Document:

Gold City Industries Ltd

Gold City Industries Ltd.

Suite 550 — 580 Hornby Street, Vancouver, BC V6C 3B6

telephone: (604) 682-7677 fax: (604) 642-6577

email: info@gold-city.net Website: www.gold-city.net

January 8, 2004

Mr. Hugh Wynne

San Gold Resources Corporation

Lot 1, Block 12

Bissett, Manitoba

ROE OJO

Dear Mr. Wynne:

Letter of Intent

By way of this letter, we wish to set out the various agreements made between Gold City and San Gold Resources, with respect to an intended Joint Venture which will acquire all of the issued shares of Harmony Gold Canada (“HGC”) from Harmony Gold Mining Co. Ltd. (“HarmonySA”), fund the rehabilitation of the main asset of HGC, being the Bissett Gold Mine, and conduct future exploration and development on San Gold’s mineral properties that are contiguous to the Harmony Mining Lease on which the Bissett Gold Mine is located (the “San Gold Project”). This letter will form the basis on which a definitive Joint Venture Agreement (the “JV”) will be negotiated, and it describes certain of the terms and conditions, which will be included in the JV.

1)

San Gold’s contribution to the Joint Venture will be the letter of intent (and all rights which flow therefrom) dated November 19, 2003 and entered into with HarmonySA in respect of the acquisition of HGC, and the San Gold Project. Gold City wishes to fund and own 50% of HGC and fund and own 50% of the existing San Gold Project, and in consideration of San Gold’s contribution to the Joint Venture and in recognition of the monies San Gold has spent to date, agrees to raise $2,000,000 (half of which will be flow through and half non flow through), which will be allocated for exploration on the San Gold Project.

2)

Gold City proposes that it be the Operator for the rehabilitation, development and ongoing operation of the Bissett Gold Mine and any mining properties connected therewith, and San Gold will be the Operator for any exploration program required as part of the rehabilitation and development of the Bissett Gold Mine, and for exploration on the San Gold Project. Each Company would have representation on the management committee to determine the best strategy for operations and exploration.

3)

Gold City proposes it participate in San Gold’s current private placement (by which San Gold is offering 4,000,000 units ~ $0.40 per unit comprised of one flow-through share and one non flow through share plus one warrant exercisable to purchase one additional share at $0.39 per share for a period of two years. Gold City proposes to invest up to $800,000 in this private placement.

4)

In addition (but only if funds are not otherwise available to San Gold from unallocated working capital on closing of the private placement) Gold City proposes to loan funds of up to $250,000 (or such other amount which may be agreed upon), which may be used by San Gold to pay out and secure a release of the existing obligation by San Gold to Hunter-Dickinson, and a discharge of the BCSC Supreme Court Action commenced by Hunter Dickinson against San Gold in respect of such loan. Funds shall be advanced by Gold City to San Gold on the following terms:

•

6 month loan, thereafter on demand;

•

convertible at Gold City’s option into San Gold shares @ the closing market price on January 8th less maximum allowable discount;

•

Gold City shall receive an equal amount of warrants exercisable to purchase San Gold shares at the above price + 15%, for 18 months from the date of conversion;

•

Should San Gold not require the loan, Gold City will receive a break fee of 100,000 San Gold warrants exercisable to purchase Saxi Gold shares at the above price, for 18 months from January 8, 2004.

5)

Gold City would also require a Right of First Refusal from San Gold in the event San

Gold shareholders receive an offer from a third party to purchase securities which would

result in a change of control or the creation of a control block (more than 20% of San

Gold’s voting shares), or an offer to purchase any of its assets, including any of San

Gold’s assets that are not part of the joint venture.

6)

Gold City proposes Harris Partners Limited of Toronto, Ontario, coordinate financing the purchase of HGC, and the subsequent project financing for both companies so as to avoid duplication of efforts, confusion in the marketplace and to economize on expenses. In addition, Harris Partners would advise on value creation opportunities such as monetization of the tax pools related to the Bissett Gold Mine.

7)

The transaction contemplated herein is subject, among other things, to the following occurring on or before ________________ (the “Closing Date”):

a)

Regulatory approval from those organizations having jurisdiction over the affairs of Gold City and San Gold, including the TSX Venture Exchange;

b)

Shareholder Approval, if deemed necessary for either party;

c)

HarmonySA giving its consent to Gold City’s participation in the acquisition of HDC in the manner contemplated herein.

8)

In the event the Joint Venture is not able to complete the acquisition of HDC, and Gold City has acquired San Gold securities, Gold City reserves the option to require San Gold to purchase such shares at Gold City’s purchase price.

9)

The parties agree not to disclose to any party, without having the express consent and understanding of the other that these discussions are ongoing, except as may be required by law, government regulation, or the rules of the TSX Venture Exchange.

The intent of this letter is not to create legal relations or give rise to binding obligations, other than the obligation to utilize our respective and reasonable business efforts to negotiate the JV based on the principals described in this letter. Neither party shall be liable or responsible to the

other for any failure to successfully negotiate or execute the IV or any other document or agreement necessary to complete the transactions contemplated herein.

Please indicate your acceptance of this letter by signing where indicated below. Yours truly,Exhibit 4.2

                            OPEN JOINT STOCK COMPANY
         LONG-DISTANCE AND INTERNATIONAL TELECOMMUNICATIONS ROSTELECOM
                                   (as seller)

                                       and

                           CLOSED JOINT STOCK COMPANY
                             RAIFFEISENBANK AUSTRIA
                                   (as buyer)

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                        STOCK SALE AND PURCHASE AGREEMENT
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<PAGE>

                        STOCK SALE AND PURCHASE AGREEMENT
                                  No. 438-03-4

This Stock Sale and Purchase Agreement ("Agreement") is made on this 22 day of
October 2003 in Moscow by and between:

(1)  Closed Joint Stock Company "Raiffeisenbank Austria" (the "Buyer")
     established under the laws of Russian Federation, acting on the basis of
     Brokerage Agreement dated September 08, 2003 # 70066 (concluded between the
     Buyer acting as a broker and a client of the Buyer (the "Client"),
     represented by Michel P. Perhirin, Chairman of the Board, acting on the
     basis of the Charter, and

(2)  Open Joint Stock Company Long-Distance and International Telecommunications
     "Rostelecom" (the "Seller") organised in accordance with the laws of the
     Russian Federation represented by Mr. Sergei Ivanovich Kouznetsov, General
     Director, acting on the basis of the Charter,

(together, the "Parties" and separately, a "Party").

THE PARTIES AGREE as follows:

1.   SUBJECT OF AGREEMENT

The Seller agrees to transfer title to and the Buyer, acting in its own name and
at the expense of the Client, agrees to accept and pay for 669 554 (six hundred
sixty nine thousand five hundred fifty four) common registered non-documentary
shares of the third issue in the Open Joint Stock Company "RTC-Leasing" (state
registration number of the issue: 1-03-01154-N of 21 February 2002), nominal
value 10 Rubles per share (the "Shares"), comprising, as rounded to one
thousandth of percent, 16,038 (sixteen 38/1000) percent of the charter capital
of Open Joint Stock Company "RTC-Leasing" (the "Company"), on the terms and
conditions of this Agreement.

2.   transfer of title

     (1)  All rights to the Shares shall be transferred to the Buyer as of the
          moment of making the entry in the register of shareholders of the
          Company (the "Shareholders' Register") from the Seller's name to the
          Buyer's name.

     (2)  The Seller shall file the transfer order in respect of the Shares in
          accordance with legislation of the Russian Federation in force and
          requirements of the registrar (the "Registrar") maintaining the
          Shareholders' Register as well as any documents to be presented to
          transfer the rights to the Shares with the Shareholders' Register,
          within 5 (five) business days from the execution date of this
          Agreement.

     (3)  The Seller shall provide the Buyer with the Registrar's notice (the
          "Registrar's Notice") of transfer of the title to the Shares to the
          Buyer. If the Seller is unable to provide the Seller with the
          Registrar's Notice within five (5) business days following the date of
          transfer of the title to the Shares to the Buyer, the Seller shall,
          (i) without delay, notify the Buyer of this fact, and provide the
          Buyer with a copy of the Sellers' request for the Registrar's Notice
          delivered to the Registrar, and (ii) use any and all possible efforts
          to furnish or make available to the Buyer, at the Seller's cost and
          expense, information of the Registrar duly executed and signed by an
          authorised representative of the Registrar, received by request of the
          Company, with a statement that the Buyer is a registered person in
          respect of the Shares in accordance with the Shareholders' Register.
          Notwithstanding any provisions herein to the contrary, the Buyer shall
          request the Registrar for a extract from the Shareholders' Register
          within three (3) business days of receipt of the notice of the Seller
          mentioned in section (i) of clause 2 (3) hereof.

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<PAGE>

3.   PAYMENTS

     (1)  The Buyer shall pay to the Seller for the transfer of title to the
          Shares the amount (the "Purchase Price") of 438 518 519 (four hundred
          thirty eight million five hundred eighteen thousand five hundred
          nineteen) Russian rubles within 2 (two) business days (i) following
          the date of receipt of the Registrar's Notice by the Buyer, or (ii)
          from the date on which the Buyer receives the information of the
          Registrar as set out in section (ii) of clause 2 (3) of this
          Agreement, or (iii) following the date on which the Buyer receives the
          extract from the Shareholders' Register stating that the Buyer is a
          registered person in respect of the Shares in accordance with the
          Shareholders' Register, whichever shall occur earlier.

     (2)  Amounts to be paid under this Agreement shall be paid by bank transfer
          to the relevant account set out at the end of this Agreement. The
          Seller's obligation to pay the Purchase Price or any part of the
          Purchase Price shall be considered to have been fulfilled as of the
          moment when (i) the monetary funds are credited to the Buyer's bank
          account if a fund transfer is executed over Parties' accounts open
          within a credit institution, or (ii) in any other cases, when the
          monetary funds are credited to the correspondent account of the credit
          organization servicing the Buyer's bank account.

     (3)  All payments hereunder shall be effected in the Russian rubles.

4.   DEFAULT

     If the Seller has committed a material breach of provisions of this
     Agreement and such breach remains uncured for thirty (30) calendar days as
     of the date of receipt by the Seller of the Buyer's notice, then the Buyer,
     by written notice to the Seller and without recourse to courts, may at its
     discretion either proceed with the fulfillment of this Agreement or
     terminate this Agreement pursuant to clause 5 of this Agreement.

     If:

          o    The Buyer fails to pay any sum due from it as specified in this
               Agreement; or

          o    any representation or warranty made by the Buyer in this
               Agreement is or proves to have been incorrect or misleading when
               made, provided that such incorrect or misleading representation
               or warranty has a material adverse effect on the Buyer 's ability
               to duly perform its obligations and/or on the rights of the
               Seller hereunder; or

          o    the Buyer is unable to make payments under this Agreement as they
               fall due, or any steps are taken by the Buyer, any Russian agency
               or any third party for the liquidation of or for the appointment
               of a receiver, administrator or similar official of the Buyer; or

          o    the Buyer has committed a material breach of provisions of this
               Agreement and such breach remains uncured for thirty (30)
               calendar days as of the date of receipt by the Buyer of the
               Seller's notice;

     then, and in any such case, the Seller, by written notice to the Buyer and
     without recourse to courts, may at its discretion either proceed with the
     fulfillment of this Agreement or terminate this Agreement pursuant to
     clause 5 of this Agreement.

5.   TERMINATION AND INDEMNITY

     (1)  Upon termination of this Agreement by either Party, each Party shall
          be required to return to the other Party everything received from the
          other Party. For the avoidance of doubt, upon termination by either
          Party, the Buyer shall transfer the Shares back to the Seller, and the
          Seller shall return to

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<PAGE>

          the Buyer the amounts paid towards the Purchase Price by the Buyer, in
          addition to any indemnity provisions set out below.

     (2)  If any Party terminates this Agreement pursuant to clause 4 (1) or 4
          (2) of this Agreement, the other Party shall indemnify the terminating
          Party against all its reasonable costs relating to the negotiation,
          preparation, signing, or termination of this Agreement.

     (3)  Upon termination as provided by clause 4 (1) or 4 (2) hereof, this
          Agreement shall be of no further force or effect, and no Party shall
          have any further obligation for further performance of this Agreement
          or any of its terms, except for clauses 5, 8, 10, 12 and 13 hereof,
          which shall survive the termination of this Agreement.

     (4)  The Seller and the Buyer agree that:

          -    The Buyer shall be liable to indemnify and hold harmless the
               Seller from and against losses in full, including those
               associated with any claims, losses, liabilities, damages,
               reasonable costs and reasonable expenses, arising out of the
               termination of this Agreement pursuant to clause 4 (2) hereof.
               Money becoming due from the Buyer to the Seller under the
               indemnities contained in this clause shall be paid on demand made
               by the Seller and shall be paid together with interest thereon at
               double interest rate of the Central Bank of the Russian
               Federation from the date of demand to the date of payment by the
               Buyer to the Seller, and

          -    Upon termination of this Agreement by either Party, each Party
               shall be required to return to the other Party everything
               received from the other Party. For the avoidance of doubt, upon
               termination by either Party, the Buyer shall transfer the Shares
               back to the Seller, and the Seller shall return to the Buyer the
               amounts paid towards the Purchase Price by the Buyer, in addition
               to any indemnity provisions set out below.

6.   FORCE MAJEURE

     (1)  The parties shall not be liable for the consequences of any delay,
          failure or inability to discharge an obligation under this Agreement
          for reasons beyond their reasonable control. Such events will include,
          but not be limited to any law, order, regulation or threat of any
          governmental or other authority prohibiting activities which are the
          subject of this Agreement, or actions of the Registrar which prevent
          completion of this Agreement (a "Force Majeure Event").

     (2)  If either Party becomes aware of a Force Majeure Event it shall, on
          becoming so aware, notify the other Party of the event.

     (3)  If a Force Majeure Event causes a delay in the performance of this
          Agreement the Parties may agree to terminate this Agreement.

7.   WARRANTIES

     (1)  The Seller and Buyer represent and warrant that they have the
          requisite power to enter into this Agreement and perform their
          obligations under this Agreement and that this power is duly
          established and not in violation of any agreements or the legislation
          of the Russian Federation.

     (2)  The Seller represents and warrants that it has the requisite power to
          dispose of the Shares, and the Seller is the owner of the Shares.

     (3)  The Seller represents and warrants that the Shares are free and clear
          from any third party lien, charge interest or encumbrance or other
          Shares interest.

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<PAGE>

     (4)  The Buyer represents and warrants that Brokerage Agreement dated
          September 08, 2003 # 70066 concluded between the Buyer and the Client
          provides that the broker shall perform any securities transactions
          with third persons in its own name and at the expense of the Client.

     (5)  The Buyer represents and warrants that it has duly opened and
          maintains an account with the Registrar in order to receive the Shares
          upon their transfer from the Seller.

     (6)  The Parties hereby acknowledge that their respective representations
          and warranties set out in this Clause 7 are true, accurate and not
          misleading as of the date of signing of this Agreement; such
          representations and warranties shall be deemed repeated in full at (i)
          the date of the transfer of title to the Shares, and (ii) except for
          the representations and warranties made by the Seller in clauses 7 (2)
          and 7 (3) hereof, the date of payment of the Purchase Price.

8.   CONFIDENTIALITY

     (1)  Neither Party shall disclose any information about the other Party
          obtained as a result of, or in connection with, entry into this
          Agreement, except as provided for in this Agreement or where required
          by the Client or according to applicable legislation or any court
          order or when required to do so by any fiscal or regulatory body.

     (2)  No public announcement, communication or circular concerning the
          transactions referred to in this Agreement may be made or dispatched
          at any time by either Party without having first obtained written
          consent of the other Party, which must not unreasonably withhold or
          delay giving consent.

9.   ASSIGNMENT

Neither Party may assign or transfer any of its rights and obligations under
this Agreement without the prior written consent of the other Party.

10.  NOTICES

Except as otherwise expressly provided in this Agreement, all notices shall be
in writing and mailed, telecopied or hand delivered to the address set out below
in this clause 10. All such notices shall be effective when received by the
receiving Party.

With respect to the Buyer to:

     ZAO Raiffeisenbank Austria
     Russian Federation
     129090 Moscow
     17/1 Troitskaya
     Fax: (095) 721 99 01
     Attn: Head of Securities Operations and Custody Service Dept.

With respect to the Seller to:

     OAO Rostelecom
     Russian Federation
     125047 Moscow
     14, ul. 1st Tverskaya-Yamskaya
     Fax: (095) 787 2850
     Attn: Finance Director

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<PAGE>

11.  FURTHER ASSURANCE

Each Party shall, at its own expense, promptly take such steps and execute such
documents as shall be necessary or desirable to give effect to the provisions of
this Agreement.

12.  GOVERNING LAW

This Agreement shall be governed by and construed in accordance with legislation
of Russia. Any dispute arising under this Agreement shall be resolved
exclusively through the International Commercial Arbitration court at the
Chamber of Commerce and Industry of the Russian Federation, Moscow, Russian
Federation without resort to other courts.

13.  MISCELLANEOUS

     (1)  Each of the Parties shall pay its own expenses which may arise in
          connection with this Agreement as well as expenses relating to the
          negotiation, preparation, signing and implementation by the Parties of
          this Agreement and of all other documents referred to in it.

     (2)  Amendments and additions to this Agreement will only be valid if they
          are in written form and signed by duly authorized representatives of
          both Parties.

     (3)  This Agreement is valid from the date of its signing by both Parties
          and shall be valid until all obligations of the Parties under it have
          been fulfilled or the Agreement is terminated by the agreement of both
          Parties or in accordance with clause 4 of this Agreement.

     (4)  This Agreement is made in two originals, one for each Party. The
          originals of the Agreement shall have equal legal force.

     (5)  In the event of any inconsistency between the English and Russian
          texts of this Agreement, the Russian shall prevail.

          On behalf of the Seller:                    On behalf of the Buyer:
          Authorized Signatory:                       Authorized Signatory:

          _______/signed/____________                 _______/signed/___________
          S.I. Kouznetsov                             Michel P. Perhirin
          General Director                            Chairman of the Board

          Authorized Signatory:                       Authorized Signatory:

          _______/signed/____________                 _______/signed/___________
          A.A. Lutsky                                 E.Yu. Soukhoveeva
          Chief Accountant                            Chief Accountant

          [Seal]                                      [Seal]

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