Document:

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                                                            EXHIBIT 10(a)

             [GENERAL PETROLEUM & MINERAL ORGANIZATION LETTERHEAD]

                                    CONTRACT
                                    Between
                                    PETROMIN
                                      AND
                          NATIONAL AND ARABIAN SHIELD

         DATE AND PARTIES:

                  This Contract, entered into in JEDDAH, SAUDI ARABIA, on 6th
         day of the month of JUMADA II, 1391 H., corresponding to the 29th day
         of the month of July, 1971, between GENERAL PETROLEUM AND MINERAL
         ORGANIZATION, a public or organization under the laws of the Kingdom of
         Saudi Arabia, (hereinafter referred to as "PETROMIN"), represented by
         H.E. SHEIKH AHMED ZAKI YAMANI, Chairman of its Board of Directors,
         First Party,

                                       and

         NATIONAL MINING COMPANY, a Saudi Arabian company under the laws of
         the Kingdom of Saudi Arabia, having its principal place of business in
         the city of Jeddah, Saudi Arabia, (hereinafter called "NATIONAL"),
         represented by His Highness Prince Khalid bin Abdallah bin Abdal
         Rahman, Chairman of its Board of Directors and ARABIAN SHIELD
         DEVELOPMENT COMPANY, a Delaware, U.S.A. corporation (hereinafter
         referred to as "ARABIAN SHIELD") represented by Mr. Hatem El
         Khalidi, its Vice President, both NATIONAL and ARABIAN SHIELD being
         hereinafter referred to collectively as Second Party.

         RECITALS:

                  WHEREAS, PETROMIN is entrusted by the laws of the Kingdom of
         Saudi Arabia, inter alia, with the promotion and achievement of
         development projects related to mining endeavours with the view to
         enhance the industrial wealth and the national welfare in Saudi Arabia.

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             [GENERAL PETROLEUM & MINERAL ORGANIZATION LETTERHEAD]

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                  WHEREAS, Second Party has represented to the Ministry of
         Petroleum and Mineral Resources that it has the necessary technical
         competence, financial resources and marketing skills and outlets to
         undertake and perform, in accordance with the best accepted practice
         in the mining industry, exploration, prospecting development,
         exploitation, production, treatment, processing and marketing of
         minerals in shape of ore and/or as finished product in world market;
         and

                  WHEREAS Second Party submitted an application to the Ministry
         of Petroleum and Mineral Resources for the grant of an exploration
         licence for minerals over certain areas (Licence Area), and PETROMIN is
         agreeable to accept the terms and conditions of the Exploration Licence
         when granted; and

                  WHEREAS, Second Party, undertake to renounce their
         preferential and exclusive rights, under Article 11 of the Saudi Mining
         Code, to an Exploitation Concession for the benefit of PETROMIN and to
         the extent set forth in this document, hereinafter called this
         "Contract"; and

                  WHEREAS, PETROMIN and Second Party therefore, agree that all
         the rights and claims Second Party may assume according to the
         Exploration Licence and the Saudi Mining Code, are conditioned and
         limited by the terms and provisions of this Contract, which Contract
         Second Party undertake to append to their Application for an
         Exploration Licence; and

                  WHEREAS, Second Party shall perform all obligations under the
         Exploration Licence, make all payments required to be made to the
         Government, the College of Petroleum and Minerals and/or as requested
         by the Government, and shall be responsible to attain and prove a
         discovery of minerals which can be commercially exploited; and

                  WHEREAS, upon proving a discovery by Second Party of a
         commercially exploitable deposit of minerals, Second Party are willing
         and prepared to form in accordance with the provisions of this
         Contract a joint venture with PETROMIN  for the exploitation of the
         discovered mineral or minerals and PETROMIN is agreeable to this; and

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             [GENERAL PETROLEUM & MINERAL ORGANIZATION LETTERHEAD]

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                  WHEREAS, Second Party shall forthwith notify PETROMIN of
         the discovery to enable PETROMIN to exercise, at its own discretion,
         its right of option to acquire a share in the Exploitation Concession,
         which notification shall be served before application for an
         Exploitation Concession; end

                  WHEREAS, in the event PETROMIN elects to participate in
         exploitation the Exploitation Concession shall be issued, pro rata, in
         the name of both PETROMIN end Second Party, failing which the
         Concession shall be issued in the name of Second Party; and

                  WHEREAS, the Parties desire to set forth in this Contract,
         the terms and conditions that shall govern their association and
         relationship.

                  NOW, THEREFORE, THE PARTIES AGREE
                          AS FOLLOWS:

         ARTICLE 1 - DEFINITIONS:

                  In this Contract the following words and expressions shall
         (unless repugnant to the context) have the meanings hereby respectively
         assigned to them, that is to say:-

         (a)      "this Contract" means this Contract between the Parties
                  hereto.

         (b)      "Licence" means the Exploration Licence granted in the name of
                  Second Party.

         (c)      "the Concession" means the Exploitation Concession granted or
                  to be granted in the name of the Parties hereto, in the event
                  PETROMIN elects to acquire a share in the Concession and in
                  default of which shall be granted in the name of Second Party.

         (d)      "Government" means the government of the Kingdom of Saudi
                  Arabia.

         (e)      "Ministry" means the Ministry of Petroleum and Mineral
                  Resources, Government of the Kingdom of Saudi Arabia.

         (f)      "Company" means the company formed by PETROMIN and Second
                  Party under Article 6 of this Contract.

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         (g)      "Exploitable Discovery" means such a discovery of mineral
                  deposits in the License Area which shall be considered to be
                  found if it is calculated that it will bring annually from its
                  exploitation, and for the life of the proven ore reserves, a
                  reasonable percentage of the capital investment, above
                  provision for capital return, which percentage shall be set by
                  ARABIAN SHIELD after the amount, type, average grade, and
                  amenability to treatment of the ore becomes known, and
                  considering the then prevailing rates of return in the mining
                  industry in comparable situations.

         (h)      "Treatment Plant" or "Plant" means any or all of the
                  facilities to be constructed in accordance with this Contract
                  together with the necessary off-sites and such
                  transportation, if any, as shall be required to service such
                  Plant and any extensions thereof.

         (i)      "the Site" means the PETROMIN Industrial Areas at Jeddah/
                  Dammam or such other area in Saudi Arabia as may be mutually
                  selected by the Parties for the location of Treatment Plant.

         (j)      "the product" means any product or by-product manufactured by
                  Treatment Plant or Plant.

         (k)      "Year" and "Month" shall mean a calendar year and a calendar
                  month of the Gregorian Calendar.

         (1)      Words importing persons include corporations.

         (m)      Words importing the singular include the plural and
                  vice-versa where the context so permits.

         (n)      "Minerals" means the minerals with respect to which rights
                  are granted by the Licence and Concession.

         ARTICLE  2 - OBJECTS OF THIS CONTRACT:

         2.1      The immediate object of this Contract is two-fold:-

                  (a)      The regulation of the relationship of the Parties
                           with respect to the acquisition by PETROMIN of 25%
                           of the Concession.

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             [GENERAL PETROLEUM & MINERAL ORGANIZATION LETTERHEAD]

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                  (b)      The formation of a company by PETROMIN and Second
                           Party or, in the event PETROMIN does not acquire a
                           share, by ARABIAN SHIELD and NATIONAL, for the
                           purpose of undertaking exploration, prospecting,
                           development and production operations for winning and
                           obtaining minerals from the area covered by the
                           Exploitation Concession (the Concession Area) and
                           such other operations as nay be necessary to
                           transport and market minerals ore.

         2.2      The long-term objective of this Contract is the treatment,
                  processing, upgrading and/or manufacture of the recovered
                  minerals ore by the Parties or by agreement of Parties any
                  other mineral or minerals Exploitation Concession whereof has
                  been duly granted by the Government, with, where appropriate,
                  participation by the Saudi public, and for such operations,
                  provided the same are agreed or determined to be commercially
                  feasible, as set forth in Article 1 hereof, to set up the
                  necessary Treatment Plant and or obtain Transportation
                  Concession so that Operator shall undertake and hereby
                  undertakes to arrange that the products of such Plant, which
                  shall be available for export, shall be sold in world market
                  by Second Party on sell or take basis.

         ARTICLE 3 - PERFORMANCE DURING THE PERIOD OF LICENCE

         3.1      Second Party shall during the period of the Exploration
                  License have the exclusive management and control of all
                  operations authorized by the License, and accordingly hereby
                  agrees to make all payments, conduct all operations and
                  promptly and properly carry out all obligations which are
                  required under the License until such time as commercially
                  exploitable discovery of minerals shall have been made and
                  proved and the Exploitation Concession shall have been
                  granted by the Government.

         3.2      Second Party shall furnish evidence to PETROMIN as to the
                  faithful performance by Second Party of all the obligations to
                  be performed under the terms of the License on a reasonably
                  current basis.

         3.3      Promptly after the discovery of minerals in commercially
                  exploitable quantities, Second Party shall give written notice
                  thereof to PETROMIN. PETROMIN hereby agrees that when after
                  it has been so notified to inform Second Party of its stand as
                  to the acquisition by it of a share in the

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             [GENERAL PETROLEUM & MINERAL ORGANIZATION LETTERHEAD]

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                  Concession. Such option shall be made by PETROMIN within two
                  months after the receipt of said request from Second Party.
                  Second Party, promptly after the receipt of an answer from
                  PETROMIN, shall apply for the grant of an Exploitation
                  Concession in accordance with Article II of the Mining Code.

         ARTICLE 4 - ACQUISITION OF INTEREST IN THE CONCESSION:

         4.1      If PETROMIN does not elect to exercise its right to acquire in
                  accordance with Articles 2 and 3 of this Contract or if
                  PETROMIN elects to acquire a percentage less than 25% in the
                  Concession, then PETROMIN may establish a Saudi Arabian
                  Company which shall acquire all or part of that right.
                  Participation of shares in such Company may be offered to the
                  Government, any of its agencies or organizations, or Saudi
                  Arabian persons or any of these, either alone or in
                  conjunction with any of the others, but ARABIAN SHIELD shall
                  not acquire directly or indirectly, any of such shares. In
                  this case the Saudi Arabian Company shall replace PETROMIN in
                  this Contract and shall have the same rights and obligations
                  under the Contract that it would have had had it been one of
                  the original parties to the Contract.

         4.2      If the 25% of the Concession earmarked for PETROMIN or any
                  part of that percentage is not used up by PETROMIN in the
                  manner set out in Article 4.1, Second Party shall acquire such
                  unused percentage of the Concession. PETROMIN shall
                  however retain the right to acquire at any time during the
                  currency of the Concession all or any part of the 25% of the
                  Concession earmarked for it upon giving written notice to
                  Second Party of its intention to do so. In that event Second
                  Party shall promptly take all due legal measures to secure
                  for PETROMIN the acquisition of the requested share with
                  retroactive effect as from the date PETROMIN served such
                  written notice.

         4.3      In the event that PETROMIN elects to resume twenty-five
                  percent (25%) interest in the Concession by so notifying in
                  writing to Second Party, at a later stage during the life of
                  the Concession, all the relevant Articles of this

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             [GENERAL PETROLEUM & MINERAL ORGANIZATION LETTERHEAD]

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                  Contract shall immediately come into force and effect and
                  PETROMIN shall make payment to Second Party in the following
                  amounts:-

                  (i)      an amount equal to twenty-five percent of "the
                           Exploration Expenses" as defined in Article 5
                           hereof at the rate of one-thirtieth thereof per year
                           from the date of the granting of the Concession to
                           the date of such election by PETROMIN, which rate is
                           calculated on the basis of a thirty year period
                           Concession.

                  (ii)     an amount equal to twenty-five percent (25%) of the
                           total costs and expenses incurred in further
                           exploration and prospecting operations carried out
                           from the date of coming into force of the Concession
                           to the date of such election by PETROMIN, after
                           writing down such total costs and expenses on a
                           straight line basis to extend from the year in which
                           they were incurred to the end of the initial 30 year
                           period of the Concession.

                  (iii)    an amount equal to twenty-five percent of sums
                           expended on assets after depreciating such sums on a
                           straight line basis over the expected useful life of
                           the assets concerned.

                           All such amounts shall be audited and certified by an
                  internationally recognized auditing firm as being consistent
                  with the above-mentioned provisions and in case of doubt as
                  to whether any sum falls within paragraph (ii) or paragraph
                  (iii) hereinabove the decision of such firm shall be final
                  and binding. Such amounts shall be paid to Second Party in the
                  same manner as provided in Article 5.4.

         4.4      In the event that the right of conversion of the Licence to an
                  Exploitation Concession is lost on account of non-
                  performance of obligations or any default done by Second
                  Party, or non-discovery of the mineral in exploitable
                  quantities by Second Party, as laid down in Article 11 of the
                  Mining Code, this Contract shall thereupon automatically
                  terminate and PETROMIN shall not be liable for the
                  reimbursement of any expenses whatsoever of Second Party
                  incurred pursuant to this Contract and the Licence and all

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             [GENERAL PETROLEUM & MINERAL ORGANIZATION LETTERHEAD]

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                  rights and obligations of the Parties under this Contract
                  shall cease and be of no further effect provided that Second
                  Party shall be bound to meet and clear all obligations and
                  liabilities up to and including such date of termination. This
                  clause, however, does not impede the right of PETROMIN, if
                  circumstances so justify, to hold Second Party responsible for
                  compensation and/or damages.

         4.5      Second Party shall, severally and jointly, be strictly bound
                  by and duly to perform all the terms, covenants, conditions
                  and obligations of the Concession to the extent of the
                  interest held by them and shall always act in the best
                  interest of the Kingdom of Saudi Arabia and the welfare of
                  the Saudi people.

         ARTICLE  5 - PAYMENT BY PETROMIN AND/OR NATIONAL:

          5.1     PETROMIN and/or NATIONAL depending on their relative
                  participation in the Concession, shall, severally, pay to
                  ARABIAN SHIELD a total sum equal to fifty percent (50%) of the
                  Exploration Expenses, as defined hereinafter. Thus if PETROMIN
                  retains 25% and NATIONAL has 25% participation interest in the
                  Concession each shall pay 25% of such expenses to ARABIAN
                  SHIELD, while if PETROMIN does not acquire an interest and
                  NATIONAL has 50% interest in the Concession then NATIONAL
                  shall pay the entire 50% of the Exploration Expenses.

         5.2      The Exploration Expenses shall be those costs and expenses
                  falling within sub-paragraphs 5.2-1, 5.2-2, 5.2-3, 5.2-4
                  and 5.2-5, and paragraph 5.3 wholly reasonably and
                  necessarily incurred by Second Party in discharging
                  obligations expressed under the License to be carried out
                  until the date of the granting of the Concession. Such costs
                  and expenses shall be calculated on the basis of actual
                  expenditure with no element of profit to be included insofar
                  as the work has been carried out by the Second Party.
                  Exploration and prospecting expenses and costs wherever
                  incurred in connection with the operations under the License
                  shall be determined under the following classifications and
                  according to the following conditions:-

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             [GENERAL PETROLEUM & MINERAL ORGANIZATION LETTERHEAD]

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         5.2-1    Costs end expenses for exploration and prospecting activities
                  carried out by Second Party inside Saudi Arabia shall be
                  calculated on the basis of their original book value provided
                  that they are directly or indirectly identifiable with the
                  aforesaid activities and provided also that such costs shall
                  not exceed normal commercial rates for such works.

         5.2-2    Costs and expenses for exploration and prospecting activities
                  carried out by third parties inside or outside Saudi Arabia in
                  connection with Second Party's exploration and prospecting
                  activities in Saudi Arabia and incurred by Second Party shall
                  be calculated on the basic of the cost to Second Party of such
                  work, which costs shall not exceed the normal commercial rates
                  for such work.

         5.2-3    Costs and expenses incurred by Second Party and/or its
                  affiliates outside Saudi Arabia in connection with exploration
                  and prospecting activities of Second Party in Saudi Arabia
                  shall be calculated on the basis of their original book value
                  based on normal accounting practices consistently followed in
                  previous years, provided that they do not include any profit
                  elements and further provided that they are directly or
                  indirectly identifiable with the afore-mentioned activities.

         5.2-4    Any bonus paid or payable to the Government as provided for in
                  the Mining Code or the License shall not be considered as
                  part of such exploration expenses.

         5.2-5    Rentals, paid or payable to the Government and contributions
                  made or to be made to the College of Petroleum and Minerals
                  prior to the grant of the Concession shall not be considered
                  as part of such exploration expenses.

         5.3      All such costs rind expenses shall be audited and certified by
                  an internationally recognized auditing firm to be nominated by
                  PETROMIN as being consistent with the above-mentioned
                  provisions and the cost of this audit shall be considered to
                  be an Exploration Expense.

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             [GENERAL PETROLEUM & MINERAL ORGANIZATION LETTERHEAD]

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          5.4     PETROMIN and/or NATIONAL, severally, shall effect such payment
                  under Sub-paragraphs 5.2-1, 5.2-2, 5.2-3, 5.2-4 and 5.2-5 and
                  paragraph 5.3 hereof to ARABIAN SHIELD in the shortest
                  possible time and, if PETROMIN  shall so elect, by quarterly
                  installments each amounting to not less than twenty-five
                  percent (25%) of the total amount payable. Any payments in
                  quarterly installments shall be made by PETROMIN to Second
                  Party on the first day of January, April, July and October of
                  each calendar year. If both PETROMIN and NATIONAL hold an
                  interest then they and ARABIAN SHIELD shall join in the
                  formation of the Company, hereinafter provided for, while if
                  PETROMIN does not acquire an interest then only NATIONAL and
                  ARABIAN SHIELD form such Company. The Parties to the Company
                  shall be referred to hereafter as "the Parties concerned".

         ARTICLE 6 - NON-PROFIT JOINT COMPANY:

         6.1      For the purpose of operating the Exploitation Concession, the
                  Parties having an interest therein, shall form nonprofit Saudi
                  Arabian Joint Company (hereinafter referred to as "the
                  Company"), the charter of which shall be laid down in Annex
                  "A" hereof as an integral part of this joint venture Contract
                  and shall function as herein provided to explore, develop and
                  operate the said Exploitation Concession and the Treatment
                  Plants, if any, for the joint account of the Parties concerned
                  in accordance with the terms of the Contract and in conformity
                  with provisions of the said Concession.

         6.2      The duration of the Company shall be the duration of the
                  Exploitation Concession, including any extensions thereof. The
                  Company shall be wound up and put in liquidation if said
                  Concession is terminated.

         6.3      The function of the Company shall be to carry out in Saudi
                  Arabia, as agent for the Parties concerned, the Mining
                  Operations as defined hereunder in paragraph 6.8.

         6.4      The authorized capital of the Company shall be nominal and
                  arrived by mutual agreement of the Parties concerned and the
                  stock shall be transferred only with the interest in the
                  Concession. Each party shall subscribe and pay up its
                  appropriate percentage of such authorized share capital.
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             [GENERAL PETROLEUM & MINERAL ORGANIZATION LETTERHEAD]

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         6.5      The Parties concerned shall share, in proportion to their
                  interest, the cost and expenses in connection with the
                  creation of the Company. The costs and expenses required for
                  equipping, staffing, maintaining and operating the office or
                  offices of the Company shall also be shared equally between
                  said Parties.

         6.6      The Company shall not own any right, title, interest or
                  estate in the Exploitation Concession or in any of the mineral
                  ores produced from the Concession Area, or in the proceeds
                  from the sale thereof, or any of the assets, equipment or
                  other property obtained or used in connection therewith, and
                  shall not be obliged for the financing or performance of any
                  of the duties or obligations of any party under the Contract
                  or the Concession. The Company, as agent only, shall receive
                  and disburse only the moneys received by it and on behalf of
                  the Parties concerned contributed or advanced to it, including
                  payments for its capital stock, by the Parties concerned for
                  and in connection with obligations under this Contract and the
                  Concession.

         6.7      The Company shall have the physical custody of all equipment,
                  material and supplies used, acquired or obtained to carry out
                  its duties as Operator of the Concession.

         6.8      Mining Operations shall mean:-

                  (i)      the exploration, prospecting, development and
                           production operation/operations to win and obtain
                           Minerals by geological and related methods including
                           drilling, excavating and extracting by mechanical or
                           other means;

                  (ii)     the transportation of Mineral from Concession Area
                           to stock depots, rail road, ports, or other
                           facilities; and

                  (iii)    treatment and processing of minerals and/or other
                           related operations.

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         ARTICLE 7 - DESIGNATION OF THE COMPANY AS COMMISSION OPERATOR:

         7.1      The Company is hereby designated from and after its formation
                  for and during the balance of the period covered by the
                  Concession as the operator of the Concession with physical
                  custody of all the equipment and other property used, had or
                  obtained in connection therewith for the joint account of the
                  Parties concerned to the extent that such operations are made
                  the obligations of the Parties concerned and to the extent
                  that said equipment and other movable property are purchased
                  or obtained by or for the joint account. It shall have the
                  usual and customary duties of an operator of mining
                  properties, except as elsewhere herein adversely provided, and
                  shall pursue all its duties in a good and workmanlike manner
                  pursuant to modern and prudent practice.

         ARTICLE 8  ANNUAL WORK PROGRAM AND BUDGET:

         8.1      On or before October 1st of each year the Company shall
                  prepare and submit to its Board of Directors a proposed work
                  program and annual budget for the ensuing calendar year. A
                  work program and annual budget shall, after due consideration
                  of the recommendations of the share-holders in relation
                  thereto, be settled by the Board of the Company by December
                  15th.

         8.2      Prior to the first day of the month preceding a calendar
                  quarter the required cash for payment of operating expenses
                  (all expenses which are not capital items) shall be called
                  for by the Company from the Parties concerned. Each Party
                  shall put at the disposal of the Company not later than the
                  day before the first of each calendar quarter amounts
                  sufficient to cover such Party's share of the expenditures
                  envisaged for the then next two succeeding calendar quarters,
                  and if a remittance is late, the Company shall give notice to
                  the Party in default demanding payment within fifteen (15)
                  days from the date such notice is served. Any Party may
                  satisfy its obligations in whole or part under this paragraph
                  by authorizing the Company to use for such expenditures the
                  whole or part of its share of joint account funds held by the
                  Company for it. The required cash for capital expenditures
                  shall be handled in a similar manner although the Company
                  shall not require payments in advance except to the extent
                  reasonably necessary.

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         8.3      The Board of Directors or the Technical Manger shall from time
                  to time determine the rates of production of minerals, taking
                  into consideration all relevant factors including availability
                  of labour, transportation end economically attractive markets.
                  Such rates of production shall prevail until changed by the
                  Board of Directors or by the Manager Technical.

         ARTICLE  9 - ACCOUNTING PROCEDURE:

                  Each Party and the Company shall maintain, at their main
                  business offices in Saudi Arabia, books of account in
                  accordance with generally accepted first-class accounting
                  practices used in mining industry, and such other books and
                  records as may be necessary to show the work performed under
                  this Contract, including the quantity and value of all
                  mineral ore/ores produced or exported hereunder. The Company
                  shall furnish to the Parties concerned monthly returns showing
                  the quantity of mineral ores produced, transported or exported
                  by it hereunder. Such returns shall be prepared in the form
                  required by the Parties concerned and shall be delivered to
                  each Party within thirty (30) days after the end of the month
                  covered in the return.

                  Company shall also prepare and submit all forms returns etc.,
                  required to be prepared or submitted under provisions of the
                  Mining Code. Company shall furnish copies of all such forms or
                  documents to Parties concerned also.

         ARTICLE 10 - INSURANCE:

         10.1     Adequate insurance shall be maintained by the Company and
                  charged to the joint account, which insurance coverage shall
                  include Fire and Extended Coverage, Workman's Compensation,
                  Employers' Liability, General Liability, and Aircraft
                  Liability, and when necessary Marine Insurance.

         10.2     A Party desiring additional insurance in excess of that
                  mutually agreed upon, may do so for its own account and
                  benefit in connection with its interest under the Concession
                  and this Contract.

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         10.3     The Company shall require all contractors and subcontractors
                  to furnish certificates of their insurance evidence of such
                  types and limits of insurance which in the opinion of the
                  Company are deemed sufficient and in accordance with good
                  industry practice.

           ARTICLE 11 - TREATMENT PLANT AND TRANSPORTATION FACILITIES:

         11.1     The Parties concerned agree and undertake with each other that
                  they will exercise their right under the Concession and this
                  Contract for optimum benefit of Parties and to that extent it
                  is specifically agreed that if the Parties agree or it is
                  determined as provided hereinafter that the ultimate
                  profitability of treating processing or manufacturing the
                  mineral ore produced from the Concession Area will be more if
                  exported or sold in treated/processed form than exports of
                  same in untreated/unprocessed form, then the Parties agree to
                  apply for and obtain Concession for Treatment Plants and to
                  set up Treatment Plant for that purpose.

         11.2     Similarly if it is agreed or determined that it will be more
                  profitable to have a Transportation Concession, the Parties
                  agree to apply for and obtain a Concession for Transportation.

         11.3     In order to agree or determine whether the obtaining of a
                  Concession for Treatment Plant and/or Transportation and the
                  setting up of such facilities will have more ultimate
                  profitability, the Parties shall within one year of
                  establishing of first exports of mineral ore, initiate
                  feasibility studies in relation to such facilities. Such
                  studies shall conform to the terms of reference laid down in
                  Annex "B" and shall be completed within twenty-four months
                  of first export.

         11.4     The Parties shall each inform the other of the names and
                  qualifications of the engineers and other experts each has
                  instructed to carry out such studies on its behalf so that
                  each Party may take recommendations to the other Party as to
                  any further or alternate experts which it may consider
                  desirable to instruct. The Parties shall each request their
                  engineers and other experts fully to cooperate with the other
                  Party's engineers and experts during the course of such
                  studies with the intent that there shall be produced by all
                  engineers and experts engaged agreed results of such studies,
                  or where they do not agree, fully reasoned

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                  dissenting reports. The Parties shall each bear all costs and
                  charges of engineers and other experts respectively instructed
                  or employed by them.

         11.5     With respect to the Treatment Plant end Transportation
                  Facilities envisaged the criteria used by the engineers and
                  other experts to determine the profitability of projects under
                  consideration shall be those criteria normally and
                  conventionally used in the Mining Industry in comparable
                  situations.

         11.6     If the agreed results of any such study shall be to the
                  effect that :-

                  (a)      either of the projects referred to in the foregoing
                           paragraph will show on equal or higher profitability
                           than profitability derived from sales of the raw ore
                           at export taking into account the then prevailing
                           prices for such raw ore or the use of alternative
                           transport, as applicable, and

                  (b)      such projects are within the limits of financial
                           commitment of Parties adding thereto conventional
                           loan capital,

                  then the Parties undertake to carry out such projects.

         11.7     If the agreed or determined results of such feasibility study
                  are to the effect that the criteria necessary for these
                  projects are not present, then the projects, which are the
                  subject of such feasibility study, shall be delayed until such
                  time within the period of this Contract as the Parties may
                  agree based on further feasibility studies, which feasibility
                  studies shall be made at intervals of not more than two (2)
                  years after the conclusion of the previous feasibility study.

         11.8     If the engineers end other experts respectively instructed or
                  employed by the Parties for the purpose of any such
                  feasibility study shall express dissenting views on the
                  subject to be covered by the relevant feasibility study and
                  either one of such views is to the effect that the criteria
                  referred heretofore in this Article would be satisfied, then
                  the subject or subjects on which such

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                                      -16-

                  dissenting views are expressed shall be submitted for the
                  decision of such expert third party or parties as the Parties
                  shall agree, or failing such agreement, such expert third
                  party shall be nominated by the President of the Board of
                  Concession Appeals provided for in Article 50 of the Mining
                  Code. If the decision of such third party or parties on the
                  matters which are the subject of such dissent is to the effect
                  that the criteria set out above would be satisfied, then the
                  Parties undertake to carry out such project or projects and
                  undertake with each other to make available, when called upon,
                  their relevant shares of investment.

         11.9     For the purpose of financing such Treatment Plants and
                  Transportation Facilities as described in this Contract, the
                  necessary capitalization provided for in Annex "B" shall be
                  made available by the Parties in proportion with their
                  respective interests in the Concession.

         ARTICLE  12 - PLANT CONSTRUCTION:

         12.1     In the event the Parties agree or it is determined as set
                  forth in Article 11 hereof to set up a Treatment Plant and or
                  Transportation Facilities, and a Concession for same is
                  granted by the Government, Second Party shall be responsible
                  for making necessary arrangements for the design, engineering
                  purchasing of material and equipment and construction of the
                  Treatment Plant and or Transportation Facilities and its
                  commencement of operation.

         12.2     In discharging the duties undertaken by it under Article
                  12.1 above, Second Party shall be responsible, amongst other
                  things, for the compilation of all data, specifications
                  drawings, conditions of contract end other documents and
                  information necessary or desirable for obtaining tenders on an
                  international basis for the design, engineering, purchasing of
                  materials and equipment and construction of the Treatment
                  Plant and or Transportation Facilities. No such data,
                  specifications, drawings, conditions of contract, documents or
                  information shall be published or distributed unless the same
                  shall have been approved by PETROMIN provided that this
                  requirement shall not apply if PETROMIN does not hold an
                  interest in the Concession.

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                                      -17-

         12.3     Upon such approval having been given, Second Party shall
                  invite tenders for the design, engineering, purchasing of
                  materials and equipment and construction of the
                  Plant/Transportation Facilities from such persons and in such
                  countries as the Parties to this Contract agree in advance.

         12.4.    Second Party shall not conclude by themselves any contract for
                  design, engineering, purchasing of materials and equipment and
                  construction of Plant/Transportation Facilities or any part
                  thereof. Instead, Second Party shall forward to PETROMIN
                  all tenders received together with the appraisals and
                  recommendations of Second Party with regard to those tenders
                  and the contracts will be placed thereafter with the mutual
                  agreement of the Parties.

         12.5     During the period of construction of the Treatment Plant,
                  Second Party shall:-

                  (a)      prepare any further designs and drawings necessary
                           for the information of the contractors to enable them
                           to carry out such construction.

                  (b)      inspect and teat during construction the mechanical
                           and electrical materials, machinery and equipment
                           supplied by the contractors and arrange and witness
                           acceptance tests.

                  (c)      issue proper instructions to contractors in
                           accordance with the terms of contracts between the
                           Joint-Venture and such contractors.

                  (d)      issue such certificates as the conditions of
                           contracts between the Parties and a contractor
                           provide shall be issued prior to the contractor
                           becoming entitled to the whole or any part of his
                           contract price.

                  (e)      arrange with prior written concurrence of PETROMIN
                           for such competent and qualified engineers,
                           technicians and/or consultants, as shall be
                           reasonably necessary for the efficient planning and
                           designing of the Treatment Plant and facilities; and
                           for a competent and qualified resident staff.

                  (f)      assist, when appropriate, in settling disputes and
                           differences which may arise between the Parties and
                           contractors.

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                                      -18-

                  Provided always that Second Party shall in no way be
                  responsible to the Joint-Venture and/or PETROMIN for the
                  wrongful or negligent acts or omissions of the contractors
                  where such acts or omissions do not result from the failure of
                  Second Party to discharge its own responsibilities as set
                  forth in this Article.

         12.6     Second Party shall not charge any fees to the Joint-Venture
                  for the exercise of its functions under this Article. However,
                  it is agreed that the Joint-Venture shall pay (a) expenses
                  incurred for jobs carried out through third parties with the
                  prior approval of PETROMIN and (b) salaries and remunerations
                  of staff employed for supervision of designing, planning and
                  construction of the Plant/Transportation Facilities.

         ARTICLE  13 - PLANT OPERATION:

         13.1     Second Party shall, for the duration of the Contract, be
                  responsible to Joint-Venture and PETROMIN for efficient
                  technical management of the Treatment Plant and/or
                  Transportation Facilities (in the event same are set up) and
                  its offsites, according to first-class generally accepted
                  engineering standards. In the discharge of this responsibility
                  Second Party shall :-

                           (a)      provide and/or secure with the prior
                                    approval of PETROMIN, if PETROMIN is
                                    holder of an interest, in the Concession,
                                    such technical staff and employees of the
                                    Joint-Venture as may be reasonably
                                    necessary on suitable terms of employment.

                           (b)      ensure proper extraction of minerals ore and
                                    proper scheduling of production in the
                                    Treatment Plant when it is set up.

                           (c)      ensure that the Treatment Plant and its
                                    offsites are properly maintained and
                                    repaired.

                           (d)      ensure that the production of the Treatment
                                    Plant is properly stored and loaded on to
                                    Transportation.

                           (e)      from time to time transfer such of its
                                    responsibility to such Saudi Arabian
                                    employees of the Joint-Venture as the
                                    Parties mutually agree are sufficiently
                                    experienced.

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                                      -19-

                           (f)      provide all such information, patents and
                                    processes and consultation services to the
                                    Joint-Venture as may be reasonably within
                                    its power and which shall be needed to
                                    perform its obligations hereunder to the
                                    efficient degree and to ensure that the
                                    production by the Treatment Plant is
                                    technically uptodate.

                           (g)      provide for, as long as necessary, continued
                                    instruction and training to an appropriate
                                    number of Saudi Arabian employees of the
                                    Joint-Venture with a view to ensuring that
                                    the management and staff employed in the
                                    operation, maintenance and repair of the
                                    equipment and machinery of the
                                    Joint-Venture and in marketing the ore
                                    and/or products of the Treatment Plant shall
                                    become progressively more Saudi Arabian in
                                    content. The instruction and training of
                                    such Saudi Arabian employees shall take
                                    place at the Plants and offices of Second
                                    Party or its affiliates as may be
                                    appropriate. The Joint-Venture shall be
                                    responsible for the travelling expenses,
                                    living expenses and salaries of such Saudi
                                    Arabian employees during the period of such
                                    instruction and training but Second Party
                                    shall not make any charge for such
                                    instruction and training.

         13.2     The provision of this Article shall apply with equal force in
                  case any Transportation Facilities are set up.

         ARTICLE  14 - MARKETING ARRANGEMENTS:

         14.1     Second Party, severally and jointly, shell be responsible for
                  a period of eight (8) years from the commencement of
                  production in the Concession Area or by the Treatment Plant,
                  in consideration of the remuneration hereinafter laid down, to
                  arrange the marketing and sales of relevant proportion of
                  PETROMIN's share, if any, of all the mineral ore produced
                  and/or products of the Treatment Plant, that are available for
                  export from Saudi Arabia and in the discharge of such
                  responsibility Second Party shall either itself purchase or at
                  its option procure purchasers for such ore or products of
                  PETROMIN's share that are available for export. Sales in
                  Saudi Arabia shall be handled by PETROMIN itself or through
                  any other agency appointed by PETROMIN.

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                                      -20-

         14.2     The relevant proportion of PETROMIN's share, referred to in
                  Article 14.1 hereinabove, shall be :-

                  (a)      During the 1st year from the date of commencement
                           of production in the Concession Area or by the
                           Treatment Plant...............................100%

                  (b)      During the 2nd year...........................87 1/2%

                  (c)      During the 3rd year...........................75%

                  (d)      During the 4th year...........................62 1/2%

                  (e)      During the 5th year...........................50%

                  (f)      During the 6th year...........................37 1/2%

                  (g)      During the 7th year...........................25%

                  (h)      During the 8th year...........................12%

                  (i)      During the 9th year...........................NIL

                  The excess of ore and or Plant production over the relevant
                  proportion will be sold by PETROMIN itself or through any
                  other agency appointed by it. PETROMIN will be entitled to a
                  commission of two percent (2%) on the total of such sales and
                  sales in Saudi Arabia.

         14.3     The prices to be paid by the purchasers for mineral ore and
                  Plant products F.O.B. Jeddah or any other port of loading in
                  Saudi Arabia shall be the prices fixed under paragraph 8 and
                  of this Article 14, except in the case of sales into Saudi
                  Arabia where sales shall be at the best prices obtainable
                  having due regard to local conditions and prevailing world
                  prices at the time of such sales. In case of sales to Second
                  Party or purchasers of products for export directly procured
                  by Second Party it shall be entitled to a gross sales
                  commission equal to two percent (2%) of the sale price
                  received.

         14.4     The volume of sales into Saudi Arabia shall be determined by
                  the Parties for each period of three (3) months ending 31st
                  March, on 30th June, on 30th September and 31st December.
                  Sales into Saudi Arabia shall have priority over sales for
                  export.

<PAGE>   21

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                                      -21-

         14.5     50 far as may be reasonable the Parties will cooperate with
                  each other in agreeing prices on a long term basis.

         14.6     If Second Party shall fail to market any portion of the ore or
                  the products of the Plant in accordance with its
                  responsibilities as per paragraphs 1 and 2 of this Article 14
                  then without prejudice to remedies of PETROMIN against Second
                  Party, PETROMIN shall be entitled to procure export buyers
                  for such portion. In such event PETROMIN shall be entitled to
                  receive from the Joint-Venture the sales commission of two
                  percent (2%) which would have been paid to Second Party had it
                  marketed such portion and PETROMIN shall in addition be
                  entitled to receive from Second Party compensation at the rate
                  of two percent (2%) of the purchase price received by the
                  Joint-Venture for the portion so sold.

         14.7     (a) The mineral ore or the Treatment Plant products for export
                  shall be sold only under the following terms end conditions:-

                           (i)      On payment of agreed F.O.B. price against
                                    delivery of shipping documents,

                           (ii)     On payment agreed F.O.B. price within
                                    thirty (30) days from the date of the
                                    relevant bill of loading such payment to be
                                    guaranteed in advance by a bank acceptable
                                    to PETROMIN, if PETROMIN at the time
                                    has an interest in the Concession,

                           (iii)    Risk and title shall pass to Second Party or
                                    buyer, as the case may be, at delivery point
                                    F.O.B. Jeddah or any other Saudi port as
                                    progressively loaded.

                           (iv)     Arrangements for payment shall be agreed to
                                    the satisfaction of PETROMIN any shipment
                                    can be taken in hand.

                                    Where Second Party estimate that the best
                                    economic interest of the Joint-Venture
                                    requires variations in the above, they shall
                                    secure the prior approval of PETROMIN for
                                    making such variations.

<PAGE>   22

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                                      -22-

                  (b)      Payments for the account of the Joint-Venture by
                           Second Party or a purchaser for all its purchases
                           from the Joint-Venture shall be made in U.S.
                           Dollars or any other currency acceptable to the
                           Joint-Venture and freely convertible into U.S.
                           Dollars but sales into Saudi Arabia shall be made
                           in Saudi Arabian currency. Such sales shall be made
                           in cash or on thirty (30) days credit against
                           acceptable bank guarantee.

          14.8    The representative/representatives of each Party shall meet
                  together in Saudi Arabia or such other place as may be agreed
                  on March 31, June 30, September 30 and December 31, or as near
                  as possible to such dates, in each year during the period of
                  the Contract for the purpose of agreeing upon prices at the
                  date of such meeting for the ore and plant products,
                  considering the provision of paragraph 14.9 hereof. If within
                  a period of fourteen (14) days from the date of such
                  representatives so meeting together, they shall not have
                  agreed on prices, then the matter shall be referred to the
                  Government Prices Committee set up for this purpose. An appeal
                  against the decision of this Committee may be made by any
                  party to the Board of Concession Appeals provided for in
                  Article 50 of the Mining Code, the award of the Board shall be
                  final and binding.

         14.9     The geographic world markets the prices of which shall be
                  taken into consideration are :

                  (1)  NEW YORK                 (2)  LONDON
                  (3)  TOKYO                    (4)  ZURICH
                  (5)  OTHERS.                  The list of such markets may be
                  amended from time to time by mutual agreement of Parties.

         14.10    If at any time during the said period of eight (8) years
                  Second Party are in breach of its duty imposed by paragraph 1
                  of this Article 14 to purchase or procure purchasers of the
                  relevant proportion of PETROMIN's share of the ore
                  produced or the Treatment Plant products, then they shall be
                  liable to pay to PETROMIN as liquidated damages in respect
                  of such default so long  is it continues, such profit as
                  PETROMIN would have realized on the sale of such relevant
                  proportion not so purchased at prices which shall reflect the
                  prices actually obtained during the period of default based
                  on the program or actual production from the Concession Area
                  whichever is more at the time of commencement of such
                  default less such profit as PETROMIN shall actually

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                                      -23-

                  realize on such sales as it shall be able to make of such
                  relevant proportion of ore produced or the Plant products not
                  purchased but after adding all costs incurred by PETROMIN,
                  as the same shall not have been taken into account in arriving
                  at such profit in keeping mining operations in the Concession
                  Area and/or the Plant in operational readiness during the
                  period of such default.

         14.11    Without prejudice to the provisions of this Contract and in
                  case at any time during the period of this Contract any party
                  is in breach of its obligations under this Contract that party
                  shall pay to the other party or parties damages as shall be
                  determined by adjudication as set forth in Article 29 hereof.

         14.12    Second Party shall be free to market the ore or the Treatment
                  Plant products in any country of the world provided that at no
                  time shall Second Party market the ore or Treatment Plant
                  products to any hostile country or sell the same to Parties
                  under a commercial ban by the Government of the Kingdom of
                  Saudi Arabia.

         ARTICLE 15 - MATERIAL AND SERVICES:

         15.1     Second Party shall give preference to goods and materials that
                  are available in Saudi Arabia. They shall not knowingly
                  purchase directly or indirectly goods or materials from any
                  foreign source hostile or unfriendly to the Saudi Government.
                  Each year from the beginning of the commercial production,
                  at least twenty five percent (25%) of the cash reserves
                  retained by Second Party in Saudi Arabia shall be deposited as
                  current account in Saudi bank or banks and that fifty percent
                  (50%) of the value of the Second Party's letters of credit
                  related to purchases made during the period of the Concession
                  shall be opened through such bank or banks.

         15.2     Second Party shall also accord priority to Saudi Arabian
                  contractors for the execution of the Second Party's works and
                  installations, provided that the rates and terms and the
                  quality of work are generally the same as those that may be
                  obtained from contractors in other countries.

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                                      -24-

         15.3     Should the need arise during the periods of the License and
                  the Concession, for the services of drilling rigs other than
                  those owned by Second Party, first preference shall be given
                  to rigs owned by the Saudi Government, any of its
                  organizations and/or Saudi Arabian nationals, provided that
                  the rates and terms and quality of work are generally the same
                  as those for similar rigs of other contractors.

         ARTICLE 16 - PERSONNEL:

         16.1     Second Party and the Company shall employ Saudi Arabian
                  personnel in the administration and management of their
                  operations and activities. Once the Concession is granted, the
                  following proportions must be observed in all brackets:-

         16.2     Inside Saudi Arabia a minimum of eighty five percent (85%) of
                  the employees of the Second Party and the Company shall be
                  Saudis, of whom at least fifty percent (50%) must be in major
                  posts.

         16.3     Outside Saudi Arabia a minimum of thirty-five percent (35%)
                  shall be Saudis, if and when they are available.

         16.4     Whenever it is not possible to meet these requirements, due
                  to a shortage of skilled Saudi personnel, Second Party, the
                  Company and such other companies or ventures formed under this
                  Contract shall employ personnel in the following order :
                  citizens of the Arab States who are members of the Arab
                  League, citizens of other Arab countries and citizens of other
                  friendly states.

         16.5     Saudi and non-Saudi employees having substantially similar
                  capabilities or having substantially similar duties and
                  responsibilities must receive the same remuneration and the
                  same reasonable foreign allowance if an when circumstances
                  require it.

         ARTICLE 17 - TRAINING:

                  Once the Concession is granted by the Government, the Parties
                  shall, at the expense of the Joint-Venture, prepare a
                  specialized theoretical and practical training program for
                  Saudi Arabian employees relating to the various aspects of the
                  mining industry and including supervisory and management
                  training.

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                                      -25-

         ARTICLE 18 - EDUCATION, MEDICAL AND OTHER SERVICES:

                  Once the Concession is granted, the Parties shall contribute
                  to the welfare of the people of Saudi Arabia by providing
                  various facilities pertaining to educational, medical,
                  hygenical and other services including but not limited to
                  setting up of schools, hospitals and water facilities to be
                  agreed upon with the Government.

         ARTICLE 19 - OTHER INTERESTS:

         19.1     Except with the prior written approval of PETROMIN, neither
                  Second Party nor any of its affiliates or associated companies
                  shall either directly or indirectly in any capacity be
                  concerned or interested in any corporation, firm, business or
                  enterprise in Saudi Arabia which shall compete with or be
                  likely to compete with the business, activities and program of
                  the Joint-Ventvre.

         19.2     PETROMIN notwithstanding anything to the contrary herein
                  contained shall be at liberty without any restriction
                  whatsoever to mine, produce or sell or be associated with or
                  interested in any corporation, firm, business or enterprise
                  mining, making or selling any minerals or products whatsoever
                  whether or not the same shall be competitive with the
                  business, activities and program of the Joint-Venture.

         ARTICLE 20 - TRANSFER OF INTEREST IN CONCESSION:

         20.1     PETROMIN may transfer its total or partial interest
                  and holdings in the Concession and/or the Joint-Venture to
                  any Saudi Arabian company, firm or person, provided PETROMIN
                  shall always hold itself responsible to Second Party for
                  performance by such transferee of this Contract.

         20.2     Second Party may transfer its total or partial interest and
                  holdings in the Concession and/or the Joint-Venture to its
                  parent company or a subsidiary or an affiliate, provided
                  Second Party shall always hold itself responsible to
                  PETROMIN for performance, by such transferee of this
                  Contract

<PAGE>   26

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                                     -26-

                  A subsidiary shall mean a corporation or company which the
                  Second Party owns more than half of its capital and which is
                  under the direct or indirect control of the Second Party. An
                  affiliate shall mean a corporation or company which more than
                  half of its capital is owned by, and which is under the
                  direct or indirect control of, a corporation or company which
                  the Second Party owns more than half of its capital and which
                  is under his direct or indirect control.

         20.3     Any transfer by any Party at variance with the afore stated
                  provisions of this Article shall require the approval in
                  writing of the other Party.

         ARTICLE  21 - VOLUNTARY SURRENDER OF CONCESSION

          21.1    Should any Party at any time desire to surrender or abandon
                  its entire interest under the Concession and this Contract,
                  and any other Party or Parties do not so desire, such Party
                  shall, subject to Government approval, execute and deliver an
                  instrument transferring its interest, pro rata, to the
                  Parties desiring not to surrender or abandon, provided
                  however, that if either PETROMIN or NATIONAL wishes to abandon
                  its participation interest as aforesaid, the other of them
                  shall have the first option to take all of the interest so
                  abandoned.

         21.2     From and after the making of the transfer referred to in the
                  preceding paragraph, the transferring Party shall have no
                  further interest under the Concession and this Contract and
                  shall be relieved from the relevant obligations thereafter
                  accruing under the Concession and this Contract but shall be
                  bound to meet and clear all its share obligations and
                  liabilities up to and including such date of transfer and the
                  substitute Party shall assume all obligations and be entitled
                  to all benefits thereafter arising so far as applicable to the
                  interest transferred.

         21.3     At the making of the transfer under this Article the
                  transferee shall be entitled to purchase the transferor's
                  interest in all facilities, materials and equipment at its
                  value determined by agreement, or, failing such agreement, by
                  an award of the Board of Concession Appeals.

<PAGE>   27

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                                      -27-

         21.4     If however the Transferor should wish to participate once
                  again under the particular Concession and this Contract it may
                  do so upon terms mutually acceptable to PETROMIN.

         ARTICLE 22 - WAIVER:

                  The failure of any Party hereto to insist upon strict
                  performance of any terms, conditions and provisions of
                  the Contract shall not be deemed a waiver of future compliance
                  therewith by the Party by which the same is required to be
                  performed hereunder and shall in no way prejudice the
                  remaining provisions of this Contract.

         ARTICLE 23 - INDEMNITY:

                  Second Party hereby agrees to indemnify and keep PETROMIN
                  harmless and indemnified against all claims, demands or
                  losses, including but not limited to personal losses and
                  third party claims from whatever source arising, for the
                  duration hereof, which PETROMIN may have to meet during the
                  currency of the Contract or after its termination, if such
                  claims, demands, or losses are the result of any neglect,
                  delay or default by Second Party of any of the obligations or
                  liabilities assumed by Second Party under this Contract, the
                  License, the Concession, or the provisions of the Mining Code.

         ARTICLE  24 - FORCE MAJEURE:

                  Neither party to this Contract shall be liable to the other
                  party for any failure of or delay in performance of its
                  obligations hereunder due to any cause or circumstance which
                  is beyond its reasonable control and may not reasonably be
                  prevented, including but without limiting the generality of
                  the foregoing any such failure or delay as is caused by
                  strikes, lockouts, fires, explosions, shipwreck, stern,
                  earthquake, flood, lightning, act of God, wars, riots,
                  interference by military authorities, regulation or direction
                  of the Government of Saudi Arabia, or any other government or
                  governmental authority, provided that the party so restricted
                  shall continue to use its best efforts to remove the cause
                  of the force majeure.

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                                        -28-

         ARTICLE 25 - CONTROLLING LAW:
                  The rights of Parties hereunder shall be exercised in a lawful
                  manner, subject to the laws of the Kingdom of Saudi Arabia,
                  and in the exercise thereof all respect shall be accorded to
                  the religion and customs of the people.

         ARTICLE 26 - CONFIDENTIAL INFORMATION:

                  All information acquired by any Party hereto in respect of the
                  operations hereunder shall be considered as confidential and
                  shall not be divulged to any other entity except on mutual
                  agreement of the Parties. This restriction shall not apply in
                  case of information submitted to or required by the
                  Government.

         ARTICLE 27 - NOTICES:

         27.1     Second Party shall designate a fully authorized representative
                  who shall maintain an office in Saudi Arabia at which notices
                  to Second Party may be validly served. The address of such
                  office and any change of address shall be noticed in writing
                  to PETROMIN, and the address of PETROMIN shall be noticed by
                  it in writing to Second Party at the office of its said
                  representative. A party shall not be bound to take notice of
                  any change of address of the other party until it is so
                  notified. Second Party, unless otherwise advised, shall direct
                  his correspondence with PETROMIN to PETROMIN'S address in
                  Riyadh, Saudi Arabia.

         27.2     Any notice to be given by a party to another party hereto
                  shall be deemed to be validly served if made:

                  27.2.1   by means of a registered letter, airmail post,
                           postage prepaid, with receipt requested sent to the
                           office of the party or authorized representative to
                           which it is addressed:

                  27.2.2   by means of a letter delivered by hand at the mail
                           reception department or desk of the party or
                           authorized representative to which it is sent, with
                           an acknowledgement of a receipt on a copy.

<PAGE>   29
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                                     -29-

         27.3     Notice by registered mail shall be deemed to have been served
                  at the expiration of the tenth (10th) day after the same shall
                  have been posted in Saudi Arabia. In proving such service, it
                  shall be sufficient to prove that the envelope containing the
                  notice was properly addressed and posted with prepaid postage.

         ARTICLE 28 - ABEYANCE OR ARTICLES:

                  All Articles of this Contract pertaining to imposition of a
                  financial burden or responsibility on PETROMIN or pertaining
                  to participation of PETROMIN in non-profit joint company shall
                  remain in abeyance and shall come into force only after
                  PETROMIN exercise its option to retain or resume the agreed
                  percentage of interest in the Concession in accordance with
                  provision of this Contract.

         ARTICLE 29 - SETTLEMENT OF DISPUTES:

                  If any doubt, difference or disputes shall arise between the
                  Parties concerning the interpretation of performance of this
                  Contract, or anything herein contained or in connection
                  herewith, or the rights and liabilities of the Parties
                  hereunder, it shall, failing any agreement to settle it, be
                  referred to the Board of Concession Appeals provided for in
                  Article 50 of the Mining Code. The award of the said Board
                  shall be final and binding on the Parties and may be
                  enforceable in any Court of Law.

         ARTICLE 30 - ORIGINALS AND LANGUAGE:

                  This Contract is executed in six (6) duplicates, three in
                  Arabic and three in English and each of the Parties

<PAGE>   30
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                                      -30-

                  shall retain one of each. All duplicates shall be regarded as
                  originals and both Arabic and English texts shall have equal
                  authority and weight.

         ARTICLE 31 - EFFECTIVE DATE OF THE CONTRACT:

                  This Contract shall be effective on and from the date of
                  signing hereof.

                                   GENERAL PETROLEUM AND MINERAL ORGANIZATION

                                   By /s/ AHMED ZAKI YAMANI
                                     ------------------------------------------

                                   NATIONAL MINING COMPANY

                                   By /S/ [ILLEGIBLE]
                                     ------------------------------------------

                                   ARABIAN SHIELD DEVELOPMENT COMPANY

                                   By /s/ HATEM EL KHALIDI
                                     ------------------------------------------<PAGE>   1
                                                                   EXHIBIT 10(b)

                                LOAN AGREEMENT

         This Loan Agreement was signed on 24/1/1979 between:

         The Government of Saudi Arabia, represented by His Excellency the
Minister of Finance and National Economy, Sheikh Mohammad Aba Al Khail (First
Party) and,

         National Mining Company, a limited Saudi company with headquarters in
Jeddah, represented by His Highness Prince Kaled bin Abdullah bin Abdul Rahman
in accordance with resolution of the Board no. 78/1, dated 20/12/1978 and,

         Arabian Shield Development Company, a public stock company with head-
quarters at 10830 North Central Expressway, Dallas, Texas, U.S.A., represented
by Mr. Hatem Hussein El-Khalidi, U.S. citizen, in accordance with Power of
Attorney dated 10 October, 1978. The two above will be referred to as (Second
Party).

                                  Introduction

         Whereas the Second Party has procured two exploration licenses for
minerals in the areas of Wadi Qatan and Al Masane in accordance with Council of
Ministers Resolution no. 264 adated 28/3/1391, or 22/5/71, and another
exploration license in the Jabal Harr area in accordance with Ministerial
resolution no. 35/16/4368 dated 1/9/1397.

         And whereas the field operations performed by the Second Party has
proven the existence of nickel minerals in Wadi Qatan and the minerals of
copper, zinc, silver and gold in the Al Masane area, and the Second Party then
brought two consulting companies and they are Robertson Research of British
Nationality, and Watts, Griffis and McOuat of Canadian Nationality to
economically evaluate these minerals, and make feasibility studies on them.
These companies did the above studies and they recommended in their report to
begin Phase I of the development program which was estimated to cost 11 million
U.S. dollars.

         These reports were also studied by the Technical experts of the
Ministry of Petroleum and Mineral Resources who concluded that the deposits of
the Al Masane area could be economically exploited.

         It is understood that that period for the implementation of this
Phase I of this mining program is estimated to be sixteen months as shown by the
reports presented by the consultants to the Directorate General of Mineral

                                      -1-

<PAGE>   2

Resources. This period starts from the date of the obtaining of the loan of
this agreement.

         And whereas the High Order (from the Prime Minister) no. 14672 dated
9/7/1398 delegating the Minister of Finance and National Economy as the
Minister of Petroleum and Mineral Resources to implement what is necessary for
the issuance of financial aid to the Second Party. The two Ministers met and
agreed to give the Second Party a loan of 11 million U.S. dollars to help the
Second Party in implementing its Phase I program on condition that the
implimentation shall be under the supervision of the Directorate General of
Mineral Resources as shown in the minutes of the meeting of the two Ministers
on 12/9/1398.

         And whereas National Mining Company and Arabian Shield Development
Company are agreeable to a joint undertaking to benefit from this loan to
implement the above mentioned program. Thus the two parties have agreed to the
following:

         Article I The introduction above shall be considered as an integral
part of this agreement.

         Article II The First Party agrees to loan jointly to the Second Party,
11 million dollars to help him implement Phase I of the development and
exploitation of minerals in the Al Masane area.

         Article III (1) The Second Party agrees to spend this loan for the
implementation of the program referred to in the Introduction of this
agreement, and that is under the supervision of the Directorate General of
Mineral Resources. (2) Second Party agrees to keep records and books whereby
all equipment purchased by this loan can be identified, also all expenses
incurred. (3) The Directorate General of Mineral Resources shall have access at
all times to the records of the Second Party, and the right to audit all Second
Party's accounts and documents, and that is for insuring that the funds are
being correctly spent.

         Article IV The loan funds shall be payed to the Second Party as
follows: (a) The First Party shall immediately upon the signing of this
agreement deposit the full amount of this loan in a special account in the name
of the Second Party in the Saudi Dutch Bank in Jeddah. (b) The Second Party
shall have the right to draw from this account to open letters of credit to buy
and pay for equipment and instruments and others which are necessary for the

                                      -2-

<PAGE>   3

implementation of Phase I of the mining program. The Second Party shall also
have the right to draw from this account to pay for the general administrative
expenses. The consultants' fees, operating expenses, salaries of personnel,
fuel, and other expenses of operation and administration. In both cases the
drawing of funds shall be in accordance with periodic statements of accounts
authorized by the joint financial committee of the Second Party and a
representative of the Directorate General of Mineral Resources. (c) Second
Party shall give certified copies of all shipment records and the periodic
statements of account to the Directorate General of Mineral Resources, also a
certified copy of the budget of Phase I, and the final statement of account
audited by an authorized Auditor. (d) First Party shall have the right to stop
the withdrawal of funds from this account by Second Party if conditions arise
for the stoppage of the project before completion, or if Second Party did not
comply with the Articles of this Agreement.

         Article V The period of repayment of this loan is 10 years which
starts from the date of deferral specified as five years after the signing of
this Agreement.

         Article VI The Second Party agree jointly to repay the loan to the
First Party in U.S. dollars in ten equal yearly installments, and without any
interest, and each yearly installment shall be due at the end of the month of
December of every year following the period of exemption described in Article V
of this Agreement.

         Article VII The Petroleum and Mineral Association (PETROMIN) shall have
the right to participate in the mineral exploitation of the Al Masane area in
accordance with PETROMIN's agreement with the Second Party dated 6/6/1391. And
in that case and upon PETROMIN's signing an agreement to that effect with the
Second Party, then this loan shall be considered as part of the participation
of PETROMIN in the capital of the joint company that will be formed for that
purpose in accordance with the agreement referred to. The resolution of the
loan shall then be in accordance with an agreement to be made between the two
parties.

         Article VIII As security for this loan the Second Party shall put all
its movable and immovable assets in the country in lien to the First Party,
also its equipment and other things tabulated in Attachment (I) of this
Agreement. And the Second Party cannot sell or bequeath or dispose of this

                                      -3-

<PAGE>   4

equipment and other things in any manner during the period of this loan, and
until it is fully repaid or considered part of PETROMIN's contribution to the
capitalization of the proposed company as described in the previous article.

         Article IX No member of the second Party can withdraw from this Loan
Agreement or transfer it to others except by prior written agreement of the
First Party.

         Article X This agreement comes under the jurisdiction of the laws and
regulations of the Kingdom of Saudi Arabia.

         Article XI In case of dispute between the two parties about the
interpretation or its implementation, then the Saudi Office of Appeal shall be
the final arbitrator in any such dispute, and its decision binding on both
parties.

         Article XII This agreement has been prepared in five copies in Arabic
and was signed on the above date after reading and understanding it, and the
Second Party received a copy to take action in accordance with it.

First Party

Mohammad Aba Al Khail
Minister of Finance and National Economy

Second Party jointly

For National Mining Company
Prince Khaled bin Abdullah bin Abdul Rahman

For Arabian Shield Development Company
Hatem El-Khalidi

                                      -4-

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