<PAGE>
 
[LOGO OF GRANGES INC.]                                             Exhibit 10.42
 
     SUITE 3000
     370 SEVENTEENTH STREET
     DENVER, CO. U.S.A. 80202
     TELEPHONE: (303) 629-2450
     FAX: (303) 629-2499


January 6, 1997


PERSONAL DELIVERY
-----------------

Mr. Gregg B. Shafter
Vice President
Atlas Corporation
370 Seventeenth Street, Suite 3050
Denver, Colorado  80202

Re:  Withdrawal from Mining Venture Agreement
     Gold Bar Property, Eureka County, Nevada

Dear Gregg:

     Subject to the terms and conditions set forth herein, this letter is
written notice of Granges (U.S.), Inc.'s ("Granges") election to withdraw (the
"Election") from that certain Mining Venture Agreement between Granges and Atlas
Corporation, Atlas Precious Metals Inc. and Atlas Gold Mining Inc.
(collectively, "Atlas") dated as of September 29, 1995 (the "Agreement"). This
Election by Granges is made in accordance with Section 12.1.B. of the Agreement,
which sets forth that Granges' "sole liabilities and responsibilities ...
resulting from or surviving such termination, shall be those set forth in
Sections 5.1(C)(2) and (C)(6), Section 5.2 and Section 5.8." For your
information and without having effect to interpretation of the Agreement, the
preceding recitals pertain to the following issues: *

Section 5.1(C)(2):                       
-----------------
Granges required to reclaim areas of the Properties disturbed by Granges'
activities, to the extent disturbed by its activities, and shall indemnify Atlas
through completion of reclamation work in accordance with applicable
Environmental Laws for disturbance to the Properties caused by Granges"
Operations under the Agreement.

Section 5.1(C)(6):                             
-----------------                                                               
After termination of the Agreement, Granges shall have the right of reasonable
access to the Properties in order to complete reclamation of the Properties 
disturbed by Granges' Operations.
------------------

/*/Unless defined otherwise in this letter, all capitalized terms shall
have the meanings and definitions provided for them in the Agreement.
<PAGE>
 
Mr. Gregg B. Shafter
January 6, 1997
Page 2

 
Section 5.2:    
-----------
Granges shall remain responsible for obligations or liabilities to third parties
resulting from its Operations prior to the date of delivery of this letter. 
Further, Granges shall reconvey to Atlas its interst in the Assets by a 
quitclaim deed, free of all liens, claims or other encumbrances arising by, 
through or under Grages. Upon delivery of the quitclaim deed, Granges is 
relieved of liability or obligation to complete its Initial Contribution.
 
Section 5.8:                                                    
-----------                        
This Section is not applicable since Granges has made this Election prior to 
July 31 of 1997.
                            
     In consideration of Granges' withdrawal from the Agreement, Atlas hereby
agrees to pay to Granges the sum of $450,000, to be paid as follows: $100,000
due not later than five (5) business days after Atlas receives approval by its
Board of Directors for execution of this letter (however in no event beyond
January 10, 1997) with $350,000 to be paid on May 16, 1997. Simple interest in
the amount of eight percent (8%) will be paid on May 16, 1997, calculated on
$350,000 for 150 days. In the event Atlas sells or otherwise disposes of the
Properties prior to May 16, 1997, the $350,000 plus accrued interest shall be
paid to Granges within five (5) days of such a sale of disposition, with
interest prorated to the date of such payment.

     Granges hereby represents to Atlas that Granges' Operations have been
conducted in compliance with the Agreement. Upon Granges' completion of its
reclamation obligations under the Agreement as set forth above, as additional
consideration for the withdrawal of Granges, Atlas hereby agrees to indemnify
and save harmless Granges and its Affiliates from and against all claims,
demands, actions, damages, costs, losses, expenses (including but not limited to
reasonable attorneys' fees) and liabilities which may arise with respect to any
of the Assets or Operations under the Agreement, including but not limited to
those arising under any Environmental Laws in connection with Granges'
Operations under the Agreement, or pertaining to the facilities for processing
of ores at the Atlas Mill Complex, to include the tailings pond associated
therewith; provided, however, that Granges shall indemnify and hold Atlas
harmless from and against any claims, demands, actions, damages, costs, losses,
expenses (including but not limited to reasonable attorneys' fees) and
liabilities that Atlas may incur to third parties as a result of any condition
or event that
<PAGE>
 
Mr. Gregg B. Shafter
January 6, 1997
Page 3


constitutes a breach by Granges of its representation in the first sentence of
this paragraph, or as a result of Granges' failure to complete its reclamation
obligations under the Agreement. Atlas' right to bring any action against
Granges based upon this indemnification shall terminate on midnight, Mountain
Standard Time, December 31, 1998.

     The parties understand and agree that, after this notice, Granges' sole
obligations with respect to the Assets shall be: (i) the indemnification of
Atlas, as set forth in the paragraph above; and (ii) filing and recording of the
Deed, as set forth in the paragraph below.

     Upon receipt from you of a fully-executed original of this letter and the
$100,000 payment described above, Granges will immediately proceed to file with
the Nevada State Office of the Bureau of Land Management and to record in Eureka
County, Nevada, with BLM filing fee and county recordation fee to be paid by
Granges, an executed and notarized Deed in the form attached hereto and
incorporated herein by reference, with a proper Exhibit A attached thereto.

     Thank you for your cooperation.

                              Sincerely,

                              GRANGES (U.S.), INC.

                               
                              By: /s/ Michael B. Richings 
                                 ------------------------
                                      Michael B. Richings
                                      President

Agreed to and accepted on this 10th day of January, 1997 by:

/s/ Gregg B. Shafter
--------------------
    Gregg B. Shafter
    Vice President
    Atlas Corporation
<PAGE>
 
                                   EXHIBIT A

                                     DEED
                                     ----

     THIS DEED ("Deed"), dated as of January 8, 1997, is between:

     "GRANTOR":

          GRANGES (U.S.), INC.
          a Nevada corporation
          350 South Rock Blvd., #E
          Reno, NV  89502

                                      and

     "GRANTEE":

          ATLAS CORPORATION
          a Delaware corporation
          370 Seventeenth Street, Suite 3050
          Denver, CO  80202

     FOR TEN DOLLARS ($10.00) and other good and valuable consideration, the
receipt and sufficiency of which hereby are acknowledged by Grantee, Grantor
conveys and quitclaims to Grantee the "Properties" situated in Eureka County,
Nevada, that are more particularly described in Exhibit A, appended hereto and
by this reference incorporated herein, together with: (i) all of Grantor's
right, title and interest in and to all mineral deposits, mineral rights,
extralateral rights and subsurface rights therein, thereunder and appurtenant
thereto; and (ii) with respect to the Properties described in Parts 2-4 of
Exhibit A, all of Grantor's right, title and interest in and to all buildings,
facilities, improvements, surface rights, water, water rights, mineral
stockpiles, mineral dumps, roads, easements, rights of ingress and egress and
all other appurtenances and hereditaments thereon, therein, thereunder or
appurtenant thereto.
<PAGE>
 
     Grantor warrants that there are no persons or entities lawfully claiming
any interest in the Properties by, through, or under Grantor, subject to the
paramount title of the United States of America.

     This Deed is executed and delivered pursuant to and in accordance with that
certain Mining Venture Agreement dated as of September 29, 1995 ("Venture
Agreement") by and between Grantor and Grantee, a Memorandum of which is
recorded in Book 291 at Page 235 of the Official Records of Eureka County,
Nevada, as amended by that certain letter agreement, dated December 27, 1996, in
order to evidence the termination of, and pursuant to and in accordance with,
that Venture Agreement.

     IN WITNESS WHEREOF, Grantor has executed this Deed effective as of the date
first above written.

                                   "GRANTOR"

                                         GRANGES (U.S.), INC.
                                         By: /s/ Michael B. Richings
                                            -------------------------
                                                 Michael B. Richings
                                                 President

STATE OF COLORADO  }
                   }  ss.
COUNTY OF DENVER   }

     Before me personally appeared Michael B. Richings on this 8th day of
January, 1997, and first being duly sworn, executed the above DEED, as President
of GRANGES (U.S.), INC., a Nevada corporation, and acknowledged to me that he
executed the same in that capacity.

     Witness my hand and official seal.


                                         /s/ Lori K. Crosby
                                         -----------------------------
          (Seal)                         NOTARY PUBLIC
                                         My commission expires: 3\3\98