                            $    
144,436           2,281     (182,390)
                                                                               
     ========  ========  ========
Income (loss) per share                                                 $ 0.08 
                 *             (.12)
                                                                               
          ===               ===             ===
Weighted average common shares outstanding             1,839,300    1,572,383  
 1,571,050
                                                                               
     ========  ========  ========
*Less than $.01 per share.


See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
GOLDEN CYCLE GOLD CORPORATION

Consolidated Statements of Shareholders' Equity

Years Ended December 31, 1995, 1994, and 1993

<CAPTION>
                                                                               
      Additional
                                                    Common stock             
paid-in      Accumulated
                                             _________________
                                             Shares           Amount          
capital           deficit          Total
                                          ________       ________      ________
     ________   ________
<S>                                    <C>                <C>              <C> 
           <C>               <C>

Balances at
     December 31, 1993      1,571,050        4,975,612     1,927,736   
(6,223,030)   680,318

Net Loss                                   -                       -           
        -              (182,390)  (182,390)
                                          ________       ________      ________
     ________   ________
Balances at
     December 31, 1994      1,571,050        4,975,612     1,927,736   
(6,405,420)   497,928

Stock options exercised           2,000             14,125             -       
            -              14,125  
Net Income                               -                       -             
      -                    2,281        2,281
                                          ________       ________      ________
     ________   ________
Balances at
     December 31, 1995      1,573,050        4,989,737     1,927,736   
(6,403,139)   514,334

Shares issued for cash
     in private placements,
     net of offering costs
     of $87,425                       270,000       1,932,575            -     
                 -        1,932,575
Stock options exercised          27,000         132,250             -          
            -           132,250  
Net Income                                  -                    -             
     -                144,436      144,436
Foreign currency
     translation adjustment             -                    -                 
-                        -                 766
                                          ________       ________      ________
     ________   ________      
Balances at
     December 31, 1996      1,870,050    $ 7,054,562     1,927,736   
(6,258,703)   2,724,361
                                          ========     ========    ========   
========   ======      
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
GOLDEN CYCLE GOLD CORPORATION

Consolidated Statements of Cash Flows

Years Ended December 31, 1996, 1995 and 1994

<CAPTION>
                                                                               
              1996          1995           1994
                                                                               
          _______    _______     _______
<S>                                                                            
         <C>       <C>             <C>
Cash flows from operating activities:
     Net income (loss)                                                    $   
144,436         2,281    (182,390)
     Adjustments to reconcile net income (loss)
          to net cash provided by (used in)
          operating activities:
               Depreciation expense                                            
3,917          4,031          4,233
               Gain on sale of assets                                      
(268,593)            -           (13,221)
               Decrease (increase) in interest receivable
                    and other current assets                                   
(9,385)         (445)         1,946
               Increase (decrease) in accounts payable
                    and accrued liabilities                                    
  4,654          (905)         1,739
               Increase in deferred revenue                                    
-                 -             20,000
               Provision for uncollectible receivable                      -   
             -             15,955
                                                                               
          _______    _______     _______
                         Net cash provided by (used in)
                              operating activities                            
(124,971)        4,962    (151,738)
                                                                               
          _______    _______     _______

Cash flows from investing activities:
     Decrease (increase) in short-term
          investments                                                        
(1,951,103)    (26,674)      140,662
     Purchases of property and equipment                           (12,445)    
       -             (2,673)
     Proceeds from sale of assets                                         
50,000             -             25,269
                                                                               
          _______    _______     _______
                         Net cash provided by (used in)
                              investing activities                         
(1,913,548)    (26,674)      163,258
                                                                               
          _______    _______     _______
Cash flows from financing activities:
     Proceeds from issuance of common stock                 2,064,825      
14,125              -
     Proceeds from issuance of note payable                              -     
         -             500,000
     Repayment of note payable                                                 
-        (500,000)            -
                                                                               
          _______    _______     _______
                         Net cash provided by (used in)
                              financing activities                           
2,064,825    (485,875)    500,000
                                                                               
          _______    _______     _______
Effect of exchange rate changes on cash                                   122  
          -                -
                                                                               
         _______    _______     _______

                         Net increase (decrease) in cash and
                              cash equivalents                                 
  26,428    (507,587)    511,520

Cash and cash equivalents, beginning of year                       9,840     
517,427         5,907
                                                                               
          _______    _______     _______
Cash and cash equivalents, end of year                         $    36,268     
   9,840      517,427
                                                                               
           ======    ======      ====== 


See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
GOLDEN CYCLE GOLD CORPORATION
AND SUBSIDIARY

Notes to Consolidated Financial Statements

December 31, 1996 and 1995
________________________________________________________________________

(1)  Summary of Significant Accounting Policies

Golden Cycle Gold Corporation (the Company) acquires and develops mining
properties.  The Company's principal investment consists of its joint venture
participation in the Cripple Creek and Victor Gold Mining Company (the Joint
Venture), a precious metals mining company in the Cripple Creek Mining District
of Teller County, Colorado.  In addition, during 1996, the Company established
operations in the Republic of the Philippines in order to participate in
potential mining opportunities.  As of December 31, 1996, no mineral properties
had been acquired in the Philippines.

Use of Estimates

Management makes various estimates and assumptions in determining the reported
amounts of assets, liabilities, revenues and expenses for each period
presented, and in the disclosure of commitments and contingencies.  Changes in
these estimates and assumptions will occur based on the passage of time and the
occurrence of future events.

Principals of Consolidation

The consolidated financial statements include the accounts of the Company and
its wholly-owned subsidiary.  All significant intercompany transactions and
balances have been eliminated on consolidation.

Short-Term Investments

Short-term investments consist of U.S. Treasury Bills and certificates of
deposit.  Debt securities that the Company has both the positive intent and
ability to hold to maturity are carried at amortized cost.  

Investment in Mining Joint Venture

The Company accounts for its investment in the Joint Venture on the equity
method.  In prior years, the Company's share of Joint Venture losses exceeded
the remaining carrying value of the investment and, accordingly, the investment
was reduced to zero.  Joint Venture distributions in excess of the investment
carrying value are recorded as income.  The Company does not record it share of
Joint Venture losses incurred subsequent to the reduction of its investment
balance to zero.  To the extent the Joint Venture is profitable, the Company
does not record its share of equity income until the cumulative amount of
previously unrecorded Joint Venture losses have been recouped.
<PAGE>
GOLDEN CYCLE GOLD CORPORATION
AND SUBSIDIARY

Notes to Consolidated Financial Statement, Continued
________________________________________________________________________

Property and Equipment

Office furniture, fixtures and equipment are stated at cost and are depreciated
using the straight-line method over estimated useful lives ranging from three
to ten years.

Impairment of Assets

In 1996, the Company adopted Financial Accounting Standards Board Statement of
Financial Accounting Standards No. 121, Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of, ("SFAS 121"). 
The adoption of SFAS 121 had no effect on the Company's consolidated financial
statements.

Foreign Currency Translation

The Company uses the method of foreign currency translation whereby the assets
and liabilities of its self-sustaining Philippines operations are translated
into their United States dollar equivalent at rates of exchange prevailing at
each balance sheet date.  Revenues and expenses are translated at average
exchange rates prevailing during the periods in which such items are recognized
in operations.  Transaction amounts denominated in foreign currencies are
translated into their United States dollar equivalents at exchange rates
prevailing at the transaction dates.

Gains and losses arising from translation of the consolidated financial
statements of Philippine operations are included in the foreign currency
translation adjustment account in shareholders' equity.  Amounts in this
account are recognized in the consolidated statement of operations when the
related net foreign investment is reduced.

Stock Options

The Company applies Accounting Principles Board Opinion No. 25 and related
interpretations in accounting for its stock option plans.  Accordingly, no
compensation cost is recognized for stock options granted at fair market value.

Income Taxes

The Company utilities the asset and liability method of accounting for income
taxes.  Under the asset and liability method, deferred tax assets and
liabilities are recognized for the future tax consequences attributable to
differences between the financial statement carrying amounts and the tax basis
of existing assets and liabilities using enacted tax rates expected to apply in
the years in which such temporary differences are expected to be recovered or
settled.  Changes in tax rates are recognized in the period of the enactment
date.

Income (Loss) Per Share

Income (loss) per share is based on the weighted average number of shares
outstanding during each year.  The computation in 1994 excludes outstanding
options as their effect is antidilutive.

GOLDEN CYCLE GOLD CORPORATION
AND SUBSIDIARY

Notes to Consolidated Financial Statement, Continued
________________________________________________________________________

(2)  Short-Term Investments

The amortized cost of debt securities, which approximates fair value, at
December 31, 1996 and 1995 was $1,926,261 and $294,118, respectively.  All debt
securities held at December 31, 1996 mature within one year.  The Company held
certificates of deposit of $379,605 and $111,618 at December 31, 1996 and 1995,
respectively.

(3)  Assets Held for Sale

The Company owns certain water rights in Fremont County, Colorado, which it is
actively attempting to sell.  In December 1996, the Company sold a portion of
these water rights for $70,000, $20,000 of which was received in 1994, in cash
and a $242,500 secured promissory note, payable in equal annual installments
over 5 years with interest a 8% per annum.

(4)  Investment in Mining Joint Venture

The Company owns an interest in the Joint Venture with Pikes Peak Mining
Company (PPMC).  PPMC manages the Joint Venture.  The Joint Venture conducts
exploration, development, and mining of certain properties in the Cripple Creek
Mining District, Teller County, Colorado.  The Joint Venture owns or controls
approximately 6,500 acres of surface and/or mineral rights in the Cripple Creek
Mining District, certain portions of which are being actively explored and
developed.

The Joint Venture Agreement, as amended, generally requires PPMC to finance
operations and capital expenditures of the Joint Venture.  The Joint Venture is
currently operating in an Initial Phase, as defined, that will terminate when
Initial Loans, as defined, have been repaid and when $58 million of Net
Proceeds, as defined, has been distributed 80% to PPMC and 20% to the Company. 
As of December 31, 1996 Initial Loans were approximately $149 million and no
Net Proceeds have been distributed.  Initial Loans must be repaid prior to Net
Proceeds being distributed to the venturers.  After the Initial Phase, the
Joint Venture will distribute metal in kind, 67% to PPMC and 33% to the
Company.  The Agreement also provides for the Company to receive a minimum
annual distribution of $250,000 during the Initial Phase.  Beginning in 1994,
such minimum annual distributions are recoupable against the Company's future
share of Net Proceeds.

The Company's share of Joint Venture earnings which have not been recorded in
its consolidated financial statements is $386,000 in 1996.  The Company's share
of Joint Venture losses, which have not been recorded in its consolidated
financial statements, is $731,000 and $1,870,000 in 1995 and 1994,
respectively.  As of December 31, 1996, the Company's accumulated unrecorded
losses from the Joint Venture are $4,027,858.
<PAGE>

GOLDEN CYCLE GOLD CORPORATION
AND SUBSIDIARY

Notes to Consolidated Financial Statement, Continued
________________________________________________________________________

(4)  Investment in Mining Joint Venture (continued)

The condensed balance sheets of the Joint Venture as of December 31, 1996 and
1995 are summarized as follows:
<TABLE>
<CAPTION>                                                                      
                    1996                 1995
                                                                               
       _______          _______
<S>                                                                            
   <C>                 <C>Assets
_________________________________
Inventory                                                                    $ 
   35,524             27,403
Other current assets                                                           
    334                   58
                                                                               
       _______          _______
          Total current assets                                                
35,858             27,461

Fixed assets and mine development costs                       147,260          
136,785
                                                                               
       _______          _______
          Total assets                                                       $ 
183,118           164,246
                                                                               
      =======         =======
Liabilities and Venturers' Equity
_________________________________
Current liabilities                                                       $    
10,043              7,879
Payable to PPMC                                                           
149,327           142,586
Capital lease obligations                                                   
7,196                   -
Accrued reclamation costs                                                 
6,317               5,226
                                                                               
       _______          _______
          Total liabilities                                                    
172,883           155,691

Venturers' equity                                                              
10,235               8,555
                                                                               
       _______          _______
          Total liabilities and venturers' equity               $  183,118     
     164,246
                                                                               
      =======         =======
</TABLE>
The condensed statements of operations of the Joint Venture for each of the
three years ended December 31, 1996 are summarized as follows:
<TABLE>
<CAPTION>
                                                                 1996          
     1995               1994
                                                            _______         
_______         _______
                                                                               
(in thousands)
<S>                                                     <C>                 <C>
                <C>
Revenue                                           $    67,699            
29,595             21,669
Operating expenses                              (52,883)          (23,789)     
    (27,774)
Interest expense                                   (12,886)            (9,460) 
          (3,245)
                                                            _______         
_______         _______
Net earnings (loss)                          $      1,930             (3,654)  
         (9,350)
                                                           =======        
=======        =======
</TABLE>
<PAGE>
GOLDEN CYCLE GOLD CORPORATION
AND SUBSIDIARY

Notes to Consolidated Financial Statement, Continued
________________________________________________________________________

(5)  Income Taxes

The tax effects of temporary differences that give ries to significant portions
of the deferred tax assets at December 31, 1996 and 1995 are presented below:
<TABLE><CAPTION>
                                                                               
      1996              1995
                                                                               
 ________        ________
<S>                                                                           
<C>                 <C>
     Deferred tax assets:
          Net operating loss carryforwards                 $  375,000          
429,000
          Provisions for asset impairments, related  
               to assets held for sale                                  140,000
          186,000
                                                                               
 ________        ________
                                                                               
   515,000           615,000
          Valuation allowance                                       (515,000)  
     (615,000)
                                                                               
 ________        ________
                    Net deferred tax asset                          $        - 
                    -
                                                                               
  =======        =======
</TABLE>
At December 31, 1996, the Company has net operating loss carryforwards for
income tax purposes of approxiamtely $1,001,000 which expire beginning in 1998
through 2010.

(6)  Common Stock Options

Prior to 1992, certain officers, directors and employees were granted options
to acquire shares of common stock, at the discretion of the Company's Board of
Directors.  The exercise price of the options was based upon the market value
of the common stock on the date of the grant.  Such options expire ten years
from the date of the grant.

During 1992, the Company's board of Directors adopted a Directors' Stock Option
Plan (the Directors' Plan) and a 1992 Stock Option Plan (the 1992 Plan).  All
options available under the Directors' Plan were granted prior to December 31,
1994.  The 1992 Plan provides for the grant of options on a discretionary basis
to certain employees and consultants.  Under each plan, the exercise price
cannot be less than the fair market value of the common stock on the date of
the grant.  The expiration of these options is ten years from the date of the
grant.
<PAGE>
GOLDEN CYCLE GOLD CORPORATION
AND SUBSIDIARY

Notes to Consolidated Financial Statement, Continued
________________________________________________________________________

(6)  Common Stock Options (continued)

Changes in stock options for each of the years in the three year period ended
December 31, 1996 are as follows:

<TABLE>
<CAPTION>
                                                                               
                                       Weighted
                                                                               
        Option price      average exercise
                                                               Shares          
      per share                  price
                                                               _______         
___________          _________
<S>                                                        <C>                 
         <C>Outstanding and exercisable at
     December 31, 1993                           183,300           $3.00 -
11.00               7.53
     Granted                                                37,000           
6.625 -  7.50               7.42
     Terminated                                              (300)             
    8.50                     8.50
                                                               _______
Outstanding and exercisable at
     December 31, 1994                            220,000             3.00 -
11.00              7.51
     Exercised                                              (2,000)          
6.625 -  7.50              7.06
                                                               _______

Outstanding and exercisable at
     December 31, 1995                            218,000             3.00 -
11.00              7.51
     Exercised                                            (27,000)           
3.00 - 5.56               4.90
                                                                _______
Outstanding and exercisable at
     December 31, 1996                            191,000           $3.00 -
11.00               7.92
</TABLE>
                                                                =======        
          

The weighted average remaining term of options outstanding was 5 and 6 years at
December 31, 1996 and 1995, respectively.

No options were granted during 1996 and 1995.  Accordingly, no disclosures
regarding compensation cost for the company's stock based compensation plans in
accordance with the provisions of Statement of Financial Accounting Standards
No. 123 have been presented.
<PAGE>
Deloitte &
     Touche LLP
_____________           __________________________________________
                        Suite 3600              Telephone: (303) 292-5400
                        555 Seventeenth Street    Facsimile: (303) 312-4000    
                   
    Denver, Colorado 80202-3942





INDEPENDENT AUDITORS' REPORT


Cripple Creek and Victor Gold Mining Company:

We have audited the accompanying balance sheets of Cripple Creek and Victor
Gold Mining Company (a Joint venture) as of December 31, 1996 and 1995, and the
related statements of operations, venturers' equity, and cash flows for each of
the three years in the period ended December 31, 1996.  These financial
statements are the responsibility of the Joint Venture's management.  Our
responsibility is to express an opinion on the financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards.  Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement.  An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements.  An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation.  We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, such financial statements present fairly, in all material
respects, the financial position of Cripple Creek and Victor Gold Mining
Company as of December 31, 1996 and 1995, and the results of its operations and
its cash flows for each of the three years in the period ended December 31,
1996 in conformity with generally accepted accounting principles.


DELOITTE & TOUCHE LLP

Denver, Colorado
February 7, 1997
<PAGE>
CRIPPLE CREEK AND VICTOR GOLD MINING COMPANY
(A Joint Venture)

BALANCE SHEETS
DECEMBER 31, 1996 AND 1995 (In Thousands)
_______________________________________________________________________
<TABLE><CAPTION>                                                               
                                   1996                 1995
<S>                                                                            
            <C>                  <C>
ASSETS
CURRENT ASSETS:
     Cash and cash equivalents                                                
$         4          $          1
     Inventory                                                                 
            35,524             27,403
     Prepaid expenses                                                          
            330                    57
                                                                               
               _______          _______
               Total current assets                                            
       35,858              27,461
                                                                               
               _______          _______

PROPERTY, PLANT AND EQUIPMENT:
     Land and mineral properties                                               
18,222              17,772
     Structures, equipment and mine development                    195,765     
     152,887
     Construction - work in progress                                           
    672             14,668
                                                                               
               _______          _______
                                                                               
                214,659           185,327
     Accumulated depreciation, depletion and amortization    (67,399)          
(48,542)
                                                                               
               _______          _______
               Property, plant and equipment, net                         
147,260           136,785
                                                                               
               _______          _______
TOTAL                                                                          
      $183,118         $164,246
                                                                               
              =======         =======

LIABILITIES AND VENTURERS' EQUITY

CURRENT LIABILITIES:
     Accounts payable - trade                                                 
$   6,106           $    5,548
     Accrued liabilities                                                       
         2,914                 2,331
     Current portion of capital lease obligations                          
1,023            
                                                       _______            
_______
               Total current liabilities                                       
      10,043                 7,879
                                                                               
               _______             _______
INITIAL LOANS PAYABLE TO PPMC                              149,327            
142,586

CAPITAL LEASE OBLIGATIONS                                          7,196   

ACCRUED RECLAMATION COSTS, noncurrent                  6,317               5,226

VENTURERS' EQUITY
     Venturers' investments                                                    
   60,062             60,062
     Accumulated deficit                                                       
   (49,827)          (51,507)
                                                                               
               _______          _______
               Total venturers' equity                                         
     10,235               8,555
                                                                               
               _______          _______
TOTAL                                                                          
      $183,118         $164,246
                                                                               
              =======         =======
</TABLE>
See accompanying notes to financial statements.
<PAGE>
CRIPPLE CREEK AND VICTOR GOLD MINING COMPANY
(A Joint Venture)

STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
(in Thousands)
_______________________________________________________________________
<TABLE><CAPTION>
                                                                               
1996                 1995               1994
<S>                                                                         <C>
                <C>                 <C>
REVENUES                                                    $    67,699       $
    29,595       $    21,669

OPERATING EXPENSES                                    52,883             23,789
             27,774
                                                                            
______             ______            ______
INCOME (LOSS)  FROM OPERATIONS           14,816               5,806            
 (6,105)
                                                                            
______             ______            ______
OTHER INCOME (EXPENSE)
     Interest expense                                              (12,963)    
        (9,507)            (3,259)     
     Other income                                                          77  
                  47                    14
                                                                            
______             ______            ______

Total other income (expense)                              (12,886)            
(9,460)            (3,245)
                                                                            
______             ______            ______

NET INCOME (LOSS)                                    $     1,930       $    
(3,654)      $    (9,350)
                                                                            
======           ======           ======
</TABLE>
See accompanying notes to financial statements.
<PAGE>
CRIPPLE CREEK AND VICTOR GOLD MINING COMPANY
(A Joint Venture)

STATEMENTS OF VENTURER'S EQUITY
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994 (In Thousands)
_______________________________________________________________________
<TABLE><CAPTION>
                                                                           
Venturers'    Accumulated
                                                                          
Investments       Deficit            Total
<S>                                                                         
<C>            <C>              <C>
BALANCES AT DECEMBER 31, 1993              $ 60,062    $  (38,003)    $  22,059

     Net Loss                                                                  
                (9,350)         (9,350)
     Distribution                                                              
                  (250)            (250)
                                                                              
_______      _______      _______
BALANCES AT DECEMBER 31, 1994              $ 60,062    $  (47,603)     $ 12,459

     Net Loss                                                                  
                (3,654)         (3,654)       
     Distribution                                                              
                  (250)            (250)
                                                                              
_______      _______      _______
BALANCES AT DECEMBER 31, 1995               $ 60,062    $ (51,507)      $  8,555

     Net Income                                                                
                 1,930          1,930
     Distribution                                                              
                    (250)          (250)
                                                                               
_______       _______      _______
BALANCES AT DECEMBER 31, 1996               $ 60,062     $ (49,827)   $   10,235
                                                                              
=======      =======     =======
</TABLE>
See accompanying notes to financial statements.
<PAGE>
CRIPPLE CREEK AND VICTOR GOLD MINING COMPANY
(A Joint Venture)

STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994 (In Thousands)
_______________________________________________________________________
<TABLE><CAPTION>
                                                                               
            1996       1995          1994
<S>                                                                            
        <C>         <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:

     Net income (loss)                                                         
$ 1,930   $(3,654)    $(9,350)
     Adjustments to reconcile net income (loss) to net cash
        provided by (used in) operating activities:
           Depreciation, depletion and amortization                15,212      
4,811        6,851
           Reclamation, net of cash expenditures                      1,939    
  1,364           186
           Noncash interest expense financed through
      PPMC loan                                                          
12,410       9,507        3,259
               Loss (gain) on the sale of property, plant
                 and equipment                                                 
      (77)         (47)           498                            Changes in
assets and liabilities:                                                        
                                                                               
  
   Inventory                                                          (4,275)  
(18,173)       7,345
                  Prepaid expenses                                             
   (273)            52            41
                  Accounts payable - trade                                     
558        2,596       1,385
                  Accrued liabilities                                          
  1,190        1,901        (152)
                                                                               
           ______    ______    ______
                Net cash provided by (used in)
                  operating activities                                         
 28,614     (1,643)    10,063
                                                                               
           ______     ______   ______
CASH FLOWS FROM INVESTING ACTIVITIES:
     Capital expenditures                                                   
(20,407)  (20,922)  (68,465)
     Proceeds from the sale of property, plant and
    equipment                                                                  
   96            50       7,711
                                                                               
            ______     ______   ______
             Net cash used in investing activities                     (20,311)
  (20,872)  (60,754)
                                                                               
            ______     ______    _____
CASH FLOWS FROM FINANCING ACTIVITIES:
     Principle payments under capital lease obligations            (667) 
     Net borrowings-(payments) under PPMC loan                (7,383)    22,760
    50,940
     Distributions to venturers                                                
   (250)       (250)       (250)
                                                                               
            ______    ______     ______
          Net cash provided by (used in) financing activities   (8,300)   
22,510      50,690
                                                                               
            ______     ______   ______
NET INCREASE (DECREASE) IN CASH                                3            (5)
          (1)

CASH BALANCE, BEGINNING OF YEAR                             1              6   
          7
                                                                               
             ______     ______   ______
CASH BALANCE, END OF YEAR                                   $      4     $     
 1     $       6
                                                                               
             ======   ======   =====
</TABLE>
See accompanying notes to financial statements.
<PAGE>
CRIPPLE CREEK AND VICTOR GOLD MINING COMPANY
(A Joint Venture)

NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994 (In Thousands)
_______________________________________________________________________

1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The Joint Venture and Its Operations - Cripple Creek and Victor Gold Mining
Company (the "Joint Venture") is a joint venture organized for the purpose of
conducting exploration, development and mining of certain properties in the
Cripple Creek Mining District, Teller County, Colorado.  The venturers are
Pikes Peak Mining Company ("PPMC") and Golden Cycle Gold Corporation ("GCG"). 
The Joint venture is managed  by PPMC.  PPMC is wholly owned subsidiary of
Independence Mining Company, Inc.   ("IMC") which, in turn, is an indirect
wholly owned subsidiary of Minorco.

Cash and Cash Equivalents - The Joint Venture considers all highly liquid
investments and investments purchased with maturities of three months of less
to be cash equivalents.

Inventory - Inventories of finished goods and work in process are valued at the
lower of cost (first-in, first-out which approximates average cost) or market. 
Inventory costs include labor, materials, depreciation, depletion and
amortization, and other production costs.  Finished goods include gold and
silver bullion.  Work in process includes unrefined and in-process gold and
silver.  Materials and supplies are stated at average cost.
<TABLE>
<CAPTION>
                                                                               
     December 31,
                                                                               
 1996              1995
<S>                                                                      <C>   
             <C>
Finished goods                                                    $        --  
     $         31
Work in process                                                    33,788      
     25,801
Materials and supplies                                            1,736        
     1,571
                                                                           
_______        _______  
                                                                            $
35,524         $27,403
                                                                            
======         ======
</TABLE>
During 1996, the Joint Venture received insurance proceeds aggregating $1.7
million related to a business interruption claim arising from operational
problems with a crusher during 1995 and has accounted for the proceeds as a
recoupment of production costs.

Property, Plant and Equipment - Property, plant and equipment contributed by
the venturers has been recorded at the venturers' carrying values.  Assets
acquired and mine development costs capitalized subsequent to organization of
the Joint Venture, including interest on funds borrowed to finance mine
development, are stated at cost.  Such capitalized interest amounted to $1,714
in 1996, $2,937 in 1995 and $2,199 in 1994.  Depreciation, depletion and
amortization is provided either on a straight-line basis over the estimated
useful lives of the assets or on a units-of-production method.

Through December 31, 1995, the carrying value of the Joint Venture's property,
plant and equipment has been periodically evaluated based upon a number of
factors, including undiscounted estimated future net cash flows and
management's plans to develop the assets.  If conditions warranted, impairment
expense is recorded.
<PAGE>

Effective January 1, 1996, the Joint Venture adopted statement of Financial
Accounting Standards No. 121 (SFAS No. 121) "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Diposed Of."  SFAS No. 121
requires companies to evaluate property, plant and equipment for impairment
whenever events or changes in circumstances indicate that the carrying amount
may not be recoverable.  If property, plant and equipment is identified as
impaired, the carrying value must be reduced to fair value.  The adoption of
SFAS No.121 did not result in an impairment to the Joint Venture's property,
plant and equipment.

Exploration and Development - Exploration costs incurred in the initial
evaluation of new mineral properties are expensed as incurred.  Costs incurred
to acquire mineral rights, rehabilitate or expand the capacity of the mine or
develop areas in advance of production, which are expected to be recovered in
the future, are capitalized.

Reclamation - The Joint Venture accrues estimated final reclamation costs of
mined properties over the estimated life of the mine on a units-of-production
basis.

Income Taxes - Income taxes are not recorded by the Joint Venture, since any
taxable income or loss is reported on the respective tax returns of the
venturers.

Estimates - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in these financial statements
and accompanying notes.  Actual results could differ from those estimates.

2.  JOINT VENTURE CONTRIBUTIONS AND DISTRIBUTIONS

The Amended Joint Venture Agreement defines an Initial Phase that will end when
$58 million of Net Proceeds (as defined) has been distributed to the venturers,
80% to PPMC and 20% to GCG.  After the Initial Phase, the Joint Venture will
distribute metal in-kind, 67% to PPMC and 33% to GCG.  The Amended Joint
Venture Agreement also provides for a minimum annual distribution of $250 to
GCG during the Initial Phase.  Beginning in 1994, these minimum annual
distributions are recoupable against GCG's share of any Net Proceeds.  No Net
Proceeds, other than the minimum annual distributions, may be distributed until
repayment of existing loans made by the venturers to the Joint Venture has
occurred.

3.  INITIAL LOANS PAYABLE TO PPMC

During the Initial Phase, PPMC lends the Joint Venture all funds needed for
operations and mine development (the "Initial Loans").  Except for the minimum
annual distributions to GCG, the Initial Loans and interest thereon must be
repaid prior to distribution of Net Proceeds to the venturers.  The terms of
the Initial Loans do not require scheduled repayments and there is no maturity
date.  The Initial Loans payable to PPMC bear interest at a rate of prime plus
2% (10.5% at December 31, 1996, and 10.75% at December 31, 1995), compounded
annually.  In 1996, 1995 and 1994, interest on the Initial Loans was based upon
the existing market rates for comparable borrowings and was $14,124, $12,444
and  $5,458, respectively.  Management of the Joint Venture believes that the
carrying value of the loans approximates fair value.
<PAGE>
4.  SUPPLEMENTAL CASH FLOW INFORMATION

The Joint Venture had the following non-cash financing and investment
activities:

                                                                               
  Year Ended December 31,
                                                                             
1996           1995         1994

Non-cash interest on initial loans payable
     to PPMC capitalized to property                  $  1,714      $  2,937   
  $ 2,199
Property, plant and equipment financed through
     capital leases (note 6)                                       7,431       
 
Deferred operating lease payments financed
     through capital leases (note 6)                          1,454

Joint Venture cash receipts are received by PPMC and payroll expenditures are
paid by PPMC and are recorded as corresponding increases or decreases to the
Initial Loan account.  Such cash receipts and expenditures are reflected in the
related underlying accounts in the statement of cash flows.

Interest paid during the year ended December 31, 1996 amounted to $553.

5. RELATED-PARTY TRANSACTIONS

In the normal course of business, PPMC charges the Joint Venture for its costs
and expenses incurred on behalf of the Joint Venture, including salaries of its
employees performing work directly for the benefit of the Joint Venture.  Total
charges to the Joint Venture from PPMC related to such costs were $14,907,
$12,847 and $6,435 during 1996, 1995 and 1994, respectively.  In addition, PPMC
is paid a management fee of the lesser of the actual costs incurred of 3% of
equipment purchases and 7% of allowable cash costs.  Allowable cash costs
exclude labor, equipment purchases, management fees, property rentals and
royalties.  Total management fees charged to the Joint Venture from PPMC were
$960 in 1996, $1,124 in 1995 and $972 in 1994.

The Joint Venture leases certain mine equipment from PPMC.  The leases may be
renewed annually, at the option of the Joint Venture.  In August 1994, lease
charges were suspended by PPMC until active mining resumed in January 1995. 
Total charges to the Joint Venture from PPMC related to such leases were
$1,279, $1,279 and $692 for the years ended December 31, 1996, 1995 and 1994,
respectively.

Sales to a refiner, who is an affiliate of PPMC through common ownership,
amounted to $467, $54 and $2,095 for the years ended December 31, 1996, 1995
and 1994, respectively.  Sales to the affiliated refiner were made at
prevailing market terms.

Certain affiliates arrange for insurance coverage and gold sales on behalf of
the Joint Venture.
<PAGE>

6.  LEASE OBLIGATIONS

During 1996 PPMC entered into capital lease agreements for mobile equipment
with an unrelated party.  Three of these leases were accounted for under
noncancellable long-term operating leases in the prior year.  These leases have
since been renegotiated and replaced by capital lease agreements.  Interest
rates vary on these leases from 6.06% to 8.99% and payments are made monthly,
including interest through 2002.


Property and equipment includes $7,431 of capital leases with $572 of
accumulated depreciation at December 31, 1996.

The following is a schedule of annual future minimum lease payments under
capital leases together with the present value of the net minimum lease
payments as of December 31, 1996:

Year Ending December 31:

          1997                                                                 
         $      1,696
          1998                                                                 
                 1,696
          1999                                                                 
                 1,952         
          2000                                                                 
                 2,073
          2001                                                                 
                 2,073
          Thereafter                                                           
                 980
                                                                               
                 ________
          Total minimum lease payments                                       
10,470
          Less amount representing interest                                    
(2,251)
                                       ________
          Present value of net minimum lease payment                    8,219
          Less current portion                            (1,023)
                                              ________
          Long term capital lease obligations              $   7,196
                                                                               
               ========

The Joint Venture has a number of operating leases and the related rental
expense under such leases was $1,974, $2,882 and $1,832 during 1996, 1995 and
1994, respectively.  The leases do not have terms in excess of one year.

7. COMMITMENTS AND CONTINGENCIES

The Joint Venture leases various mining claims.  As a result, the Joint Venture
is required to pay varying annual amounts and/or royalties in order to maintain
these titles and leases.

IMC has posted reclamation performance bonds with various Colorado governmental
agencies amounting to approximately $18,000 on behalf of the Joint Venture,
which are supported by a letter of credit posted by IMC.

The Joint Venture is involved in certain litigation in the normal course of
business.  Management believes these matters will be resolved without a
material adverse effect on the financial statements of the Joint Venture.
<PAGE>
BENGUET CORPORATION
and
GOLDEN CYCLE PHILIPPINES, INC.


BGA MINERALS PROJECT AGREEMENT


KNOW ALL MEN BY THESE PRESENTS:

     This BGA Minerals Project Agreement (Agreement), entered into this 14th
day of January, 1997, by and between:

     BENGUET CORPORATION (BENGUET), a Philippine corporation with office
address at 12 ADB Avenue, Mandaluyong City, Metro Manila, Philippines,
represented by its President, MR. DENNIS R. BELMONTE;

and

     GOLDEN CYCLE PHILIPPINES, INC. (GOLDEN CYCLE), a corporation that is a
wholly owned subsidiary of GOLDEN CYCLE GOLD CORPORATION, a Colorado
corporation, in the process of incorporation in accordance with the laws of the
Republic of the  Philippines, with office address at Rm. 107, Prince Plaza I,
106 Legaspi St., Legaspi Village, Makati City, represented by its Vice
Chairman, MR. ALVIN J. FARRETTA and its President, MR. LUISITO B. ALBARRACIN;

WITNESSETH

     WHEREAS, the Parties desire to participate in a project for the
exploration, development and production of precious metals and other metallic
and non-metallic minerals within the area of interest in the Republic of the
Philippines;

     WHEREAS, the Parties executed a Letter of Intent dated 30 August 1996 to
confirm their understanding for the formation of a project to be known as the
BGA Minerals Project (Project);

     WHEREAS, pursuant to the Letter of Intent, the Parties agreed to negotiate
the terms and conditions for their participation in the Project and to execute
the agreement that will embody those terms and conditions;

     NOW, THEREFORE, in consideration of the mutual benefits, covenants and
agreements, the Parties execute this Agreement for the formation of the BGA
Minerals Project, under the following terms and conditions:

ARTICLE I
DEFINITIONS

SECTION 1.01     Definitions

     Unless the context shall otherwise clearly indicate, the following terms,
when used in this Agreement and in all exhibits hereto, shall have the
respective meanings assigned to them in this Section 1.01:

     1."Accounting Procedure" shall consist of the principles and procedures
stated in Exhibit "A" attached hereto and by this reference incorporated
herein.  Should any provision of said Accounting Procedure be inconsistent with
any provision in this Agreement, the provision in this Agreement shall prevail.

     2.     "Affiliate" shall mean:
          a.A company, partnership or other entity in which a Participant holds
directly or indirectly at least fifty percent (50%) of its outstanding shares
entitled to vote or equity interests, as applied; or
          b.A company, partnership or other entity which holds directly or
indirectly at least fifty percent (50%) of a Participant's outstanding shares
entitled to vote or entity interests, as applied; or
          c.A company, partnership or other entity in which at least fifty
percent (50%) of its shares outstanding and entitled to vote or entity
interests, as applied, are owned by a company which owns directly or indirectly
at least fifty percent (50%) of the shares outstanding and entitled to vote or
entity interests, as applied, of the Participant.

     3."Agreement" , "Project Agreement"; shall mean this BGA Minerals Project 
Agreement.

     4."Area of Interest" shall mean all mineral properties in the provinces of
Davao del Norte, Davao del Sur, Davao Oriental, Agusan del Norte, Agusan del
Sur, Surigao del Norte, and Surigao del Sur in the Republic of the Philippines
which will be acquired or controlled by the Project or the Participants after
the Effective Date by virtue of Royalty or Operating Agreements or other
Contracts with  claimowners granting mineral and/or
operating rights to the Project or the Participants singly or collectively,
provided, that the Area of Interest may include other provinces by approval of
the Management Committee; provided further, that Participant shall have the
option to include in the Area of Interest any properties or mining claims held
by it prior to the Effective Date.

     5.     "Budget"  shall  mean Work Plan Budget.

     6."Development" means the work undertaken to prepare an ore body or a
mineral deposit for mining and/or expansion of a mine, including the
construction of  necessary infrastructure and related facilities, excavations,
shafts, pits, tunnels, and openings for the purpose of developing and mining
ore or minerals; construction of mills and facilities for processing, for
storage, and for waste; construction, erection, and installation of machinery,
equipment, tools, buildings, facilities, and improvements for mining,
processing, handling, and transportation of ore, minerals, and materials; and
construction of housing, offices, roads, airstrips, power lines, power
generation facilities, pipelines, infrastructure, and other facilities for the
above purposes.

     7."Development Plan" shall mean a Work Plan containing a plan of
Development, with the Budget and timetable, covering a Specific Prospect as
approved pursuant to the terms of this Agreement.

     8."Effective Date" shall mean the date written above as the date of
execution of this Agreement.

     9."Exploration" means the searching or prospecting for mineral resources
by geological, geochemical or geophysical surveys, remote sensing, test
pitting, trenching, drilling, shaft sinking, tunneling or any other means for
the purpose of determining the existence, extent, quantity and quality of the
mineral reources and the feasibility of mining them for profit, including
without limitation, evaluation drilling to determine the detailed extent and
mode of the mineral occurrence, preliminary mining work and testing necessary
to complete an evaluation and to obtain a bulk sample of ore for pilot
processing, construction of preliminary camps, access roads and airstrips, and
any other work necessary to obtain sufficient information to conduct a
Feasibility Study.

     10."Exploration Plan" shall mean a Work Plan containing a plan for
Exploration, with the Budget and timetable, covering a Specific Prospect.

     11."Feasibility Study" shall mean all work within a Specific Prospect
showing the feasibility of placing a prospective ore body into production and
shall include, without limiting the generality of the following:

          a.Reasonable assessments of the size and quality of the minable ore
reserves;
          b.Reasonable assessments of the amenability of the ores to
metallurgical treatment;
          c.Reasonable description of pre-production work, production equipment
and supplies required to bring the prospective ore body into commercial
production and the estimated cost thereof;
          d.Basis upon which any assumptions, such as the process to be used or
products to be obtained, have been made; and
          e.Conclusion and recommendation in respect of the economic
feasibility and timing for bringing the prospective ore body into commercial
production.

     12."for the Project account" means for the risk, cost, and expense of the
Participants  in proportion to their Participating Interests.

     13."Management Committee" shall mean a committee comprised of
representatives designated by the Participants in accordance with Section 4.01.

     14."Mining Operation"  shall mean the mining and extraction of ore from a
mine by any method, concentrating ore or processing the same; extracting other
materials in the course of mining or of extracting ore and minerals; disposal
of waste and tailings; transportation and handling of ore, minerals, other
materials, waste tailings, and product; and all work and operations, including
provisioning of the necessary working capital or providing funds for a program
related to infrastructure, building and equipment replacement, as well as an
increase(s) or decrease(s) in the capacity of the mine and/or milling
facilities.  Mining Operation shall not include smelting or treating of ore at
a refinery.

     15."Mining Operation Plan" shall mean a Work Plan for the Mining
Operation, with the Budget and timetable, covering a Specific Prospect.

     16."Non-Operator" shall mean any Party other than the Operator.

     17."Non-Participant" shall mean a Party or Participant whose interest has
been assigned to another and/or who does not contribute funds to pursue an
approved Work Plan.

     18."Operator" shall mean one of the Participants appointed as Operator
when acting in that capacity and not when acting as an owner of an interest
herein. Operator is the entity-in-charge of the operation of the Project or
Specific Prospect under the direction of the Management Committee.

     19.     "Party" shall mean a signatory to this Agreement.

     20."Participant"  shall mean any Party whose interest in this Agreement
has not been assigned to another, including the sucessors and assigns of any
Non-Participant, and who contributes funds to pursue an approved Work Plan.

     21."Participating Interest" means the respective share or interest of a
Participant in the Project, Specific Prospect and to the Project Lands, Project
Assets and the products produced therefrom as well as all costs and expenses
incurred under the Work Plan.

     22."Project" shall mean the BGA Minerals Project formed under this
Agreement and  all activities undertaken within the scope of this Agreement.

     23."Project Account" shall be the set of accounts maintained by the
Operator to record all expenditures and other transactions prepared in
accordance with the Accounting Procedures prescribed in Exhibit A.

     24."Project Lands" shall mean all real property within the Area of
Interest in which the Participants may, from time to time, acquire an interest,
whether such interest is acquired by purchase, service contract, option,
mineral lease, mineral agreements or otherwise, and which is contributed to the
Project in accordance with Section 6.06 hereof.

     25."Project Assets" shall mean all personal property owned and held for
the Project account, including all equipment, data, and technical information
to be obtained as a result of expenditures for the Project Account.

     26."Specific Prospect" shall mean a specifically identified area or areas
within the Area of Interest as having mineral potential and designated as a
Specific Prospect in a Work Plan. The boundaries of any Specific Prospect may
be expanded or decreased, from time to time in accordance with good exploration
and/or development practice.

     27."Work Plan" means an Exploration Plan, a Development Plan or a Mining
Operation Plan.

ARTICLE II
PROJECT OBJECTIVES AND PROJECT AREAS OF INTEREST

SECTION 2.01     Formation of the Project

     GOLDEN CYCLE and BENGUET hereby enter into and form the BGA MINERALS
PROJECT for the limited purpose and scope set forth in Section 2.02.


SECTION 2.02     Purpose and Scope of the Project

     The principal purpose and scope of work pursuant to this Agreement shall
be the exploration, development and mining operation of mineral deposits, both
metallic and non-metallic, that may be discovered within the Area of Interest. 
If any other substances not within the purpose and scope of this Agreement are
discovered in connection with operations conducted pursuant to this Agreement,
the Participants shall each hold in these substances the same Participating
Interest as they hold in the Project Lands and Project Assets under which such
substances are discovered. Such other substances shall be
developed and  produced subject to the terms of this Agreement. 
     A secondary purpose of this Agreement is to find, through exploration in
the Area of Interest, ore deposits which may be sold by the Participants in
whole or in part to other financially capable entities for their mutual
economic benefit.


SECTION 2.03     Scope of Participant's Authority

     Except as otherwise specified in this Agreement, none of the Participants
shall have any authority to act for or to assume any obligations or
responsibilities in behalf of the other Participant.  This Agreement shall not
be construed as creating a common law or statutory partnership or other
relationship whereby any Participant shall be held liable for the acts or
omissions of any other Participant.

SECTION 2.04     Project Areas of Interest

     "Area of Interest" shall refer to all the areas in the Philippines as
herein defined,  which the Parties hereto by Supplemental Agreement have agreed
and shall hereinafter agree to be included as subject to the BGA MINERALS
PROJECT Agreement; provided, however, that the Area of Interest may be
increased by amendment and approval of the Management Committee.  It is
understood that all mineral properties and prospects which BENGUET held or
acquired prior to the execution of the Letter of Intent shall remain the sole
and exclusive property of BENGUET, unless BENGUET, at its sole and exclusive
option, agrees by Supplemental Agreement to include any or all of those
properties within the coverage of the BGA MINERALS PROJECT Agreement.


SECTION 2.05     Option to Include Previously Assigned Properties

     If prior to the Effective Date hereof, a Participant owns or controls any
license, lease, land or  interest in any mining claim or property within the
Area of Interest, said Participant shall have the option to offer the same for
inclusion in the Project.  The contributing party will be proportionately
reimbursed for all reasonable costs related to this property acquisition and
any physical assets connected thereto which were purchased by the Participant. 
 The properties offered  shall be  subject to the inclusion procedures set
forth in Section 2.06.


SECTION 2.06      Option to Include Currently Acquired Properties

     (1)     If a Participant acquires or controls, at any time during the
period commencing on the Effective Date and during the effectivity of this
Agreement or commencement of its Participation in the Project, any license,
lease, or interest in any mineral claim within the area of interest or a
Specific Prospect, the acquiring Participant shall have the sole and exclusive
option to offer the same for inclusion in the Project by notifying the other
Participants of such acquisition by written notice, setting forth a description
of the property,  the cost of the acquisition and all material terms relating
thereto.  The non-acquiring Participants shall have thirty (30) days after the
receipt of such written notice, to accept or reject the offer.  Should the
offer be accepted, a Supplemental Agreement shall be executed between the
Participants who shall thereupon, acquire their respective
interests in the property in the same proportion as their respective Percentage
Interests in the Specific Prospect, or as specified in the Supplemental
Agreement.

     (2)     If one or more of the non-acquiring Participants do not elect to
acquire their respective proportionate interest in the after-acquired property
or rights, or if less than one hundred percent (100%) of the remaining interest
in the property or rights are acquired by the other Participants, such
proportionate or residual interest in the property or rights shall be retained
by the acquiring Participant.  The property or rights shall thereafter be
owned, controlled or operated under the terms and conditions of this Agreement,
and the income and expenses shall be borne by the respective Participants in
proportion to their resulting Participating Interest in the  property.  Title
to the acquired property or rights shall be assigned and conveyed to the
Participants as co-owners holding interest in such property or rights.
     (3)     If all non-acquiring Participants fail to make an election or
elect not to acquire any interest therein, such property or rights shall remain
with the acquiring Participant and shall not be subject to this Agreement.
     (4)     Any additional license, lease, or any interest in mineral lands
acquired by the Operator through property expenditures pursuant to a Work Plan
shall be held by the Participants in the manner  specified in Section 7.01.

SECTION 2.07     Discoveries and Disclosures

     Should any Participant to this Agreement, during the term of its
Participation in the Project and for the period of one (1) year following
termination or withdrawal of such Participant, discover or have any knowledge
of any mineralization within a Specific Prospect which was the subject of any
Work Plan, said Participant shall immediately make such discovery or knowledge
available to the Management Committee and Operator for the benefit of all
remaining Participants.  This obligation does not apply to discoveries within
the exclusive property of a Participant even though situated within the
specific prospect of the project.


SECTION 2.08     Independent Exploration

     No Participant shall conduct independent Exploration for its own account
within a Specific Prospect until the specific area is released from the
coverage of the Project with the approval of the Management Committee.   This
prohibition does not apply to exploration and mining activities conducted
within the exclusive Properties of a Participant even though located within a
Specific Prospect or area of interest of the Project.

ARTICLE III
MANAGEMENT OF THE PROJECT

SECTION 3.01     Management of the Project 

     The overall management and control of the business and affairs of the
Project shall be vested in the Management Committee. Except where expressly
provided to the contrary, all decisions with respect to the management and
control of the Project shall be made and approved by the Management Committee
only and shall be binding on the Operator and all Participants.  


SECTION 3.02     Management Guidelines

     1.The employees of the Participants  will receive first consideration from
the Operator for employment under each of the Work Plans approved by the
Management Committee.

     2.No act shall be taken, sum expended or obligation incurred by or on
behalf of the Project, by the Operator or any Participant with respect to any
of the Major Decisions (as herein defined), unless such Major Decisions have
been approved by the Management Committee.  

SECTION 3.03     Major Decisions

          The following are Major Decisions and all actions relating thereto
are subject to the review and approval of the Management Committee:
     1.Acquisition of any Project land, Project Asset or interest therein,
whether by purchase, lease, option or otherwise, as well as the sale, transfer
or disposition of the whole or part interest thereof.
     2.Authorization for conducting a Feasibility Study on any Specific
Prospect.
     3.Approval of actions to defend title to Project Lands.
     4.Terminating or modifying any lease or other arrangement involving
Project Lands or Project Assets if such lease or other arrangement was required
to be approved by the Management Committee, or if such modification would
result in a modified lease or other arrangement which if it were a new lease
would be required to be approved by the Management Committee.
     5.Construction of any building or other improvements on Project Lands, if
not included in a proposed Work Plan, when any such building or improvement
will have a total cost in excess of Ten Thousand Dollars ($10,000).
     6.Selecting depreciation and accounting methods directed towards
maximizing deductions and reducing taxable income each Contract Year, and
making other decisions with respect to treatment of various transactions for
Philippine income tax purposes, consistent with the other provisions of this
Agreement.
     7.Making any expenditures or incurring any obligations by or of the
Project involving a sum in excess of Ten Thousand Dollars ($10,000) for any
transaction or group of similar transactions except for expenditures made and
obligations incurred pursuant to an approved Work Plan.
     8.Removal and appointment of the Operator pursuant to Section 5.07.
     9.Approval of action to surrender any portion of the Area of Interest
and/or to release the same from the status of Project Lands.
     10.Any other decision or action which, by any provision of this Agreement,
is required to be approved by the Management Committee or which would be
reasonably expected to have a material effect on the Project or its assets or
operations.
     11.Approval of all Work Plans and related Budgets including the
implementation thereof by contracting or farming out and/or subcontracting to
third parties (who are neither Party, Participant and/or Operator) any work to
be done as provided for under an approved Work Plan.

ARTICLE IV
THE MANAGEMENT COMMITTEE

SECTION 4.01     Composition

     The Management Committee shall be composed of one representative and one
alternate of each Participant.  The representatives and alternates shall have
management authority to bind their respective company.  Each Party shall
designate, in writing to the others, the name of its representative and
alternate representative to the Management Committee.  

SECTION 4.02     Scope of Authority

     The Management Committee shall decide on all Major Decisions as herein
defined and also perform the following specific functions:

     a.review and approve all proposed Work Plans and financial matters which
constitute major decision as provided in Section 4.0 hereof;
     b.review all technical matters, including engineering and construction,
and the status of any Work Plan in progress;
     c.exercise supervision and control over the activities of the Operator;
     d.offer such advice to the Operator as it may deem appropriate and
relevant to the operations carried on under this Agreement.  

SECTION 4.03     Meetings

     The Management Committee shall meet at such time as the Management
Committee deems appropriate, but not less often than quarterly.  Meetings of
the Management Committee may be called by any Participant or its
representative, upon thirty (30) days' advance written notice, unless such
notice is waived by all Participants. Meetings shall be held in Metro Manila,
Philippines, or such other place approved by the Management Committee.  The
Operator's representative shall be designated as the Chairman of the
Management Committee and shall distribute agendas and keep minutes of meetings.
 


SECTION 4.04     Voting in Major Decisions

     The Management Committee shall have plenary authority to act and to
approve Major Decisions, upon the affirmative vote of at least sixty-six
percent (66%) of the Participating Interests. For purposes of determining a 66%
vote of the Participating Interests, each Participant's representative's or
alternate's vote shall be weighed in the same ratio as the interests of the
Participants in such Specific  Prospect as initially stated in Section 7.01 or
as subsequently modified by a transfer or forfeiture of all or part of the
interest. Voting may be conducted verbally, in writing or by telex ballot.


SECTION 4.05     Operator's Advice               

     The Operator shall keep the Management Committee fully advised of all
matters arising from the Project which the Operator, in the exercise of its
best judgment, deems important or as reasonably requested by any Non-Operator's
representative.  The Operator shall consult freely with the Management
Committee, and keep it fully advised of present and prospective operations and
plans.


ARTICLE V
THE OPERATOR

SECTION 5.01.     Duties and Obligations of the Operator

     The Operator shall have direct control and management of the Project and
all operations. Subject to the general overall supervision of the Management
Committee, the Operator shall  have custody and responsibility for all Project
Lands and Project Assets; and shall direct, supervise, and administer all
approved Work Plans.  

     The Operator shall have the right to sub-contract, with the approval of
the Management Committee, any or all of specific work it needs to perform or
implement in connection with the operations of the Project; provided, however,
that the Operator shall not be relieved of its primary responsibility as
Operator with respect to works under sub-contract.


SECTION 5.02     Specific Duties of Operator

     1.     Liens:
          The Operator shall promptly pay all valid accounts and indebtedness
incurred in connection with any operations or work carried on for the Project
to insure that no lien or encumbrance is sustained against the Project Lands or
Project Assets or any minerals contained therein other than liens being validly
contested and diligently pursued by Operator and liens or encumbrance that
exist upon on a Participant's specific interest or participation in the Project
as provided for in specific agreements or contracts entered into by such
Participant(s) with respect to its own interest or participation.

     2.     Standard of Performance:
          The Operator shall carry out its duties and functions with respect to
the Project in a commercially reasonable manner and in accordance with good
exploration, development and mining methods, and practices applicable in the
Philippines;  provided, however, that the Operator shall not be responsible to
Non-Operators for any loss or damage suffered or done in the course of the
discharge of the Operator's duties hereunder, except those arising directly or
indirectly from the gross negligence or willful misconduct of Operator, its
officers, agents or employees or those arising directly or indirectly from the
acts of Operator, its officers, agents or employees which are outside the scope
of an approved Work Plan.

     3.     Insurance:
          a.The Operator shall procure and maintain in full force and effect,
at all times during the contract year, policies of insurance on all Project
Assets and properties that are exposed to insurable risks and such other
policies of insurance as may be reasonably required by the Management Committee
with costs to be chargeable to the Project in the manner specified in the
Accounting Procedures, Annex "A" hereof, and with insurance carriers that are
duly approved by the Management Committee,  including but not limited
to:
               i.  Workers' Compensation Insurance as required by Philippine
law, including employer's liability insurance for all employees of the Operator
in the amount to be determined by the Management Commitee; provided, however,
that all  non-Philippine nationals hired as employees of the Operator shall be
covered by employer's liability insurance at Operator's expense to the extent
of the higher of (1) that amount which is required by such employee's country
of residence and (2) the amount which is required for such employee in the
United States.
               ii.Commercial General Liability Insurance to provide coverage
against claims for third party bodily injury (including death) and third party
property damage. Such insurance shall provide coverage for completed operation,
blanket contractual, explosion, collapse and underground coverage, broad form
property damage and personal injury insurance with a set limit per occurrence
for combined bodily injury and property damage and an aggregate annual limit as
may be determined by the Management Committee.
               iii.Comprehensive Automobile Liability Insurance to provide
Automobile Liability in accordance with the Law against claims of bodily injury
(including death) and property damage covering all owned, leased, non-owned and
hired vehicles used in the performance of the operation with a set limit per
occurrence for combined bodily injury and property damage as may be determined
by the Management Committee.

          b.Each Participant may self-insure, or may at its option and expense
purchase policies of insurance which cover all the risks specified in the
agreed insurance program for insurance other than insurance required under 3.a.
above from a reputable insurer that is acceptable to the Management Committee. 
Each Participant which provides its own insurance shall produce evidence to the
other Participant and the Management Committee that the insurance has been
effected in accordance with the insurance program adopted by the Management
Committee.
          c.Unless prohibited by law, all insurance policies held or obtained
by the Operator and the Participants, whether required by this Agreement or
not, shall be sufficiently endorsed to waive any and all claims by the
underwriters or insurers against the Operator and the Participants and their
officers, directors, agents, employees and invitees, for injuries, deaths,
losses or damages covered by such policies.
          d.The Operator shall furnish the Participants with certificates of
evidence of compliance with the foregoing provisions regarding the insurance
required, which shall also provide that the insurance will not be materially
changed or canceled unless the Participants have been served with written
notice thirty (30) days prior to the effective date of such change or
cancellation.

     4.     Access and Inspections:
          The Operator shall permit authorized representatives of
Participant(s), at the latter's sole risk and expense, to inspect the Project
Lands, Project Assets, and any mine at reasonable times, subject to reasonable
rules and regulations established by the Operator for safety and efficiency in
its operations.  The Operator shall have no responsibility or liability on
account of the death of or injury to any such representatives, or for damage
to any property of the Participants other than such as might be occasioned by
gross negligence or willful misconduct on the part of the Operator.

     5.     Property Obligations and Taxes:
          During the term of this Agreement, the Operator shall, subject to the
receipt of  payments from the Participants pursuant to Sec. 2.3:
          a.Make all payments in respect of the acquisition and maintenance of
Project Assets, Project Lands and any mine, and perform all obligations in
connection therewith.
          b.Pay all other fees, taxes (other than income taxes), assessments,
and charges levied with respect to Project Assets, Project Lands, and any mine
and operations thereon; however, the Operator shall not be considered to be in
default if the reason for any non-payment is due to Operator contesting the
assessment in good faith.

     6.     Assays and Samples:
          The Operator shall keep safely all unused core samples and assay pulp
and rejects which it recovers from Project Lands.

     7.     Maintain Records:
          The Operator shall maintain records of operations and technical data
with respect to the Project and this Agreement and shall permit, at all
reasonable times, the inspection or audit of such records and data by the
Participants, in accordance with Accounting procedures.

     8.     Written Records:
          The Operator shall furnish the Participants with the following
written reports:
          a.On or before the thirtieth (30th) day of each month, or as often as
necessary, beginning on the first month following the execution of this
Agreement, a written report, which, in accordance with Exhibit A, shall set
forth in reasonable detail the results of the operations of the preceding month
and will keep the Participants advised of all matters arising from the
operations which the Operator deems important or which are reasonably
requested by the Participants.
          b.An annual written report on all Specific Prospects to be submitted
on or before January 31 of each year during the existence of this Agreement. 
The annual report shall contain appropriate maps, logs, charts, and other data,
setting forth the results to date of the operations carried out by Operator and
the conclusions and recommendations of the Operator with respect to such
operations.
          c.A written report, within sixty (60) days after completion of all
work intended on Specific Prospects, with appropriate maps, logs, charts, and
other data, setting forth the results of all operations carried out by Operator
and the conclusions and recommendations of Operator with respect to such
operations.

         
SECTION 5.03     Operator as Independent Contractor

     The Operator is an Independent Contractor and nothing contained herein or
in Exhibit A shall be construed as constituting any other relationship with the
Participants other than that of owner and independent contractor.  Except as
expressly limited in this Agreement, the Operator shall be entitled to exercise
the right to hire, discharge, promote and transfer its employees; to select and
remove foremen or other persons at other levels of supervision; to establish
and enforce reasonable standards of production; to introduce, to the extent
feasible, labor saving equipment and materials; to determine the number of
craftsmen necessary to perform a task; and to establish, maintain and enforce
rules and regulations conducive to efficient and productive operations.

SECTION 5.04     Reimbursement of Operator and Payment

     1.     Amount of Reimbursement
          a.In consideration of Operator's services, the Operator shall be
entitled to a Management Fee to cover reasonable overhead costs which will be
at least  three percent (3%) of the current operating budget.  The Operator
shall likewise be reimbursed out of the Project for the expenditures as
provided in Exhibit A.  Such chargeable costs shall include, but are not
limited to:  rentals, fees; labor and related costs; employee benefits;
materials; transportation and employee relocation costs; services; damages and
losses to the Project Property; insurance premiums; legal expense; rates, taxes
(other than income taxes), assessments, and fees levied with respect to Project
Assets, Project Lands, and any mine and operations thereon; offices, camps and
miscellaneous facilities; indirect charges; storage of production inventories
and the like.
          b.Any disputes under the immediately preceding subparagraph (a)
pertaining to the amount of reimbursement or compensation to Operator, shall be
submitted to arbitration pursuant to Section 10.07.

     2.     Method of Payment
     The Operator shall be entitled to receive the payment described in Section
5.04 (1) above in accordance with the provisions of Section 7.07.


SECTION 5.05     Designation of Operator

     The Management Committee shall designate the Operator for the Project. The
Parties agree that GOLDEN CYCLE shall be designated as the initial Operator. 
The Operator  shall have those powers, rights, duties and obligations conferred
herein. The Management Committee may also designate a Non-Operator 
Participants to perform any duties of the Operator hereunder for any Specific
Propsect, and such Non-Operator(s) Participants shall be deemed Operator for
such purpose and shall have the powers, rights, duties, and
obligations of Operator provided herein.



Section 5.06           Resignation of Operator

     The Operator may, by sixty (60) days' advance notice, in writing to the
Participants, resign as of the end of any calendar year, but in no event shall
the Operator be required to continue to serve for more than twelve (12) months
after giving notice.  An Operator that resigns shall continue as Operator, as
the case may be, until such resignation becomes effective, or until a successor
Operator is appointed and has arranged to take over as Operator, whichever
first occurs.


Section 5.07           Removal of Operator

     Operator may be removed by the Participants  on the following grounds:
     1. the Operator's share of the Project has been reduced through dilution,
sale or other transfer to less than 50% of its Participating Interest  in the
Project as a Participant,
     2. the Operator files a voluntary petition in bankruptcy or seeks any
reorganization, composition, readjustment, liquidation or similar relief under
the Bankruptcy Code of the Philippines or under any similar applicable statute,
law or regulation of the Philippines,
     3. there is filed against the Operator an involuntary petition in
bankruptcy or any similar applicable statute, law or regulation of the
Philippines which petition shall remain undismissed or unstayed for an
aggregate of 60 days, or
     4. the Operator materially fails to perform its duties as Operator and
such failure is determined, in an arbitration proceeding under Section 10.07 to
have been a result of the gross negligence or willful misconduct of the
Operator. 

SECTION 5.08     Effect of Change of Operatorship

     If the Operator is removed due to gross negligence or wilful misconduct,
as provided in subsection (5.07) above, the Operator shall, upon such removal,
have no further obligation for the operation of the Project. 
     If the Operator resigns or is removed, a new Operator shall be selected by
the Management Committee and the new Operator shall similarly be subject to
removal for the causes set forth in this Section.
     The Operator, upon ceasing to act in such capacity, shall immediately
deliver and convey, to its successor, the custody of all the assets, records,
books, and other property, both real and personal, of the Project.
     If the Operator, at any time, relinquishes all of its Participating
Interest in any Specific Project, it shall no longer be the Operator with
respect to such Specific Project.

ARTICLE VI
WORK PLANS

SECTION 6.01     General Provisions Applicable to Work Plans

(a)     Every Work Plan proposed hereunder shall contain the following:
     1.     A description of the work to be performed.
     2.     An estimate of the time required to perform the work.
     3.Sufficient technical and financial data, broken down in reasonable
detail on a functional basis to be readily understandable.
     4.     Plans for the acquisition of additional properties.
     5.     Details for construction, expansion or other capital improvements.
     6.A general list of the number of personnel required; provided, however,
that in the case of a Mining Operation Plan, senior management personnel shall
be described by name and experience.
     7.A Budget of costs, both capital and operating, showing in reasonable
detail the nature of proposed expenditures, the place or places where the
expenditures are to be made, the kind and capacity of any plant and facilities
to be acquired or constructed, and an estimate of the cost thereof.
     8.Reasonable detail, including description, as to the portion of the Area
of Interest or Specific Prospect on which the proposed expenditures are to be
made.
     9.     Intended relinquishments of Project Lands and/or Project Assets.

(b)Every Mining Operation Plan shall, in addition to the requirements specified
in Sec. 6.01 (a), include the following:
     1.any pertinent geological and engineering information;
     2.a description of the capacity and estimated development costs of a
proposed mine, including any milling or other facilities necessary to obtain a
product which is commercially marketable;
     3.details regarding any development drilling, including the estimated time
required to perform such development drilling and sinking of a shaft;
     4.be accompanied by a Feasibility Study compiled preparatory to submitting
such Development Plan.
     5.the list of personnel shall include a list of senior management
personnel who shall be described by name and experience.
     6.Specify the Work Plan period, the expected tonnage and grade of ore to
be mined, and the amount of products to be derived, the quantity of
concentrates expected to be available for shipment, and expected working
capital requirements. 

(c)Each Development Plan shall, in addition to the requirements specified in
Section 6.01(a), include  the folowing:
     1.Mining Operation Plan in detail, for the first year's operation of the
mine proposed to be constructed or expanded.
     2.The technical basis of such proposed Work Plan.

(d)The period for any Work Plan submitted pursuant to the provisions of this
Agreement (except a Mining Operation Plan) shall coincide with calendar years;
provided that a Work Plan may be proposed for less than a full year to
accomplish a particular purpose based on operational desirability or necessity.

(e)There may be separate Work Plans, at any given time, covering different
Specific Prospects for various phases of Exploration, Development, or Mining
Operation. Except for Development Plans, no Work Plan shall combine
Exploration, Development or Mining Operations.
(f)A Development Plan shall cover whatever period of time is reasonably
required to bring a proposed mine into production.

SECTION 6.02     Proposal of Work Plans

     All work on the Project shall be conducted pursuant to an approved Work
Plan to be submitted as follows:
     1.The Operator shall submit to the Management Committee, on or before
November 1 of the current year, proposed Work Plans covering Exploration,
Development and/or Mining Operation for the year following such submission.
     2.Any Participant may propose, prior to November 1 each year, their own
Work Plans covering Exploration, Development or Mining Operation on properties
of the Project located within the Area of Interest which shall then be duly
identified as a Specific Prospect.
     3.A Work Plan shall not be required in the case of minimum work required
to maintain the Project Lands in good standing which the Operator will each
year carry out for the Project. 

SECTION 6.03     Approval of Work Plans and Budgets

     Within ten (10) days after receiving a Work Plan (180 days in the case of
a development Plan), the non-proposing Participants shall confirm in writing to
the proposing Participant, its approval or disapproval of such Work Plan and,
if conditions are attached to its approval or disapproval, its reasons therefor
must likewise be stated.  The Management Committee shall vote on the Work Plans
within the month of November. An approval shall require an affirmative vote by
the Participants representing 66% of the Participating Interest. Should the
required affirmative vote not be obtained, the Management Committee shall give
the Operator economic guidelines for the formation of an acceptable budget
prior to December 10 of the current year. If a Participant disapproves a
specific Work Plan, the Management Committee shall meet as soon as possible to
prepare, in good faith,  an acceptable Work Plan for the
succeeding year. 

     If no new plan is approved by December 31, the current Exploration and/or
Development  Work Plan as the case may be shall be continued using the current
levels of expenditure and/or production.

SECTION 6.04     Revision of Work Plans

     The size and configuration of the Specific Prospect shall be reasonable in
relation to the reason for its being so designated, provided that if the
results of any Work Plan indicate that a Specific Propsect should be expanded
to include a larger area, the boundaries thereof may be expanded upon approval
by the Management Committee, with an adjustment to the Work Plan expenditures
allocation, if necessary.  


SECTION 6.05     Election Not to Contribute to an Approved Work Plan

     Any Participant may elect not to participate in any approved Work Plan.
Upon such election, the Participant shall relinquish and assign, and shall
thereupon be completely divested of all its rights, title, and interest in the
Specific Prospect which is the subject of the Work Plan and the Project Lands
and Project Assets affected thereby in favor of  the remaining Participant(s)
that have elected to participate, who shall acquire such interests, lands and
assets in proportion to their Participating Interests in the Specific Prospect
which is the subject of the Work Plan.


ARTICLE VII
PARTICIPATING INTEREST,
CONTRIBUTIONS AND DISTRIBUTIONS

SECTION 7.01     Participating Interests of the Parties

     The Participants shall be co-owners of the Project, the Project Assets,
Project Lands and the products produced in accordance with the following
respective undivided shares or interests:
               BENGUET                          Fifty Percent (50%)
               GOLDEN CYCLE               Fifty Percent (50%)
     The above percentages of interest shall be subject to any adjustments of
Participating Interests as provided for in Supplemental Agreements with respect
to properties subsequently included in the BGA MINERALS PROJECT as well as
variations of resulting interests in relation to contributions to Work Plans
for  Specific Prospects.


SECTION 7.02     Expenditures

     The Participants shall share in all costs and expenses paid or incurred by
the Project in proportion to each Participant's Participating Interest.   All
the funds supplied with respect to the Project, each Specific Prospect and all
approved Work Plans shall be funded.   Expenditures shall be incurred and
recorded in accordance with the Accounting Procedures.


SECTION 7.03     Payment of Cash Calls and Contributions

     Cash calls shall specify the estimates of expenditures for each month and
the amount of each Participant's proportionate share shall be submitted by the
Operator to each Participant in accordance with Exhibit A. 

SECTION 7.04      Interest on Delinquent Contributions

     Should a Participant fail to pay any cash call within the time period
required, the amount due shall thereafter bear interest at a rate of two
percent (2%) per annum above the prime lending rate extended by Bank of America
or such bank as may be designated by the Management Committee, at its main
branch in Manila, Philippines, at the time such cash call is due, compounded
quarterly.


SECTION 7.05     Failure to Pay Contribution

     If, after electing to participate in any Work Plan, a Participant fails to
pay all or part of its proportionate share of a cash call in connection with a
Work Plan and such delinquency continues for a period of sixty (60) days from
the due date, the Operator shall give written notice of such delinquency. 
After receipt of such notice, the delinquent Participant shall have thirty (30)
days to cure the delinquency.  If the delinquent Participant neither cures its
delinquency nor elects to withdraw within thirty (30) days
after such notice, the delinquent Participant's Interest in the area which is
included in a Work Plan or in the entire Specific Prospect shall be distributed
to the remaining Participants in the same proportion as their Interests bear to
each other, for a consideration of One Dollar ($1.00); and the delinquent
Participant shall execute all such assignments and transfers to accomplish the
distribution.  The distribution to the other Participants of a delinquent
Participant's Interest shall be without prejudice of any other
remedies which the paying Participants may have against such delinquent
Participant.

SECTION 7.06      Expenditures Without Approval

     The Operator may exceed an approved Budget by ten percent (10%) in any
year without need of specific approval of the Management Committee.  Except in
case of an emergency to preserve life or property, expenditures in excess of
ten percent (10%) of an approved Budget in any year must be unanimously
approved by the Management Committee.  The Operator may terminate a Work Plan
if all Participants do not approve the excess expenditures.


SECTION 7.07     Distribution  of Production

     1.     Taking in Kind
          Each Participant shall take its proportionate share of the products
produced by the Project at the time when it is available for shipment to a
"first sale" facility, and each Participant shall, at its own expense,
separately dispose of its share of produced minerals.

     2.     Failure to Take in Kind
          If a Participant fails, after ninety (90) days' notice from the
Operator, to make the necessary arrangements to take in kind or separately
dispose of its proportionate share of produced minerals, the Operator shall
have the option, but not the obligation, to purchase such share or sell the
same to others for the account of Participant at not less than the fair market
value at the time of such sale; which shall be done within a reasonable period
of time. 

     3.     Storage of Products
          The Operator shall, if requested by a Participant, store in a
suitable location the product share of said Participant.  All of the costs
involved in arranging and effecting such storage shall be billed directly to
said Participant.  The Operator shall likewise have the right, after such
ninety (90) days' notice pursuant to Section 7.07 (2) above, to arrange for the
storage and/or shipment of such product and charge the cost to said
Participant.  Once stored, such product shall no longer be subject to the
Agreement and the Operator shall be under no further responsibility with
respect thereto.  The Operator's charges for such storage and/or shipment shall
be billed directly to such Participant.  If the Participant is in default in
the payment of such  charges and costs for a period of more than thirty (30)
days, the Operator shall have a lien on the stored product to secure the
payment of
all storage and shipment costs.

     4.     Other Modes of Distribution
     The parties may agree on a mode of distribution other than in kind as may
be reasonable, expedient and advantageous to the parties under the prevailing
circumstances.


SECTION 7.08      Books of Record,  Accounting and Examination

     The fiscal year of the Project shall start on January 1 and end on the
last day of December of each year.

     The Operator shall keep, and maintain for the Project Account, true and
correct books, records and accounts in accordance with generally accepted
accounting principles and practices in the Republic of the Philippines
consistently applied, showing all items of income and expense, and account to
the Parties in accordance with the Accounting Procedures.

     All such books, records, and accounts may be examined by any Participant
or its designee at all reasonable times in accordance with the procedure set
forth in Exhibit ____.  The cost of such examination shall be borne solely by
the Participant requesting such examination.   In the event all Participants
wish to examine such books, records, and accounts, the cost of such examination
will be borne by the Participants in proportion to their respective
Participating Interests.  


ARTICLE VIII
TERM AND TERMINATION

SECTION 8.01     Term
     This Agreement shall commence on the Effective Date and shall continue
until terminated or canceled.
SECTION 8.02     Voluntary Termination
     1.     Termination by Consent
          This Agreement may be terminated at any time upon unanimous vote of
the Participants, in which event each Participant shall cease to have any
further rights or obligations hereunder except to settle liabilities incurred
or accrued prior to termination.  Upon such termination, the Operator shall pay
or deliver to itself and to the Non-Operator(s), in proportion to their
respective existing interests, all cash and other readily divisible property
then held by the Operator in behalf of the Participants, except to the extent
required to satisfy creditors.  Any property or interest which cannot be
readily divided or the division of which the Parties shall fail to agree upon
shall be held by the Operator for ninety (90) days after the termination, after
which the Operator shall liquidate that property or interest as promptly as
practicable and distribute the proceeds to the Parties in proportion to their
Participating Interest except to the extent required to satisfy creditors.

     2.     Termination By Withdrawal
          Any Participant may withdraw either totally from the Project or
partially from a Work Plan or Specific Prospect and at the end of any Work Plan
period.  At least sixty (60) days advance written notice to the other
Participant(s) of its intent to withdraw shall be given by the withdrawing
Participant.  In case of total withdrawal from the Project by less than all the
Participants, this Agreement shall continue  with respect to the
non-withdrawing Participants.  In case of partial withdrawal from a Work Plan
or Specific Prospect, this Agreement shall continue with respect to other
Specific Prospects where the withdrawing Participant(s) has not withrawn.

          Effect of Withdrawal:         
          (a)     If the withdrawal refers to the Project, this Agreement shall
be terminated with respect to such Participant.  In the event of termination of
a Participant's interest in the Project, all of the withdrawing Participant's
rights and interests in this Agreement, the Project and Specific Prospect, the
Project Assets and Project Lands shall be evaluated or appraised and thereafter
shall be relinquished and distributed to the remaining Participant(s), in the
same proportion as their interests bear to each other, and they shall assume
the withdrawing Participant's share of any obligations incurred or accrued
hereunder or pursuant hereto but not in excess of the value of the
Participant's rights and interests relinquished and distributed to such
remaining Participant(s).  In addition, they shall assume the obligations of
the withdrawing Participant with respect to any previously
approved Work Plan; provided, however, that they  shall have the right to
collect whatever costs and other obligations they have assumed and paid
pursuant to a Work Plan from the withdrawing Participant but not in excess of
its share of expenditures set forth in such Work Plan or approved by such
withdrawing Participant.
     (b)     In case of partial withdrawal from a specific Work Plan, the other
Participant(s) shall have thirty (30) days after receipt of notice of
withdrawal to either join in the withdrawal or to request assignment of all the
rights and obligations of the withdrawing Participant in the terminated
interest.  Except as provided in Section 8.06, all rights and obligations of
the withdrawing Participant under the Agreement with respect to the Specific
Work Plan shall terminate as of the date of the giving of notice of such
withdrawal and the assignee of the withdrawing Participant shall assume all the
liabilities and obligations corresponding to the withdrawing Participant's
share of any obligations, including costs incurred pursuant to such Work Plan
after the effective date of the withdrawal, but not in excess of its share of
expenditures set forth in such Work Plan, or otherwise approved by such
withdrawing Participant. 
     (c)     In case of withdrawal at the end of any Work Plan, the withdrawing
Participant shall retain its rights and interests in the Work Plan just ended
but it shall remain liable for its share of any obligation incurred or accrued
with respect to the Work Plan prior to the effective date of withdrawal.
     (d)      The withdrawing Participant shall be obligated to execute and
deliver such instruments as may be necessary to formally effect the transfer of
its interest to the non-withdrawing Participant(s).  


SECTION 8.03     Termination in case of Default

The Project and this Agreement shall terminate if any of the following events
shall occur:
     1.If any Participant shall file a voluntary petition in bankruptcy or
shall be adjudicated as bankrupt or insolvent, or shall file any petition or
answer seeking any reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief for itself under the present or any
future bankruptcy act or any other present or future applicable statute or law
relative to bankruptcy, insolvency or other relief for debtors, or shall seek
or consent to or acquiesce in the appointment of any trustee, receiver,
conservator or liquidator of said Participant or of all or any substantial part
of its properties or its interest in the Project (the term "acquiesce" includes
the failure to file a petition or motion to vacate or discharge any order,
judgment or decree) providing for such appointment within the reglementary
period  after the appointment, or
     2.If a court of competent jurisdiction shall enter an order, judgment or
decree approving a petition filed against any Participant seeking any
reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief under the present or any future federal
bankruptcy act, or any other present or future applicable federal, state or
other statute or law relating to bankruptcy, insolvency or other relief for
debtors, and said Participant shall acquiesce in the entry for such order,
judgment or decree (the term "acquiesce" includes the failure to file a
petition or motion to vacate or discharge such order, judgment or decree within
the reglementary period after the entry of the order, judgment or decree), or
such order, judgment or decree shall remain unvacated and unstayed for an
aggregate of ninety (90) days (whether or not consecutive) from the date of
entry thereof; or any trustee, receiver, conservator or liquidator of said
Participant or of all or any substantial Participant of its property or its
interest in the Project shall be appointed without the consent or acquiescence
of said Participant and such appointment shall remain unvacated and unstayed
for an aggregate of sixty (60) days (whether or not consecutive); unless the
Participant shall have filed within the abovestated 90 or 60-day
periods respectively, a petition or proper pleading to vacate or stay such
order, judgment or decree or appointment as the case may be and the same is
pending resolution by the proper court or authority; or
     3.Any Participant shall admit in writing its inability to pay its debts as
they mature; or
     4.Any Participant shall give notice to any governmental body of insolvency
or pending insolvency, or suspension or pending suspension of operations; or
     5.Any Participant shall make an assignment of any interest in this
Agreement for the benefit of creditors or take any other similar action for the
protection or benefit of creditors; or
     6.The Partipants are disqualified from holding Project Lands.

     In any of the foregoing events, the Project and this Agreement shall
terminate with respect to the defaulting Participant upon the occurence thereof
subject to compliance of Section 8.04 hereof,  in which event, the provisions
of Sec. 8.02(1) shall apply with respect to the liquidation of the rights,
interests and obligations of the Participants.


SECTION 8.04     Termination Upon Default

     1.     Procedure
          If any Participant claims that the other is in default under this
Agreement, such Participant shall give notice to the other Participant alleged
to be in default, specifying the basis for such  claimed default.  Within
thirty (30) days after its receipt of such notice, the defaulting Participant
shall either (i) cure such default, (ii) proceed diligently to cure such
default, or (iii) send a reply to the other Participant denying such default
with a notice that it is submitting the question to arbitration as provided in
this Agreement. 
          If the matter is submitted for arbitration, a Participant shall not
be deemed in default until the matter shall have been determined finally by
appropriate arbitration under the provisions of Section 10.07 hereof.  

     2.     Effect of Default.
          If (i) the default is not cured, or (ii) the Participant fails to
proceed diligently to cure such default, or (iii) arbitration is not sought, or
(iv) after arbitration proceedings, a Participant is found to be in default and
fails to cure it within thirty (30) days after rendition of the arbitration
award, the non-defaulting Participant shall give the defaulting
Participant, at any time while the default continues, a notice declaring the
Participant in default and stating the date of termination of the existing
proportionate interest of the defaulting Participant in the Project, or
Specific Prospect or Project Assets and Project Lands directly affected by the
default.

3.Partial Default
     If the default refers to a Specific Prospect, this Agreement shall
continue with respect to other Specific Prospects or Project Lands and Project
Assets where Participant(s) has not defaulted, and the rights and interests of
the Participants in the Specific Prospect wherein it has defaulted shall be
distributed in the manner provided in Sec. 8.02(2)(b).
          If one Participant knows of the other Participant's default and does
not give notice as provided in the preceding paragraph, the non-defaulting
Participant's failure to give notice shall not be deemed a waiver or consent to
the default or a forgiveness of the debt, or obligation of the defaulting
Participant to the Project or the Work Plan except that the non-defaulting
Participant may be barred by laches by failure to give notice of default for an
unreasonable length of time from the occurrence of such default.

     4.     Project Default
          If the default refers to the Project, this Agreement shall be
terminated with respect to such defaulting Participant and the provision of
Sec. 8.02 1(a) shall apply with respect to the transfer of terminated interest
in the Agreement, the Project, Specific Prospects, Project Assets and Lands.
     In addition, the defaulting Participant shall remain liable for all
amounts chargeable to it with respect to any Work Plan to which it is
committed, including costs incurred pursuant to such Work Plan after the
effective date of the termination.  The defaulting Participant shall also
remain liable for its share of any obligation incurred or accrued hereunder or
pursuant hereto, including reclamation obligations prior to the date of
termination, provided, however, that payment by the defaulting Participant of
all its obligations assumed by the remaining Participants plus legal interest
rate shall reinstate the  rights and interests of the defaulting Participant in
such Project, Specific Prospect, Project Lands or Project Assets.


SECTION 8.05     Continuing Liability

     Upon termination hereof, all rights and obligations of the Participants
and Operator shall cease and terminate, except that all rights and obligations
which have been incurred or have accrued as provided in this Agreement, prior
to the termination, shall not be impaired or affected in any way and shall
survive the termination or expiration of this Agreement and any outstanding
debts of the Participants arising out of this Agreement will become immediately
due and payable and subject of set-off against any amounts
receivable by the Participants from the Project Account.



ARTICLE IX
TRANSFER OF INTEREST

SECTION 9.01     Relinquishment of Property Interest

     Any Participant may, at any time, relinquish any interest in this
Agreement and in the Project, Specific Prospect, Project Lands, or Project
Asset, after giving at least ninety (90) days' written notice to the other
Participant(ies) prior to a property obligation date as herein defined.  If a
Specific Prospect is relinquished, it shall include all interest in all other
Project Assets and Project Lands which form an integral part of the Specific
Prospect. The other Participants shall have thirty (30) days after receipt of
notice to either join in the relinquishment or to require the assignment of all
the rights and obligations of the relinquishing Participant to the remaining
Participants.
     The words "property obligation date" shall mean any date on which any
property holding fees are due for payment.


SECTION 9.02     Assignment

     Any Participant may assign or otherwise dispose of all or any part of its
interest in the Project or any of its rights hereunder to an Affiliate;
provided such Affiliate shall in writing assume and agree to carry out all the
disposing Participant's proportionate obligations under this Agreement.  In the
event of any such assignment or disposition, the Participant shall be
considered as one Participant for all purposes of this Agreement, including
representation on the Management Committee. 
     Except as provided above in Sections 9.02 or 9.01,  no Participant shall
assign or otherwise dispose of all or any part of its interest in the Project
or Specific Prospect, or any of its rights and interests in Project Lands or
Project Assets to any person other than an affiliate,  unless it shall have
first offered to make such assignment or other disposition to the other
Participants as provided in Section 9.03, and in all cases of such assignment
or disposition, the transferee or assignee shall in writing assume and agree to
carry out all the corresponding proportion of the disposing Participant's
obligations under the Project and this Agreement.

SECTION 9.03     Right of First Refusal

     1.     Offer to Sell
          A Participant that intends to voluntarily transfer as a whole or any
part of its interest in the Project, Project Lands, Project Asset or Specific
Prospect shall first make an offer to sell to the other Participant(s) at the
same price and other terms included in a bona fide offer received from a
third-party who is ready, willing, and able to purchase such interest.  The
other Participants shall have forty-five (45) days from receipt of such offer
within which to accept or reject it.  If the offered interest is not sold  to
the other Participants during that forty-five (45) day period, the offered
interest may be sold to the third-party  making such bona fide offer during the
next ensuing one hundred eighty (180) days, at the price that is not lower than
the price set forth in the bona fide offer and upon the other terms and
conditions set forth on the offer.  Unless waived by the non-transferring
Participants, any interest sold shall remain subject to this Agreement, and the
transferee shall be required to execute a document acceding to the terms and
conditions  of the Agreement and assumes all the rights and obligations of the
disposing Participant under this Agreement.

     2.Forced Divestment.
     In the event of a forced divestment due to governmental law or regulation,
the Participants not being required to divest shall have one hundred eighty
(180) days to acquire the interest of the divesting Participant for cash at the
fair market value as appraised by a licensed appraiser jointly appointed by the
Participants.

     3.     Exempt Transfers
          Paragraph 1 of this Section 9.03 shall not apply to:
          a.a transfer to an Affiliate.
          b.a sale by a Participant in accordance with Section 7.05  which
shall result in the transfer of the selling Participant's interest to the
remaining Participants for the amount of US$1.00.

SECTION 9.04     Hypothecation of Interest

     A Participant shall not hypothecate its interest in the Project, Project
Asset, Project Lands, Specific Prospect or this Agreement, unless (i) it shall
first give notice to the other Participants of the proposed hypothecation in
sufficient detail to enable it to analyze the proposed hypothecation, and (ii)
the other Participants consent thereto,which consent shall not be unreasonably
withheld or delayed provided that in no event shall  consent be required if the
purpose of the hypothecating Participant is to obtain funds to carry out or
maintain its position under this Agreement. In the event of any hypothecation
such hypothecation shall not impair or reduce the rights of the other
Participant in any way, and any security interest created by such hypothecation
shall be subordinate to all rights of the other Participant under this
Agreement.  Any Participant who does not give the hypothecating Participant
notice of its objections to such hypothecation within fifteen (15) days after
receipt of the notice of the proposed hypothecation shall be deemed to have
consented thereto.


SECTION 9.05     Transferring Participant Not Released from Agreement

     A transferring Participant shall not be relieved of any of its obligations
or liabilities under this Agreement, unless the other Participants consent in
writing. 


SECTION 9.06     Evidence of Change of Ownership

     No change in ownership of any interest in the Project or rights under this
Agreement shall be binding upon any other Participants unless and until notice
is given to the other Participants by delivering a copy of all instruments
executed in connection with such transfer or assignment, or as may be provided
by law. 


SECTION 9.07     No Partition

     No Participant shall partition, through order of a court or otherwise, any
property right or other asset subject to this Agreement and any action for
partition shall be deemed a withdrawal from the Project subject to the
provisions of Sec. 8.02(2).

ARTICLE X
GENERAL CONDITIONS

SECTION 10.01     Severability

     If any part, term or provision of this Agreement is held by a court of
competent jurisdiction to be illegal and/or unenforceable, the validity of the
remaining portions or provisions shall not be affected, and the rights and
obligations of the Parties shall be construed and enforced as if the Agreement
did not contain the particular part, term or provision held to be invalid or
unenforceable.


SECTION 10.02     Headings and Table of Contents

     The headings to all Sections and Subsections in this Agreement shall be
regarded as having been used for the convenience of reference only. Unless such
exhibits are expressly made an integral part hereof, all exhibits hereto shall
not form part of this Agreement.


SECTION 10.03     Liability of Parties

     1.     Joint and Not Solidary
          Each Participant hereto shall be responsible for only its separate
and individual obligations under the Agreement and shall be liable for only its
proportionate share of the cost of operations relative to the Project.

     2.     Defense of Claims
          All claims and actions on account of death to or injury to persons or
damage to property caused by any operations conducted under this Agreement
shall (to the extent not covered by insurance) be defended or satisfied by the
Operator for the Project Account and each of the Participants shall pay its
proportionate share of the costs and expenses of defense or settlement of any
such claim or actions and any judgment rendered in any such action, except to
the extent that the Operator is solely liable therefor pursuant to Section 5.02
(2);  be provided, however, that there shall be no such settlement for any
amount greater than Twenty-Five Thousand Dollars ($25,000) without the consent
of all Participants.

     3.There is no intention of the Participants to create a partnership under
the common law or statutory law or decree of either the Republic of the
Philippines or the United States of America.  In view of the foregoing, the
Participants agree that this Agreement shall be excluded from Sub-Chapter K of
Chapter 1 of the U.S. Internal Revenue Code of 1986.


SECTION 10.04     Successors and Assigns

     Subject to the restrictions on transfer, this Agreement shall inure to the
benefit of and be binding upon the respective successors and assigns of the
Participants.


SECTION 10.05     Notices

     1.Any notice, election, payment, report or other correspondence required
or permitted under this Agreement shall be given in writing and may be
delivered personally to an officer of the Participant to whom directed, or may
be delivered by registered or certified mail, return receipt requested, or by
confirmed telex, telegraph or facsimile, with all necessary postage and charges
prepaid.  All notices hereunder shall be directed to addresses set forth below
or such substitute addresses as provided to the other Participants to this
Agreement thirty (30) days in advance of the notice.  Present addresses to
which notices shall be sent in accordance with the provisions of this paragraph
are:

GOLDEN CYCLE PHILIPPINES, INC.
(a wholly owned subsidiary of Golden Cycle Gold Corporation)
2340 Robinson Street, Suite 209
Colorado Springs, CO 80904 USA
                    Manila address:  Room 107, Prince Plaza I
106 Legaspi St., Legaspi Village
Makati City
               

BENGUET CORPORATION
12 ADB Avenue, Mandaluyong City
Metro Manila  Philipppines

     2.Any notice, election, payment, report or other correspondence given
hereunder shall be deemed given only when received by the Participant to whom
such correspondence is directed.  For purposes of determining time of receipt,
personal delivery shall be deemed to have been received upon delivery to an
officer of the Participant to whom directed; registered or certified mail, as
of the time of the postmark on the return receipt; and any telex, telegram or
facsimile shall be deemed to have been received by the Participant to whom it
was addressed, two (2) days after the time of dispatch.


SECTION 10.06     Covenant for Further Assurances

     The Participants to this Agreement shall execute such further agreements,
conveyances, and assurances as may be reasonably requested by any Participant
to effectuate the intent of this Agreement.


SECTION 10.07     Arbitration

     1.In the event the Participants do not settle a dispute at any time
arising with  respect to this Agreement which is expressly required by this
Agreement to be resolved by arbitration, it shall be resolved in accordance
with the terms of this Section 10.07.  In such event, arbitration may be
initiated by either party, by notice to the other regarding appointment of an
arbitration panel. 

     2.The Participants shall each appoint one arbitrator and so advise the
other Participant and these two arbitrators will appoint a third.  If either
Participant fails to appoint an arbitrator within thirty (30) days after
receipt of a written request of the other Participant to do so, such arbitrator
shall, at the request of the other Participant, if the Participants do not
otherwise agree, be appointed by the President of the International Chamber of
Commerce.  If the first two arbitrators appointed as aforesaid fail to agree on
a third within thirty (30) days following the appointment of the second
arbitrator, the third arbitrator shall, if the Participants do not otherwise
agree, be appointed at the request of either Participant, by the President of
the International Chamber of Commerce.  If an arbitrator fails or is unable to
act, his successor will be appointed in the same manner as the arbitrator whom
he succeeds.  Unless the Participants agree otherwise, Manila, Philippines,
shall be the venue of the arbitration proceedings.

     3.The decision of a majority of the arbitrators shall be final and binding
upon the Parties.  Judgment upon the award rendered may be entered in any court
having jurisdiction or application may be made to such court for a judicial
acceptance of the award and an order of enforcement as the cause may be.

     4.Except as provided in this Section, arbitration shall be conducted in
accordance with the Rules of Arbitration of the International Chamber of
Commerce, then in effect.

     5.The issues subject to arbitration shall include but not be limited to
those proposed pursuant to Section 5.07 (Removal of Operator Upon Default),
Section 5.04 (Operator Reimbursement), Section 8.04 (Termination Upon Default
by Participant)., and employee Benefits and Indirect Charges of Exhibit A.

     6.The arbitration decision shall be final and binding upon the Parties.


SECTION 10.08     Force Majeure

     1. An event of Force Majeure shall include a cause or event beyond the
control of any Participant, including fires, floods, earthquakes, volcanic
eruption, inability to obtain fuel and/ or power, ground collapse or
landslides, interruptions or delays in transportation or power supplies,
strikes, lockouts, wars, insurrection, civil disturbance, acts of God,
government regulation or interference, including forest closures or any other
cause beyond the Participant's control.

     2.Each Participant shall be excused from performance and shall not be
considered to be in default with respect to any obligation hereunder, if, and
to the extent that, its failure of or delay in performance is due to an event
of Force Majeure.  Any such failure on the part of the Participant to perform
shall not be deemed to be a breach of this Agreement and the time within which
the Participant is obligated to comply with any such term, covenant or
condition of this Agreement shall be extended by the total period of all such
delays on account of Force Majeure.

     3.If either Participant's ability to perform its obligations hereunder is
affected by an event of Force Majeure, such Participant shall, promptly, but in
any event within fifteen (15)  days of learning of such event, give due Notice
to the other Participant stating the nature of the event, its potential effect
and the anticipated duration thereof, and any action being taken to avoid or
minimize its effect.  The Participant shall give like Notice forthwith
following the date such cause ceased to exist.  The burden of proof shall be on
the Participant claiming Force Majeure.

     4.  The Participant affected by an event of Force Majeure shall use its
reasonable efforts under the circumstances to mitigate the adverse impact of
the event of Force Majeure.  The suspension of performance allowed the affected
Participant for the consequences of Force Majeure shall be of no greater scope
and no longer duration than reasonably required.  


SECTION 10.09     Waiver Clause

     The failure of any Participant to enforce, at any time, any of the
provisions of this Agreement, or to exercise any option which is herein
provided or to require, at any time, performance by another Participant of any
of the provisions hereof, shall in no way be construed to be a waiver of such
provisions, nor in any way to affect the validity of this Agreement or any part
thereof, or the right of a Participant to thereafter enforce each and
every such provision.


SECTION 10.10     Entire Agreement

     This Agreement represents the complete agreement between the Participants
and supersedes all prior or contemporaneous oral or written agreements of the
Parties, and this Agreement may be modified, amended or changed only by a
writing specifically purporting so to do and signed by the Participants hereto.





SECTION 10.11     Applicable Law

     This Agreement and exhibits hereto shall be governed as to validity,
enforcement, construction, effect and, in all other respects, by the law of the
Republic of the Philippines and its courts shall have jurisdiction to enforce
this Agreement.


SECTION 10.12     Matters to be Treated Confidential

     1.     Information
          Except as otherwise provided in this Agreement, all information
obtained in connection with the performance of this Agreement shall be the
exclusive property of the Participants and shall not be disclosed, whether by
press release or otherwise, to others during the effectivity of this Agreement,
without the prior written consent of all Participants, which consent shall not
be unreasonably withheld.
          a.With respect to areas within the Area of Interest not identified as
a Specific Prospect, each Participant shall be bound by this confidentiality
provision until one (1) year after the termination or cancellation of this
Agreement or until one (1) year after such Participant withdraws from this
Agreement, whichever occurs first.
          b.With respect to each Specific Prospect, each Participant shall be
bound by this confidentiality provision until such Specific Prospect is
released with the approval of the Management Committee or until one (1) year
after such Participant withdraws from this Agreement, whichever occurs first.

     2.     Disclosure Pursuant to Laws or Regulations
          Nothing contained in this Section 10.12 shall prohibit any
Participant from furnishing to any governmental agency to which it is subject,
and any securities exchange on which its stock is traded or an Affiliate is
traded, any information which it believes in good faith is required to be so
furnished or disclosed by pertinent law, regulation, regulatory body or
exchange rule or policy.  Any Participant making such disclosure shall use its
best efforts to restrict its distribution to the full extent permitted by such
law, regulation or policy.


     3.     Disclosure for Purposes of Sale or Transfer of an Interest
          Nothing in this Section 10.12 shall prohibit a Participant from
furnishing to any entity with which it is in good faith negotiating for the
sale of its interest, such information as may reasonably be required by such
entity.  The intended recipient of such information shall be required to give a
written secrecy commitment that, for a period of not less than one year, the
information will not be disseminated to any persons other than those involved
directly in the evaluation of the proposed acquisition.

     4.     Press Release
          Unless required by law or exchange rule or policy,  no Participant
shall make any press release pertaining to any part of the Area of Interest
without giving the other Participant(s)  reasonable advance written notice of
the form of  such release and, whenever possible, such release shall be made by
the Operator.

     5.     Copies of Information and/or Releases to Parties
          Complete copies of information disclosed and/or released pursuant to
this Section 10.12 shall be sent to each Participant at the time of disclosure
and/or release.


SECTION 10.13     Memorandum Agreement

     A memorandum of this Agreement may be recorded at the appropriate DENR
office by any Participant hereto.  All Participants shall promptly execute and
deliver to the requesting Participant, a "short form" memorandum of this
Agreement acceptable to the Management Committee for recording purposes.


SECTION 10.14     Compliance with Laws, Rules and Regulations

     Participants and Operator shall comply with any applicable laws, rules and
regulations, including the provisions of any laws, rules and regulations with
respect to equal opportunity and certification of nonsegregated facilities, and
laws, rules and regulations pertaining to employment of the handicapped.

SECTION 10.15     Attorney's Fees

     In the event of default by any Participant in the performance of its
duties,other than a dispute to  be resolved by arbitration under Section 10.07,
the court with the proper jurisdiction to resolve the dispute shall award
reasonable attorney's fees and costs to the successful Participant.


10.16     Time of the Essence

     Time shall be of the essence of this Agreement.


SECTION 10.17     Ratification

     This Agreement shall not be in force or effect or be binding on any
Parties hereto until properly executed by all Parties.

     IN WITNESS WHEREOF, the Parties have caused this Agreement to be effective
as of the day and year first written above and have executed it in duplicate by
their authorized officers or representatives.

BENGUET CORPORATION               GOLDEN CYCLE PHILIPPINES, INC.
                                                              a wholly owned
subsidiary of
By:                                                        Golden Cycle Gold
Corporation
    
                                                              By:

DENNIS R. BELMONTE                     ALVIN J. FARRETTA
                                                              Vice-Chairman     


                                                             LUISITO B.
ALBARRACIN
                                                             President


SIGNED IN THE PRESENCE OF:


     _____________________________               _____________________________





 ACKNOWLEDGMENT


REPUBLIC OF THE PHILIPPINES)
CITY OF MANDALUYONG           ) S.S.

           BEFORE ME, a Notary Public for and in Mandaluyong City, on this day
personally appeared:

     NAME                          COM. TAX RECEIPT NO.         DATE/PLACE
ISSUED

Mr. Dennis R. Belmonte          13346664               Feb. 28, 1996; Quezon
City
in his capacity as
President / CEO of
Benguet Corporation               127006                Jan. 18, 1996;
Mandaluyong

Mr. Alvin J. Farretta               14046613-D                June 17,
1996;Muntinlupa
in his capacity as
Vice-Chairman of
Golden Cycle Philippines, Inc.

Mr. Luisito B. Albarracin          1599697-B               Feb. 14,
1996;Argao, Cebu
in his capacity as
President of
Golden Cycle Philippines, Inc.

all known to me and to me known to me to be the same persons who executed the
foregoing BGA MINERALS PROJECT AGREEMENT and that they acknowledged the same
to me to be their free and voluntary acts and deeds as well as the free act
and deed of the corporations they represented.

      I further certify that this instrument consists of forty-two  (42)
pages, including this page whereon this acknowledgment is written and that
each page were duly signed by the parties, together with their instrumental
witnesses hereof.

      IN WITNESS WHEREOF, I have hereunto set my hand and affixed my notarial
seal this _____     day of  January, 1997 at  Mandaluyong City.



                                    NOTARY PUBLIC               

Doc. No.      ;
Page No.      ;
Book No.      ;
Series of 1997.

EXHIBIT "A"
Project  OPERATIONS ACCOUNTING PROCEDURE

     Attached to and made a part of the Operating Agreement between GOLDEN
CYCLE PHILIPPINES, INC. (GC) and BENGUET CORPORATION (BENGUET) executed this
14th day of Janurary, 1997.

     In the event of a conflict between the provisions of this Accounting
Procedure and the provisions of the Operating Agreement to which this
Accounting Procedure is attached, the provisions of the Operating Agreement
shall control; provided, however, that the definitions contained herein shall
control as to the Interpretation of this Accounting Procedure.

     The purpose of this Accounting Procedure is to establish equitable methods
for determining charges and credits applicable to operations under the
Operating Agreement.  The Parties agree that if any such methods prove unfair
or inequitable to Operator or Non-Operator(s), the Parties will meet and in
good faith endeavor to agree on changes in wording deemed necessary to correct
any unfairness or inequity.

I.  GENERAL PROVISIONS

1.     Definitions

     Agreement means the Operating Agreement to which this Accounting Procedure
is attached.

     Operator shall mean the Party designated in the Operating Agreement to
conduct the Project Operations.

     Non-Operator(s) shall mean the Parties in the Operating Agreement other
than the Operator.

     Parties shall mean the Operator and Non-Operator(s).

     Project Property shall mean the real and personal property acquired and
held for use in connection with operations under the Operating Agreement.

     Project Operations shall mean all activities necessary and proper under
the provisions of the Operating Agreement.

     Project Account shall be the set of accounts maintained by the Operator to
record all expenditures and other transactions under the provisions of the
Operating Agreement.

     Material shall mean personal property, including supplies and equipment,
acquired and held for use in Project Operations.

     Controllable Material shall mean material which the Operator subjects to
record control and inventory.  A list of types of such materials shall be
furnished to Non-Operator(s) upon request.

     Construction shall mean the erection of facilities for mining, milling,
ore beneficiation and concentration, ore and concentrate storage, all types of
environmentally sound enclosures for waste disposal, transportation facilities,
housing, and service facilities, including any additions or alterations thereto
and any replacements of a fixed asset nature.

2.     Statements, Billings, and Obligations

     Operator is responsible for preparing its own accounting reports to meet
the requirements of any governmental authority having jurisdiction over Project
Operations.  The Operator is required to furnish Non-Operator(s) statements and
billings in such form as required with respect to its Project interests and
share in the obligations and liabilities.

     The Operator shall render to Non-Operator(s), on or before the last day of
each month, a statement of billing for its proportionate share of costs and
expenses for the preceding month.  Each statement or billing shall consist of
charges and credits to the Project Account, itemized by appropriate
classification indicative of the nature thereof, except that items of
Controllable Material and unusual charges shall be detailed.

     The Operator shall, upon request by Non-Operator(s), furnish a description
of such accounting classifications.

     Payment of any bills shall not prejudice the right of any Non-Operator(s)
to protest or question the correctness thereof; however, all bills and
statements rendered to Non-Operator(s) by the Operator during any calendar year
shall conclusively be presumed to be true and correct after twenty-four (24)
months following the end of any such calendar year, unless within said
twenty-four (24)-month period a Non-Operator takes written exception thereto
and makes claim on Operator for adjustment.  No adjustment favorable to the
Operator shall be made unless it is made within the same prescribed period. 
However, the provisions of this paragraph shall not prevent adjustments
resulting from a physical inventory of the Project Property.

3.     Advances and Payments

     If, twenty (20) days prior to the due date, as hereinafter used in this
Section 3, the Operator has on hand sufficient cash to satisfy or partially
satisfy estimated cash requirements for the succeeding month's operations, the
Operator shall satisfy such cash requirements, to the extent possible, from
such cash on hand, thus reducing the amount of any advances due hereunder from
any Party for the succeeding months' operations, taking into account any funds
used therefor pursuant to the next preceding sentence.    Such estimates shall
be based on the latest information available to the Operator at the time the
request is forwarded as to Project Operations cash requirements for the month. 
The operator shall make written request to each Non-Operator at least twenty
(20) days prior to the due date on which each Non-Operator is to make such
advances.  The due date for such advances shall be set by the Operator, but
shall be no sooner than the first day of the month for which the advances are
required.  If the Operator requests such an advance from any Non-Operator for
any month in an amount in excess of $1 million, then the due date for that
portion of such advance which exceeds $1 million but is less than or equal to
$2 million shall be no sooner than the 10th day of the month for which such
advance is required, and the due date for that portion of such advance which
exceeds $2 million shall be no sooner than the 20th day of such month;
provided, however, that if the funding requirements of the Project could not be
met under the schedule of due dates specified above, then the due date may be
advanced to the next preceding due date or dates for the portion of such
advance as is necessary to permit such requirements to be met, with such
re-scheduling being detailed in the original request for such advance.

     Should the Operator be required to pay any large sums of money on behalf
of the Project Operations, which were unforeseen at the time of providing the
Non-Operator(s) with said monthly estimates of its cash requirements, the
Operator may make a written request of each Non-Operator for special advances
covering the Non-Operator's share of such payment.  Each Non-Operator shall
make its proportional special advances within ten (10) days after receipt of
such notice.

     If any Non-Operator advances exceeds its share of actual Project
Operations cash requirements, the next succeeding request for advances of cash
requirements, after such determination, shall be reduced accordingly.  However,
any Non-Operator may request that excess advances be refunded.  The Operator
shall make such refund within ten (10) days after receipt of a Non-Operator's
request.

     If any Non-Operator's advances are less than its share of actual
expenditures, the deficiency shall, at the Operator's option, be added to a
subsequent request for advances of cash requirements or be paid by such
Non-Operator within fifteen (15) days following the receipt of the Operator's
billing to such Non-Operator for such deficiency.

     If Operator does not request Non-Operators to advance their share of
estimated cash requirements, each Non-Operator shall pay its share of actual
expenditures within fifteen (15) days following receipt of Operator's billing.

     All payments herein provided for shall be made on or before the due date,
and if not so paid, the unpaid balance shall bear interest after the due date
at the rate specified in the Operating Agreement.  Such rate, however, shall
not exceed the maximum legal rate.

4.     Audits and Budgetary Control

     A.     An annual audit or verification of the Project Account will be
performed for the benefit of all Parties, and the cost thereof shall be
chargeable to the Project Account.

     B.     Budgetary Control

          Statements and billings, as well as requests for advances, submitted
by Operator under paragraphs 2 and 3 of this Section, shall be sufficiently
detailed so as to permit reference to such item therein to the appropriate, if
any, in the approved budget.

II.  CHARGEABLE COSTS AND EXPENDITURES

     The Operator shall charge the Project Account for all costs necessary to
conduct Project Operations under approved Work Plans with Budget.  Such costs
may include, but are not necessary limited to:

1.     Rentals, Fees, etc.

     A.     Rentals, fees, etc., for development licenses, mining leases, or
rental and royalties paid for the Project Account.

     B.     Permits, fees, and other charges which are assessed by governmental
agencies.

2.     Labor and Related Costs.

     A.     Salaries and wages of the Operator's employees who are directly
engaged in the conduct of Project Operations whether temporarily or permanently
assigned thereto, as well as the cost of employee benefits, holidays,
vacations, sickness, disability benefits, and other customary allowances and
reasonable expenses which are paid or reimbursed under the Operator's usual
practice, and amounts imposed by governmental authorities
which are applicable to such employee.

     B.     Employee Benefits

          The Operator's reasonable costs of established plans for employees'
group life insurance, hospitalization, pension, retirement, stock purchase,
thrift, bonus, and other benefit plans of a similar nature, applicable to
Operator's labor costs chargeable to the Project Account shall not exceed the
limits prescribed by the Management Committee, plus any mandated cost of living
allowance (COLA), of the total chargeable labor cost.

3.     Materials

     Materials purchased or furnished by the Operator for use in the Project
Operation as provided under Section III hereof.

4.     Transportation and Employee Relocation Costs

     A.     Transportation of material and other related costs such as
expediting, crating, freight, and unloading at the final destination.

     B.     Transportation of employees as required to conduct the Project
Operation.

     C.     Relocation costs of employees assigned and directly engaged in the
conduct of Project Operations.  Such costs shall include transportation of
employees' family and their personal household effects if such employee is
permanently assigned to the Project Operation.

5.     Services

     A.     Contract services, professional consultants, and other services
procured from outside sources other than services covered by paragraph 8 of
this Section II.

     B.     Technical services, such as, but not limited to, laboratory
analysis, drafting, geological and geophysical interpretations, engineering,
ore reserve studies, and related computer services and data processing provided
by the Operator for the direct benefit of the Project Operation.

6.     Damages and Losses to Project Property

     All costs or expenses necessary for the repair or replacement of Project
Property resulting from damages or losses covered by fire, flood, storm, theft,
accident or any other cause.  The Operator shall furnish each Non-Operator
written notice of damage or losses as soon as practicable.

7.     Insurance

     A.     Premium for insurance for the protection of the Parties less
credits for settlements received from the insurance carrier and others.

     B.     Actual expenditures incurred in the settlement of all losses,
claims, damages, judgments, and other expenses for the benefit of the Project
Operations.

8.     Legal Expense

     All costs or expenses of handling, investigating, and settling litigation
or claims arising by reason of the Project Operation or necessary to protect or
recover the Project Property, including, but not limited to, attorneys fees,
court costs, costs of investigation or procuring evidence and amounts paid in
settlement or satisfaction of any such litigation or claim; however, no charge
shall be made for the services of the legal staff of the Operator (such
services being considered to be administrative charges under paragraph 11)
unless previously agreed to by the Operator and the Non-Operator(s).

9.     Taxes

     All taxes due on the Project and Project Income, if any (except taxes
based on or determined with reference to net income accruing to the parties)
fees, and governmental assessments of every kind and nature.

10.     Offices, Camps, and Miscellaneous Facilities

     Net costs of maintaining and operating any offices, sub-offices, camps,
warehouses, housing, and other facilities directly serving the Project
Operations shall be charged to the Project Account.  If such facilities serve
operations in addition to the Project Operations, the net costs shall be
allocated to the Operations served on actual use per day or per month basis as
may be practicable.

11.     Indirect Charges

     A charge shall be made to the Project Account to cover:  (1) a pro-rata
ratio of the compensation or salaries, applicable payroll burden, employee
benefits, and other expenses of any management, supervisory, administrative,
clerical or other personnel of the Operator serving the Project Operation which
are not otherwise chargeable under paragraph 2 of this Section II, and (2) a
pro-rata portion of the expenses of operating and maintaining the office and
facilities of the Operator and its affiliated companies (as defined in the
Operating Agreement) not required exclusively for the Project Operation, such
charge to be calculated on the basis as indicated below:

     A.     Percentage Basis

          (1)     Exploration and Development Work: (Excludes construction work
as           defined herein):  3% of the cost of exploration and development
work under Section II hereof, excluding paragraphs 1, 6, and 8 thereof and
excluding all salvage credits.

          (2)     Production Work: (Excludes construction work as defined
herein):
3% of the cost of operating the Project Property under Section II hereof,
excluding costs provided under paragraphs 1, 6, and 8 thereof, and excluding
all salvage credits and all taxes, duties, and assessments which are levied,
assessed, and paid by Operator applicable to Project Property.

          (3)     Construction Work:
               (a)     Total cost less than P________($25,000), no charge.
               (b)Total cost of more than P_______($25,000), but less than
P_________($100,000), 1% of total cost
               (c)total cost of P_________($100,000) or more, 1.0% of the first
P_________($100,000), plus 1.5% of all over P________ ($100,000) of total cost.

     B.     Monthly Fee Basis

          The rate of monthly fee shall be fixed by the Management Committee on
the basis as set forth in Section II, 1, 2, and 3 above.

     C.     Amendment of Rates

          The specific rates or monthly fee basis provided for in this
provision 11 of Section II shall be amended from time to time by mutual
agreement between the Parties hereto if, in practice, the rates are found to be
insufficient or excessive.

12.     Storage of Production Inventories

     Each party will bear the cost incurred for handling and storage of
merchantable ore or concentrates as follows:
     A.     Taxes on ore and/or concentrates in storage for a Party on the
Project Properties shall be charged to such Party but paid by the operator
subject to reimbursement by such Party.

     B.     The cost of loading out such ore in storage for a Party from the
Project Properties shall be charged to such Party.

     C.     Cost associated with providing storage of ore and/or concentrates
on the project properties will be charged on a pro-rata basis determined by the
Parties.

     D.     Other costs arising out of storage or handling of ore and/or
concentrates shall be charged to the Party owning such materials.

13.     Other Expenditures

     Any other chargeable expenditures not covered or dealt with in the
foregoing provisions which are incurred by the Operator and its affiliated
companies (as defined in the Operating Agreement) for the necessary and proper
conduct of the Project Operation.

III.  BASIS OF CHARGES TO PROJECT ACCOUNT

1.     Purchases

     Materials purchased and service procured shall be charged at the price
paid by Operator after deduction of all discounts actually received.

2.     Material Furnished from Operator's Warehouse or Other Properties

     A.     New Material (Condition "A")

          (1)     Material shall be priced at the current replacement cost of
the same kind of Material, effective at date of movement and f.o.b. the supply
store or railway receiving point nearest the Project Property where Material of
the same kind is normally available.

          (2)     The Project Account shall not be credited with cash discounts
applied to prices provided for in this paragraph 2.A of Section III.

     B.     Used Material (Condition "B" and "C")

          (1)     Material in sound and serviceable condition and suitable for
reuse without reconditioning shall be classified as Condition "B" and priced at
seventy-five percent (75%) of the current price of new Material.

          (2)     Material which is not suitable for its original function
until after reconditioning shall be furnished to the Project Account under one
of the two methods defined below:
               (a)Classified as Condition "B" and priced at seventy-five
percent (75%) of the current price of the new material.  The cost of
reconditioning shall be absorbed by the Operator.
               (b)Classified as Condition "C" and priced at fifty percent (50%)
of the current price of the new material.  The cost or reconditioning shall
also be charged to the Project Account, provided Condition "C" value, plus cost
of reconditioning, does not exceed Condition "B" value.

          (3)     Obsolete Material or Material which cannot be classified as
Condition "B" or Condition "C" shall be priced at a value commensurate with its
use.  Material no longer suitable for its original purpose but usable for some
other purpose, shall be priced on a basis comparable with that of the items
normally used for such other purpose.

          (4) Material involving erection costs shall be charged at applicable
percentage of the current knock-down price of new material.

3.     Premium Prices

     Whenever Material is not readily obtainable at prices specified in
paragraphs 1 and 2 of this Section III because of national emergencies, strikes
or other unusual causes over which the Operator has no control, the Operator
may charge the Project Account for the required Material at the Operator's
actual cost incurred in procuring such Material.  In making it suitable for
use, and in moving it to the Project Property, provided that notice in writing
is furnished to each Non-Operator of the proposed charge prior to billing
Non-Operators for such Material.  Each Non-Operator shall have the right, by so
electing and notifying Operator within ten (10) days after receiving notice
from Operator, to furnish in kind all or part of its share of such Material
suitable for use and acceptable to Operator.

4.     Warranty of Material Furnished by Operator

     Operator does not warrant the Material furnished.  In case of defective
Material, credit shall not be passed to the Project Account until adjustment
has been received by Operator from the manufacturers or their agents.

5.     Equipment and Facilities Furnished by Operator

     A.     Operator shall charge the Project Account for approved use of
Operator's equipment and facilities at amounts commensurate with Operator's
cost of ownership and operation and the assets normal operating life.  Such
rates shall include cost of maintenance, repairs, other operating expense,
insurance, taxes (other than income taxes), depreciation, and interest on
estimated current depreciated replacement cost at bank rates but not to exceed
sixteen percent (16%) per annum.   In lieu of rates based on costs of ownership
and operation of equipment, the Participants  and Operator may agree to use
commercial bank rates prevailing in the area of the Project Property less one
percent (1%).  Fees for laboratory services shall not exceed those currently
prevailing in the local area performed by outside service laboratories.

     B.     Operator shall informthe Participants in advance  of the amounts it
proposes to charge.

     C.     Rates of charges or fees shall be revised and adjusted from time to
time when found to be either excessive or insufficient.

IV.  DISPOSAL OF MATERIAL

     The Operator may purchase, but shall be under no obligation to purchase,
the interest of Participants  in surplus Condition "A" or "B" Material.  The
disposition of surplus Controlled Material, not purchased by Operator, shall be
subject to agreement between Operator and Non-Operators, provided Operator
shall dispose of normal accumulation of junk and scrap Material either by
transfer or sale from the Project Property.

1.     Material Purchased by Operator/s Participants

     Material purchased by either Operator or any  Participant shall be
credited by the Operator to the Project Account for the month in which the
Material is removed by the purchaser.

2.     Division in Kind

     Division of Material in kind, if made between Operator and Participants,
shall be in proportion to the then respective interests of each in such
Material.  The Parties will thereupon be charged individually with the value of
the Material received or receivable priced in accordance with Article V below. 
Proper credits shall be made by the Operator in the monthly statement of
operations.  Taxes due on such transfers or deemed sales shall  likewise be
borne by Participants in proportion to their interests.

3.     Sale to Outsiders

     Sales to outsiders of Material from Project Property shall be credited by
Operator to the Project Account at the amount collected by Operator from
vendee.  Any claim by vendee related to such sale shall be charged back to the
Project Account if and when paid by Operator.

V.  BASIS OF PRICING MATERIAL TRANSFERRED
 FROM Project ACCOUNT

     Material purchased by either Operator or Participants  and  divided in
kind, unless otherwise agreed to between Operator and Participants shall be
priced on the following basis:

1.     New Price Defined

     New Price as used in Section V shall be the price specified for new
Material in Section III.

2.     New Material

     New Material (Condition "A"), being new Material procured for the Project
Property but never been used, at one hundred percent (100%) of current new
price (plus VAT tax, if any).

3.     Good Used Material

     Good Used Material (Condition "B"), being used Material in sound and
serviceable condition suitable for reuse without reconditioning:

     A.     At seventy-five percent (75%) of current new price if Material was
charged to Project Account as new, or

     B.     At sixty-five percent (65%) of current new price if Material was
originally charged to the Project Account as secondhand at seventy-five percent
(75%) of net price.

4.     Other Used Material

     Used Material (Condition "C"), at fifty percent (50%) of current price,
being used Material which:

     A.     Is not in sound and serviceable condition but suitable for reuse
after reconditioning, or

     B.     Is serviceable for original function but not suitable for
reconditioning.

5.     Bad-Order Material

     Material (Condition "D"), no longer suitable for its original purpose
without excessive repair cost but usable for some other purpose at a price
comparable with that of items normally used for such other purpose.

6.     Junk Material

     Junk Material (Condition "E"), being obsolete and scrap material, at
prevailing prices.

7.     Temporarily Used Material

     When the use of Material is temporary and its service to the Project
Property does not justify the reduction in price as provided for in paragraph
3.8 of this Section V, such Material shall be priced on a basis that will leave
a net charge to the Project Account consistent with the value of the service
rendered.

VI.  INVENTORIES

1.     Annual Inventories shall be taken by Operator of all Controllable
Material as required by the Parties.  Operator shall have ninety (90) days'
written notice of intention to take such inventories to allow each Participant
to be represented when any inventory is taken.  Failure of any Non-Operator to
be represented shall bind such Participant to accept the Inventory taken by
Operator.

2.     Reconciliation of Inventory with the Project Account will be made and a
list of overages and shortages shall be furnished to each Participant. 
Inventory adjustments shall be made to the Project Account, if required by the
Parties.

3.     Whenever there is a sale or change of interest in the Project Property,
a special Inventory may be taken by the Operator, provided the seller and/or
purchaser of such interest agree to bear all of the expense thereof.  In such
cases, both the seller and the purchaser shall be entitled to be represented
and shall be governed by the Inventory taken.


VII.  GENERAL CONDITIONS

     It is the understanding of the Participants and the Operator that in case
of doubt or ambiguity in the provisions of these Accounting Procedures or
absence of relevant provisions hereof, the generally accepted accounting
procedures (GAAP) of the Philippines shall apply, and in the absence of the
latter, the parties shall meet to settle and agree on such procedures or
systems as may be just and equitable under the circumstances.
<PAGE>
                                        Consent of Independent Auditors





The Board of Directors
Golden Cycle Gold Corporation

We consent to the incorporation by reference in the Registration Statements on
Form S-3 registration number 33-47877 dated May 28, 1992, on Form S-8
registration number 33-62952, dated May 18, 1993, and on Form S-3 registration
number 333-12245, dated December 2, 1996 of Golden Cycle Gold Corporation of
our report dated February 19, 1997, relating to the consolidated balance sheets
of Golden Cycle Gold Corporation as of December 31, 1996 and 1995, and the
related statements of operations, shareholders' equity and cash flows for each
of the years in the three-year period ended December 31, 1996, which report
appears in the December 31, 1996 annual report on Form 10-K of Golden Cycle
Gold Corporation.




                                                                           
KPMG Peat Marwick LLP

Denver, Colorado
March 25, 1997