Document:

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                                                                   Exhibit 10.50

                SETTLEMENT AGREEMENT AND MUTUAL RELEASE OF CLAIMS

This Settlement Agreement and Mutual Release of Claims (the "Agreement") is
entered into by and among Nord Resources Corporation ("Nord"), National City
Bank ("NCB"), Trust Beneficiaries as defined below, the Arizona Department of
Environmental Quality ("ADEQ") and Arimetco ("Arimetco").

WHEREAS, on May 21, 2001, Nord filed its civil action, Case No. C-3-01-210,
captioned Nord Resources Corporation v. National City Bank, in the United States
District Court for the Southern District of Ohio (the "Litigation");

WHEREAS, Nord, NCB, Trust Beneficiaries and Arimetco desire to avoid the
expense, inconvenience, uncertainty and distraction of litigation concerning the
Parties' claims in the Litigation, and have entered into this Agreement to
settle completely all disputes between them under the terms set forth below; and

WHEREAS, Nord and ADEQ desire to reach a certain, expeditious and mutually
acceptable resolution of Nord's violation of ADEQ Consent Order P-4-01 and Title
49, Chapter 2, Article 3 of the Arizona Revised Statutes, at its Johnson Camp
Mine, 1octed in Cochise County, Arizona, and have reached an agreement to settle
and resolve those violations under the terms set forth below.

NOW THEREFORE, in consideration of the foregoing premises, which shall be deemed
an integral part of this Agreement, and of the mutual covenants and agreements
set forth below, which the Signatories each acknowledge and agree are good and
valuable consideration, the receipt and sufficiency of which are acknowledged by
each, the Signatories each agree as follows:

I.   DEFINITIONS

For the purposes of this Agreement, the following are defined terms:

     1. The "Rabbi Trusts" are:

     A.   "Nord Corporation Trust Agreement for Key Executives as Restated,"
          including any and all amendments, schedules, parts and terms however
          denominated;

     B.   "Nord Resources Corporation Split-Dollar Life Insurance and
          Supplemental Compensation Plan Trust," including any and all
          amendments, schedules, parts and terms however denominated; and

     C.   "Nord Resources Corporation Trust Agreement for Executive Severance
          Agreements", including any and all amendments, schedules, parts and
          terms however denominated.

     2. "Nord" means Nord and its past, present and future representatives,
attorneys, agents, employees, servants, partners, shareholders, officers,
directors, owners, parents, trustees

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(except NCB as trustee of the Rabbi Trusts), heirs, executors, administrators,
subsidiaries, affiliates, successors or assigns of them, or any of them.

     3. "NCB" means NCB and its past, present and future representatives,
attorney, agents, employees, servants, partners, shareholders, officers,
directors, owners, parents, trustees, heirs, executors, administrators,
subsidiaries, affiliates, successors or assigns of them, or any of them.

     4. "Trust Beneficiaries" means Richard L. Steinberger, Nancy O.
Steinberger, Terence H. Lang, Evelyn G. Lang, Edgar F. Cruft, Geraldine A.
Cruft, James T. Booth, Benny L. Bray, Daniel C. Brown, Richard T. Colvin, Robert
E. Davis, Jr., Leo Edward Dugdale, John Roy Etheridge, Karl A. Frydryk, Kenneth
A. Johnson, William N. Shinkan, Andres X. Vaska, William W. Wilcox, Ann Bianco
and Timothy St. Clair. "Trust Beneficiaries" also includes past, present and
future insurers or co-insurers of any of these individuals and past, present and
future representatives, attorneys, agents, emp1oyees, servants, partners,
shareholders, officers, directors, owners, parents, heirs, executors,
administrators, subsidiaries, affiliates, successors or assigns of them, or any
of them, as well as any other persons who ever were beneficiaries, are now
beneficiaries or may become beneficiaries of any of the Rabbi Trusts, or who
had, have or may in the future have any interest in the Rabbi Trusts.

     5. "ADEQ" means the Arizona Department of Environmental Quality. While ADEQ
is not a Party to the Litigation, it is a Signatory and third party beneficiary
to this Agreement, and a creditor of Nord that possesses claims against Nord for
its violation of ADEQ Consent Order P-4-01 and Title 49, Chapter 2, Article 3 of
the Arizona Revised Statutes.

     6. "Arimetco" Arimetco, any past, present and future insurer or co-insurer
of it, and its past, present and future representatives, attorneys, agents,
employees, servants, partners, shareholders, officers, directors, owners,
parents, trustees, heirs, executors, administrators, subsidiaries, affiliates,
successors or assigns of them, or any of them.

     7. "Settlement Effective Date" means the fifth business day after the
deadline for filing a notice of appeal from the order of the United States
District Court for the Southern District of Ohio ("the Court") granting final
approval to this Agreement and dismissing the Litigation with prejudice (the
"Judgment"), if no notice of appeal is filed. If a notice of appeal is filed,
the Settlement Effective Date will occur five business days after the latest of:
(i) the date of final affirmance of an appeal of the Judgment, the expiration of
the time for a petition for or a denial of a writ of certiorari to review a
ruling on appeal from the Judgment and, if certiorari is granted, the date of
final affirmance of the Judgment following review pursuant to that grant; or
(ii) the date of final dismissal of any proceeding on certiorari to review the
judgment.

     8. "Settlement Notice" means a notice of the Settlement Substantially in
the form of Exhibit _____.

     9. "Parties" mean Nord, NCB, and the Trust Beneficiaries, who are parties
to the Litigation.

     10. "Signatories" mean ADEQ and Arimetco, who are not Parties to the
Litigation, but who are signatories to this Agreement, and all of the Parties.

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II.  TERMS OF SETTLEMENT

     1. PAYMENT OF RABBI TRUST FUNDS. On the Settlement Effective Date, the
Rabbi Trusts will terminate and dissolve. Within three business days after the
Settlement Effective Date, NCB shall release and transfer the following funds
from the proceeds of the three Rabbi Trusts as set forth below:

     A.   $1,000,000 (One Million U.S. Dollars) shall be paid to the Trust
          Beneficiaries in care of their counsel into an account designated by
          their counsel. Allocation of the $1,000,000 among the Trust
          Beneficiaries shall be in accordance with a formula agreed upon by the
          respective Trust Beneficiaries.

     B.   $100,000 (One Hundred Thousand U.S. Dollars) shall be paid to Arimetco
          in partial satisfaction of Nord's debt to Arimetco, which shall be
          reaffirmed.

     C.   $1,500,000 (One Million Five Hundred Thousand U.S. Dollars) shall be
          paid into an escrow account with Compass Bank, created by the Johnson
          Camp Mine Escrow Agreement dated _______________, 2002 and signed by
          Nord and ADEQ. Nord and ADEQ have agreed the monies in the escrow
          account shall be available to Nord upon ADEQ's written consent and
          pursuant to the terms of the Johnson Camp Mine Escrow Agreement. A
          copy of the Johnson Camp Mine Escrow Agreement is attached hereto as
          Exhibit _____.

     2. All remaining funds in the Rabbi Trusts as of the Settlement Effective
Date, if any, after the payments made above, shall continue to be held in the
custody of NCB in an interest-bearing account titled "Nord Resources Trust
Litigation Settlement Account" for 91 days from the date of the latest of the
payments set forth above. Within five business days after the 91st day ("Nord
Payment Date") after the date of the latest of the payments described above in
Sections II.1.A. to II.1.C., NCB will pay to Nord any funds in the "Nord
Resources Trust Litigation Settlement Account."

III. PROCEDURES FOR NOTICE

     1. The Signatories recognize that the Court has ordered that notice of this
Agreement be provided to all creditors of Nord, including any unrepresented
beneficiaries of the Rabbi Trusts, in order to give them an opportunity to
object and to permit the Court to evaluate the fairness and adequacy of this
Agreement.

     2. Within three (3) days of the date of the last signature to this
Agreement, all Parties will jointly submit to the Court a motion for approval of
notice procedures and preliminary approval of the settlement, substantially in
the form of Exhibit _____. ADEQ will indicate its approval with a separate
letter to the Court. Within five (5) days of the date on the last signature on
this Agreement, Nord will provide to the Court and all Signatories a list of the
names and addresses of all of its known creditors, including all unrepresented
beneficiaries of the Rabbi Trusts.

     3. NCB will mail the Settlement Notice to each of Nord's creditors, as
identified by Nord, in the manner and form and at the time directed by the
Court. NCB will certify to the

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Court and all Signatories that notice has been given in conformity with the
Court's direction within two business days after mailing the Settlement Notice.
The cost of duplicating and mailing the Settlement Notice will be borne by the
Rabbi Trusts on a pro rata basis.

     4. On a date to be set by the Court in its order granting preliminary
approval of the settlement and approval of notice procedures, the Parties will
jointly file a motion for final approval of the settlement by the Court, with a
proposed order finally approving the settlement, dissolving the Rabbi Trusts,
and dismissing the litigation with prejudice; the proposed order will be
substantially in the form of Exhibit _____. ADEQ will indicate its approval with
a separate letter to the Court.

     5. Should this Agreement not be approved by the Court, for whatever reason,
or should this Agreement be approved by the Court subject to conditions that not
all Signatories to this Agreement, in their sole discretion, find acceptable, or
should the Court's approval of this Agreement be reversed on appeal or modified
in a manner that not all Signatories to this Agreement, in their sole
discretion, find acceptable, then this Agreement shall be terminated and
considered void, and all Signatories shall have the same rights and obligations
that they had prior to entering into this Agreement, and all releases set forth
below will be void.

IV.  NORD'S BANKRUPTCY

          Should Nord declare or be placed in bankruptcy, voluntarily or
involuntarily or commence or become the subject of any insolvency or
receivership proceedings of any kind under any state or federal law, any time
before the Nord Payment Date, all Releases of and by Nord in Section V below
shall be void, and all Signatories shall retain all rights and obligations that
they possessed prior to entering into this Agreement, except to the extent those
obligations are satisfied by payments made in Section II above.

V.   RELEASE

          For and in consideration of the payments referenced above, Nord, the
Trust Beneficiaries, NCB, ADEQ and Arimetco execute the following releases:

     1. MUTUAL RELEASE OF CLAIMS BETWEEN NORD AND THE TRUST BENEFICIARIES. Upon
receipt by Trust Beneficiaries of the payment described above in Section II,
paragraph 1, Nord and Trust Beneficiaries fully, finally, and forever mutually
release and discharge Nord and Trust Beneficiaries and each of them from any and
all claims, contracts, promises, judgments, suits, liens, losses, indebtedness,
rights, damages, costs, fees, expenses, remedies, accounts, demands,
obligations, liabilities and causes of action of every type, nature and
description, including but not limited to all claims relating to the Litigation,
the Rabbi Trusts, deferred compensation, retirement benefits, severance
agreements, deferred supplemental payments, deferred compensation or retirement
benefit plans, insurance of any nature, the management of Nord, the operation of
Nord or the ownership of Nord; however, this waiver and release shall not apply
to Trust Beneficiaries' rights, benefits or privileges under the Nord 401(K)
Retirement Plan for Salaried Employees.

     2. RELEASE BY ARIMETCO. Arimetco expressly agrees to forbear from
commencing all Collection actions against Nord, including but not limited to
actions for

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foreclosure on its security interest in the Johnson Camp Mine, and with respect
to any current or future indebtedness, until two (2) years from the Settlement
Effective Date, and Arimetco's loan guarantee and/or security agreements are
hereby modified accordingly. Anything in this Agreement to the contrary
notwithstanding, Arimetco may commence any collection action against Nord,
including but not limited to an action for foreclosure on its security interest
in the Johnson Camp Mine, if Nord receives any notice from ADEQ that Nord has
failed to comply with the Compliance Order and Nord does not cure the violation
in accordance with the provisions of the Compliance Order. Nord shall advise
Arimetco immediately in writing of any notice Nord receives from the ADEQ
pertaining to (1) any failure by Nord to comply with the terms of the Compliance
Order, (2) any failure by Nord to cure the violation according to the provisions
of the Compliance Order, and/or (3) any extension by the ADEQ of the time
permitted to cure the violation. Anything in this Agreement to the contrary
notwithstanding, Arimetco may commence any collection action against Nord,
including but not limited to an action for foreclosure on its security interest
in the Johnson Camp Mine, if Nord fails to provide Arimetco with any of the
notices required by this Agreement. Arimetco waives all default-rate interest,
late charges and penalties accrued through the date of this Agreement. Except as
otherwise provided in this Agreement, the security position of Arimetco with
respect to the Johnson Camp Mine and other assets of Nord, as applicable, shall
be unaffected. Arimetco shall have the right to assign its rights under this
Settlement Agreement to any third party.

3. RELEASE BY ADEQ. Nord and ADEQ have agreed to resolve and settle Nord's
violation of ADEQ Consent Order P-4-01 Title 49, Chapter 2, Article 3, in the
following manner:

     A.   ADEQ shall issue a Compliance Order to Nord requiring that it bring
          the Johnson Camp Mine into compliance with Arizona's aquifer
          protection laws within the time frames set forth therein. Nord shall
          fully and timely comply with the Compliance Order. ADEQ shall not
          issue the Compliance Order before the Settlement Effective Date.

     B.   Nord and ADEQ shall enter into a Stipulated Judgment and Stipulated
          Judgment Entry Agreement. The Stipulated Judgment sets forth Nord and
          ADEQ's agreement that ADEQ shall have a judgment against Nord for
          civil penalties in the amount of $4,325,000 (U.S. Dollars) pursuant to
          Arizona Revised Statutes Section 49-262 as a consequence of Nord's
          violation of ADEQ Consent Order P-4-01 and Arizona's aquifer
          protection laws through the effective date of the Compliance Order.
          The Stipulated Judgment Entry Agreement sets forth Nord and ADEQ's
          agreement that ADEQ may not file for entry of the Stipulated Judgment
          unless and until Nord violates the Compliance Order and fails to
          timely cure that violation, or Nord becomes the subject of a
          bankruptcy, insolvency or receivership proceeding prior to achieving
          compliance with this Order.

     C.   Nord and ADEQ shall enter into the Johnson Camp Mine Escrow Agreement.
          The Johnson Camp Mine Escrow Agreement creates an escrow account, into
          which $1,500,000 shall be deposited by Nord, and which shall be used
          pursuant to the terms of the Johnson Camp Mine Escrow Agreement.

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     D.   ADEQ covenants not to sue Nord for any claim arising under Title 49,
          Chapter 2, Article 3 of the Arizona Revised Statutes provided that
          Nord funds the escrow account created by the Johnson Camp Mine Escrow
          Agreement and complies with the terms and conditions of the Agreement,
          the Johnson Camp Mine Escrow Agreement, and the Compliance Order. This
          covenant Not to Sue is limited to Nord's violations of Title 49,
          Chapter 2, Article 3 of the Arizona Revised Statutes and Nord's
          violation of the ADEQ Consent Order P-4-01 and does not limit the
          State's right to pursue any other claims relating to or arising out of
          any other matters whatsoever against Nord.

     E.   Paragraphs A through E constitutes the entire agreement between Nord
          and ADEQ and all documents referenced in A through D shall be merged
          and incorporated into this Agreement, and shall be governed by the law
          of Arizona.

     4. MUTUAL RELEASE BETWEEN NORD AND NCB. Nord and NCB expressly release,
discharge, terminate and otherwise extinguish any and all actual and potential
claims of any type that they may have against each other arising out of,
relating to or in any manner concerning the Rabbi Trusts, deferred compensation,
retirement benefits, severance agreements, deferred supplemental payments,
deferred compensation or retirement benefit plans, insurance of any nature, the
management of Nord, the operation of Nord, the ownership of Nord or the
Litigation, including but not limited to claims in breach of contract, tort,
equitable relief or any other damage, costs, expense or loss of any nature
whatsoever whether based on a tort, contract or other theory of recovery and all
claims that were asserted or could have been asserted in the Litigation.

     5. MUTUAL RELEASE OF CLAIMS BETWEEN NCB AND TRUST BENEFICIARIES. NCB and
Trust Beneficiaries fully, finally and forever mutually release and discharge
NCB and Trust Beneficiaries and each of them from any and all claims, contracts,
promises, judgments, suits, liens, losses, indebtedness, rights, damages, costs,
fees, expenses, remedies, accounts, demands, obligations, liabilities and causes
of action of every type, nature and description, whether known or unknown, or
past, present or future, relating to the Litigation, the Rabbi Trusts, deferred
compensation, retirement benefits, severance agreements, deferred supplemental
payments or deferred compensation or retirement benefit plans.

     6. WARRANTY. Nord, Trust Beneficiaries, NCB, and Arimetco represent and
warrant that each alone is the proper Party to assert the claims alleged by each
in the Litigation and that each Party has not assigned all or any part of any
claims the Parties asserted or could have asserted in the Litigation or which
are being released in this Agreement.

VI.  NORD, NCB, ADEQ AND ARIMETCO ARE NOT RESPONSIBLE FOR DISTRIBUTION OF
     COLLECTIVE SETTLEMENT TO TRUST BENEFICIARIES

          Trust Beneficiaries, individually and collectively, agree that this
Agreement is a collective settlement, and that Trust Beneficiaries alone,
without any control, input, recommendation or advice y or from Nord, NCB, ADEQ
and Arimetco, shall decide and agree upon the distribution of the $1,000,000
(One Million Dollars) collective settlement to all Trust Beneficiaries. Trust
Beneficiaries agree that Nord, NCB, ADEQ and Arimetco shall have no

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liability or obligation in regard to the distribution of the collective
settlement to Trust Beneficiaries.

VII. CONTINUATION OF THE TEMPORARY RESTRAINING ORDER AND DISBURSEMENTS OF FUNDS
     TO NORD

          The Parties stipulate to the continuation of the Temporary Restraining
Order ("TRO") entered by the Court in the Litigation (including authorizing
disbursements for ongoing expenses consistent with the Court's existing order,
including but not limited to payroll) so as to permit the preparation of final
documentation, approval by all necessary Signatories and approval by the Court
of this settlement. The TRO will be dissolved upon final Court approval of this
Agreement. During the pendency of the TRO, only expenses consistent with the
Court's prior orders will be approved y the Court. Prior to the dissolution of
the TRO, Nord will submit to the Court, in an amount consistent with the Court's
prior orders, a budget necessary to maintain Nord until the Nord Payment Date.
The other parties will be entitled to offer reasonable objections to Nord's
request.

VIII. ADDITIONAL CONDITIONS FOR SETTLEMENT

     1. COMPLIANCE WITH COMPLIANCE ORDER AND APP APPLICATION. Nord shall
immediately take all steps necessary to bring itself into compliance with the
Compliance Order issued by ADEQ. Without limiting the foregoing, Nord shall
apply for the permits necessary to allow ongoing operations at the Johnson Camp
Mine and to permit closure of the Johnson Camp Mine, if such action becomes
necessary or appropriate.

     2. PAYMENT OF OTHER GENERAL CREDITORS. Other general creditors of Nord
shall be paid by Nord in the ordinary course of its business activities from
available funds paid to Nord pursuant to Section II, paragraph 2 of this
Agreement. Nord shall make no payment to its officers, directors or
shareholders, other than paying officer salaries or directors' fees in the
normal course of business (as set forth in Schedule _____ hereto), without first
filing with the Court a declaration signed under penalty of perjury certifying
that Nord has (i) paid all of the undisputed claims of its general Creditors, or
(ii) that the proceeds paid to Nord under this settlement have been exhausted.

     3. INSURANCE PROCEEDS FROM THE LIGHTNING STRIKE. All insurance proceeds
relating to the lightning strike at Johnson Camp Mine shall be property of Nord.

     4. ISSUANCE OF STOCK AND INCURRING DEBT OBLIGATIONS. Nord shall have the
right to make or issue stock, profit participation interests, debt, or similar
securities so long as such issuance does not materially impact the rights of the
Signatories to this Agreement.

     5. NON-DISPARAGEMENT. No Party shall disparage the business or reputation
of any other Party.

     6. DISMISSAL OF CONTEMPT PROCEEDINGS. Counsel for Trust Beneficiaries shall
recommend to the Court in the Litigation or support the dismissal of the

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pending contempt proceedings without further sanction. NCB does not agree to any
recommendation of the dismissal of the contempt proceedings.

     7. COOPERATION OF MAKING THIS AGREEMENT FINAL AND EFFECTIVE. All
Signatories to this Agreement will cooperate completely and in good faith to
obtain Court approval of this Agreement and to ensure the prompt execution and
filing of all necessary documents to effectuate that purpose and to do all other
acts reasonably necessary or requested by any other Signatory in order to
accomplish such purpose.

IX.  EXECUTION OF DOCUMENTS

          The Signatories shall promptly execute and deliver, or cause to be
executed and entered, any and all further documents as may be necessary to fully
consummate the undertakings of the Signatories as contemplated by this
Agreement.

X.   DISMISSAL OF LAWSUITS, OTHER CLAIMS AND ACTIONS

          On the date the Court approves this Agreement, the Parties
specifically authorize and instruct their counsel to execute all documents
necessary to a dismissal with prejudice of all claims, counterclaims and
cross-claims in the Litigation, consistent with the terms and conditions set
forth above, and all similar actions.

XI.  RETURN OF NORD PACIFIC LIMITED SHARES

          All stock and share certificates that were pledged as security for the
TRO will be returned to Nord on the Nord Payment Date.

XII. COMPLETE AGREEMENT

          This Agreement contains and sets forth all of the terms agreed to by
the Signatories and sets forth the complete understanding and intentions of the
Signatories. All discussions, negotiations, understandings and agreements of the
Signatories are merged into this Agreement and no discussions, negotiations
understandings or agreements that are not set forth in this Agreement shall be
binding upon any party. No amendment, modification or supplement to this
agreement shall be valid unless evidenced by a writing signed by all Signatories
to this Agreement, subject to Court approval.

XIII. APPLICABLE LAW

          The validity, meaning interpretation, enforcement and effect of this
Agreement shall be governed by the law of the State of Ohio. Exclusive
jurisdiction for all disputes arising under this agreement shall be in the
Court. The prevailing party in any such dispute shall be entitled to reasonable
attorney's fees and costs.

XIV. RELIANCE IN ENTERING INTO THIS AGREEMENT

          Entering into this Agreement, each Signatory has not relied upon any
statements or representations regarding their rights by any other Signatory,
their agents or their attorneys.

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On the contrary, each Signatory has considered all of these matters themselves
and has relied upon their own judgment after consultation with their attorneys.
This Agreement is being entered into only after each Signatory and their
attorneys have had a full and complete opportunity to make their own independent
evaluations regarding the strength of each Signatories' claims and rights
against all other Signatories.

XV.  INDEMNIFICATION

          Nord shall indemnify, defend and hold harmless NCB from and against
any and all losses, claims, damages, liabilities and costs, as and when
incurred, to which NCB may become subject or which are asserted against NCB,
directly or indirectly relating to NCB entering into this Agreement or taking
the actions required of NCB under this Agreement.

XVI. MISCELLANEOUS PROVISIONS

     1. The terms of this Agreement are not and should not be construed as an
admission of liability or wrongdoing on the part of any Signatory. Each
Signatory in fact denies any wrongdoing or any liability to all others.

     2. This Agreement shall be binding upon, inure to the benefit of, and be
enforceable by the Signatories' respective heirs, executors, administrators,
representatives, successors, and assigns.

     3. This Agreement may be executed in multiple counterparts in order that
each Signatory might retain an executed original. Each counterpart may serve as
the original Agreement.

                                        By: /s/ John F. Champagne
                                            ------------------------------------
                                            NORD RESOURCES CORPORATION

STATE OF NEW YORK
COUNTY OF NEW YORK

The foregoing instrument was acknowledged before me this 6th day of June, 2002
by John F. Champagne.

                                        /s/ Laura B. Melillo
                                        ----------------------------------------
                                        Notary Public

My commission expires:

LAURA B. MELILLO
Notary Public, State of New York
Qualified in New York County
No. 01ME6018225
Commission Expires January 4, 03<PAGE>
                                                                   Exhibit 10.51

                              SETTLEMENT AGREEMENT

BETWEEN AND AMONG:

NORD RESOURCES CORPORATION, a body corporate, with offices in Dragoon, Arizona
("NRC");

NORD PACIFIC LIMITED, a body corporate of the Province of New Brunswick, Canada,
with offices in Albuquerque, New Mexico ("NORD PACIFIC");

MARK R. WELCH, and individual residing in Albuquerque, New Mexico ("WE1CH");

SHARON S. WELCH, an individual residing in Albuquerque, New Mexico;

JOHN ROBERTS, an individual residing in St. Georges, South Australia
("ROBERTS");

LUCILLE LANSING, an individual residing in Albuquerque, New Mexico ("LANSING");

ALEX CHISHOLM, as trustee for the Retirement Trust of Mark R. Welch and Sharon
S. Welch;

RONALD A. HIRSCH an individual residing in Laguna Beach, California ("HIRSCH");

ERLAND ANDERSON an individual residing in Oro Valley, Arizona ("ANDERSON");

CLIVE BAILEY an individual residing in Dragoon, Arizona ("BAILEY"); and

MATTHEW WILLIAMS an individual residing in Benson, Arizona ("WILLIAMS");

RECITALS:

WHEREAS:

A. Nord Resources Corporation commenced an action in the Court of Queen's Bench
of the Province of New Brunswick, Canada, Trial Division Judicial District of
Saint John, Court File No: SIMJ2S/03 (the "NB ACTION") against Nord Pacific
Limited, Mark R. Welch, Sharon S. Welch, John Roberts, Lucile Lansing and Alex
Chisholm as trustee for the Retirement Trust of Mark R. Welch and Sharon Welch
(collectively, including Nord Pacific, the "NB DEFENDANTS").

B. NRC and Hirsch commenced Action No. CV-2002 in the Second Judicial District
Court in the State of New Mexico (the "NEW MEXICO ACTION") against Nord Pacific,
Welch, Lansing and Roberts (collectively the "NEW MEXICO DEFENDANTS"), who filed
counterclaims (the "NEW MEXICO COUNTERCLAIMS") against NRC, Hirsch and John
Champagne (collectively the "NEW MEXICO COUNTER-DEFENDANTS").

C. Nord Pacific commenced Action No. CIV 03-0799 BB/ACT in the United States
District Court for the District of New Mexico (the "FEDERAL ACTION") against
NRC, Hirsch, John Champagne, Anderson, Bailey and Williams (collectively the
"FEDERAL DEFENDANTS").

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                                      -2-

D. NRC and the NB Defendants, as well as their respective principals, officers,
directors, subsidiaries, associates, affiliates, agents, predecessor and
successor corporations, heirs, assigns and administrators, as the case may be
("NB ASSOCIATED PARTIES"), wish to finally and completely resolve any and all
claims or counterclaims (including the New Mexico Counterclaims) that were made,
ought to have been made or could have been made in the NB Action, including but
not limited to any claim for costs in the Action (the "NB CLAIMS"), and to that
end acknowledge and agree that the Recitals herein are true and that they form
part of the terms of this Settlement Agreement.

E. Nord Pacific and the New Mexico Defendants and the New Mexico
Counter-Defendants other than John Champagne, as well as their respective
principals, officers, directors, subsidiaries, associates, affiliates, agents,
predecessor and, successor corporations, heirs, assigns and administrators, as
the case may be ("NEW MEXICO ASSOCIATED PARTIES"), wish to finally and
completely resolve any and all claims or counterclaims that were made (including
the NEW MEXICO COUNTERCLAIMS), ought to have been made or could have been made
in the New Mexico Action, including but not limited to any claim for costs in
the New Mexico Action and the New Mexico Counterclaims (the "NEW MEXICO
CLAIMS"), and to that end acknowledge and agree that the Recitals herein are
true and that they form part of the terms of this Settlement Agreement.

F. Nord Pacific and the Federal Defendants other than John Champagne, as well as
their respective principals, officers, directors, subsidiaries, associates,
affiliates, agents, predecessor and, successor corporations, heirs, assigns and
administrators, as the case may be ("Federal ASSOCIATED PARTIES"), wish to
finally and completely resolve any and all claims or counterclaims that were
made, ought to have been made or could have been made in the Federal Action,
including but not limited to any claim for costs in the Federal Action (the
"FEDERAL CLAIMS"), and to that end acknowledge and agree that the Recitals
herein are true and that the' form part of the terms of this Settlement
Agreement.

G. All the parties hereto acknowledge and agree that there is valid
consideration supporting this Settlement Agreement, including the inducement to
Allied Gold Limited ("ALLIED"):

     (a) to enter into an arrangement agreement (the "ARRANGEMENT AGREEMENT")
under which Allied would exchange shares of Allied for all of the shares of the
Corporation and Nord Pacific shareholders and NRC would be entitled to benefit
therefrom as a shareholder, and

     (b) to enter into a credit facility agreement (the "CREDIT AGREEMENT")
contemplating whereunder Allied would obtain notes of Nord Pacific convertible
into shares of Nord Pacific in exchange for certain advances to be made to Nord
Pacific to pay certain costs and expenses of Nord Pacific including historic
costs of Nord Pacific;

     (collectively the Arrangement Agreement and the Credit Agreement are
hereinafter referred to as the "ALLIED AGREEMENTS");

NOW THEREFORE the parties hereto agree to the following TERMS:

1. The terms of this Settlement Agreement shall be disclosed by press release
mutually agreed by NRC and Nord Pacific and may be described in documents
required to be filed by Nord Pacific or which relate to the Arrangement
Agreement.

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                                      -3-

2. It is expressly acknowledged by each of the parties hereto that there is no
admission of liability on the part of the NB Defendants for any of the NB Claims
and there is no admission liability on the part of the New Mexico Defendants for
the New Mexico Claims or the Federal Defendants for the Federal Claims and in
each case such liability is denied.

3. All parties acknowledge that the directors of Nord Pacific are Roberts, Welch
and Lansing.

4. In order to allow the Board of Directors of Nord Pacific to immediately
approve and for Nord Pacific to enter into this Settlement Agreement and the
Allied Agreements, each of Hirsch, Anderson, Bailey and Williams who were
purported to be elected on June 28, 2003 agree to resign effective immediately
from any position they may have on the Board of Directors of Nord Pacific and
from any office or employment they may have in Nord Pacific and to release Nord
Pacific from any claims in respect thereof, NRC and Hirsch shall forthwith
petition the Court of Queen's Bench of the Province of New Brunswick, Canada,
Trial Division Judicial District of Saint John, to declare that the directors of
Nord Pacific are Roberts, Lansing and Welch and that John Champagne is not a
director thereof and Nord Pacific shall support NRC in this regard.

5. NRC shall cause its counsel to take all action necessary to withdraw the NB
Action without costs. The NB Defendants hereby authorize the solicitors for NRC
to execute on their behalf and to file all documents necessary to achieve the
same and shall consent to any order of the New Brunswick Court: (i) terminating
the New Brunswick court's interim order; and (ii) declaring that the existing
directors of Nord Pacific are Welch, Lansing and Roberts and that John Champagne
is not a director thereof;

6. NRC represents and warrants that it has delivered to PGM Ventures Corporation
('PGM") an executed copy of release and withdrawal of the letter of October 9,
2003 in a form which has been agreed upon between NRC and PGM.

7. Upon the Board of Directors of Nord Pacific approving and ratifying this
Settlement Agreement and the entry into of the Allied Agreements:

(a) Each of Nord Pacific and NRC shall provide to each other corporate
resolutions evidencing that this Settlement Agreement has been approved and
shall immediately use their best efforts to complete documentation of the
matters set forth herein.

(b) Nord Pacific shall cause its counsel to promptly file with the Second
Judicial District Court in the State of New Mexico an order dismissing the New
Mexico Action and the New Mexico Counterclaims without costs and to promptly
file with the United States District Court for the District of New Mexico an
order dismissing the Federal Actions without costs. The New Mexico Defendants
hereby authorize the solicitors for Nord Pacific to execute on their behalf and
to file all documents necessary to achieve the same.

(c) The parties hereby agree:

     (i) The 4,000,000 shares in Nord Pacific Limited issued to Alex Chisholm in
trust for Mark R. Welch ("WELCH") and Sharon S. Welch in satisfaction of the
debt of an amount

<PAGE>

                                      -4-

U.S.$517,311.40 by resolution of the Board of Directors of Nord Pacific dated
March 31, 2003 are accepted as having been validly issued;

     (ii) The 400,000 shares issued to Welch by resolutions of the Board of
Directors of Nord Pacific dated February 25, 2002 and December 16, 2002 are
accepted as having been validly issued;

     (iii) The 400,000 shares issued to Lansing by resolutions of the Board of
Directors of Nord Pacific dated February 25, 2002 and December 16, 2002 are
accepted as having been validly issued;

     (iv) The 400,000 shares issued to Roberts by resolutions of the Board of
Directors of Nord Pacific dated February 25, 2002 and December 16, 2002 are
accepted as having been validly issued;

     (v) Nord Pacific shall acknowledge its indebtedness to Nord Resources
Corporation, which indebtedness shall be subordinated to all other creditors
pursuant to a Subordination Agreement (in substantially the form of
Subordination Agreement set forth as a Schedule to the Credit Facility
Agreement), in an amount of Australian $280,000 upon the NB Action being
withdrawn or dismissed without costs and the interim order of the court therein
dated June 26, 2003 being terminated, and the Board of Nord Pacific thereby
warrants that it shall pass a resolution to authorize such indebtedness and the
Arrangement Agreement shall contemplate that the arrangement thereunder shall
convert such indebtedness at a rate of Australian $0.20 per share into 1,400,000
shares of Allied;

     (vi) NRC and its NB Associated Parties, on the one hand, and the NB
Defendants and their NB Associated Parties, on the other hand, hereby release
and forever, discharge each other from any and all actions, causes of action,
claims and demands for damages, loss or injury, howsoever arising and in any way
relating to the NB Action, including the NB Claims;

     (vii) Nord Pacific and its New Mexico Associated Parties, on the one hand,
and the New Mexico Defendants, other than John Champagne, and their New Mexico
Associated Parties, on the other hand, hereby release and forever discharge each
other from any and all actions, causes of action, claims and demands for
damages, loss or injury, howsoever arising and in any way relating to the New
Mexico Action or the New Mexico Counterclaims, including the New Mexico Claims;

     (viii) Nord Pacific and its Federal Associated Parties, on the one hand,
and the Federal Defendants, other than John Champagne, and their Federal
Associated Parties, on the other hand, hereby release and forever discharge each
other from any and all actions, causes of action, claims and demands for
damages, loss or injury, howsoever arising and in any way relating to the
Federal Action, including the Federal Claims;

     (ix) All agree not to make any claim or take any proceedings against any
other person, corporation or entity who might claim contribution or indemnity
under the provisions of any legislation, regulations or under law from any party
to this Settlement Agreement;

<PAGE>

                                      -5-

     (x) Nord Pacific will re-convey to NRC the 20% carried interest held by
Nord Pacific in NRC's Johnson Camp copper property located near Dragoon, Arizona
and NRC shall assume any and all obligations with respect to such property,
past, present or future and shall indemnify and save harmless Nord Pacific and
its subsidiaries, directors, officers and shareholders, past, present or future
in respect to any claims, obligations or liabilities in respect of such
property;

     (xi) NRC and Nord Pacific release each other from any financial obligations
associated with the joint office cost sharing agreement for the Albuquerque
office at 201 Third Street N.W. Albuquerque, New Mexico;

     (xii) NRC thereby agrees to accept that the balance of the shares issued by
resolutions of the Board of Directors of Nord Pacific dated February 25, 2002
and December 16, 2002 being the 1.1 million Nord Pacific shares to certain Nord
Pacific employees and consultants (other than Welch, Lansing and Roberts), the
issuance of 150,000 Nord Pacific shares to Warrama Consulting Pty. Ltd. and
Herbert Levine and the future issuance of an additional 1,431,482 Nord Pacific
shares to Pierce Carson and that NRC releases the recipients of such shares and
the NB Defendants from any claim in respect thereof.

     (xiii) NRC will release all business records belonging to Nord Pacific in
its possession including those which are being held at Johnson Camp.

     (xiv) NRC will remove all information pertaining to Nord Pacific from its
website and shall not reintroduce such information in the future.

8. It is further agreed that each of NRC and Nord Pacific will fully disclose to
each other all communications between themselves and Allied relating to the
Arrangement Agreement.

9. This Agreement may be executed by facsimile in counterparts each of which
when executed and delivered shall together constitute one and the same
instrument.

10. This Agreement is governed by the law of the Province of New Brunswick,
Canada

IN WITNESS WHEREOF we have hereunto set our hands this 19th day of December,
2003.

NORD, RESOURCES CORPORATION             N0RD PACIFIC LIMITED

Per: /s/ Ronald A. Hirsch               Per: /s/ Mark R. Welsh
     --------------------------------        -----------------------------------
Name: Ronald A. Hirsch                  Name: Mark R. Welch
Title: Chairman and CEO                 Title: President and CEO

Per: /s/ Erland A. Anderson             Per: /s/ Patricia Solano
     --------------------------------        -----------------------------------
Name: Erland A. Anderson                Name: Patricia Solano
Title: President                        Title: Secretary

<PAGE>

                                      -6-

/s/ Mark R. Welch                       /s/ Witness
-------------------------------------   ----------------------------------------
MARK R. WELCH                           WITNESS

/s/ Sharon S. Welch                     /s/ Witness
-------------------------------------   ----------------------------------------
SHARON S. WELCH                         WITNESS

/s/ John Roberts                        /s/ J. Roberts
-------------------------------------   ----------------------------------------
JOHN ROBERTS                            WITNESS

/s/ Lucille Lansing                     /s/ Brenda Y. Davila
-------------------------------------   ----------------------------------------
LUCILLE LANSING                         WITNESS

/s/ Alex Chisholm                       /s/ Witness
-------------------------------------   ----------------------------------------
ALEX CHISHOLM,                          WITNESS
as trustee for the Retirement Trust
of Mark R. Welch and Sharon S. Welch

/s/ Ronald A. Hirsch                    /s/ Witness
-------------------------------------   ----------------------------------------
RONALD A. HIRSCH                        WITNESS

/s/ Erland A. Anderson                  /s/ Jeffrey S. Anderson
-------------------------------------   ----------------------------------------
ERLAND ANDERSON                         WITNESS

-------------------------------------   ----------------------------------------
CLIVE BAILEY                            WITNESS

/s/ Matthew Williams                    /s/ Lisa Williams
-------------------------------------   ----------------------------------------
MATTHEW WILLIAMS                        WITNESS

<PAGE>

                                      -7-

                                 PROMISSORY NOTE

Australian $280,000                                     Dated: December 20, 2003

     Pursuant to the Settlement Agreement dated December 19, 2003, (the
"SETTLEMENT AGREEMENT") between Nord Pacific Limited (the "BORROWER"), Nord
Resources Corporation, Mark R. Welch, Sharon S. Welch, John Roberts, Lucille
Lansing, Alex Chisholm as trustee for the Retirement Trust of Mark R. Welch and
Sharon S. Welch; Ronald A. Hirsch, Erland Anderson, Clive Bailey and Matthew
Williams, the Borrower hereby provides evidence of the recognition of
indebtedness to be provided pursuant to the Settlement Agreement, as follows.

     FOR VALUE RECEIVED, the Borrower, having its principal office and place of
business at 2727 San Pedro, NE. Suite 116, Albuquerque, NM 87110, Albuquerque,
New Mexico promises to pay to or to the order of Nord Resources Corporation (the
"LENDER") prior to the distribution of any assets of the Borrower to its
shareholders (which shall include any return of capital, dividend or repurchase
of its own shares by the Borrower), or on such earlier date as the Borrower
shall by written notice to the Lender advise, the principal sum of Two Hundred
Eighty Thousand Australian Dollars (A$280.000) in lawful money of Australia with
no interest thereon. This agreement is governed by the laws of New Brunswick.

                                        NORD PACIFIC LIMITED

Witness: /s/ Witness                    By: /s/ Mark R. Welch
         ----------------------------       ------------------------------------
                                            Mark R. Welch, President

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