<PAGE>
                                                                  Execution Copy











                                 LOAN AGREEMENT

                          Dated as of September 5, 1997

                                  by and among

                           GETCHELL GOLD CORPORATION,
                                  as Borrower,

                                    FMG INC.,
                                  as Guarantor

                                       and

                                   CIBC INC.,
                                    as Lender







0198094.04
                                                         3

<PAGE>
                                TABLE OF CONTENTS



ARTICLE 1

         CERTAIN DEFINITIONS AND ACCOUNTING TERMS..............................1

ARTICLE 2

         LOANS.................................................................9
         2.1      Revolving Loans..............................................9
         2.2      Making the Advances..........................................9
         2.3      Funding of Borrowings; Borrowing Options.....................9
         2.4      Payment Dates...............................................10
         2.5      Fees........................................................10
         2.6      Reduction of the Commitment.................................11
         2.7      Optional Prepayment.........................................11
         2.8      Mandatory Prepayment........................................11
         2.9      Amount and Allocation of Partial Prepayments................11
         2.10     Conversion of Borrowings....................................11
         2.11     Inability to Provide Funds..................................12
         2.12     Yield Protection............................................13
         2.13     Payments and Computations...................................14
         2.14     Advance, Conversion, Renewal or Payment on Business Day.....14

ARTICLE 3

         CONDITIONS OF LENDING................................................14
         3.1      Conditions Precedent to the Initial Borrowing...............14
         3.2      Conditions Precedent to All Borrowings, Conversions
                                   and Renewals...............................15

ARTICLE 4

         REPRESENTATIONS AND WARRANTIES.......................................16
         4.1      Representations and Warranties of the Borrower and the 
                                      Guarantor...............................16

ARTICLE 5

         COVENANTS OF THE BORROWER AND THE GUARANTOR..........................19
         5.1      Affirmative Covenants.......................................19
         5.2      Negative Covenants..........................................22
         5.3      Financial Covenants.........................................24


0198094.04
                                        i
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ARTICLE 6

         ABSOLUTE CONTINUING GUARANTEE........................................25
         6.1      Undertaking.................................................25
         6.2      Unconditional Guarantee.....................................25

ARTICLE 7

         EVENTS OF DEFAULT....................................................28
         7.1      Events of Default...........................................28

ARTICLE 8

         MISCELLANEOUS........................................................30
         8.1      Amendments, Etc.............................................30
         8.2      Notices, Etc................................................30
         8.3      No Waiver; Remedies.........................................31
         8.4      Accounting Terms............................................31
         8.5      Costs, Expenses and Taxes...................................31
         8.6      Right of Setoff.............................................32
         8.7      Binding Effect; Governing Law...............................33
         8.8      Consent to Jurisdiction.....................................33
         8.9      Severability................................................33
         8.10     Confidentiality.............................................34
         8.11     Execution in Counterparts...................................34




EXHIBITS AND SCHEDULES


Exhibit A         --       Promissory Note
Exhibit B         --       Notice of Borrowing
Exhibit C         --       Notice of Conversion or Renewal of Interest


Schedule A        --       Lender Model For Determination of Net Present Value
                           of Future North American Mining Cash Flow


0198094.04
                                       ii
<PAGE>
                                 LOAN AGREEMENT


         THIS LOAN  AGREEMENT  (this  "Agreement"),  made and entered into as of
September  5,  1997,  by  and  among  GETCHELL  GOLD  CORPORATION,   a  Delaware
corporation (the "Borrower"),  FMG INC., a Nevada corporation (the "Guarantor"),
and CIBC INC. (the "Lender").

                                   WITNESSETH:

         WHEREAS,  the  Borrower  is  engaged  in  the  business  of  exploring,
developing,  owning  interests  in and  operating  precious  metals  properties,
including gold mines, and requires funds for working capital needs and for other
general corporate purposes;

         WHEREAS,  the Lender has agreed to extend credit to the  Borrower,  and
the Borrower wishes to avail itself of such credit in the amounts and subject to
the terms and conditions hereof for the corporate purposes described above; and

         WHEREAS,  to induce  the Lender to enter  into this  Agreement  and the
transactions  contemplated hereby, the Guarantor shall guarantee the obligations
of the Borrower hereunder;

         NOW, THEREFORE, the parties hereto agree as follows:


                                    ARTICLE 1

                    CERTAIN DEFINITIONS AND ACCOUNTING TERMS

         1.1  Certain  Defined  Terms.  As  used in this  Agreement  and  unless
otherwise  expressly  indicated,  the  following  terms shall have the following
meanings (such meanings to be equally applicable to both the singular and plural
forms of the terms defined).

         "Additional Costs" has the meaning assigned to it in Section 2.11(b).

         "Adjusted  Revolving  Commitment"  means, for purposes of computing the
commitment  fee  only,  an  amount  which  is the  lesser  of (i) the  Revolving
Commitment  or (ii) the amount of Debt  actually  available  to be incurred  and
outstanding hereunder from time to time in compliance with the Protection Ratio.

         "Advance" means a Borrowing hereunder and "Advances" means all of the
outstanding Advances.

         "Advance Date" means the date of funding of a Borrowing.

         "Affiliate",  means any Person  directly or indirectly  controlling  or
controlled by or under common  control with the  Borrower,  provided  that,  for
purposes of this definition, "control", as used

                                                      -1-
0198094.04

<PAGE>



with respect to any Person,  shall mean the possession,  directly or indirectly,
of the power to direct or cause the direction of the  management and policies of
such Person,  whether through the ownership of voting  securities or by contract
or otherwise.

         "Annual  Operating  Cash Flow" means,  as at any date of  determination
thereof,  as to the Borrower and its  subsidiaries,  the Operating Cash Flow for
the immediately  preceding four consecutive fiscal quarters for which the Lender
has received  financial  statements in compliance with Section 5.1(b)(i) or (ii)
hereof (or,  if as at any date of  determination  the Lender  shall not yet have
received financial  statements delivered in compliance with Section 5.1(b)(i) or
(ii) hereof,  then the Operating Cash Flow for such  immediately  preceding four
consecutive  fiscal quarters shall be determined by the Lender in its reasonable
judgment  based on such  financial  information  as it shall have  requested and
received from the Borrower).

         "Asset  Disposition"  means any conveyance,  sale,  lease,  assignment,
transfer or other disposition of property, assets or business of the Borrower or
any  subsidiary of the Borrower in a single  transaction  or a series of related
transactions (other than in the ordinary course of business).

         "Authorized Officer or Agent" means the president or any vice president
of the Borrower and each other  officer or agent of the Borrower  authorized  by
the Board of Directors  of the  Borrower to act on behalf of the Borrower  under
this Agreement executed pursuant hereto.

         "Base Borrowing"  means any Borrowing  bearing interest at a rate based
on the Base Rate.

         "Base Rate" means a  fluctuating  interest  rate per annum equal at all
times to the  greater of: (a) the rate of  interest  announced  by the Lender in
Atlanta, Georgia from time to time in its sole discretion as the Lender's "prime
rate"; and (b) the Federal Funds Effective Rate plus 1/2 of 1% per annum. If for
any reason  the  Lender  shall have  determined  (which  determination  shall be
conclusive,  absent  manifest  error) that it is unable to ascertain the Federal
Funds Effective Rate for any reason, including without limitation, the inability
or failure of the Lender to obtain sufficient bids or publications in accordance
with the terms hereof,  the rate  announced by the Lender as its base rate shall
be the Base Rate until the circumstances giving rise to such inability no longer
exist. For purposes of this paragraph,  "Federal Funds Effective Rate" means for
any period,  a fluctuating  interest  rate per annum equal,  for each day during
such period,  to the weighted  average of the rates on overnight  federal  funds
transactions  with  members of the Federal  Reserve  System  arranged by federal
funds  brokers as published for such day (or, if such day is not a Business Day,
for the next preceding Business Day) by the Federal Reserve Bank of New York or,
for any day on which such rate is not so  published  for such day by the Federal
Reserve Bank of New York,  the average of the  quotations  for such day for such
transactions  received  by the  Lender  from  three  federal  funds  brokers  of
recognized  standing  selected by the Lender.  Any change in the Base Rate shall
take effect on the day  specified  in the public  announcement  of change to the
Lender's  prime  rate.  The  Lender's  prime rate is set by the Lender  based on
various  factors,  including  the  Lender's  costs and desired  return,  general
economic  conditions  and other  factors,  and is used as a reference  point for
pricing  some loans.  The Lender may price  other  loans at,  above or below the
Lender's prime rate.

         "Borrower" has the meaning assigned to it in the introduction to this
Agreement.

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0198094.04

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         "Borrowing" has the meaning assigned to it in Section 2.1(a).

         "Breakage  Costs" means all costs and losses which the Lender may incur
as a result of any  repayment of principal  on LIBOR  Borrowings  hereunder on a
date other than a scheduled  maturity date for the applicable  Borrowing and all
costs and losses  which the  Lender may incur as a result of any  failure of the
Borrower to borrow hereunder after giving written notice of its intent to borrow
hereunder  to the  Lender  pursuant  to Section  2.2,  the  Lender's  good faith
computation of such costs and losses to be conclusive and binding in the absence
of  manifest  error,  and the  amount  thereof to be paid in same day funds upon
demand by the Lender.

         "Business  Day"  means a day of the  year on which  banks  are open for
business in New York, New York, and Atlanta, Georgia.

         "Change in Control"  means,  at any time, (i) any Person or "group" has
acquired  "beneficial  ownership" (as such terms are defined under Section 13d-3
of and  Regulation  13D under the  Securities  Exchange Act of 1934, as amended)
either  directly  or  indirectly,  of more  than  thirty  percent  (30%)  of the
outstanding  shares of stock of the  Borrower  having  the right to vote for the
election of directors of the Borrower under ordinary  circumstances or (ii) more
than fifty percent (50%) of the Persons  constituting  the  Borrower's  board of
directors at the  beginning  of any  consecutive  twenty-four  (24) month period
shall have been replaced by new  directors  not nominated for  membership on the
board of directors by  two-thirds  of the  directors  who were  directors at the
beginning of such period.

         "ChemFirst Note" has the meaning assigned to it in Section 5.2(a).

         "Closing Date" means September 5, 1997.

         "Debt"  means (i)  obligations  under the Note and this  Agreement  and
financial Letter of Credit Obligations;  (ii) indebtedness for borrowed money or
for the  deferred  purchase  price of property or services  where such  purchase
price is deferred  for more than sixty (60) days,  (iii)  obligations  as lessee
under leases which shall have been or should be, in  accordance  with  generally
accepted accounting principles, recorded as capital leases, and (iv) obligations
under direct or indirect  guarantees in respect of, and obligations  (contingent
or  otherwise)  to purchase  or  otherwise  acquire,  or  otherwise  to assure a
creditor  against loss in respect of,  indebtedness  or obligations of others of
the kinds referred to in clause (ii) or (iii) above.

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

         "Environmental Laws" means any Governmental  Requirement  pertaining to
land use, air, soil,  surface  water,  groundwater  (including  the  protection,
cleanup,  removal,  remediation or damage thereof), public or employee health or
safety or any other environmental  matter,  including,  without limitation,  the
following  laws as the same may be amended from time to time:  (1) Clean Air Act
(42 U.S.C.  ss. 7401,  et seq.);  (2) Clean Water Act (33 U.S.C.  ss.  1251,  et
seq.); (3) Resource Conservation and Recovery Act (42 U.S.C. ss. 6901, et seq.);
(4)  Comprehensive  Environmental  Response,   Compensation  and  Liability  Act
("CERCLA") (42 U.S.C. ss. 9601, et seq.); (5) Safe

                                                      -3-
0198094.04

<PAGE>



Drinking Water Act (42 U.S.C. ss. 300f, et seq.);  (6) Toxic Substances  Control
Act (15 U.S.C.  ss. 2601,  et seq.);  (7) Rivers and Harbors Act (33 U.S.C.  ss.
401, et seq.);  (8) Endangered  Species Act (16 U.S.C.  ss. 1531, et seq.);  (9)
Occupational  Safety  and Health Act (29 U.S.C.  ss.  651,  et seq.);  (10) Mine
Safety and Health Act of 1977; (11) Migratory Bird Treaty Act; (12) Federal Land
Policy and  Management  Act;  (13) National  Environmental  Policy Act; and (14)
National Historic  Preservation Act; together with any other foreign or domestic
laws (federal,  state or local) relating to emissions,  discharges,  releases or
threatened  releases of any Hazardous  Substance into ambient air, land, surface
water,  groundwater,  personal property or structures,  or otherwise relating to
the manufacture,  processing,  distribution,  use, treatment, storage, disposal,
transport, discharge or handling of any Hazardous Substance.

         "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.

        "Event of Default" has the meaning assigned to that term in Section 7.1.

         "Event of Loss"  means,  with  respect to any  property,  (i) any loss,
destruction  or damage of such  property  or (ii) any  condemnation,  seizure or
taking,  by  exercise  of the  power of  eminent  domain or  otherwise,  of such
property, or confiscation of such property or the requisition of the use of such
property.

         "Funds" means lawful money of the United States of America.

         "Getchell  Property"  means the  33,000-acre  tract of  property of the
Borrower located in the Potosi Mining District in north central Nevada.

         "Governmental Agency" means the federal government of the United States
of America  and the  government  of any  state,  county,  municipality  or other
political  subdivision  thereof or any  governmental  body,  agency,  authority,
department or commission  (including without limitation any taxing authority) or
any  instrumentality  or officer thereof (including without limitation any court
or  tribunal)  exercising  executive,   legislative,   judicial,  regulatory  or
administrative  functions of or pertaining to  government  and any  corporation,
partnership or other entity directly or indirectly owned by or controlled by the
foregoing.

         "Governmental Requirements" means all legal requirements in effect from
time to time, including all laws,  statutes,  codes, acts,  ordinances,  orders,
judgments,   decrees,  injunctions,   rules,  regulations,   permits,  licenses,
authorizations,  and such other  directions and requirements of all Governmental
Agencies and all  instruments of record,  foreseen or unforeseen and ordinary or
extraordinary, including but not limited to any change in any law, regulation or
the interpretation  thereof by any Governmental Agency,  relating at any time to
the business or  operations  of the  Borrower or the  Guarantor or to any of the
property  owned,  leased or used by the  Borrower or the  Guarantor,  including,
without  limitation,  the  exploration,   development,   construction,   mining,
processing, ownership, operation and maintenance of the Getchell Property.

         "Guarantor" has the meaning assigned to it in the introduction to this
Agreement.


                                                      -4-
0198094.04

<PAGE>



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

         "Indemnitees" has the meaning assigned to it in Section 8.5(c).

         "Interest  Coverage  Ratio" means,  as at any date, for the immediately
preceding four consecutive fiscal quarters, the ratio determined by dividing (i)
Annual Operating Cash Flow by (ii) Interest  Expense for such period;  provided,
however,  that (x) for the fiscal  quarter  ended  December 31, 1998,  the ratio
shall be determined  solely by reference to the preceding  fiscal  quarter ended
such date,  (y) for the fiscal  quarter ended March 31, 1999, the ratio shall be
determined solely by reference to the preceding two consecutive  fiscal quarters
ended such date,  and (z) for the fiscal  quarter ended June 30, 1999, the ratio
shall be  determined  solely by reference  to the  preceding  three  consecutive
fiscal quarters ended such date.

         "Interest  Expense" means, with respect to Debt of the Borrower and its
subsidiaries  on a  consolidated  basis,  the  sum of all (i)  interest  and all
amortization  of debt  discount  and  expense  (including,  without  limitation,
interest  that is imputed  in  accordance  with  generally  accepted  accounting
principles on capitalized  lease obligations that are included in Debt) and (ii)
commitment  fees,  commissions,  discounts  and other fees and charges owed with
respect to letters of credit and  bankers'  acceptance  financing  and net costs
under interest rate contracts,  in each case that were due and payable  relating
to such Debt during the immediately  preceding four consecutive  fiscal quarters
for which the  Lender has  received  financial  statements  in  compliance  with
Sections  5.1(b)(i) or (ii) hereof (or, if as at any date of  determination  the
Lender shall not yet have received financial  statements delivered in compliance
with  Sections  5.1(b)(i)  or  (ii)  hereof,  then  Interest  Expense  for  such
immediately  preceding four  consecutive  fiscal quarters shall be determined by
the Lender in its reasonable judgment based on such financial  information as it
shall have requested and received from the Borrower).

         "Interest Period" means,  with respect to any Borrowing,  a period from
the Advance Date or date of conversion or renewal with respect to such Borrowing
to a date which is (a) one (1), two (2), three (3) or six (6) months thereafter,
in the case of a LIBOR Borrowing; provided that:

         (a) The Interest Period for any Borrowing shall commence on the Advance
Date or date of conversion or renewal with respect to such Borrowing;

         (b) If any Interest Period would otherwise expire on a day which is not
a  Business  Day,  such  Interest  Period  shall  expire on the next  succeeding
Business Day;  provided,  however,  that if any Interest  Period in respect of a
LIBOR Borrowing would otherwise  expire on a day which is not a Business Day but
is a day of the month after which no further  Business Day occurs in such month,
such Interest Period shall expire on the next preceding Business Day;

         (c) Any Interest Period in respect of a LIBOR Borrowing which begins on
the last  Business  Day of a calendar  month (or on a day for which  there is no
numerically  corresponding day in the calendar month at the end of such Interest
Period)  shall,  subject to clause (d) below,  end on the last Business Day of a
calendar month;

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0198094.04

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         (d) No Interest Period for any Borrowing shall extend beyond the 
Maturity Date;

         (e) There shall be no more than five (5) different Interest Periods 
respecting Borrowings at any one time; and

         (f) If the Borrower  shall fail to request an initial  Interest  Period
with respect to a LIBOR Borrowing  pursuant to Section 2.3 hereof,  the Borrower
shall be deemed to have selected an Interest Period of one (1) month.

         "Lender" has the meaning assigned to it in the introduction to this
Agreement.

         "Letter of Credit" means any financial  (but not  performance)  standby
letter of credit issued for the account of the Borrower.

         "Letter of Credit  Obligations"  means, as at the time of determination
thereof,  all  liabilities,  whether actual or contingent,  of the Borrower with
respect  to  Letters  of  Credit,  including  the sum of (a)  Letter  of  Credit
Reimbursement   Obligations  and  (b)  the  aggregate  undrawn  face  amount  of
outstanding Letters of Credit.

         "Letter of Credit  Reimbursement  Obligations"  means, at any time, the
aggregate of the obligations of the Borrower under all reimbursement  agreements
in respect of all unreimbursed drawings under Letters of Credit.

         "LIBOR"  means the rate  (rounded  upwards if  necessary to the nearest
whole  one-sixteenth  of one percent (1/16%)) equal to the product of Base LIBOR
times Statutory  Reserves.  "Base LIBOR" means the rate per annum  determined by
the Lender (which  determination  shall be conclusive in the absence of manifest
error) to be the average of the rate at which it is offered Dollars  deposits in
the  interbank  Eurodollar  market at about  11:00  A.M.  London  time,  two (2)
Business  Days  prior to the  beginning  of the  Interest  Period  for any LIBOR
Borrowing,  for  delivery  on the first  day  thereof  for the  number of months
comprised therein and in an amount equal to the amount of such LIBOR Borrowing.

         "LIBOR Borrowing" means any Borrowing bearing interest at a rate based 
on LIBOR.

         "Maturity Date" means September 1, 2000.

         "Net Present Value of Future North American Mining Cash Flow" means, at
any time, the net present value of the Borrower's  future North American  mining
operations  cash flow as  determined by the Lender  substantially  in the manner
reflected on Schedule A attached hereto in accordance with the Lender's  current
policies  and  practices  applicable  to mine  financings.  Such value  shall be
recalculated  at least annually after  Borrower's  delivery to the Lender of the
business plan and mine plan referred to in Section 5.1(b)(iii) hereof.




                                                      -6-
0198094.04

<PAGE>




         "Note" means a promissory  note in the form of Exhibit A hereto  signed
by an Authorized  Officer or Agent of the Borrower  delivered by the Borrower to
the Lender, including all renewals, extensions and replacements thereof.

         "Notice of Borrowing"  means a notice of Borrowing by the Borrower,  on
the Borrower's  letterhead and in the form set forth in Exhibit B hereto, signed
by an Authorized Officer or Agent of the Borrower.

         "Notice of  Conversion  or Renewal of  Interest"  means a notice by the
Borrower,  on the  Borrower's  letterhead and in the form set forth in Exhibit C
hereto, signed by an Authorized Officer or Agent of the Borrower.

         "Operating  Cash Flow"  means,  for any period,  the  consolidated  net
income (or net loss) of the Borrower and its subsidiaries during such period (a)
plus,  but only to the extent such items shall have been deducted in determining
such net income (or net loss), the sum of (i) all interest,  fees and costs paid
or accrued during such period on Debt, including,  without limitation,  interest
that is imputed in accordance with generally accepted  accounting  principles on
capitalized  lease  obligations that are included in Debt, (ii) depreciation and
amortization  of assets,  and (iii)  income  taxes paid or accrued  during  such
period; (b) minus the sum of (i) interest and other income,  (ii) income derived
from other than the  consolidated  operations of the Borrower,  (iii) income tax
benefits,  and (iv) to the extent not already  deducted in determining  such net
income, all corporate overhead expenses of the Borrower;  all of the above items
exclusive  of  minority  interests  (except  to  the  extent  of  cash  or  cash
equivalents  in  respect  thereof  actually  received  by the  Borrower  in such
period); as to all of the foregoing,  as determined in accordance with generally
accepted   accounting   principles   consistently   applied;   provided,   that,
notwithstanding any of the foregoing,  regardless of the receipt of any proceeds
or  any  other  distributions  therefrom,  there  shall  not  be  considered  in
calculating  Operating  Cash  Flow  any  subsidiary  which  is  not a  Guarantor
hereunder.

         "Person" means an  individual,  partnership,  corporation  (including a
business  trust or bank),  joint  venture  or other  entity,  or a  Governmental
Agency.

         "Plan" means a pension  plan  providing  benefits for  employees of the
Borrower  or any  affiliate  (as  such  term is  defined  in the  definition  of
"Termination Event" herein) and covered by Title IV of ERISA.

         "Protection  Ratio"  means,  as at any date,  the ratio  determined  by
dividing (i) the Net Present Value of Future North American  Mining Cash Flow by
(ii) Total Senior Debt.

         "Regulatory  Change" shall mean, with respect to the Lender, any change
after the date of this Agreement in United States federal, state or foreign laws
or  regulations  (including  Regulation D of the Federal  Reserve  Board) or the
adoption  or  making  after  such  date of any  interpretations,  directives  or
requests  applying  to a class of banks  including  the  Lender  of or under any
United States federal or state, or any foreign,  laws or regulations (whether or
not having the force of law) by any

                                                      -7-
0198094.04

<PAGE>



court or governmental or monetary authority charged with the interpretation or 
administration thereof.

         "Revolving Advance" has the meaning assigned to it in Section 2.1(a).

         "Revolving Commitment" means as to the Lender initially $25,000,000, as
such amount may be subject to reduction or  assignment  in  accordance  with the
terms hereof.

         "Statutory  Reserves"  means a fraction  (expressed as a decimal),  the
numerator of which is the number one and the  denominator of which is the number
one minus the aggregate of the maximum reserve percentages  (including,  without
limitations,   any  marginal,   special,  emergency  or  supplemental  reserves)
expressed as a decimal  established  by the Federal  Reserve  Board for a member
bank in the Federal Reserve System, for Eurocurrency  Liabilities (as defined in
Regulation  D of the Federal  Reserve  Board).  Such reserve  percentages  shall
include,  without  limitation,  those  imposed  under  such  Regulation  D LIBOR
Borrowings as shall be deemed to constitute Eurocurrency Liabilities and as such
shall be deemed to be subject to such reserve requirements without benefit of or
credit for proration,  exceptions or offsets which may be available from time to
time to the Lender under such Regulation D. Statutory Reserves shall be adjusted
automatically  on and as of the  effective  date of any  change  in any  reserve
percentage.

         "Taxes" has the meaning assigned to it in Section 6.2(i).

         "Termination  Event" means (i) a Reportable  Event described in section
4043 of ERISA and the  regulations  issued  thereunder  (other than a Reportable
Event not  subject to the  provision  for thirty  (30) day notice to the Pension
Benefit Guaranty Corporation under such regulations),  or (ii) the withdrawal of
the Borrower or any of its affiliates from a Plan during a plan year in which it
was a "substantial employer" as defined in section 4001(a)(2) of ERISA, or (iii)
the filing of a notice of intent to  terminate a Plan in a distress  termination
or the  treatment of a Plan  amendment as a distress  termination  under section
4041(c) of ERISA,  or (iv) the institution of proceedings to terminate a Plan by
the Pension Benefit Guaranty Corporation under section 4042 of ERISA, or (v) any
other event or condition  which might  constitute  grounds under section 4042 of
ERISA for the termination of, or the appointment of a trustee to administer, any
Plan. For purposes of this  definition,  the term  "affiliate"  means any member
(whether or not  incorporated)  of a group which is under common control (within
the meaning of the regulations under section 414 of the Internal Revenue Code of
1986, as amended) and of which the Borrower is a member.

         "Total Senior Debt" means,  for the Borrower and its  subsidiaries on a
consolidated  basis,  the aggregate  outstanding  principal  balance of: (i) the
obligations  of the Borrower  under the Note and this  Agreement  and  financial
Letter of Credit Obligations,  (ii) the ChemFirst Note, and (iii) all other Debt
other  than  capitalized  leases  and Debt  which is  subordinated  on terms and
conditions  acceptable  to the Lender.  Total Senior Debt shall be determined by
the Lender, in its reasonable  judgment,  based upon its review of a certificate
of the  Borrower  delivered  to the Lender  which shall set forth in  reasonable
detail  a  calculation  of Total  Senior  Debt,  together  with  such  financial
information  as the Lender shall have  requested and received from the Borrower,
or in the absence

                                                      -8-
0198094.04

<PAGE>



of such certificate, such other pertinent financial information as the Lender in
its sole discretion shall deem appropriate.


                                    ARTICLE 2

                                      LOANS

         2.1      Revolving Loans.

                  (a)  Revolving  Advances.  The Lender  agrees on the terms and
conditions  set  forth  herein  to make  advances  ("Revolving  Advances")  on a
revolving basis to the Borrower of various amounts of Funds from time to time on
any Business  Day during the period from the Closing  Date to but not  including
the Maturity Date, provided that each such Revolving Advance shall be limited to
an amount which, when added to the principal amount of all outstanding Revolving
Advances,  shall not exceed the Revolving Commitment.  Each borrowing under this
Section 2.1 (a "Borrowing")  shall be in an aggregate  amount of (x) in the case
of LIBOR  Borrowings,  five hundred thousand  dollars  ($500,000) and (y) in the
case of Base Borrowings,  one hundred thousand dollars ($100,000), or, in either
case in an integral  multiple  of one hundred  thousand  dollars  ($100,000)  in
excess of the  applicable  minimum.  Subject to the terms and conditions of this
Agreement, Borrowings which are repaid or prepaid may be reborrowed.

                  (b) Note. The Borrower shall execute and deliver to the Lender
on or  prior to the  Closing  Date a Note to  evidence  the  Lender's  Revolving
Advances.

         2.2 Making the Advances. Each Borrowing shall be made not later than 11
a.m.,  Atlanta time,  upon one (1) Business Day's notice,  in the case of a Base
Borrowing,  and  three  (3)  Business  Days'  notice,  in the  case  of a  LIBOR
Borrowing,  by irrevocable written notice pursuant to a Notice of Borrowing from
the Borrower to the Lender setting forth (i) the Advance Date,  which shall be a
Business Day, (ii) the amount of the  Borrowing,  (iii) whether the Borrowing is
to be a Base Borrowing or a LIBOR  Borrowing and the applicable  Interest Period
(if  the  proposed  Borrowing  is  a  LIBOR  Borrowing),  (iv)  such  additional
information  as is  required by the Notice of  Borrowing.  In the event that the
Borrower fails to borrow after delivering a Notice of Borrowing hereunder to the
Lender,  the Borrower shall pay any resulting  Breakage Costs to the Lender, and
provided such  Breakage  Costs are promptly paid upon the request of the Lender,
such failure to borrow shall not be a default hereunder.

         2.3      Funding of Borrowings; Borrowing Options.

                  (a) Not  later  than  noon  (Atlanta  time)  on the  date of a
Borrowing,  upon the  satisfaction of the conditions set forth in Article 3 with
respect to such  Borrowing,  the Lender shall make available to the Borrower the
proceeds of such Borrowing at the Lender's  Atlanta,  Georgia  address set forth
below. All repayments of Advances and cash payments of interest shall be made to
the Lender at said address.


                                                      -9-
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<PAGE>



                  (b)  Borrowings  may, at the option of the  Borrower,  be Base
Borrowings or LIBOR Borrowings.  Borrowings shall bear interest from the Advance
Date on the unpaid principal amount thereof from time to time outstanding  until
due and payable  (whether on the Maturity Date, upon  acceleration or otherwise)
(i) in the case of Base Borrowings, at a fluctuating rate per annum equal to the
Base  Rate,  as from  time to time in  effect,  and  (ii) in the  case of  LIBOR
Borrowings,  at a rate per annum  equal to the sum of LIBOR  for the  applicable
Interest Period plus  three-fourths  of one percent (3/4%);  provided,  however,
that if the sum of the principal  amount of all outstanding  Revolving  Advances
equals or exceeds  fifteen million  dollars  ($15,000,000),  then in the case of
LIBOR  Borrowings  the rate per annum shall be equal to the sum of LIBOR for the
applicable  Interest Period plus seven-eighths of one percent (7/8%);  provided,
further that any interest  rate for  Borrowings  hereunder  shall be in no event
more than the  maximum  allowed  under  applicable  law.  The unpaid  balance of
principal  and, to the extent  permitted  by law,  any accrued  interest on Base
Borrowings and LIBOR  Borrowings  shall bear interest payable on demand from the
Maturity  Date  (or  such  earlier  date as such  principal  has  become  due by
acceleration  pursuant to Section 7.1 or by operation of Section  2.8),  whether
scheduled or  accelerated,  until paid in full, at a rate per annum equal to (in
the case of LIBOR  Borrowings)  LIBOR plus two percent (2%) until the end of the
applicable  Interest Period and thereafter at a rate per annum equal to the Base
Rate plus one percent (1%), which rate shall change as the Base Rate changes, or
(in the case of Base Borrowings) the Base Rate plus one percent (1%), which rate
shall change as the Base Rate changes.

         2.4 Payment Dates.  The Borrower shall pay interest on each outstanding
Base Borrowing in arrears on the first Business Day of each quarter,  and on the
Maturity  Date.  The  Borrower  shall pay  interest  on each  outstanding  LIBOR
Borrowing on the last day of the Interest Period for such Borrowing but not less
frequently than every three (3) months following the date of such Borrowing, and
on such date as the LIBOR  Borrowing is paid in full.  The entire balance of all
Advances  shall be  repaid  not  later  than the  Maturity  Date.  All  payments
hereunder  shall be applied  first to  interest  on past due  interest,  if any,
second to  interest  due on the  outstanding  principal  balance  of the Note as
designated  by the  Borrower  (or,  if the  Borrower  makes no  designation,  as
designated by the Lender),  and then to principal on Base Borrowings or on LIBOR
Borrowings with Interest  Periods  expiring on the date of payment as designated
by the Borrower (or, if the Borrower makes no designation,  as designated by the
Lender).

         2.5      Fees.

                  (a) Commitment  Fee. The Borrower  agrees to pay in Dollars to
the Lender on the first  Business Day of each  calendar  quarter,  commencing on
October 1, 1997, up to and including the Maturity Date, a commitment fee for the
Revolving  Commitment at the rate of one-quarter of one percent (1/4%) per annum
of the daily average of the unused amount of the Adjusted  Revolving  Commitment
(determined by subtracting the principal amount of all outstanding Advances from
the amount of the Adjusted  Revolving  Commitment) during the preceding calendar
quarter or portion thereof.  The first payment shall be made for the period from
the Closing Date through September 30, 1997.


                                                      -10-
0198094.04

<PAGE>



                  (b) Structuring  Fee. The Borrower agrees to pay to the Lender
on the Closing Date the structuring fee provided in the letter agreement of even
date herewith between the Borrower and the Lender.

         2.6  Reduction of the  Commitment.  The Borrower  shall have the right,
upon at least five (5) days' written notice to the Lender, to terminate in whole
or in part the unused  portion of the Revolving  Commitment,  provided that each
partial  reduction of such Commitment  shall be in the aggregate  amount of five
million  dollars  ($5,000,000) or any greater  integral  multiple of one million
dollars  ($1,000,000).  The Borrower shall designate in its notice to the Lender
the amount of the Revolving Commitment giving effect to such reduction.

         2.7 Optional  Prepayment.  The  Borrower  may from time to time,  repay
Advances hereunder before the Maturity Date without premium or penalty, provided
that any such prepayment shall be made together with interest accrued thereon to
the date of such repayment and any related Breakage Costs, and provided, further
that any prepayment  hereunder must be made on a Business Day. The amount of any
such  prepayment  on any  date  shall  be not  less  than  one  million  dollars
($1,000,000) or any integral multiple of one hundred thousand dollars ($100,000)
in excess of such minimum amount (or, if less, the entire outstanding  principal
amount of Advances).

         2.8      Mandatory Prepayment.

                  (a) Advances in Excess of Revolving Commitment. If on any date
the aggregate principal amount of Advances outstanding exceeds the amount of the
Revolving  Commitment  in effect on such date,  the  Borrower  will on such date
repay to the Lender such amount,  together with interest  accrued thereon to the
date of such  payment  and any  Breakage  Costs,  as  will  cause  the  Advances
outstanding  after such  repayment to be equal to or less than the amount of the
Revolving Commitment.

                  (b)  Asset   Dispositions.   The  Borrower  shall  prepay  any
Advances,  and the Revolving  Commitment  shall be permanently  and  irrevocably
reduced,  by an amount equal to one hundred  percent (100%) of the aggregate net
proceeds in excess of $1,000,000 realized in any fiscal year by the Borrower and
its subsidiaries  from any and all Asset  Dispositions and Events of Loss to the
extent that such  aggregate  net proceeds are not  reinvested by the Borrower in
substantially similar assets within 180 days after the date of such disposition.

         2.9 Amount and  Allocation of Partial  Prepayments.  In the case of any
partial prepayments of Advances,  the aggregate amount repaid shall be allocated
by the Lender among all of the Borrowings at the time outstanding in such manner
as shall minimize to the greatest extent  reasonably  possible the amount of any
Breakage Costs.

         2.10  Conversion of  Borrowings.  Unless an Event of Default shall have
occurred  and be  continuing  and  subject to the terms and  conditions  of this
Agreement,  the  Borrower  shall have the right at any time or from time to time
prior to the Maturity Date to convert Base  Borrowings to LIBOR  Borrowings  and
LIBOR Borrowings to Base Borrowings in the same aggregate  principal  amount, or
to select a new Interest  Period for an outstanding  LIBOR  Borrowing,  provided
that: (i)

                                                      -11-
0198094.04

<PAGE>



the Borrower shall give the Lender notice of each such  conversion or renewal as
provided below; (ii) LIBOR Borrowings may be converted or renewed (upon at least
five (5) Business Days' notice to the Lender  pursuant to a Notice of Conversion
or  Renewal of  Interest)  only on the last day of an  Interest  Period for such
Borrowings;  (iii) Base  Borrowings  may be  converted  at any time upon two (2)
Business  Days'  notice to the  Lender  pursuant  to a Notice of  Conversion  or
Renewal of  Interest  in a minimum  aggregate  principal  amount of one  million
dollars  ($1,000,000).  Each Notice of Conversion  or Renewal of Interest  shall
specify the Borrowings to be converted or renewed,  whether such  Borrowings are
being converted or renewed, the duration of the Interest Period selected and the
date of conversion or renewal (which shall be a Business Day). In the event that
the Borrower fails to renew any Interest Period for any LIBOR  Borrowing  before
the expiration of such Interest  Period,  such  Borrowing will be  automatically
converted  into a Base  Borrowing on the last day of the then  current  Interest
Period for such Borrowing.

         2.11     Inability to Provide Funds.

                  (a) Funds at LIBOR.  Notwithstanding  anything to the contrary
in this Agreement, the Lender shall not be liable for any failure to comply with
its  obligations  under or pursuant  to this  Article,  and the Lender  shall be
entitled to terminate any arrangements  respecting LIBOR Borrowings entered into
under this Article  without  liability,  if such  failure is caused  directly or
indirectly, wholly or partly, by:

                           (i) Lack of availability in the interbank  Eurodollar
         market of Dollar  deposits  in the  principal  amount  and for a period
         equal to the relevant Interest Period; or

                           (ii)     Failure of LIBOR to accurately reflect the 
cost of the Lender of making, funding or maintaining the LIBOR Borrowing; or

                           (iii) Any change in financial,  political or economic
         conditions or currency  exchange  rates making it  impractical  for the
         Lender to make, fund or maintain the LIBOR Borrowing; or

                           (iv) Any change in applicable law or regulation or in
         the  interpretation  thereof making it unlawful or impractical  for the
         Lender to make, fund or maintain the LIBOR Borrowing.

The Lender  shall give prompt  notice of the  foregoing to the Borrower and upon
the  sending of such  notice,  any  obligation  of the  Lender to make,  fund or
maintain the LIBOR  Borrowing shall terminate and the Lender shall make, fund or
maintain such Borrowing as a Base Borrowing.

                  (b) Commercial Impracticability.  In the event that, by reason
of any Regulatory  Change,  the Lender either (i) incurs any  incremental  costs
which the Lender  determines are  attributable  to its making or maintaining any
Advances or its obligation to make any Advances  hereunder,  or any reduction in
any amount receivable by the Lender hereunder in respect of any of such Advances
or such obligation (such increases in costs and reductions in amounts receivable
being herein called "Additional Costs") based on or measured by the excess above
a specified level

                                                      -12-
0198094.04

<PAGE>



of the amount of a category of deposits or other liabilities of the Lender which
includes deposits by reference to which the interest rate on LIBOR Borrowings or
Base  Borrowings is  determined  as provided in this  Agreement or a category of
extensions  of  credit  or other  assets  of the  Lender  which  includes  LIBOR
Borrowings or Base  Borrowings or (ii) becomes  subject to  restrictions  on the
amount of such category of liabilities or assets which it may hold, then, if the
Lender so elects by notice to the Borrower, the obligation of the Lender to make
additional  Advances  of such  type  hereunder  shall be  suspended  until  such
Regulatory  Change  ceases to be in  effect  (in which  case the  provisions  of
Section 2.11(a) hereof shall be applicable).

         2.12     Yield Protection.

                  (a) Increased  Costs. If due to (i) the imposition or increase
of the taxes  (other  than  income  taxes) on amounts  payable  by the  Borrower
hereunder or (ii) the  introduction  of, or any  Regulatory  Change  (including,
without  limitation,  any change by way of  imposition  or  increase  of reserve
requirements)  or (iii) the  compliance  by the  Lender  with any  guideline  or
request from any central bank or other governmental authority respecting capital
requirements or any other matter (whether or not having the force of law), there
shall be any  increase  in the cost to the Lender of agreeing to make or making,
funding or maintaining Advances or resulting in a reduction of the amounts which
the Lender is entitled to receive and retain hereunder,  then the Borrower shall
from time to time,  upon  demand by the  Lender,  pay to the  Lender  additional
amounts sufficient to indemnify the Lender against such cost.

                  (b) Capital Requirements.  In the event that at any time after
the date of this  Agreement  any  Regulatory  Change  shall,  in the  reasonable
opinion of the Lender,  require that its  Revolving  Commitment  (or any portion
thereof)  be  treated as an asset or  otherwise  be  included  for  purposes  of
calculating the appropriate  amount of capital or equity to be maintained by the
Lender or any  corporation  controlling  or affiliated  with the Lender and such
Regulatory  Change  shall have the effect of reducing  the rate of return on the
Lender's  or such  corporation's  capital  or  equity,  as the case may be, as a
consequence  of the Lender's  obligations  hereunder to a level below that which
the Lender or such corporation,  as the case may be, could have achieved but for
such Regulatory  Change (taking into account the Lender's or such  corporation's
policies,  as the case may be, with respect to capital adequacy and any payments
made to the Lender pursuant to Section 2.12(a) which relate to capital adequacy)
by an amount reasonably  deemed by the Lender to be material,  then from time to
time following  written notice by the Lender to the Borrower of such  Regulatory
Change,  within five (5) days after demand by the Lender, the Borrower shall pay
to the Lender such additional amount or amounts as will compensate the Lender or
such corporation, as the case may be, for such reduction.

                  (c) Payment of Compensation. If the Lender becomes entitled to
claim any  additional  amounts  pursuant to this Section 2.12, it shall promptly
notify the Borrower of the event by reason of which it has become so entitled. A
certificate  setting forth in reasonable detail the method of computation of any
additional  amounts  payable  pursuant to this  Section  2.12,  submitted by the
Lender to the Borrower,  shall be delivered to the Borrower  promptly  after the
initial  incurrence  of such  additional  amounts and shall be conclusive in the
absence of manifest error. The

                                                      -13-
0198094.04

<PAGE>



covenants in this Section 2.12 shall survive the  termination  of this Agreement
and the payment of the Note.

         2.13 Payments and  Computations.  The Borrower  shall make each payment
hereunder  and under the Note not later than 11 A.M.  (Atlanta  time) on the day
when due in lawful  money of the  United  States of America to the Lender at its
address set forth after its signature to this Agreement in immediately available
funds. The Borrower hereby  authorizes the Lender,  if and to the extent payment
is not made  when  due  hereunder,  to  charge  from  time to time  against  the
Borrower's  account  with the  Lender  any amount so due.  All  computations  of
interest  under the Note and the  commitment fee specified in Section 2.5 hereof
shall be made by the Lender on the basis of a year of three  hundred sixty (360)
days (or, in the case of Base Borrowings,  three hundred  sixty-five (365) days)
for the actual  number of days  (including  the first day but excluding the last
day) elapsed.

         2.14  Advance,  Conversion,  Renewal or Payment on  Business  Day.  All
Advances or payments to be made  hereunder and all renewals of Interest  Periods
for LIBOR  Borrowings  shall be made on a Business  Day.  Whenever  any Advance,
conversion or payment in respect of a Base Borrowing to be made hereunder  shall
be stated to be due on a day which is not a Business Day, such Advance,  return,
conversion,  renewal or payment may be made on the next succeeding Business Day,
and such extension of time shall in such case be included in the  computation of
payment of interest or commitment fee, as the case may be. Whenever any payment,
conversion  or renewal in respect of a LIBOR  Borrowing to be made  hereunder or
under the Note shall be stated to be due on a day which is not a  Business  Day,
such payment, conversion or renewal shall be made on the next preceding Business
Day.


                                    ARTICLE 3

                              CONDITIONS OF LENDING

         3.1 Conditions  Precedent to the Initial  Borrowing.  The obligation of
the Lender to make its initial  Advance  hereunder is subject to the  conditions
precedent  that the Lender shall have  received  the  following on or before the
initial Advance, each dated the Closing Date, in form and substance satisfactory
to the Lender:

                  (a)  This Agreement and the Note duly executed by an 
Authorized Officer or Agent of the Borrower;

                  (b)  Certified  copies  of the  resolutions  of the  Board  of
Directors of the Borrower  approving and  authorizing the execution and delivery
of this Agreement and the Note, and of all documents  evidencing other necessary
corporate action and  governmental  approvals with respect to this Agreement and
the Note;

                  (c)  Certified  copies  of  the  charter  and  by-laws  of the
Borrower,  and a certificate  of the Secretary or an Assistant  Secretary of the
Borrower certifying the names and true signatures

                                                      -14-
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<PAGE>



of the officers of the Borrower authorized to sign this Agreement and the Note 
and the other documents to be delivered hereunder;

                  (d)  Certified  copies  of the  resolutions  of the  Board  of
Directors of the Guarantor  approving and authorizing the execution and delivery
of this  Agreement  by the  Guarantor,  and of all  documents  evidencing  other
necessary  corporate action and any  governmental  approvals with respect to the
Agreement;

                  (e)  Certified  copies  of  the  charter  and  by-laws  of the
Guarantor,  and a certificate of the Secretary or an Assistant  Secretary of the
Guarantor  certifying  the  names and true  signatures  of the  officers  of the
Guarantor authorized to sign the Agreement;

                  (f)  A favorable opinion of counsel for the Borrower and the 
Guarantor in form satisfactory to the Lender;

                  (g)  Evidence that the structuring fee referred to in Section 
2.5(b) has been disbursed to the Lender; and

                  (h) A satisfactory  review by the Lender's  environmental risk
group of the environmental policies,  procedures and liabilities of the Borrower
and the Guarantor.

         3.2 Conditions  Precedent to All Borrowings,  Conversions and Renewals.
The obligation of the Lender to make any Advance  including the initial  Advance
(and, with respect to subsection (a)(iii) below, the obligation of the Lender to
make each  conversion or renewal in respect of an outstanding  Advance) shall be
subject to the further  conditions  precedent  that on the date of such  Advance
(and, with respect to subsection  (a)(iii) below, on the date of such conversion
or renewal):

                  (a)  The  following   statements   shall  be  true:   (i)  the
representations  and  warranties  contained  in  Article  4 hereof  are true and
correct and with the same effect as though made as of the date of such  Advance,
and since  December  31, 1996 there has been no material  adverse  change in the
business or financial condition of the Borrower or the Guarantor,  (ii) there is
no pending , or to the knowledge of the Borrower or the  Guarantor,  threatened,
action,  suit or proceeding  affecting the Borrower or the Guarantor  before any
court,  Governmental  Agency or arbitrator which could reasonably be expected to
have a material  adverse effect upon the business or financial  condition of the
Borrower or the  Guarantor,  and (iii) no event or condition has occurred and is
continuing,  or would  result  from such  Borrowing  or the  application  of the
proceeds  thereof,  which constitutes an Event of Default or would constitute an
Event of Default but for the requirement  that notice be given or time elapse or
both; and the giving of the Notice of Borrowing (and, with respect to subsection
(a) (iii) only,  the giving of the Notice of  Conversion or Renewal of Interest)
by the Borrower shall be deemed to constitute a  representation  and warranty by
the Borrower that at the date of such Advance the foregoing statements are true;
and

                  (b) The Lender shall have received for such Advance the Notice
of Borrowing or the Notice of Conversion or Renewal of Interest, as appropriate.


                                                      -15-
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<PAGE>



                                    ARTICLE 4

                         REPRESENTATIONS AND WARRANTIES

         4.1  Representations  and Warranties of the Borrower and the Guarantor.
The Borrower and the Guarantor each represent and warrant as follows:

                  (a) Organization, Good Standing. The Borrower is a corporation
duly  incorporated,  validly  existing  and in good  standing  under the laws of
Delaware and the Guarantor is a corporation duly incorporated,  validly existing
and in good  standing  under the laws of Nevada.  The Borrower and the Guarantor
are and at all  times  will be duly  qualified  or  otherwise  authorized  to do
business  wherever  necessary  to own or lease their  properties  and to conduct
their businesses and operations.

                  (b) Authorization,  No Conflict.  The execution,  delivery and
performance by the Borrower of this Agreement and the Note, and by the Guarantor
of this Agreement,  have been duly authorized by all necessary  corporate action
and do not and will not (i) require any consent or approval of the  stockholders
of  the  Borrower  or the  Guarantor,  (ii)  contravene  the  Borrower's  or the
Guarantor's  charter or by-laws,  (iii) violate any provision of any law,  rule,
regulation (including,  without limitation,  Regulation X of the Federal Reserve
Board),  order,  writ,  judgment,  injunction,  decree,  determination  or award
presently in effect having applicability to the Borrower or the Guarantor,  (iv)
result in a breach of or  constitute  a default  under or require the consent of
any party  pursuant to any  indenture  or loan or credit  agreement or any other
agreement, lease or instrument to which the Borrower or the Guarantor is a party
or by which they or their properties may be bound or affected,  or (v) result in
or require the creation or imposition of any  mortgage,  deed of trust,  pledge,
lien,  security  interest or other charge or  encumbrance  of any nature upon or
with respect to any of the  properties  now owned or  hereafter  acquired by the
Borrower or the  Guarantor;  and neither the  Borrower  nor the  Guarantor is in
material default under any such law, rule,  regulation,  order, writ,  judgment,
injunction,  decree,  determination  or award or any such indenture,  agreement,
lease or instrument.

                  (c) No Other Action Required.  No authorization or approval or
other action by, and no notice to or filing  with,  any  Governmental  Agency or
regulatory  body is required for the due execution,  delivery and performance by
the Borrower of this Agreement and the Note or for the due  execution,  delivery
and performance by the Guarantor of this Agreement.

                  (d) Validity and Binding  Nature of Agreement  and Note.  This
Agreement is, and the Note when delivered  hereunder  will be, legal,  valid and
binding  obligations  of  the  Borrower  enforceable  against  the  Borrower  in
accordance with their respective terms, and this Agreement is a legal, valid and
binding  obligation  of the  Guarantor  enforceable  against  the  Guarantor  in
accordance  with its terms,  except to the extent that such  enforcement  may be
limited by applicable  bankruptcy,  insolvency  and other similar laws affecting
creditors'  rights  generally and except to the extent that equitable  remedies,
including  specific  performance  and  injunction,  may be  granted  only in the
discretion of a court of competent jurisdiction.


                                                      -16-
0198094.04

<PAGE>



                  (e) Other  Agreements.  Neither the Borrower nor the Guarantor
is a party to any  indenture,  loan or  credit  agreement  or any lease or other
agreement or instrument or subject to any charter or corporate restriction which
would  reasonably be expected to have a material adverse effect on the business,
properties,  assets,  operations  or condition,  financial or otherwise,  of the
Borrower or the  Guarantor,  or on the ability of the  Borrower to carry out its
obligations  under this Agreement or the Note or on the ability of the Guarantor
to carry out its obligations under this Agreement.

                  (f) Financial  Statements.  The consolidated balance sheets of
the  Borrower  at  December  31,  1996  and  June  30,  1997,  and  the  related
consolidated  statements of operations,  stockholders'  equity and cash flows of
the Borrower for the year and the quarter then ended,  copies of which have been
furnished to the Lender,  fairly present the financial condition of the Borrower
and the  Guarantor  as at such dates,  and the results of their  operations  and
their cash flows for the year and the quarter ended on such dates, in accordance
with  generally  accepted  accounting  principles  consistently  applied.  Since
December  31, 1996 there has been no material  adverse  change in the  financial
condition or operations of the Borrower or the Guarantor.

                  (g) Litigation,  Contingent  Liabilities,  Taxes.  There is no
pending  or,  to the  Borrower's  knowledge,  threatened  action  or  proceeding
affecting  the Borrower or the Guarantor or any of their  respective  properties
before  any  court,  Governmental  Agency  or  arbitrator,  which  could  have a
materially  adverse  effect on the  financial  condition  or  operations  of the
Borrower  or the  Guarantor.  Neither the  Borrower  nor the  Guarantor  has any
material  contingent  liabilities not provided for or disclosed in the financial
statements referred to in Section 4.1(f).

                  (h)  Condition  of  Business  and   Properties.   Neither  the
business, properties or operations of the Borrower or of the Guarantor as of the
date of this Agreement are affected by any fire,  explosion,  accident,  strike,
lockout or other labor dispute,  drought, storm, hail, earthquake,  embargo, act
of God or of the  public  enemy or other  casualty  (whether  or not  covered by
insurance)  materially  and adversely  affecting  such  business,  properties or
operations of the Borrower or of the Guarantor.

                  (i) Compliance  With  Applicable  Laws. All work performed and
other  actions or  omissions  to act at the  properties  of the Borrower and the
Guarantor  and the current  condition of the  properties of the Borrower and the
Guarantor comply in all material respects with all applicable laws,  ordinances,
rules and regulations of any Governmental Agency and with all directives,  rules
and  regulations of officers of every  Governmental  Agency having  jurisdiction
over the properties and operations of the Borrower and the Guarantor,  and there
are no existing  material  violations of any such applicable  laws,  ordinances,
directives, rules or regulations.

                  (j)  Environmental  Matters.  To  the  best  knowledge  of the
Borrower  and the  Guarantor,  except  for normal or  anticipated  circumstances
incurred  in  the  regular  course  of the  business  of the  Borrower  and  the
Guarantor,  which  circumstances do not have a materially  adverse effect on the
respective  financial  condition or operations of the Borrower or the Guarantor,
and except as previously  disclosed in writing to the Lender, (i) the properties
and operations of the Borrower and the Guarantor comply in all material respects
with  all  applicable  Environmental  Laws;  (ii)  none  of  the  properties  or
operations of the Borrower or the Guarantor is subject to any judicial

                                                      -17-
0198094.04

<PAGE>



or   administrative   proceeding   alleging  the   material   violation  of  any
Environmental  Laws;  (iii) none of the properties or operations of the Borrower
or the  Guarantor  is the  subject of any  investigation  concerning  any use or
release of any Hazardous Substance;  (iv) neither the Borrower nor the Guarantor
nor any predecessor of the Borrower has filed any notice under any Environmental
Laws indicating  past or present  material  treatment,  storage or disposal of a
hazardous  waste or  reporting  a  material  spill  or  release  of a  Hazardous
Substance into the  environment;  (v) neither the Borrower nor the Guarantor has
any  material  contingent  liability  in  connection  with  any  release  of any
Hazardous  Substance  into the  environment,  including  any material  liability
arising in  connection  with the acts or omissions of any past owner or operator
of any of the premises  owned,  leased or used by the Borrower or the Guarantor;
(vi)  none  of  the  Borrower's  or  the  Guarantor's   operations  involve  the
generation,   transportation,   treatment,  storage  or  disposal  of  Hazardous
Substances  (other than in the normal course of and incidental to their business
operations);  (vii)  neither  the  Borrower  nor the  Guarantor  has  improperly
disposed of any material  amount of any Hazardous  Substance in, on or about any
premises owned, leased or used by it or them; (viii) each surface impoundment or
underground  storage  tank  located in, on or about any of the  premises  owned,
leased  or  used by the  Borrower  or the  Guarantor  complies  in all  material
respects with  applicable  Environmental  Laws; and (ix) (A) no lien in favor of
any Governmental  Agency for any liability under  Environmental Laws exists, and
(B) no claim for damages  arising  from or costs  incurred by such  Governmental
Agency in response to a release of any Hazardous  Substance into the environment
is pending  or  attached  to any of the  premises  owned,  leased or used by the
Borrower or the Guarantor.

                  (k) Taxes.  Each of the Borrower and the  Guarantor has timely
filed all tax returns  and reports  required to have been filed and has paid all
taxes  required  to have  been  paid by it,  except  (i)  taxes  that are  being
contested in good faith by appropriate proceedings and for which the Borrower or
the Guarantor,  as applicable,  has set aside on its books adequate reserves, or
(ii) to the extent that the failure to do so could not reasonably be expected to
result in a material adverse effect on the financial  condition or operations of
the Borrower or the Guarantor.

                  (l) Liens. None of the assets of the Borrower or the Guarantor
is subject  to any  mortgage,  pledge,  title  retention  lien,  or other  lien,
encumbrance or security interest, except (i) for current taxes not delinquent or
taxes  being  contested  in good faith by  appropriate  proceedings,  (ii) liens
arising  in the  ordinary  course  of  business  for sums not due or sums  being
contested in good faith by appropriate proceedings, and (iii) in connection with
capitalized  leases  and as  otherwise  disclosed  in the  financial  statements
referred to in Section 4.1(f).

                  (m) Employee Benefit Plans. Each Plan complies in all material
respects  with  all  applicable  requirements  of  law  and  regulations  and no
Termination Event with respect to any Plan has occurred.

                  (n)  Regulation  U. Neither the Borrower nor the  Guarantor is
engaged in the business of  extending  credit for the purpose of  purchasing  or
carrying  margin stock (within the meaning of Regulation U issued by the Federal
Reserve Board), and no proceeds of any Advance will be used to purchase or carry
margin  stock or to extend  credit to others for the  purpose of  purchasing  or
carrying any margin stock.


                                                      -18-
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<PAGE>



                  (o)  Investment  Company  Act.  Neither the  Borrower  nor the
Guarantor is an "investment company" or a company "controlled" by an "investment
company," within the meaning of the Investment Company Act of 1940, as amended.

                  (p) No  Misstatements  of Fact.  No  information,  schedule or
report  furnished by the  Borrower or the  Guarantor to the Lender in writing in
connection  with  the  negotiation  of this  Agreement  contained  any  material
misstatement  of fact or omitted to state a material fact or any fact  necessary
to make the statements contained therein not misleading.

                  (q)      No Default.  No Event of Default has occurred and is 
continuing.


                                    ARTICLE 5

                   COVENANTS OF THE BORROWER AND THE GUARANTOR

         5.1  Affirmative  Covenants.  So long as any obligation  under the Note
shall  remain  outstanding  or the Lender  shall have any  Revolving  Commitment
hereunder, the Borrower and the Guarantor hereby covenant and agree as follows:

                  (a) Compliance  With Laws, Etc. The Borrower and the Guarantor
shall  comply  in all  material  respects  with all  Governmental  Requirements,
including without limitation all Environmental Laws, now in force or that may be
enacted hereafter and with all directives,  rules and regulations of officers of
any Governmental Agency now having or hereafter acquiring  jurisdiction over the
operations or properties of the Borrower or the Guarantor.

                  (b)      Reporting Requirements.

                           (i) Annual Financial Statements. Annually, as soon as
         available,  but in any event within ninety (90) days after the last day
         of  each  of its  fiscal  years,  consolidated  balance  sheets  of the
         Borrower and the Guarantor as of such last day of the fiscal year,  and
         consolidated  statements of operations,  stockholders'  equity and cash
         flows for such fiscal year,  each prepared in accordance with generally
         accepted  accounting  principles  consistently  applied,  in reasonable
         detail, and certified without  qualification by a nationally recognized
         firm of independent  certified public  accountants  satisfactory to the
         Lender as fairly  presenting the financial  position and the results of
         operations  and cash flows of the Borrower and the  Guarantor as at its
         date and for such year and as having been prepared in  accordance  with
         generally accepted accounting principles consistently applied.

                           (ii) Quarterly Reports. As soon as available,  but in
         any event within fifty (50) days after the end of the Borrower's  first
         three fiscal  quarters (and for purposes of  calculating  the financial
         ratio in Section  5.3(b)  hereof,  for the  immediately  preceding four
         consecutive   fiscal   quarters   necessary   to   such   calculation),
         consolidated balance sheets of the Borrower and the Guarantor as of the
         last day of such quarter and  consolidated  statements  of  operations,
         stockholders'  equity  and  cash  flows  for  such  period,  and  on  a
         comparative

                                                      -19-
0198094.04

<PAGE>



         basis figures for the corresponding period of the immediately preceding
         fiscal  year,  all in  reasonable  detail,  each such  statement  to be
         certified in a certificate of the president or chief financial  officer
         of the Borrower as accurately  presenting  the  financial  position and
         results of operations  and cash flows of the Borrower and the Guarantor
         as at its date and for such  period  and as  having  been  prepared  in
         accordance with generally accepted accounting  principles  consistently
         applied  (subject  to  non-material,   year-end  audit  adjustments  in
         accordance with generally accepted accounting principles).

                           (iii) Business Plan. Annually,  as soon as available,
         but in any event within  thirty (30) days after the last day of each of
         its fiscal years,  a  business/mine  plan relating to the operations of
         the Borrower and the Guarantor,  together with  appropriate  supporting
         details and statement of underlying assumptions.

                           (iv)  Turquoise  Ridge.  Subsequent  to  the  initial
         Advance borrowed hereunder, the Borrower shall furnish to the Lender as
         soon as available  and in any event within  fifteen (15) days after the
         end of each month, a monthly management report summarizing the progress
         toward  completion of the Turquoise Ridge mine project,  and after such
         mine has  commenced  commercial  production,  a periodic  report of the
         quantity  and  quality  of ore  mined  and  production  costs  in  form
         acceptable to the Lender.

                           (v) No  Default  Certificate.  At the same time as it
         delivers the  financial  statements  required  under the  provisions of
         Sections  5.1(b)(i) and (ii) hereof,  a certificate of the president or
         chief financial  officer of the Borrower to the effect that no Event of
         Default and no default under any other  agreement to which the Borrower
         or the  Guarantor  is a party  or by which  it is  bound,  and no event
         which,  with the giving of notice or the lapse of time, or both,  would
         constitute  such an Event of Default or  default,  exists,  or, if such
         cannot be so certified,  specifying in reasonable detail the exceptions
         and the nature of any corrective  action taken or proposed to be taken.
         Such  certificate  shall  be  accompanied  by  a  detailed  calculation
         indicating   compliance  with  the  financial  covenants  contained  in
         Sections 5.3(a) and 5.3(b) hereof.

                           (vi) Other  Reports.  The Borrower and the  Guarantor
         shall furnish to the Lender: (A) any correspondence or notices received
         by the Borrower from any federal, state or local governmental authority
         regulating the operations of the Borrower or the Guarantor  relating to
         (1) a  Plan  or (2) an  actual  or  threatened  change  or  development
         (including any regulatory directive or order) that in either case could
         be materially  adverse to the Borrower or the  Guarantor;  (B) promptly
         after the filing or receiving thereof,  copies of all notices which the
         Borrower  receives from any  Governmental  Agency alleging its material
         noncompliance with Environmental Laws or actual or potential  liability
         for cleanup, remediation or removal of any Hazardous Substance wherever
         located and any replies of the Borrower filed in response thereto;  (C)
         promptly  upon  becoming  aware of any  actual  or  proposed  Change in
         Control, a notice setting forth the particulars  thereof;  and (D) such
         other  information  regarding  the  business,  operations  or financial
         condition of the  Borrower or the  Guarantor,  or such other  financial
         data or information evidencing compliance with the requirements of this
         Agreement, as the Lender may from time to time reasonably request.

                                                      -20-
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<PAGE>



                  (c)  Visitation  Rights.  The Borrower shall at any reasonable
time during normal  business hours and from time to time, on reasonable  notice,
permit the Lender or any agents or  representatives  thereof to (i)  examine and
make  copies of and  abstracts  from the  records  and books of  account  of the
Borrower;  (ii) discuss the affairs,  finances and accounts of the Borrower with
any of its officers or its Board of  Directors;  and (iii) visit and inspect any
mine, mill or facility on the Getchell Property.

                  (d)  Maintenance of Insurance.  The Borrower and the Guarantor
shall maintain such insurance with responsible and reputable insurance companies
or  associations  in such amounts and covering such risks as is customarily  and
prudently carried by companies engaged in similar  businesses and owning similar
properties  in the same general  areas in which the  Borrower and the  Guarantor
operate.

                  (e)  Maintenance  of  Properties,  Etc.  The  Borrower and the
Guarantor will maintain or cause to be maintained in good repair,  working order
and  condition  all  material  properties  used in its business and will make or
cause to be made all appropriate repairs, renewals and replacements thereof.

                  (f) Keeping of Records and Books of Account.  The Borrower and
the  Guarantor  shall  keep  adequate  records  and books of  account,  in which
complete entries will be made in accordance with generally  accepted  accounting
principles  consistently applied,  reflecting all financial  transactions of the
Borrower and the Guarantor.

                  (g) Preservation of Corporate  Existence,  Licenses,  Etc. The
Borrower and the  Guarantor  shall (i) preserve  and  maintain  their  corporate
existence,  rights,  franchises  and  privileges in the  jurisdictions  of their
incorporation,  (ii) maintain all  consents,  licenses,  approvals,  permits and
authorizations material to the conduct of their businesses and operations or the
ownership of their properties, and (iii) qualify and remain qualified as foreign
corporations in each  jurisdiction in which such  qualification  is necessary or
desirable.

                  (h) Mining  Business.  The  Borrower and the  Guarantor  shall
engage solely in the business of exploring for, developing,  owning interests in
and  operating  precious  metals  properties,  particularly  gold mines,  and in
activities  incidental thereto, and shall conduct their businesses in accordance
with generally accepted industry practices.

                  (i) Notice of Default; Litigation; ERISA Matters. The Borrower
shall furnish to the Lender written notice as soon as possible, and in any event
within  five (5)  Business  Days after the  occurrence  of any of the  following
events or circumstances: (i) the occurrence of any Event of Default (or event or
condition  which,  with the giving of notice or the  passage  of time,  or both,
would constitute an Event of Default), including a statement of the president or
chief financial  officer of the Borrower setting forth the details of such Event
of  Default  (or such event or  condition)  and the  action  which the  Borrower
proposes to take with respect thereto;  (ii) any litigation,  legal  proceeding,
action or dispute involving amounts in excess of $500,000 affecting the Borrower
or the  Guarantor  (whether  or not fully  covered  by  insurance),  or  seeking
injunctive  or similar  relief  which,  if  adversely  determined,  could have a
materially adverse effect on the Borrower or the Guarantor;

                                                      -21-
0198094.04

<PAGE>



(iii)  the  occurrence  of any  Termination  Event;  and (iv) any  other  event,
circumstance or condition, including without limitation any development relating
to an environmental liability, which could have a material adverse effect on the
business,  operations,  properties or financial condition of the Borrower or the
Guarantor.

                  (j) Payment of Taxes and Other  Claims.  The  Borrower and the
Guarantor  shall pay or discharge or cause to be paid or discharged,  before the
same shall  become  delinquent,  (i) all  taxes,  assessments  and  governmental
charges  levied or imposed upon them or upon their income,  profits or property,
and (ii) all lawful claims for labor,  materials and supplies  which, if unpaid,
might by law become a lien upon their respective properties;  provided, however,
that the Borrower and the Guarantor shall not be required to pay or discharge or
cause to be paid or discharged any such tax,  assessment,  charge or claim whose
amount,   applicability  or  validity  is  being  contested  in  good  faith  by
appropriate  proceedings if the Borrower and the Guarantor  shall have set aside
on their  books  adequate  reserves  with  respect  thereto in  accordance  with
generally accepted accounting principles.

                  (k)  Additional  Guarantors.  The  Borrower  will  cause  each
subsidiary  of the  Borrower  established  or created  after the Closing Date to
execute a guarantee of the obligations of the Borrower  hereunder  substantially
on the terms  contained  in  Article 6 hereof  and in form  satisfactory  to the
Lender.

                  (l) Further  Assurances.  The Borrower and the Guarantor shall
promptly and duly execute and deliver to the Lender such instruments, reports or
other documents and take such further action as the Lender may from time to time
reasonably  request in order to  evidence,  perfect or otherwise  implement  the
obligations of the Borrower and the Guarantor provided for in this Agreement.

         5.2 Negative Covenants.  So long as any obligation under the Note shall
remain outstanding or the Lender shall have any Revolving Commitment  hereunder,
the Borrower and the Guarantor each hereby covenant and agree that it shall not:

                  (a) Debt. Create,  incur, assume or suffer to exist,  directly
or  indirectly,  any funded  Debt  except  (i) Debt  incurred  pursuant  to this
Agreement and the Note and Letters of Credit issued by the Lender;  or (ii) Debt
represented by the outstanding promissory note of the Borrower to ChemFirst Inc.
due  September 22, 2000 with a current  principal  balance of  $25,300,000  (the
"ChemFirst  Note");  provided,  however,  that the Borrower  shall not modify or
amend any terms or provisions of the  ChemFirst  Note, or optionally  prepay any
portion of the ChemFirst Note while any Advances are outstanding under the Note,
without the prior written consent of the Lender; or (iii) capitalized leases and
Debt secured by the security interests referred to in Section 5.2(b)(vii) hereof
in an aggregate amount not exceeding $15,000,000.

                  (b)  Liens,  Etc.  Create,  incur,  assume or suffer to exist,
directly or indirectly,  any mortgage,  deed of trust,  pledge,  lien,  security
interest,  or other charge or encumbrance  whether or not determined  (including
the lien or retained security title of a conditional vendor) of any nature, upon
or with respect to any of its properties,  now owned or hereafter  acquired,  or
assign or  otherwise  convey any right to receive  the  production,  proceeds or
income therefrom, except that the foregoing

                                                      -22-
0198094.04

<PAGE>



restrictions  shall not apply to  mortgages,  deeds of  trust,  pledges,  liens,
security interests or other charges or encumbrances:

                           (i) for taxes, assessments or governmental charges or
         levies if the same shall not at the time be  delinquent  or  thereafter
         can be paid without  penalty,  or are being  contested in good faith by
         appropriate proceedings;

                           (ii)   imposed   by   law,    such   as    carriers',
         warehousemen's  and mechanics' liens and other similar liens arising in
         the  ordinary  course of business in an amount which at no time exceeds
         $100,000;

                           (iii)  arising  out  of  pledges  or  deposits  under
         workmen's compensation laws, unemployment insurance,  old age pensions,
         or  other  social   security  or   retirement   benefits,   or  similar
         legislation;

                           (iv)  arising  out of pledges or  deposits  to secure
         performance in connection  with bids,  tenders,  contracts  (other than
         contracts  for the payment of money),  or to secure public or statutory
         obligations of the Borrower or the Guarantor,  in an amount which at no
         time exceeds $100,000;

                           (v) arising out of deposits to secure, or in lieu of,
         surety, appeal or customs bonds in proceedings to which the Borrower or
         the  Guarantor  is a  party  in an  amount  which  at no  time  exceeds
         $100,000;

                           (vi) arising out of operating  leases entered into in
         the ordinary  course of business and under which the  aggregate  annual
         rentals do not exceed $500,000;

                           (vii) of purchase money  mortgages and other security
         interests on equipment acquired,  leased or held by the Borrower or the
         Guarantor (including equipment held by the Borrower or the Guarantor as
         lessee under  leveraged  leases) in the ordinary  course of business to
         secure the purchase  price of such equipment or to secure Debt incurred
         solely  for  the  purpose  of  financing  the  acquisition   (including
         acquisition  as  lessee  under  leveraged   leases),   construction  or
         improvement  of any such  equipment to be subject to such  mortgages or
         security  interests,  or mortgages or other security interests existing
         on any such equipment at the time of such  acquisition,  or extensions,
         renewals  or  replacements  of any of the  foregoing  for the same or a
         lesser  amount,  provided  that  no such  mortgage  or  other  security
         interest  shall  extend  to or  cover  any  equipment  other  than  the
         equipment  being  acquired,   constructed  or  improved,  and  no  such
         extension, renewal or replacement shall extend to or cover any property
         not  theretofore  subject to the  mortgage or security  interest  being
         extended,  renewed  or  replaced;  and  provided,   further,  that  the
         aggregate  principal  amount  of the  Debt  of  the  Borrower  and  the
         Guarantor  at any one time  outstanding  and secured by  mortgages  and
         other  security  interests  permitted  by this  clause  (vii) shall not
         exceed  $15,000,000  and that any such  Debt  shall  not  otherwise  be
         prohibited by the terms of this Agreement; and


                                                      -23-
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<PAGE>



                           (viii)  zoning  restrictions,   easements,  licenses,
         restrictions on the use of properties or minor  irregularities in title
         thereto,  which do not materially  impair the use of such properties in
         the operations of the Borrower or the Guarantor in the ordinary  course
         of  business  or the value of such  properties  for the purpose of such
         businesses.

                  (c)  Restriction  on Fundamental  Changes.  (i) Enter into any
transaction of merger,  consolidation or other  reorganization  having a similar
result or effect;  (ii)  liquidate,  wind-up or  dissolve  itself (or suffer any
liquidation or dissolution);  (iii) convey, sell, lease,  sublease,  transfer or
otherwise dispose of, in one transaction or a series of transactions, all or any
substantial  part of its business or assets,  or the capital stock of any of its
subsidiaries,  whether  now owned or  hereafter  acquired;  or (iv)  acquire  by
purchase or otherwise all or any substantial  part of the business or assets of,
or stock or other evidence of beneficial ownership of, any Person; provided that
the foregoing  restrictions shall not apply to any merger of a subsidiary of the
Borrower  with and into the Borrower or to a merger in which the Borrower is the
surviving  corporation  or the  purchase of all or any  substantial  part of the
business or assets of, or stock or other  evidence of  beneficial  ownership of,
any Person,  provided that upon the  consummation  of such merger or purchase no
Event of Default  shall have  occurred  and be  continuing  or would occur after
giving effect to such merger or purchase.

                  (d) Asset Dispositions. Engage in any Asset Disposition unless
(i) such Asset  Disposition is for  consideration at least 75% of which is cash,
(ii) such consideration is at least equal to the fair market value of the assets
sold, transferred, leased or disposed of, and (iii) the fair market value of all
assets sold, transferred,  leased or disposed of pursuant to this Section 5.2(d)
shall not exceed (A)  $2,000,000  in any fiscal  year or (B)  $4,000,000  in the
aggregate; provided, however, that where the aggregate net proceeds of any Asset
Disposition  are  reinvested by the Borrower or the  Guarantor in  substantially
similar  assets  within  180 days  after  the date of  disposition,  such  Asset
Disposition  shall not be counted for  purposes of  calculating  the  $2,000,000
annual limitation (but nevertheless shall be counted for purposes of calculating
the  $4,000,000  aggregate  limitation)  in clause  (iii) above;  and  provided,
further, that if the Borrower shall enter into a "lay-back" or similar agreement
with  Newmont  Mining  Corporation  relating to Sections 13, 25 and/or 36 of the
Getchell  Property,  such  transaction  shall be  excluded  for  purposes of the
limitations set forth above.

                  (e) Investments and Loans. Make or permit to exist investments
in or loans to any other Person,  except:  (i) investments in short-term  direct
obligations  of the United  States or Canadian  governments;  (ii) time deposits
maturing  within  one year from the date of  creation  thereof  with,  including
certificates  of deposit issued by, any bank or trust company which is organized
under  the laws of the  United  States or any state  thereof  or Canada  and has
capital, surplus and undivided profits aggregating at least $250,000,000;  (iii)
investments  in  commercial  paper  rated  at  least  A-2 by  Standard  & Poor's
Corporation or at least P-2 by Moody's Investors  Service,  Inc.; and (iv) loans
and advances to employees for moving, entertainment,  travel, purchases of stock
in the Borrower and other similar expenses in the ordinary course of business.

         5.3 Financial Covenants. So long as any obligation under the Note shall
remain outstanding or the Lender shall have any Revolving Commitment  hereunder,
the Borrower  hereby  covenants  and agrees that it will have or maintain,  on a
consolidated basis, at all times:


                                                      -24-
0198094.04

<PAGE>



                  (a) a Protection Ratio, determined as of the end of each 
fiscal quarter, of not less than 1.50 to 1; and

                  (b) an Interest  Coverage  Ratio,  determined as of the end of
each fiscal  quarter  beginning with the fiscal quarter ended December 31, 1998,
of not less than 2.00 to 1.


                                    ARTICLE 6

                          ABSOLUTE CONTINUING GUARANTEE

         6.1  Undertaking.  For and in consideration of the entering into by the
Lender of this  Agreement,  and in order to  provide  the  Lender  with  further
assurance  of the  Borrower's  payment  of any and all  indebtedness  under this
Agreement,  the Guarantor guarantees and promises to pay the Lender when due any
amounts  now or at any  time  hereafter  owed  by the  Borrower  to the  Lender,
pursuant to this Agreement or the Note (such amounts owed by the Borrower to the
Lender are sometimes  hereinafter referred to as the  "indebtedness").  The word
"indebtedness" is used herein in its most  comprehensive  sense and includes any
and all advances,  debts,  interest and other obligations and liabilities of the
Borrower under this Agreement or the Note.

         6.2  Unconditional  Guarantee.  The  Guarantor  hereby agrees that this
guarantee is an absolute,  unconditional,  continuing  guarantee  subject to the
following terms and conditions:

                  (a)  Authorization.   The  Guarantor  authorizes  the  Lender,
without  notice to,  demand  of, or  consent  from the  Guarantor,  and  without
affecting  its  liability  to the Lender  hereunder,  from time to time,  to (i)
renew, extend,  accelerate or otherwise change the time or place for payment of,
or  otherwise  change  the  terms  of,  the  indebtedness  or any part  thereof,
including an increase or decrease of any rate of interest thereon; (ii) take and
hold security  (including other  guarantees) for the payment of the indebtedness
or this guarantee,  and exchange,  enforce,  waive,  surrender,  modify, impair,
change,  alter, renew,  continue,  compromise or release in whole or in part any
such  security,  or fail to perfect  its  interest in any such  security,  or to
establish  its priority  with  respect  thereof;  (iii) apply such  security and
direct the order or manner of sale thereof as the Lender in its sole  discretion
may determine;  (iv) release or substitute, in whole or in part, the Borrower or
any one or more endorsers or guarantors of any or all of the  indebtedness;  (v)
settle or  compromise  any or all of the  indebtedness  with the Borrower or any
endorser or guarantor of the  indebtedness;  and (vi)  subordinate any or all of
the  indebtedness to any other  indebtedness of or claim against the Borrower or
any other Guarantor,  whether owing to or existing in favor of the Lender or any
other party.  The Guarantor shall be and remain bound hereunder  notwithstanding
any such renewal,  extension,  acceleration,  change, taking, holding, exchange,
enforcement, waiver, surrender,  modification,  impairment, alteration, renewal,
continuation,    compromise,    release,   failure,   application,    direction,
substitution,  settlement or subordination. The Lender may assign this guarantee
in whole or in part.

                  (b)  Continuing Guarantee.  This is a continuing guarantee 
becoming effective to the full extent stated herein upon execution of this 
Agreement and remaining effective until the

                                                      -25-
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<PAGE>



transactions  contemplated  by  this  Agreement  have  been  completed  and  all
indebtedness  has been fully and finally  paid.  In the event that the  Borrower
becomes  insolvent  or may be  adjudicated  bankrupt  or  files a  petition  for
reorganization,  arrangement, composition or similar relief under any present or
future provision of the United States  Bankruptcy Code, or if such a petition be
filed  against  the  Borrower,  or  the  Borrower  becomes  the  subject  of any
proceedings  under any laws or regulations of any  jurisdiction  relating to the
relief of debtors,  and in any such  proceedings some or all of the indebtedness
shall be  terminated or rejected or any  obligation  of the Borrower  thereunder
modified or abrogated,  the Guarantor agrees that its liability  hereunder shall
not thereby be affected or modified,  and such liability  shall continue in full
force and effect as if no such action or proceeding had occurred. This guarantee
shall continue to be effective or reinstated, as the case may be, if any payment
of any  indebtedness  must  be  returned  by the  Lender  upon  the  insolvency,
bankruptcy or reorganization of the Borrower or the Guarantor,  or otherwise, as
though such payment had not been made.

                  (c)  Waiver  of  Notice,   Etc.  The   Guarantor   waives  all
presentments,  demands for  performance,  notices of  nonperformance,  protests,
notices of protest,  notices of  dishonor,  notices of  default,  and notices of
acceptance of this guarantee and of the existence,  creation or incurring of new
or additional  indebtedness.  At the option of the Lender,  the Guarantor may be
joined in any action or proceeding  commenced by the Lender against the Borrower
in connection with or based upon the  indebtedness or any security  therefor and
recovery may be had against the Guarantor in such action or  proceeding  against
the Guarantor,  without any requirement that the Lender first assert,  prosecute
or exhaust  any remedy or claim  against  the  Borrower.  Without  limiting  the
foregoing,  the Guarantor  acknowledges that repeated and successive demands may
be made and  payments  made  hereunder  in response to such demands as and when,
from time to time,  the  Borrower  may  default in payment of the  indebtedness.
Notwithstanding any such payments hereunder, this guarantee shall remain in full
force and  effect  and shall  apply to any and all  subsequent  defaults  by the
Borrower  in  payment  of  the  indebtedness.   All  settlements,   compromises,
compositions, accounts stated and agreed balances made in good faith between the
Lender and the Borrower shall be binding upon the Guarantor.

                  (d)  Additional  Waivers.  The  Guarantor  waives  any and all
rights to require  the Lender to (i) proceed  against the  Borrower or any other
guarantor,  (ii) proceed  against or exhaust any security held from the Borrower
or any other  guarantor,  or (iii) pursue any other remedy in the Lender's power
whatsoever. The Lender may, at its election, exercise any right or remedy it may
have against the  Borrower or any security now or hereafter  held by the Lender,
including,  without limitation, the right to foreclose upon any such security by
judicial or nonjudicial sale and regardless of whether such sale is deemed to be
commercially reasonable, without affecting or impairing in any way the liability
of the Guarantor  hereunder except to the extent the indebtedness may thereby be
paid.  Only the net proceeds from any such  foreclosure,  after deduction of all
costs and expenses  authorized to be deducted  pursuant to the  documents  under
which  such  security  is  held  or  by  law,  shall  be  applied   against  the
indebtedness.  The Lender may at its discretion purchase all or any part of such
security so sold or offered  for sale for its own account and may apply  against
the  amount  bid  therefor  all or any part of the  indebtedness  for which such
security is held. The Guarantor  waives any defense  arising out of the absence,
impairment or loss of any right of  reimbursement  or subrogation or other right
or remedy of the Guarantor against the Borrower or any such security,

                                                      -26-
0198094.04

<PAGE>



whether resulting from such election by the Lender, any defect in, failure of or
loss or  absence  of  priority  with  respect to the  Lender,  interest  in such
security,  or  otherwise.  The Lender  shall not be  required  to  institute  or
prosecute  proceedings  to recover  any  deficiency  as a  condition  of payment
hereunder or enforcement  hereof.  The Guarantor  waives any defense  arising by
reason of any  disability  or other  defense of the Borrower or by reason of the
cessation  from any cause  whatsoever  of the  liability  of the  Borrower.  The
Guarantor shall have no right of subrogation, and waive any right to enforce any
remedy which the Lender now has or may hereafter have against the Borrower,  and
waives any and all benefit of or right to  participate  in any  security  now or
hereafter held by the Lender.

                  (e) Independent  Obligations.  The  obligations  hereunder are
independent of the obligations of the Borrower, and a separate action or actions
may be brought and prosecuted  against the Guarantor,  whether action is brought
against the  Borrower  or whether  the  Borrower is joined in any such action or
actions.  The  Guarantor  waives  the  benefit  of any  statute  of  limitations
affecting its liability hereunder or the enforcement thereof.

                  (f)  Subordination.  Any  indebtedness  of the Borrower now or
hereafter  held by the  Guarantor is hereby  subordinated  and  postponed to the
indebtedness  of the Borrower to the Lender,  and the  Guarantor  agrees that it
will not accelerate the maturity of such indebtedness;  and such indebtedness of
the Borrower to the  Guarantor,  if the Lender so requests,  shall be collected,
enforced  and  received by the  Guarantor  as trustee for the Lender and be paid
over to the  Lender,  but  without  reducing  or  affecting  in any  manner  the
liability of the Guarantor under the other  provisions of this  guarantee.  This
subordination and postponement is independent of this guarantee.

                  (g) Inquiry  Into  Powers,  Etc. It is not  necessary  for the
Lender to inquire  into the powers of the Borrower or its  officers,  directors,
partners  or  agents  acting  or  purporting  to  act  on its  behalf,  and  any
indebtedness  made or created in reliance  upon the  professed  exercise of such
powers shall be guaranteed hereunder.  Any sum which may not be recoverable from
the  Guarantor  on the  basis  of a  guarantee  shall  be  recoverable  from the
Guarantor as the principal debtor and shall be paid to the Lender on demand with
interest.  The Guarantor assumes the responsibility for being and keeping itself
informed  of  the  financial   condition  of  the  Borrower  and  of  all  other
circumstances  bearing upon the risk of  nonpayment  of the  indebtedness  which
diligent  inquiry would reveal,  and agree that the Lender shall have no duty to
advise the Guarantor of information  known to it regarding such condition or any
such circumstances.

                  (h)  Assignment.  The  Guarantor  may not assign its rights or
delegate its obligations hereunder voluntarily or by operation of law without in
each case  obtaining  the Lender's  prior  written  consent,  and any  purported
assignment or delegation without such consent shall be null and void. Consent by
the Lender to any such assignment or delegation  shall not relieve the Guarantor
of any obligations or liabilities  hereunder,  unless such consent so states. No
such consent shall constitute consent to any other or subsequent such assignment
or delegation.

                  (i) Taxes. The Guarantor will (i) pay all principal, interest,
fees and all other  amounts  payable  hereunder to the Lender free and clear and
without  deduction  for any and all present and future  taxes,  duties,  levies,
compulsory loans, imposts, deductions, fees, charges,

                                                      -27-
0198094.04

<PAGE>



restrictions, conditions and withholdings, of whatsoever nature, if any, and all
liabilities  with  respect  thereto,  excluding as to the Lender those which are
imposed  by the  United  States of  America,  or any other  country in which the
Lender's  principal  office or its lending branch is or may become  organized or
established, or any political subdivision or taxing authority in such respective
countries  and are imposed on or measured by the net income of the Lender of its
lending  branch or are  imposed on or  measured  by the gross  income,  or gross
receipts  of,  the Lender or its  lending  branch and are in lieu of taxes on or
measured  by the net income  ("Taxes");  and (ii) pay and  indemnify  the Lender
against any liability for any interest  equalization and similar taxes, stamp or
any other  transfer  taxes  with  respect to this  Agreement,  and taxes (net of
applicable  deduction  and credits  actually  taken) of all  jurisdictions  with
respect to any amounts paid under this provision.  If any Taxes or amounts to be
paid under  subsection (ii) of the preceding  sentence are paid by the Lender or
if the  Guarantor  is  required  by  applicable  law to make  any  deduction  or
withholding  as  aforesaid  from  any  payment  of  the  principal  or  interest
(including interest on any overdue principal) due hereunder or any other fees or
amounts due hereunder in respect of any such Taxes, the Guarantor shall pay such
amount that after payment of any such Taxes to the appropriate  taxing authority
there shall be paid to the Lender the net amount otherwise  payable hereunder in
the absence of such Taxes.

                  (j)  Agreement  To Pay.  All  payments  by or on behalf of the
Guarantor  hereunder  shall be in lawful money of the United  States of America.
The Guarantor agrees to pay reasonable  attorneys' fees and all other reasonable
costs and  expenses  which may be incurred by the Lender in the  enforcement  of
this guarantee.


                                    ARTICLE 7

                                EVENTS OF DEFAULT

         7.1 Events of  Default.  If any of the  following  events  ("Events  of
Default") shall occur and be continuing:

                  (a)  Nonpayment of Note,  Etc. The Borrower  shall fail to pay
any principal of the Note when due (whether at stated  maturity or by prepayment
or  otherwise),  or shall fail to pay any interest  hereunder or on the Note, or
any fees payable  hereunder,  within three days after the same shall become due;
or

                  (b)  Representations  and Warranties.  Any  representation  or
warranty made by the Borrower or the Guarantor (or any of its officers) under or
in  connection  with this  Agreement  shall prove to have been  incorrect in any
material respect when made, or any schedule,  certificate,  financial statement,
report,  notice or other  writing  furnished by the Borrower or the Guarantor to
the Lender shall prove to have been incorrect in any material respect when made;
or

                  (c)  Noncompliance With This Agreement.  The Borrower or the 
Guarantor shall fail to perform or observe any other term, covenant or agreement
contained in this Agreement on

                                                      -28-
0198094.04

<PAGE>



its  part  to be  performed  or  observed  and any  such  failure  shall  remain
unremedied  for fifteen (15) days after written  notice  thereof shall have been
given to such Person by the Lender; or

                  (d) Nonpayment of Other  Indebtedness  for Borrowed Money. The
Borrower  or the  Guarantor  shall fail to pay any Debt in excess of one million
dollars  ($1,000,000)  in principal  amount (but excluding Debt evidenced by the
Note) of the Borrower or the Guarantor, or any interest or premium thereon, when
due (whether by scheduled maturity, required prepayment, acceleration, demand or
otherwise);  or any other default under any agreement or instrument  relating to
any such Debt,  or any other  event,  shall occur and shall  continue  after the
applicable grace period, if any,  specified in such agreement or instrument,  if
the  effect  of such  default  or  event  is to  accelerate,  or to  permit  the
acceleration  of, the maturity of such Debt,  unless such default or event shall
be waived by the  holders or trustees  for such Debt or unless  such  default or
event of  default  is being  contested  in good  faith  and for  which  adequate
reserves  have been  provided;  or any such Debt shall be declared to be due and
payable, or required to be prepaid (other than by a regularly scheduled required
prepayment), prior to the stated maturity thereof; or

                  (e) Bankruptcy, Insolvency, Etc. The Borrower or the Guarantor
ceases to be solvent or shall  generally  not pay its debts as such debts become
due, or shall  admit in writing its  inability  to pay its debts  generally,  or
shall make a general assignment for the benefit of creditors;  or any proceeding
shall be  instituted  by or against  the  Borrower or the  Guarantor  seeking to
adjudicate  it a bankrupt  or  insolvent,  or seeking  liquidation,  winding up,
reorganization,  arrangement,  adjustment, protection, relief, or composition of
it  or  its  debts  under  any  law  relating  to   bankruptcy,   insolvency  or
reorganization  or  relief of  debtors,  or  seeking  the entry of any order for
relief or the appointment of a receiver,  trustee, or other similar official for
it or for any  substantial  part of its property and, if instituted  against the
Borrower or the Guarantor,  shall remain  undismissed for a period of sixty (60)
days;  or the  Borrower  or the  Guarantor  shall take any  corporate  action to
authorize any of the actions set forth in this subsection (e); or

                  (f) Judgment. Final judgment(s) or order(s) for the payment of
money aggregating in excess of five hundred thousand dollars ($500,000) shall be
rendered  against  the  Borrower  or the  Guarantor  and either (i)  enforcement
proceedings  shall have been  commenced  by any creditor  upon such  judgment or
order or (ii) a stay of enforcement of such  judgment(s) or order(s),  by reason
of a pending  appeal or otherwise,  shall not be in effect for any period of ten
(10) consecutive days; or

                  (g) Repudiation or Termination of the Guarantee. The Guarantor
shall have  terminated  or  repudiated  all or any part of its  liability  under
Article 6 before  the  transactions  contemplated  by this  Agreement  have been
completed and all indebtedness hereunder has been fully and finally paid; or

                  (h) Termination Event. Any Termination Event with respect to a
Plan shall have occurred and be continuing thirty (30) days after notice thereof
shall have been given by the  Borrower or the  Guarantor  to the Lender and such
Plan's aggregate  Amount of Unfunded Benefit  Commitments (as defined in section
4001(a)(18) of ERISA) exceeds five hundred  thousand  dollars  ($500,000) (or in
the case of a Termination Event involving the withdrawal of a substantial

                                                      -29-
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<PAGE>



employer,  the  withdrawing  employer's  proportionate  share of such  aggregate
Amount of Unfunded Benefit Commitments exceeds such amount); or

                  (i)      Cessation of Business.  The Borrower or the Guarantor
ceases or threatens to cease to carry on its business in the ordinary course; or

                  (j) Material  Adverse Change.  There shall occur any event, or
any condition shall exist, which materially adversely affects (i) the ability of
the Borrower or the Guarantor to perform its  obligations  under this Agreement,
or (ii) the business or financial condition of the Borrower or the Guarantor; or

                  (k) Change in Control. A Change in Control shall have occurred
and the Lender  reasonably  determines  that such  Change in Control  materially
adversely affects its position as Lender hereunder;

then,  upon the  occurrence of an Event of Default under  subsection  (e) above,
automatically,  without notice of any kind, the obligation of the Lender to make
Advances  shall  terminate  and the  unpaid  balance of the Note,  all  interest
thereon  and all other  amounts  payable  under  this  Agreement,  shall  become
immediately  due and payable;  and,  upon the  occurrence  of any other Event of
Default,  the Lender, by notice to the Borrower,  may (i) declare the obligation
of the  Lender to make  Advances  to be  terminated,  whereupon  the same  shall
forthwith  terminate,  and (ii) declare the Note,  all interest  thereon and all
other  amounts  payable  under this  Agreement to be  forthwith  due and payable
(except in the case of a declaration  by the Lender  pursuant to subsection  (k)
above,  in which case all such amounts shall be due and payable 30 days from the
date of such declaration if the Lender is unwilling or unable to renegotiate the
terms of this  Agreement on a mutually  satisfactory  basis with the  Borrower);
whereupon all Advances shall be immediately repaid and all such interest and all
such amounts  shall become and be forthwith  due and payable,  together with any
Breakage Costs and any other transaction and other costs shall be paid forthwith
to the Lender,  without  presentment,  demand,  protest or further notice of any
kind, all of which are hereby expressly waived by the Borrower.


                                    ARTICLE 8

                                  MISCELLANEOUS

         8.1  Amendments,  Etc. Except as otherwise  expressly  provided in this
Agreement,  no amendment or waiver of any provision of this  Agreement or of the
Note, nor consent to any departure by the Borrower therefrom, shall in any event
be effective unless the same shall be in writing and signed by the Lender,  and,
in the case of any amendment,  by the Borrower,  and then such waiver or consent
shall be effective  only in the specific  instance and for the specific  purpose
for which given.

         8.2  Notices, Etc.  All notices and other communications provided for 
hereunder shall be in writing (including facsimile transmissions) and mailed, 
sent by facsimile or delivered, if to the

                                                      -30-
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<PAGE>



Borrower or the  Guarantor,  c/o Getchell  Gold  Corporation,  5460 South Quebec
Street,  Suite 240,  Englewood,  Colorado 80111,  Attention:  Vice President and
Chief Financial  Officer  (facsimile (303) 771-1075);  if to the Lender,  at its
address set forth under its name on the signature  pages hereof;  or, as to each
party,  at such other  address as shall be designated by such party in a written
notice to the other parties.  All such notices and  communications  shall,  when
transmitted  by overnight  (next day)  delivery,  or faxed,  be  effective  when
delivered for overnight  (next day) delivery,  or when  transmitted by facsimile
machine,  respectively,  or if mailed,  when  received,  addressed as aforesaid,
except that notices to the Lender  pursuant to the provisions of Article 2 shall
not be effective until received by the Lender.

         8.3 No  Waiver;  Remedies.  No  failure  on the part of the  Lender  to
exercise,  and no delay in  exercising,  any right  hereunder  or under the Note
shall operate as a waiver thereof;  nor shall any single or partial  exercise of
any right  hereunder or under the Note  preclude  any other or further  exercise
thereof or the exercise of any other right.  The  remedies  herein  provided are
cumulative and not exclusive of any remedies provided by law.

         8.4 Accounting  Terms. All accounting  terms not  specifically  defined
herein shall be construed in accordance with U.S. generally accepted  accounting
principles consistently applied, except as otherwise stated herein.

         8.5      Costs, Expenses and Taxes.

                  (a) The  Borrower  agrees  to pay on  demand  all  reasonable,
out-of-pocket costs and expenses in connection with the preparation,  execution,
delivery and administration of this Agreement,  the Note and the other documents
to be delivered hereunder, all amendments or waivers thereto including,  without
limitation,  the reasonable fees and  out-of-pocket  expenses of counsel for the
Lender with  respect  thereto and with  respect to advising the Lender as to its
rights and responsibilities  under this Agreement,  and all reasonable costs and
expenses, if any, in connection with the enforcement of this Agreement, the Note
and the other documents to be delivered hereunder.

                  (b) In addition to any amounts that may become  payable  under
Section 2.11, the Borrower shall pay any and all stamp,  mortgage  recording and
other  taxes,  filing  fees or charges  payable or  determined  to be payable in
connection with the execution and delivery of this  Agreement,  the Note and the
other  documents  to be  delivered  hereunder,  and  agrees  to save the  Lender
harmless from and against any and all  liabilities  with respect to or resulting
from any delay in paying or omission to pay such taxes,  filing fees or charges.
The Borrower  agrees to indemnify and hold harmless the Lender on demand against
any taxes  (including  any late payment  penalties  or interest)  imposed by any
state of the United States or any agency or political  subdivision thereof on or
in respect of (i) the interest and other amounts  payable on any loan under this
Agreement  and (ii) any payment of indemnity  under this  Section,  so that such
interest and indemnity  payments  shall be in an aggregate  amount which,  after
deduction of all such taxes  (including  penalties  and  interest) in respect of
such aggregate amount, will be equal to the amount of such interest or indemnity
payment otherwise required hereunder.


                                                      -31-
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<PAGE>



                  (c) In addition  to the  payment of  expenses  pursuant to the
preceding paragraphs,  whether or not the transactions contemplated hereby shall
be consummated,  the Borrower agrees to indemnify,  pay and hold the Lender, and
the officers, directors, employees and agents of the Lender (collectively called
the  "Indemnitees")  harmless from and against,  any and all other  liabilities,
obligations,  losses, damages,  penalties,  actions,  judgments,  suits, claims,
costs,  expenses and disbursements of any kind or nature whatsoever  (including,
without  limitation,  the reasonable fees and  disbursements of counsel for such
Indemnitees in connection  with any  investigative,  administrative  or judicial
proceeding, whether or not such Indemnitee shall be designated a party thereto),
that may be imposed on, incurred by, or asserted against such Indemnitee, in any
manner  relating to or arising out of this  Agreement or the Note,  the Lender's
agreement to make the loans hereunder,  the making of the loans hereunder, or in
any  way  arising  from  any  actions  in  connection   with  the   transactions
contemplated  hereby,  or the  use or  intended  use of the  proceeds  of  loans
hereunder (the "indemnified liabilities"); provided that the Borrower shall have
no obligation to an Indemnitee hereunder with respect to indemnified liabilities
arising from the gross negligence or willful  misconduct of any such Indemnitee.
To the extent that the undertaking to indemnify, pay and hold harmless set forth
in the preceding  sentence may be  unenforceable  because it is violative of any
law or public policy, the Borrower shall contribute the maximum portion which it
is  permitted  to pay  and  satisfy  under  applicable  law to the  payment  and
satisfaction of all indemnified  liabilities  incurred by the Indemnitees or any
of them.

                  (d) The Borrower  hereby agrees to indemnify,  defend and hold
harmless the Indemnitees from and against any and all liabilities,  obligations,
claims, demands,  assessments,  losses, damages, penalties,  actions, judgments,
suits, costs, fines, sanctions,  charges,  expenses or disbursements,  including
attorneys' and  environmental  consultants'  fees and  disbursements,  and other
costs of  defending or denying the same,  including  the  reasonable  expense of
preparing  any necessary  environmental  assessment  report (all the  foregoing,
collectively, the "environmental liabilities"),  resulting from, arising out of,
or relating to (i) the breach by the  Borrower  or the  Guarantor  of any of its
representations,  warranties and covenants contained in this Agreement, (ii) any
release, deposit, discharge or disposal of any Hazardous Substance in connection
with the properties or business of the Borrower or any of its  subsidiaries  and
the remedial action (if any) taken by the Lender in respect of any such release,
deposit,  discharge or disposal, and (iii) all environmental liabilities arising
under  Environmental  Laws  and  environmental   permits,   including,   without
limitation, CERCLA, resulting from, arising out of or relating to any conditions
or activities at, on, in, under,  to or from the property of the Borrower or any
of its  subsidiaries  prior to and after the  Closing  Date,  including  without
limitation,  the off-site disposal of Hazardous  Substances.  No action taken by
legal  counsel  chosen by the Lender with  regard to any matter  related to this
environmental  indemnity  shall  vitiate  or in any way  impair  the  Borrower's
obligation  and duty  hereunder to indemnify and hold harmless the  Indemnitees.
The  indemnities  contained  in  Sections  8.5(c) and 8.5(d)  shall  survive the
termination of this Agreement.

         8.6 Right of Setoff.  Upon the occurrence and during the continuance of
any Event of Default,  the Lender is hereby authorized at any time and from time
to time,  without notice to the Borrower (any such notice being expressly waived
by the Borrower), to set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held and other indebtedness at
any time owing by the Lender to or for the credit or the account of the Borrower

                                                      -32-
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<PAGE>



against any and all of the obligations of the Borrower now or hereafter existing
under this Agreement and the Note,  although such  obligations may be contingent
and unmatured.  The Lender agrees promptly to notify the Borrower after any such
setoff and application,  provided that the failure to give such notice shall not
affect the  validity  of such setoff and  application.  The rights of the Lender
under this  section  are in addition to other  rights and  remedies  (including,
without limitation, other rights of setoff) which the Lender may have.

         8.7 Binding Effect; Governing Law. This Agreement shall be binding upon
and inure to the  benefit of the  Borrower,  the  Guarantor,  and the Lender and
their respective successors and assigns, except that the Borrower shall not have
the right to assign its rights  hereunder  or any  interest  herein  without the
prior written consent of the Lender. The Lender may assign to its successors and
affiliates,  or may grant participations to one or more banks or other financial
institutions in or to all or any part of, and may assign to one or more banks or
other financial  institutions  all or any part of, its  obligations,  rights and
benefits  hereunder,  including any Advance or Advances  owing to the Lender and
the Note. To the extent of such  assignment  such  assignee  shall have the same
obligations,  rights and benefits  with respect to the Borrower as it would have
had if it were the Lender  hereunder.  Subject to the consent of the Borrower to
such  assignment,  which consent will not  unreasonably be withheld,  the Lender
shall be relieved of its  obligations  hereunder to the extent of the  Revolving
Commitment assigned. In the event of any such assignment,  the Lender shall have
the right to  unilaterally  amend  this  Agreement  to  allocate  the  Revolving
Commitment  between the Lender and all such  assignees in a pro rata manner,  to
stipulate  the level of  concurrence  between the Lender and all such  assignees
required for any amendments,  waivers or consents by the Lender  hereunder,  and
generally to settle the rights and  obligations  between the Lender and all such
assignees  with respect to this  Agreement.  The parties  hereto hereby agree to
execute and deliver any such  supplement or amendment to this Agreement that may
be necessary to effectuate such substitution.  This Agreement and the Note shall
be governed  by, and  construed  in  accordance  with,  the laws of the State of
Illinois.

         8.8 Consent to Jurisdiction. The Borrower and the Guarantor irrevocably
submit to the nonexclusive jurisdiction of any United States federal or Illinois
State court sitting in the City of Chicago in any action or  proceeding  arising
out of this  Agreement  and agree that all claims and matters in respect of such
action and  proceeding  may be heard and  determined by such federal or Illinois
State court.  The Borrower and the Guarantor also waive any objection they might
now or hereafter  have on the ground that any such action or  proceeding in such
federal  or  Illinois  court has been  brought  in an  inconvenient  forum.  The
Borrower and the  Guarantor  agree that service of process may be made upon them
by  service  on C.T.  Corporation  System at its  office in  Chicago in any such
action or proceeding,  and hereby irrevocably appoint C.T. Corporation System as
agent for service of process therein.

         8.9  Severability.  In  the  event  that  any  one or  more  provisions
contained in this Agreement should for any reason be held to be unenforceable in
any  respect  under  the  laws  of  the  United   States  or  any  state,   such
unenforceability shall not affect any other provision hereof, and this Agreement
shall be  construed  in the  applicable  jurisdiction  as if such  unenforceable
provision had not been contained herein.


                                                      -33-
0198094.04

<PAGE>



         8.10  Confidentiality.  The Lender agrees to use reasonable  efforts to
ensure that any information  concerning the Borrower and the Guarantor  obtained
by the Lender or any authorized agents or representatives of the Lender pursuant
to this  Agreement  which is not contained in a report or other  document  filed
with the Securities and Exchange Commission,  distributed by the Borrower or the
Guarantor  to  shareholders  or otherwise  available to the public  generally or
otherwise  independently  known by the Lender (otherwise than by breach of these
confidentiality  obligations by the Lender) will, to the extent permitted by law
and except as may be required  by valid  subpoena  or other  external  reporting
requirements or as may be necessary in litigation in the sole  determination  of
the Lender, be treated  confidentially by the Lender and will not be distributed
or otherwise  made available by the Lender to any Person other than the Lender's
employees,  authorized agents or  representatives  who have a reasonable need to
know such  information.  Notwithstanding  the foregoing,  the Lender may furnish
copies of any  information  received  hereunder to any  assignee or  participant
pursuant to Section 8.7.

         8.11 Execution in  Counterparts.  This Agreement may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which  when so  executed  shall be deemed to be an  original  and all of
which taken together shall constitute one and the same agreement.


                            [signature pages follow]

                                                      -34-
0198094.04

<PAGE>



         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective  officers  thereunto duly authorized as of the date
first above written.



CIBC INC.                                   GETCHELL GOLD CORPORATION



By: /s/ John W. Kunkle                      By:  /s/ D. S. Robson

Title:  As Agent                            Title: Vice President
                                                   and Chief Financial Officer


Address For Notices to Bank:                FMG INC.

for operational matters:

Canadian Imperial Bank of Commerce          By:  /s/ D. S. Robson
Two Paces West
2727 Paces Ferry Road, Suite 1200           Title:  Vice President
Atlanta, Georgia  30339                             and Chief Financial Officer
Attention:  Vice President,
                   Credit Operations
Telecopier No.:  (404) 319-4950
Telephone No.:   (404) 319-4999

for credit matters:

Canadian Imperial Bank of Commerce
200 W. Madison Avenue
Suite 2300
Chicago, Illinois  60606
Attention:  John Kunkle
Telecopier No.:  (312) 726-8884
Telephone No.:   (312) 750-8732


                                                      -35-
0198094.04

<PAGE>



                                    EXHIBIT A
                                       to
                                 LOAN AGREEMENT
                            GETCHELL GOLD CORPORATION
                         REVOLVING LOAN PROMISSORY NOTE


                                                                       , 199_


         FOR VALUE  RECEIVED,  the  undersigned,  GETCHELL GOLD  CORPORATION,  a
Delaware  corporation (the  "Borrower"),  hereby promises to pay to the order of
CIBC Inc. (the "Lender") at Two Paces West,  2727 Paces Ferry Road,  Suite 1200,
Atlanta,  Georgia  30339  and in  immediately  available  funds,  the  aggregate
outstanding  principal  amount of all Advances (as defined in the Loan Agreement
(as  hereinafter  defined))  made by the Lender to the Borrower  pursuant to the
Loan  Agreement.  Unless earlier paid, the aggregate  unpaid  principal  balance
hereunder  shall be due and payable on the Maturity Date (as defined in the Loan
Agreement).  All such payments shall be made in accordance with the terms of the
Loan Agreement. The Borrower also agrees to pay interest on the unpaid principal
amount of each such Advance at the interest rate per annum equal at all times to
the rate for each such Advance  determined in  accordance  with the terms of the
Loan  Agreement.  All accrued  and unpaid  interest  hereunder  shall be due and
payable  prior  to and at  maturity  as  provided  in  Section  2.4 of the  Loan
Agreement. Any amount of principal hereof which is not paid when due (whether as
scheduled,  by virtue of mandatory  prepayment,  by  acceleration  or otherwise)
shall  bear  interest  until  paid,  payable  on demand  (in the case of a LIBOR
Borrowing (as defined in the Loan Agreement)) at a rate per annum equal to LIBOR
plus two  percent  (2%)  until the end of the  applicable  Interest  Period  (as
defined in the Loan  Agreement) and  thereafter at a fluctuating  rate per annum
equal to the Base Rate (as defined in the Loan Agreement) plus one percent (1%),
or (in the case of Base Borrowings (as defined in the Loan  Agreement)) the Base
Rate plus one percent  (1%).  All  Advances  made by the Lender to the  Borrower
pursuant  to the Loan  Agreement  and all  payments  made on account of Advances
hereof  shall be  recorded  by the Lender  and,  prior to any  transfer  hereof,
endorsed on the grid attached hereto which is part of this  Promissory  Note, it
being understood, however, that the failure to make any such endorsement (or any
errors in notation) shall not affect the  obligations of the Borrower  hereunder
or under the Loan Agreement in respect of such Advances.

         This Promissory Note is the Note referred to in, and is entitled to the
benefits  of,  the Loan  Agreement  dated as of  September  5, 1997  (the  "Loan
Agreement")  by and among the  Borrower,  FMG Inc.,  a Nevada  Corporation  (the
"Guarantor"),  and CIBC Inc.(the  "Lender"),  which Loan Agreement,  among other
things,  contains  provisions for  acceleration  of the maturity hereof upon the
happening  of  certain  stated  events  and also for  prepayments  on account of
principal  hereof  prior to the  maturity  hereof upon the terms and  conditions
therein specified.

         In  addition  to  and  not  in  limitation  of the  foregoing  and  the
provisions of the Loan Agreement, the Borrower promises to pay the holder hereof
all costs and  expenses of  collection  of this  Promissory  Note and to pay all
reasonable attorneys' fees incurred in such collection or in any

0198094.04
                                                         1

<PAGE>



suit or action to  collect  this  Promissory  Note or any  appeal  thereof.  The
Borrower  waives  presentment,  demand,  protest,  notice of protest,  notice of
dishonor,  notice  of  nonpayment,  any and all other  notices  and  demands  in
connection with the delivery, acceptance, performance, default or enforcement of
this Promissory Note, as well as any applicable statute of limitations. No delay
by the holder hereof in exercising any power or right hereunder shall operate as
a waiver of any power or right.

         This  Promissory  Note  shall be deemed  to be made  under and shall be
construed in accordance with and governed by the laws of the State of Illinois.

                                                     GETCHELL GOLD CORPORATION



                                                     By:

                                      Its:


0198094.04
                                                         2

<PAGE>






              AMOUNT OF           AMOUNT OF         UNPAID
              ADVANCE             PRINCIPAL         PRINCIPAL      NAME OF
              MADE                PREPAID           OF NOTE        PERSON MAKING
DATE          (in Dollars)        (in Dollars)      (in Dollars    NOTATION





































0198094.04
                                                         3

<PAGE>



                                    EXHIBIT B
                                       to
                                 LOAN AGREEMENT

                                     FORM OF
                               NOTICE OF BORROWING
                            [Letterhead of Borrower]



                                                     Date: _______________, ____

Canadian Imperial Bank of Commerce
200 W. Madison Avenue
Suite 2300
Chicago, Illinois  60606
Attention:  John Kunkle

Ladies and Gentlemen:

          Reference is made to that certain Loan Agreement dated as of September
5, 1997 by and among CIBC Inc.,  Getchell Gold  Corporation  (as "Borrower") and
FMG Inc. (as "Guarantor") (as from time to time amended,  the "Loan Agreement").
All terms  defined in the Loan  Agreement  shall have the same meaning when used
herein.

         Pursuant  to Section 2.2 of the Loan  Agreement,  the  Borrower  hereby
irrevocably requests an Advance on __________, ____, which is a Business Day, as
follows:


         1.       Available Amount of                        $__________________
                  Revolving Commitment

         2.       Total Amount of Advance                    $_________________*
                  Requested Pursuant to this
                  Notice

         3.       Type of Borrowing (Base/LIBOR)             __________________

--------
   *   NOTE: EACH AMOUNT ON LINE 2 MUST BE IN A MINIMUM AMOUNT OF $500,000
       ($100,000 IN THE CASE OF A BASE BORROWING) OR A GREATER INTEGRAL MULTIPLE
       OF $100,000.

0198094.04
                                                         1

<PAGE>




         4.       If the Borrowing is LIBOR
                  - Interest Period                           __________________


         The Borrower certifies that:

                  (i)  Representations  and Warranties.  The representations and
warranties made in Article 4 of the Loan Agreement are true and correct and with
the same effect as if made on the date hereof, and since December 31, 1996 there
has been no material  adverse  change in the business or financial  condition of
the Borrower or the Guarantor;

                  (ii) No  Proceeding.  There is no pending or, to the knowledge
of the  Borrower  or the  Guarantor,  threatened,  action,  suit  or  proceeding
affecting the Borrower or the Guarantor before any court, Governmental Agency or
arbitrator  which could reasonably be expected to have a material adverse effect
upon the business or financial condition of the Borrower or the Guarantor; and

                  (iii) No Event of Default.  No event or condition has occurred
or is continuing, or would result from the above Borrowing or the application of
the proceeds thereof,  which constitutes an Event of Default or would constitute
an Event of Default but for the requirement  that notice be given or time elapse
or both.





                                                      GETCHELL GOLD CORPORATION



                                                      By:

                                                      Its:


0198094.04
                                                         2

<PAGE>



                                    EXHIBIT C
                                       to
                                 LOAN AGREEMENT


                                     FORM OF
                   NOTICE OF CONVERSION OR RENEWAL OF INTEREST

                            [Letterhead of Borrower]

                              ---------------, ----


Canadian Imperial Bank of Commerce
200 W. Madison Avenue
Suite 2300
Chicago, Illinois  60606
Attention: John Kunkle

Ladies and Gentlemen:

         Reference is made to that certain Loan Agreement  dated as of September
5, 1997 by and among CIBC Inc.,  Getchell Gold  Corporation  (as "Borrower") and
FMG Inc. (as "Guarantor") (as from time to time amended,  the "Loan Agreement").
All terms  defined in the Loan  Agreement  shall have the same meaning when used
herein.

         Pursuant to Section 2.10 of the Loan  Agreement,  the  Borrower  hereby
requests a conversion or renewal on _____________, ____, which is a Business Day
(or which,  in the case of a LIBOR  Borrowing  or a new  Interest  Period for an
outstanding  LIBOR Borrowing,  shall be a day on which commercial banks are open
for international business and quoting interest rates for Dollar deposits in the
interbank  Eurodollar  market),  as  follows  (all  terms  defined  in the  Loan
Agreement shall have the same meaning when used herein):

1.A.     Amount of Borrowings to be                          $__________________
         converted

1.B.     Amount of Borrowings to be renewed                  $__________________

2.A.     The LIBOR Borrowings to be
         converted have Interest Periods
         ending                                         _________________, 19___

                                                        _________________, 19___
                                                     
                                                        _________________, 19___
0198094.04
                                                         1

<PAGE>



2.B.     and are to be converted to Base
         Borrowings for:                                     $__________________

2.C.     and are to be renewed for Interest
         Periods of:

                                    (i)     1 month for      $__________________
                                    (ii)    2 months for     $__________________
                                    (iii)   3 months for     $__________________
                                    (iv)    6 months for     $__________________

                                            Total of 2.C.    $__________________

         Total of 2.B. and 2.C.                              $__________________

3.       The Base Borrowings to be
         converted are to be converted to
         LIBOR Borrowings having Interest Periods of:

                                    (i)     1 month for      $__________________
                                    (ii)    2 months for     $__________________
                                    (iii)   3 months for     $__________________
                                    (iv)    6 months for     $__________________

                                            Total of 3.      $__________________



                                                       GETCHELL GOLD CORPORATION

                                                       By:

                                                       Its:


0198094.04
                                                         2