Document:

OPTION AGREEMENT

          THIS  AGREEMENT  is  made  as  of  the  29  day  of  January,  2001.

BETWEEN:

          AURORA  METALS (BVI) LIMITED, a company incorporated under the laws of
          the  British  Virgin  Islands,  having  an  office at Suite 517, 2 Old
          Brompton  Road,  London,  SW7  3DQ,  United  Kingdom

          (the  "Optionor")

                                                               OF THE FIRST PART

AND:

          BILLITON  UK  RESOURCES B.V., a company incorporated under the laws of
          The  Netherlands,  having an office at Mariahoeveplein 6, 2591 TV, The
          Hague,  The  Netherlands

          (the  "Optionee")

                                                              OF THE SECOND PART

WHEREAS:

A.  The Optionor has direct or indirect Interests in certain mineral exploration
properties in the Republic of Tunisia (the "Optioned Properties") which are more
particularly  described  in  Schedule  "A"  attached  hereto;

B.  The  Optionor  has  agreed  to grant an Option to the Optionee to acquire an
Interest  in the Optioned Properties on the terms and conditions hereinafter set
forth;  and

C.  The Optionor has agreed that it will contemporaneously with the execution of
this  Agreement  enter  into  a  Subscription Agreement in the form set forth as
Schedule  "B"  hereto.

          NOW  THEREFORE  THIS AGREEMENT WITNESSETH that in consideration of the
mutual covenants contained herein and other good and valuable consideration paid
by  the  Optionee  to the Optionor, the receipt of which is hereby acknowledged,
the  parties  agreed  as  follows:

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                          ARTICLE 1  -  DEFINITIONS

1.1. For  the  purposes  of this Agreement the following words and phrases shall
     have  the  following  meanings,  namely:

     (a)  "AFFILIATE" means a company that is affiliated with another company if
          one  of  them is the subsidiary of the other, or both are subsidiaries
          of the same company, or each of them is controlled by the same person,
          company,  partnership or party. In association with this definition, a
          company  is  a  subsidiary  of  another  company  if:

          (i)  it  is  controlled  by:

               1.0.a.i.1.  that  other  company;

               1.0.a.i.2.  that  other  company and one or more company, each of
                           which  is  controlled  by  that  other  company,  or

               1.0.a.i.3.  two or more companies, each of which is controlled by
                           that  other  company,  or

          (ii) it  is  a  subsidiary  of  a  subsidiary of that other company.

          In  association  with  this  definition,  a company is controlled by a
          person,  company,  partnership  or  party  if:

                    (i)  shares  of  the  company  carrying more than 50% of the
               votes  for  the election of directors are held, other than by way
               of  security  only,  by  or  for  the  benefit  of  that  person,
               corporation,  partnership  or  party,  and

          (ii) the  votes  carried  by the shares mentioned in paragraph (i) are
               sufficient, if exercised, to elect a majority of the directors of
               the  company.;

     (b)  "AREA  OF  INTEREST"  means the area lying within the territory of the
          Republic  of Tunisia which is located within two (2) kilometres of the
          perimeter  of  the  Optioned  Properties;

     (c)  "BUSINESS  DAY"  has  the  meaning  set forth in Section 1.1(g) of the
          Subscription  Agreement;

     (d)  "CLOSING"  has  the  meaning  set  forth  in  Section  1.1(i)  of  the
          Subscription  Agreement;

     (e)  "COMMENCEMENT  OF  COMMERCIAL  PRODUCTION"  means the first day of the
          month  following  which a mine (including any associated processing or
          treatment  facilities)  on  any portion of the Optioned Properties has
          operated  for 30 consecutive days at not less than 70% of its designed
          capacity;

                                      -2-
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     (f)  "COMMON  SHARE"  has  the  meaning  set forth in Section 1.1(l) of the
          Subscription  Agreement;

     (g)  "EXPLORATION  EXPENDITURES"  in  respect  of  the Optioned Properties,
          means  the sum of (i) all costs of acquisition and maintenance and all
          exploration  and  development  expenditures  and  all  other costs and
          expenses  of  whatsoever kind or nature, incurred or chargeable by the
          Operator  with  respect  to  the  exploration  or  development  of the
          Optioned  Properties  and  the placing of the Optioned Properties into
          commercial  production,  and (ii) as compensation for general overhead
          expenses  which the Operator will incur, an amount equal to 10% of all
          amounts  included  in subparagraph (i) above to be calculated and paid
          quarterly.  For  greater  certainty,  neither  the expenditure of Unit
          Proceeds  nor  the  expenditure of funds received by the Optionor from
          the Optionee on exercise of the Warrants shall be deemed to constitute
          Exploration  Expenditures  for  the  purposes  of  this  agreement;

     (h)  "FIRST  PROPERTY  OPTION"  means the option granted by the Optionor to
          the  Optionee  to acquire a 51% Interest in the Optioned Properties as
          more  particularly  set  forth  in  this  Agreement;

     (i)  "HIGH MARSH OPTION" has the meaning set forth in Section 1.1(o) of the
          Subscription  Agreement

     (j)  "INTEREST" means, without limitation, a legal, beneficial or equitable
          interest,  in mineral properties, whether direct, indirect, contingent
          or  otherwise,  including,  without  limitation,  options  on  mineral
          properties  or on shares of corporations having a legal, beneficial or
          equitable  interest  in  mineral properties, whether direct, indirect,
          contingent  or  otherwise;

     (k)  "LIBOR"  means the rate per annum (rounded upwards if necessary to the
          nearest  whole  one-sixteenth  of  one  percent  (1/16%)) equal to the
          average of the offered rates as of 11:00 a.m. London time appearing on
          the  display  designated  as  page  "LIBO" on the Reuter Moniter Money
          Rates  Service  for  U.S.  dollar  deposits for the relevant period of
          time;

     (l)  "OPERATOR" shall mean the Optionor unless the Optionee elects, once it
          has  elected to participate in the First Property Option by commencing
          the  funding  of  Exploration  Expenditures as contemplated in Section
          1.12,  to become the Operator of the Optioned Properties in which case
          the Optionee will upon such election become the Operator in respect of
          the  Optioned  Properties;

     (m)  "OPTION"  or  "OPTIONS" means, collectively, the First Property Option
          and,  if  granted,  the  Second  Property  Option;

     (n) "OPTIONED  PROPERTIES"  means  those  certain  mineral  exploration
          properties  more  particularly  described  in  Schedule  "A"  hereto;

                                      -3-
<PAGE>
     (o)  "OPTION  PERIOD"  means:

          (i)  with  respect  to  the First Property Option, the period from the
               date hereof to and including January 1, 2004 unless the Option is
               earlier  exercised  in  accordance  with  Section  1.12;  and

          (ii) with  respect  to the Second Property Option, the period from the
               date  of  exercise  of the First Property Option to and including
               the date of satisfaction of the requirements set forth in Section
               1.19;

     (p)  "PRIVATE  PLACEMENT"  means  the  purchase  and  sale  of the Units as
          contemplated  in  the  Subscription  Agreement;

     (q)  "PROGRAM  AND  BUDGET"  has the meaning set forth in Section 1.1(t) of
          the  Subscription  Agreement;

     (r) "PROJECT  NET  REVENUE"  means  the  gross  proceeds  from the sale of
          production  from  the Optioned Properties less cash operating costs of
          production;

     (s)  "SECOND  PROPERTY OPTION" means the option which, upon exercise of the
          First  Property  Option,  will  be  deemed to have been granted by the
          Optionor  to the Optionee to acquire an additional 19% Interest in the
          Optioned  Properties  as  provided  in  Section  1.17;

     (t)  "SUBSCRIPTION  AGREEMENT" means the subscription agreement dated as of
          January  29,  2001  between  the  Optionor and Billiton E&D 3 B.V., an
          affiliate  of  the  Optionee,  in  the  form  attached as Schedule "B"
          hereto;

     (u)  "UNIT  PROCEEDS"  has  the  meaning set forth in Section 1.1(z) of the
          Subscription  Agreement;

     (v)  "UNITS"  has  the  meaning  set  forth  in  Section  1.1(aa)  of  the
          Subscription  Agreement;  and

     (w)  "WARRANT"  has  the  meaning  set  forth  in  Section  1.1(bb)  of the
          Subscription  Agreement.

1.2     ENTIRE  AGREEMENT

        This  Agreement,  together with  any  and  all agreements, documents and
other  instruments  to  be  delivered pursuant hereto or simultaneously herewith
(which,  for  the  purposes  of this Section are collectively referred to as the
"Agreement"),  constitutes  the  entire  agreement  between the Optionee and the
Optionor  pertaining  to  the  subject  matter  hereof  and supersedes all prior
agreements,  understandings,  negotiations  and  discussions,  whether  oral  or
written,  of  and between the parties hereto, including, without limitation, the
non-binding  letter  of  intent  between Aurora Gold Corporation and Billiton UK

                                      -4-
<PAGE>
Resources  B.V.  dated  February  25,  2000,  as  amended,  and  there  are  no
representations,  warranties,  covenants  or  other agreements among the parties
hereto  in  connection with the subject matter hereof except as specifically set
forth  in  the Agreement.  No supplement, modification, waiver or termination of
this  Agreement  shall  be binding unless executed in writing by the party to be
bound  thereby.  No  waiver  of any of the provisions of this Agreement shall be
deemed  to  or shall constitute a waiver of any other provisions (whether or not
similar)  nor  shall such waiver constitute a continuing waiver unless otherwise
expressly  provided.

1.3.      HEADINGS

          The  Articles,  Sections,  subsections  and  other  headings contained
herein  are  included  solely  for  convenience,  are not intended to be full or
accurate  descriptions of the context hereof and shall not be considered part of
this  Agreement.

1.4.      SCHEDULES

          The  following  Schedules  attached  to this Agreement are an integral
part  of  this  Agreement:

         Schedule  "A"  -  Optioned  Properties;
         Schedule  "B"  -  Subscription  Agreement;
         Schedule  "C"  -  Summary  of Major Joint Venture Agreement Terms; and
         Schedule  "D"  -  Net  Proceeds  Interest.

           ARTICLE 2  -  REPRESENTATIONS AND WARRANTIES OF THE OPTIONOR

1.5. The  representations  and  warranties  of  the  Optionor  contained  in the
     Subscription  Agreement  shall  be  deemed  to  be  incorporated  herein by
     reference  and  the  Optionor  confirms,  agrees  and acknowledges that the
     Optionee will have the benefit of all of the representations and warranties
     provided  to  or  for  the  benefit  of  Billiton  E&D  3  B.V.  under  the
     Subscription  Agreement as if such representations and warranties were made
     directly  to  the  Optionee  under this Agreement, and the Optionor further
     acknowledges  that  the  Optionee  has  relied  on  the  fact  that  the
     representations  and  warranties  of the Optionor to Billiton E&D 3 B.V. as
     contained  in  the Subscription Agreement are also being provided to or for
     the  benefit  of  the  Optionee  in  entering  into  this  Agreement.

1.6. The representations and warranties incorporated by reference in Section 1.5
     are  provided for the exclusive benefit of the Optionee and a breach of any
     one  or  more  thereof may be waived by the Optionee in whole or in part at
     any  time without prejudice to its rights in respect of any other breach of
     the  same  or any other representation or warranty, and the representations
     and  warranties  incorporated by reference in Section 1.5 shall survive the
     execution  hereof.

1.7. The representations and warranties incorporated by reference in Section 1.5
     shall  be  deemed  to  apply  to all assignments, transfers, conveyances or
     other  documents  transferring  to  the Optionee or to any Affiliate of the
     Optionee  any  Interest to be acquired hereunder and there shall not be any
     merger  of  any  covenant,  representation or warranty in such assignments,
     transfers,  conveyance  or documents, any rule or law, in equity or statute
     to  the  contrary.

                                      -5-
<PAGE>
         ARTICLE 5      - REPRESENTATIONS AND WARRANTIES OF THE OPTIONEE

1.8. The  Optionee  hereby  represents  and warrants to the Optionor as follows:

     (a)  the  Optionee  has been incorporated and duly organized and is validly
          existing  and  in  good  standing  under  the laws of The Netherlands;

     (b)  the  Optionee  has  full  power  and authority to execute, deliver and
          perform  this  Agreement.  This  Agreement  and  each  other agreement
          entered  into  by  the  Optionee  in  connection  with  this Agreement
          constitute  valid  and  legally  binding  obligations of the Optionee,
          enforceable  against  the Optionee in accordance with their respective
          terms  except  that:  (i)  the  enforcement  thereof may be limited by
          applicable  bankruptcy,  insolvency  and  other  laws  affecting  the
          enforcement  of creditors' rights generally, (ii) rights of indemnity,
          contribution  and  waiver  of  contribution  thereunder may be limited
          under  applicable  law and (iii) equitable remedies including, without
          limitation, specific performance and injunctive relief, may be granted
          only  in  the  discretion  of  a  court  of  competent  jurisdiction;

     (c)  except  as  set  forth  in  this Agreement, no authorization, consent,
          approval  or  other  order  of,  declaration  to,  or filing with, any
          governmental  agency or body is required for or in connection with the
          valid and lawful authorization, execution and delivery by the Optionee
          of  this  Agreement  or any other agreements, instruments or documents
          entered  into  by  the  Optionee  pursuant  to  this  Agreement;  and

     (d)  there  are  no  claims  for  brokerage commissions or finders' fees or
          similar  compensation in connection with the transactions contemplated
          by  this  Agreement  based on any arrangements made by or on behalf of
          the  Optionee.

1.9. The representations and warranties of the Optionee set forth in Section 1.8
     are  provided for the exclusive benefit of the Optionor and a breach of any
     one  or  more  thereof may be waived by the Optionor in whole or in part at
     any  time without prejudice to its rights in respect of any other breach of
     the  same  or any other representation or warranty, and the representations
     and warranties contained in Section 1.8 shall survive the execution hereof.

1.10. The  representations  and  warranties  set  forth in Section 1.8 shall be
     deemed  to  apply  to  all  assignments,  transfers,  conveyances  or other
     documents  transferring  to  the  Optionee  any  Interest  to  be  acquired
     hereunder and there shall not be any merger of any covenant, representation
     or  warranty  in  such assignments, transfers, conveyance or documents, any
     rule  or  law,  in  equity  or  statute  to  the  contrary.

                                      -6-
<PAGE>
              ARTICLE 4  -  GRANT AND EXERCISE OF FIRST PROPERTY OPTION

1.11. The Optionor hereby grants to the Optionee the First Property Option which
     constitutes the sole and exclusive right and option to acquire an undivided
     51%  Interest  in  and  to  the  Optioned  Properties free and clear of all
     charges,  encumbrances,  claims,  royalties  and  net  profit  interests of
     whatsoever  nature  except as set forth in Schedule "A" attached hereto, it
     being  agreed and understood that the Optionee shall have the right but not
     the  obligation  to  elect  by notice in writing to the Optionor within one
     year  of  the  Closing  to  proceed  to exercise the First Property Option.

1.12. If  the  Optionor  is  the  Operator,  such First Property Option shall be
     exercised  without  any  further  act  on  the  part of the Optionee or the
     Optionor  upon  the  Optionee advancing to the Operator sufficient funds to
     enable  the  Operator  to  incur  Exploration  Expenditures of a minimum of
     $500,000 on the Optioned Properties prior to December 1, 2002 and to enable
     the  Operator  to incur cumulative Exploration Expenditures on the Optioned
     Properties  of  $1,000,000  prior  to January 1, 2004. It is further agreed
     that  Exploration Expenditures incurred prior to December 1, 2002 in excess
     of  $500,000  may  be  credited  towards  the  subsequent  year's  funding
     requirement.

1.13. In  the  event  that  the  Optionee  elects to become Operator pursuant to
     Section  1.27  or  the  Optionor  elects to withdraw as Operator during the
     Option  Period,  the  First  Property Option shall be exercised without any
     further  act  on the part of the Optionee or the Optionor upon the Optionee
     as  Operator  (i)  incurring  Exploration  Expenditures  of a magnitude and
     within  the  time  stipulated  in  Section  1.12  and (ii) in the event the
     Optionee  elects to become Operator pursuant to Section 1.27, paying to the
     Optionor  an  amount  equal to 5% of Exploration Expenditures incurred from
     the  date  of  election  to  become Operator to the date of exercise of the
     First  Property  Option.

1.14. Subject  to  Article  17,  if and when such First Property Option has been
     exercised  a  51%  undivided  right,  title  and/or  Interest in and to the
     Optioned  Properties  shall vest in the Optionee or at the sole election of
     the  Optionee, in a designated Affiliate of the Optionee, free and clear of
     all  charges,  encumbrances,  claims,  royalties or net profit interests of
     whatsoever  nature  other than as set forth in Schedule "A" attached hereto
     and the Optionor shall forthwith thereafter take all such steps and actions
     as are necessary to convey such interest to the Optionee or such designated
     Affiliate,  as  the  case  may  be.

                   ARTICLE 5  -  FORMATION OF JOINT VENTURE

1.15. Unless  the  parties  otherwise  agree,  the parties shall, on the date of
     exercise  of  the First Property Option in accordance with Section 1.12, be
     deemed  to  have  entered  into  a joint venture to pursue the exploration,
     development,  construction  and  mining of the Optioned Properties as joint
     venturers  with  the Optionee having an undivided 51% Interest in the joint

                                      -7-
<PAGE>
     venture  and  the  Optionor  having  an undivided 49% Interest in the joint
     venture.  The  joint venture, at formation, shall have a deemed expenditure
     base of $1,960,784 representing deemed Exploration Expenditures of $960,784
     by the Optionor, and $1,000,000 by the Optionee, and with each party having
     responsibility  for  funding  its proportionate share of future exploration
     and  development  expenditures, subject to the terms of the Second Property
     Option.

1.16. Upon  exercise  of  the  First  Property  Option  the parties hereto shall
     forthwith  negotiate  and  conclude  a  joint venture agreement which shall
     contain  provisions  to  the  effect  that:

     (a)  the  Optionor  shall be designated as initial Operator of the Optioned
          Properties;

     (b)  work  programs  covering  a  maximum  period of one year in respect of
          further Exploration Expenditures will be prepared and submitted by the
          Operator  to  each  of  the participants who will then have 60 days to
          consider  and  approve  such work program, propose an alternative work
          program  or  decline  to  participate  in  such  work  program;

     (c)  an  election  to proceed with a work program prepared and submitted by
          the  Operator  will make a participant liable to pay its proportionate
          share  of  such  Exploration  Expenditures  and  any  cost overruns in
          respect  of  such  work  program  up  to  but not exceeding 10% of the
          estimated  Exploration  Expenditures  under  such  work  program;

     (d)  if  it  appears  that  Exploration Expenditures will exceed by greater
          than 10% those estimated by the Operator in respect of a work program,
          the  Operator will immediately give written notice to the participants
          outlining  the  nature  and extent of such cost overruns. If such cost
          overruns  are  accepted  by  all  of  the  participants,  then  each
          participant  will,  on  demand,  pay to the Operator its proportionate
          share  of  such cost overruns. If any participant does not accept such
          cost  overruns,  all  of  such cost overruns will be at the Operator's
          sole  expense  and  will  be deemed not to be Exploration Expenditures
          unless  the  participants  otherwise  agree;

     (e)  in  the  event  that  either  party's  Interest is subject to dilution
          pursuant  to  the  provisions  of  the  joint  venture agreement, such
          party's Interest shall be recalculated based upon the proportion which
          such  party's  deemed  Exploration  Expenditures  on  the  Optioned
          Properties  represents of the total deemed Exploration Expenditures of
          all  parties  on  the  Optioned  Properties;  and

     (f)  should the Interest of any participant in the joint venture fall below
          10%,  such  participant shall be deemed to have exchanged its Interest
          therein for a net proceeds interest of 5%, as calculated in accordance
          with  Schedule  "D"  attached  hereto.

and  shall  contain  such other terms as are standard in the industry including,
but  not  limited  to,  those  summarized  in  Schedule  "C"  attached  hereto.

                                      -8-
<PAGE>
         ARTICLE 11      - GRANT AND EXERCISE OF SECOND PROPERTY OPTION

1.17. Upon  exercise of the First Property Option, the Optionor shall be deemed
     to  have granted to the Optionee a further, irrevocable, sole and exclusive
     right  and  option  to  acquire  an additional 19% Interest in the Optioned
     Properties.

1.18. At  any  time after exercise of the First Property Option but prior to the
     date  upon  which  cumulative  Exploration  Expenditures  on  the  Optioned
     Properties  from  the  date of exercise of the First Property Option exceed
     $2,000,000,  the  Optionee  shall  have  the  right  to exercise the Second
     Property  Option.

1.19. The  Second  Property Option shall be exercised without any further act on
     the  part  of  the  Optionee  or  the Optionor upon the Optionee (i) giving
     written  notice  to  the  Optionor of such exercise, and (ii) committing to
     provide  the  Optionor's  pro  rata  share  of  project  financing  to  the
     Commencement  of  Commercial Production on the basis that such amount would
     bear interest at Libor plus 4.0% and would be repaid by the Optionor to the
     Optionee  from  90%  of  the  Optionor's  share  of  Project  Net  Revenue.

1.20. Upon exercise of the Second Property Option by the Optionee, an additional
     19%  undivided  right,  title  and/or  Interest  in  and  to  the  Optioned
     Properties shall vest in the Optionee or at the discretion of the Optionee,
     in  a  designated Affiliate of the Optionee, free and clear of all charges,
     encumbrances,  claims,  royalties  or  net  profit  interests of whatsoever
     nature  other  than  as  set  forth in Schedule "A" attached hereto and the
     Optionor  shall forthwith thereafter take all such steps and actions as are
     necessary  to  convey  such  interest  to  the  Optionee or such designated
     Affiliate,  as  the  case  may be. The terms of the joint venture agreement
     referred to in Article 5 shall continue to apply, with the interests of the
     participants thereunder adjusted to reflect the transfer and assignment to,
     and  vesting in, the Optionee of such additional 19% undivided right, title
     and  Interest  in  and  to  Optioned  Properties.

1.21. Notwithstanding  anything  contained in this agreement, an election by the
     Optionee  to  exercise  the  Second  Property Option shall not be deemed to
     constitute  a  commitment  on  behalf of the Optionee to place the Optioned
     Properties  into  commercial  production.

          ARTICLE 7  -  ACTIVITIES OF OPERATOR DURING OPTION PERIOD

1.22.  During the Option Period, the Optionor will, subject to the rights of the
     Optionee  as  set forth in Section 1.27 hereof, be Operator of the Optioned
     Properties.  The  Operator shall have full right, power and authority to do
     everything  necessary  or  desirable to determine the manner of exploration
     and  development  of  such  Optioned  Properties  and, without limiting the
     generality  of  the  foregoing,  the  right,  power  and  authority  to:

                                      -9-
<PAGE>
     (a)  regulate  access to such Optioned Properties subject only to the right
          of  representatives of the Optionor and the Optionee to have access to
          such  Optioned  Properties  at all reasonable times for the purpose of
          inspecting  work being done thereon but at their own risk and expense;

     (b)  employ  and  engage such employees, agents and independent contractors
          as  the  Operator may consider necessary or advisable to carry out its
          duties  and  obligations  hereunder  and  in  connection  therewith to
          delegate  any  of  its  powers  and  rights  to perform its duties and
          obligations  hereunder  to  such  employees,  agents  and  independent
          contractors;

     (c)  execute  all  documents, deeds and instruments, do or cause to be done
          all  such  acts  and  things  and  give  all such assurances as may be
          necessary to maintain good and valid title to such Optioned Properties
          and  each  party  hereby irrevocably constitutes the Operator its true
          and  lawful attorney to give effect to the foregoing and hereby agrees
          to  indemnify  and  save the Operator harmless from any and all costs,
          loss  or  damage sustained or incurred without gross negligence or bad
          faith  by  the  Operator  directly  or  indirectly  as a result of the
          exercise  of  its  powers;  and

     (d)  conduct  such  title examination and cure such title defects as may be
          advisable  in  the  reasonable  judgement  of  the  Operator.

1.23. The Operator shall deliver to each of the Optionee and the Optionor, on or
     before  July  1  of  each  year prior to the exercise of the First Property
     Option,  and  thereafter,  within  60  days  of completion of a Program and
     Budget,  a report, including up-to-date maps, if any, describing the status
     of  title  of  the  Optioned  Properties,  together with the results of the
     Program and Budget then completed on the Optioned Properties and reasonable
     details  of  Exploration  Expenditures  made  during  such  program.

1.24. During  the  Option  Period  with respect to the First Property Option and
     after  the  Optionee  elects  to  proceed  with  the  exercise of the First
     Property  Option pursuant to Section 1.11, if the Optionor is the Operator,
     the  Operator  shall  deliver to the Optionee, prior to the commencement of
     any  further  work  program on the Optioned Properties and thereafter on or
     before April 1, 2002, and on or before April 1st in each subsequent year, a
     detailed  Program  and  Budget  with  respect  to  the  following  year's
     Exploration  Expenditures  on  the  Optioned Properties. The Optionee shall
     have  60  days from delivery of such Program and Budget to modify, resubmit
     and  approve  a  Program  and  Budget,  and  elect  to  fund  the  relevant
     Exploration  Expenditures.  When  the Optionor is Operator, it shall be the
     Optionor's  responsibility  to  make  cash  calls and ensure that funds are
     efficiently  expended  in  a  timely fashion and in any event in accordance
     with  Section  1.12.

1.25. During the Option Period with respect to the First Property Option, if the
     Optionee  is the Operator, any Program and Budget delivered by the Optionee
     shall not require the consent or approval of the Optionor, and submittal of
     a  Program  and Budget by the Optionee shall not constitute a commitment by
     the  Optionee  to  incur  part  or  all  of  the  Exploration  Expenditures
     contemplated  by  such  Program  and  Budget.

                                      -10-
<PAGE>
1.26. During the Option Period with respect to the Second Property Option if the
     Optionee  is  the Operator, the Operator shall deliver to the Optionor, for
     its  review a detailed Program and Budget with respect to a work program on
     the  Optioned  Properties,  at  least 90 days prior to commencement of such
     Program  and  Budget however, such Program and Budget shall not require the
     consent or approval of the Optionor. The Operator shall thereafter commence
     the  Program  and Budget delivered by the Optionee pursuant to this Section
     1.26.

1.27.  At  any  time during the Option Period with respect to the First Property
     Option  but  only  after electing to proceed with the exercise of the First
     Property  Option pursuant to Section 1.11 the Optionee shall have the right
     on 90 days notice in writing to the Optionor, to become Operator in respect
     of  the Optioned Properties and shall thereafter be the Operator in respect
     of  the  Optioned  Properties.

                  ARTICLE 15  -  OBLIGATIONS OF THE OPERATOR

1.28. During  the  term of this Agreement the Operator shall, with regard to the
     Optioned  Properties:

     (a)  maintain  in  good standing those mineral claims, concessions, permits
          or  Interests  comprised  in  the Optioned Properties by the doing and
          filing  of  assessment work or the making of payments in lieu thereof,
          and the performance of all other obligations which may be necessary in
          that  regard  and  in  order to keep such mineral claims, concessions,
          permits  or  Interests  free  and clear of all liens and other charges
          arising  from  the  Operator's  activities thereon except those at the
          time  contested  in  good  faith  by  the  Operator;

     (b)  subject to Section 1.22, permit the directors, officers, employees and
          designated  consultants  of  the parties hereto, at their own risk and
          expense, access to the Optioned Properties at all reasonable times for
          the  purpose  of  inspecting work being done thereon, and the Operator
          agrees  to indemnify such parties against and to save the non operator
          harmless from all costs, claims, liabilities and expenses that the non
          operator  may  incur  or  suffer  as a result of any injury (including
          injury causing death) to any director, officer, employee or designated
          consultant of the Operator arising out of or attributable to the gross
          negligence  or wilful misconduct of the Operator while on the Optioned
          Properties;

     (c)  in  addition  to  the  obligations  of  the Operator under Section 7.2
          hereof,  permit  the  parties hereto, at their own expense, reasonable
          access  to  the  results  of  the work done on the Optioned Properties
          during  the  last  completed  calendar  year;

     (d)  keep  the Optioned Properties free and clear of all liens, charges and
          encumbrances  of  every character arising from its operation hereunder
          (except  for  liens  for  taxes not then due, other inchoate liens and
          liens  contested  in  good faith by the Operator) and proceed with all
          reasonable  diligence  to contest or discharge any lien that is filed.

                                      -11-
<PAGE>
     (e)  pay, when due and payable, all wages or salaries for services rendered
          in  connection  with  the  Optioned  Properties  and  all accounts for
          materials supplied on or in respect of any work or operation performed
          on  the  Optioned  Properties;

     (f)  obtain  and  maintain,  and  cause  any contractor or subcontractor to
          obtain  and maintain, for the benefit of the Optionor and the Optionee
          as  named insured parties adequate insurance having terms and coverage
          customary  in  the  industry;

     (g)  do  all  work  on  the  Optioned  Properties in a good and workmanlike
          fashion  and  in  accordance  with  all  applicable laws, regulations,
          orders  and  ordinances  of  any  governmental  authority;  and

     (h)  indemnify  and  save the parties hereto harmless in respect of any and
          all  costs,  claims,  liabilities  and  expenses  arising  out  of  or
          attributable  to  the  gross  negligence  or  wilful misconduct of the
          Operator  with  respect  to its activities on the Optioned Properties.

                    ARTICLE 9  -  TERMINATION OF OPTIONS

1.29. The  Optionee  may,  at  any  time prior to exercise of the First Property
     Option,  on  90  days'  written  notice  to  the  Optionor,  terminate this
     Agreement,  and  the  Optionee  shall  thereafter  have no liability to the
     Optionor  as  a  result  of  such  termination  other than for its pro rata
     portion  of  Exploration  Expenditures already incurred by the Optionor, at
     the  time  of  termination  in respect of the Program and Budget terms then
     applicable.

1.30. If  this  Agreement is terminated by the Optionee pursuant to Section 1.29
     above,  the  Optionee  shall  deliver  to  the  Optionor, at no cost to the
     Optionor,  within 90 days of such termination, copies of all reports, maps,
     assay  results  and  other relevant technical data compiled by, prepared at
     the  direction of, or in the possession of the Optionee with respect to the
     Optioned  Properties  and  not theretofore furnished to or otherwise in the
     possession  of  the  Optionor.

1.31. Notwithstanding  any  agreement  of  the  Optionee  with  respect  to  the
     provision  of  the  Optionor's  pro  rata share of project financing to the
     Commencement  of Commercial Production, the Optionee may, at any time after
     exercise  of  the  Second  Property Option, elect at its sole discretion to
     terminate  its  agreement  to provide project financing, provided, however,
     the Optionee shall thereafter forthwith assign and transfer to the Optionor
     an aggregate 19% undivided right, title and interest in and to the Optioned
     Properties.  Upon  such  termination,  50%  of all Exploration Expenditures

                                      -12-
<PAGE>
     funded by the Optionee on the Optioned Properties after the exercise of the
     Second  Property  Option  and  prior to such termination shall be deemed to
     constitute  Exploration  Expenditures  of the Optionee on such property for
     the  purposes  of  the  joint  venture contemplated under Article 5 and the
     joint  venture  shall thereafter continue to operate with Optionee having a
     51%  undivided Interest and the Optionor having a 49% undivided Interest in
     the  joint  venture  and  the  deemed  expenditure base of the Optionee for
     purposes  of  the dilution calculation being recalculated to include 50% of
     any Exploration Expenditures and other related expenditures on the Optioned
     Properties  funded  by  the  Optionee  prior  to  such  termination.

                           ARTICLE 10      - TRANSFERS

1.32. If  either  the Optionee vor the Optionor should receive a bona fide offer
     from  an independent third party (the "Offeror Purchaser") dealing at arm's
     length  to  purchase all or a part of such party's Interest in the Optioned
     Properties  which  offer  the  selling  party  desires to accept, or if the
     Optionee  or  the  Optionor intend to sell or otherwise dispose of all or a
     part  of  its  Interest  in the Optioned Properties to an independent third
     party  dealing  at arm's length to the selling party ("the Proposed Offeree
     Purchaser"):

     (a)  the  selling  party  shall  first offer (the "Offer") such Interest in
          writing  to  the  other party upon terms no less favourable than those
          offered  by  the  Offeror  Purchaser  or intended to be offered by the
          selling  party  to the Proposed Offeree Purchaser, as the case may be;

     (b)  the  Offer  shall  specify  the  price (with a cash alternative if the
          Offer  contains  a  non-cash  element),  terms  and conditions of such
          proposed  sale  and  the name of the Offeror Purchaser or the Proposed
          Offeree  Purchaser,  as  the  case  may  be;

     (c)  the other party shall have 20 Business Days from the date of receiving
          the  Offer  to notify the selling party in writing that it accepts the
          Offer  in  which  case  the  selling party shall be bound to sell such
          Interest  to the other party on the terms and conditions of the Offer;

     (d)  if  the  other  party  fails  to  notify  the selling party before the
          expiration  of  the  time  limited  therefor that it will purchase the
          Interest  offered,  the  selling  party  may  sell  and  transfer such
          Interest to the Offeror Purchaser or the Proposed Offeree Purchaser at
          the price and on the terms and conditions specified in the Offer for a
          period  of  60 days, but the terms of this paragraph shall again apply
          to  such Interest if the sale of the Offeror Purchaser or the Proposed
          Offeree  Purchaser  is  not  completed  within  such  60  days;

     (e)  any  sale hereunder shall be conditional upon the Offeror Purchaser or
          the  Proposed Offeree Purchaser, as the case may be, delivering to the
          selling  party  its  agreement  related  to  this Agreement and to the
          Optioned  Properties  containing:

          (i)  a  covenant  by  the  Offeror  Purchaser  or the Proposed Offeree
               Purchaser  to perform all the obligations of the selling party to
               be  performed  under this Agreement in respect of the Interest to
               be acquired by it from the selling party to the same extent as if
               this  Agreement  had  been  originally  executed  by  the Offeror
               Purchaser  or  the  Proposed  Offeree  Purchaser;  and

                                      -13-
<PAGE>
          (ii) a  provision  subjecting  any  further  sale, transfer or other
               disposition  of such Interest in such property and this Agreement
               or  any  portion  thereof  to  the restrictions contained in this
               Section  1.32.

1.33. Notwithstanding  the above, the provisions of Section 1.32 shall not apply
     in  circumstances where a party constitutes a selling party as contemplated
     in  1.32  solely  as  a  result  of  a  proposal  to  undertake a corporate
     reorganization  or  other  similar  corporate  transaction  provided  such
     corporate reorganization or other similar corporate transaction is proposed
     solely  for  bona  fide strategic corporate reasons and not, in whole or in
     part,  to  avoid  the  provisions  of  Section  1.32  above.

                         ARTICLE 11  -  FORCE MAJEURE

1.34. If  any  party  hereto  is  at any time either during the Option Period or
     thereafter  prevented  or  delayed in complying with any provisions of this
     Agreement  by  reason  of  strikes,  lock-outs,  labour  shortages,  power
     shortages,  fuel  shortages,  fires,  floods,  insurrections,  rebellion,
     sabotage,  wars,  acts  of God, governmental regulations restricting normal
     operations, expropriation or confiscation of facilities, shipping delays or
     any  other  reason  or  reasons,  other  than  lack  of  funds,  beyond the
     reasonable  control  of  such party and which by the exercise of reasonable
     diligence  such  party  is  unable  to  prevent,  the  time limited for the
     performance by such party of its obligations hereunder shall be extended by
     a  period  of time equal in length to the period of each such prevention or
     delay,  but  nothing herein shall discharge such party from its obligations
     hereunder to maintain the Optioned Properties in respect of which it is the
     Operator  in  good  standing.

1.35. Each  party  shall  give prompt notice to the other of each event of force
     majeure  under  Section 1.34 and upon cessation of such event shall furnish
     to the other parties notice to that effect together with particulars of the
     number  of  days  by which the obligations of the notifying party hereunder
     have  been  extended  by  virtue  of  such  event  of force majeure and all
     preceding  events  of  force  majeure.

                     ARTICLE 12  -  CONFIDENTIAL INFORMATION

1.36. The  parties to this Agreement shall keep confidential all books, records,
     files  and  other information supplied by any party to the other parties or
     its  employees, agents or representatives in connection with this Agreement
     or  in  respect of the activities carried out on the Optioned Properties by
     any  party,  or  related to the sale of minerals, or other products derived
     from  the  Optioned Properties, including all analyses, reports, studies or
     other  documents  prepared  by  any  party  or  its  employees,  agents  or
     representatives, which contain information from, or otherwise reflects such
     books, records, files or other information. The parties shall not and shall

                                      -14-
<PAGE>
     ensure  that  their  employees,  agents or representatives do not disclose,
     divulge, publish, transcribe, or transfer such information, all or in part,
     without  the  prior written consent of the Optionee or the Optionor, as the
     case  may be, which consent may not be arbitrarily withheld and which shall
     not  apply  to  such  information  or  any part thereof to the extent that:

     (a)  it  is  required  to  be  publicly  disclosed  pursuant  to applicable
          securities or corporate laws, in which event the party seeking to make
          such disclosure shall provide to the non-disclosing party at least one
          Business  Day  prior to making such disclosure, a written copy of such
          proposed  disclosure,  unless  mutually agreed otherwise, and shall in
          good  faith consider any comments the non-disclosing party may have on
          such  proposed  disclosure;  or

     (b)  such information becomes generally disclosed to the public, other than
          as  a  consequence  of  a  breach hereof by one of the parties hereto.

          Consent  required  under  this  Section 1.36 shall not be unreasonably
          withheld  by  the  non-disclosing  party.

1.37. The  Optionor  agrees  to provide the text of any proposed news release or
     information update related to this Agreement, the Subscription Agreement or
     the  Optioned Properties to the Optionee at least one Business Day prior to
     release of such information to third parties. The Optionee shall review and
     comment  on  the  text  thereof  within  One Business Day of receipt of the
     proposed  release.  The  Optionor,  shall  review the comments provided and
     shall take reasonable steps to modify the release according to the comments
     made  by  the  Optionee.

                           ARTICLE 13  -  MEDIATION

1.38. All  disputes  arising  out  of or in connection with this agreement or in
     respect  of  any  defined legal relationship associated herewith or derived
     hereunder  shall, subject to Section 1.39, be referred to a mediator chosen
     by  mutual  agreement  of both parties. The mediator shall be a person with
     appropriate  technical  competence  to  assist the parties to resolve their
     dispute.  The  mediator  agreed  by the parties shall assist the parties to
     resolve  their dispute in accordance with the Center for Dispute Resolution
     ("CEDR")  Model  Mediation  Procedure;  which  mediation  process  shall be
     non-binding. In the event that the parties are unable to reach agreement on
     a  choice  of  mediator  or  are  otherwise unable to resolve their dispute
     through  the  use of such mediator, then either party shall be free to have
     the  dispute  resolved  through  the  Courts  of  England.

1.39. Nothing  contained in this Article shall be interpreted as restricting the
     right  of  the Optionee to seek interim relief (whether legal, equitable or
     otherwise)  from  a  court  of  competent  jurisdiction,  pending  formal
     resolution  of  any  dispute  between  the  parties  hereto.

                                      -15-
<PAGE>
                    ARTICLE 14  -  DEFAULT AND TERMINATION

1.40. If  at any time during the Option Period the Optionee fails to perform any
     obligation  required  to  be performed by it hereunder or is in breach of a
     warranty  given  by  it  hereunder,  which  failure  or  breach  materially
     interferes  with  the  implementation  of  this Agreement, the Optionor may
     terminate  this  Agreement  but  only  if:

     (a)  the  Optionor,  shall  have  first  given to the defaulting Optionee a
          notice  of  default containing particulars of the obligation which the
          Optionor  alleges  the  Optionee  has  not  performed, or the warranty
          breached;  and

     (b)  the  defaulting  Optionee  has  not,  within 15 Business Days (or such
          longer  period  as may, in the circumstances, reasonably allow for the
          default to be cured) following delivery of such notice of default, (i)
          cured such default, (ii) commenced proceedings to cure such default by
          appropriate  payment or performance, the Optionee hereby agreeing that
          should  it  so commence to cure any default it will prosecute the same
          to completion without undue delay or (iii) delivered to the Optionor a
          notice contesting the notice of default and invoking the provisions of
          Article  13  herein,  in  which case the provisions of this Article 14
          will  be  suspended  pending  resolution of such dispute in accordance
          with  Article  13.

1.41. Should  the Optionee fail to comply with the provisions of Section ARTICLE
     14(b),  the  Optionor  may  thereafter  terminate  this  Agreement provided
     however  any  such  termination is by notice in writing given in accordance
     with  Article  18.

1.42. If  the  Closing  does  not occur on or prior to February 28, 2001 or such
     later  date  as  may  be  agreed  in  writing  by  the parties hereto, this
     Agreement  shall  terminate  and  be  of  no  further  force  and  effect.

                       ARTICLE 15  -  AREA OF INTEREST

1.43. If  the  parties  hereto or their respective Affiliates during the term of
     this  Agreement acquire any Interest, or the right to acquire any Interest,
     in  any  mineral  claim, mining lease, license, concession or other mineral
     property  Interest or portion thereof within the Area of Interest ("Area of
     Interest  Property"), such party shall thereafter promptly notify the other
     party  hereto  of  such  acquisition  and  shall  set  out in such notice a
     detailed  description  of the Area of Interest Property and the acquisition
     cost  and  shall  make all information, technical and otherwise, concerning
     the  Area  of Interest Property available for inspection by the other party
     thereto.  The  non-acquiring  party  may elect within 30 days of receipt of
     such  notice  to  have  the  Area of Interest Property included, at cost as
     Exploration  Expenditures,  as  part  of  the  Optioned  Properties. If the
     non-acquiring  party fails to make such election within such 30 day period,
     such non-acquiring party shall have no further right or interest in or with
     respect  to  such  Area  of  Interest  Property.

                                      -16-
<PAGE>
                ARTICLE 16      - COVENANT TO REGISTER AGREEMENT

1.44. Forthwith  upon  the  execution  of this Agreement, the Optionor shall, if
     requested  by  the Optionee by notice in writing to the Optionor, take such
     steps  as are necessary to legalize the grant of the Option contemplated by
     this  Agreement  and register the Interest of the Optionee and any transfer
     of  Interests  contemplated  hereunder at its own cost with the appropriate
     authority  or  registry  office  in  the  Republic  of  Tunisia to properly
     evidence  this  agreement  and  protect  the  rights  and  Interests of the
     Optionee  acquired  hereunder  from  adverse  claims  by  third  parties.

               ARTICLE 17  -  ALTERNATIVE ACQUISITION STRUCTURE

1.45. Notwithstanding  the  proposed direct property interest acquisition by the
     Optionee contemplated in Sections 1.14 and 1.20, the Optionee may elect, on
     exercise  of  the  First  Property Option, to have the Optionor transfer or
     cause  to be transferred 51%, and on exercise of the Second Property Option
     to have the Optionor transfer or cause to be transferred an additional 19%,
     of  the  outstanding voting securities of any company or other entity which
     then  holds  the  Optionor's  Interest  in  the Optioned Properties, to the
     Optionee  or  a designated Affiliate of the Optionee, free and clear of all
     charges,  encumbrances,  royalties  or Net Proceeds Interests of whatsoever
     nature  other  than  as  set  forth  in this Agreement or to incorporate or
     otherwise  establish  a  separate entity in the Republic of Tunisia to hold
     the  Optioned  Properties  with  each  of  the Optionor and Optionee having
     Interests  in  such  entity  equal  to  their  respective  Interests in the
     Optioned  Properties  and  if  such  alternative  structure is adopted, the
     parties  hereto  shall forthwith thereafter take all such steps and actions
     as  are  necessary  to  convey  such  interest  in  such outstanding voting
     securities  to  the  Optionee or such designated Affiliate, as the case may
     be. Should the Optionee elect to adopt an alternative acquisition structure
     as  contemplated  in  this  Section  1.45,  it  hereby  agrees  that  that
     alternative acquisition structure shall incorporate a form of shareholders'
     agreement  reflecting  the  provisions  of  Section  1.16  hereof.

                            ARTICLE 18  -  NOTICES

1.46. Any notice or other writing required or permitted to be given hereunder or
     for  the  purposes  hereto  to either the Optionor or the Optionee shall be
     sufficiently  given  if  delivered  personally,  or  if  sent  by  prepaid
     registered  mail  or  if transmitted by facsimile or other form of recorded
     communication  tested  prior  to  transmission  to  such  party:

                                      -17-
<PAGE>
     (a)  In  the  case  of  a  notice  to  the  Optionor,  at:

                Aurora  Metals  (BVI)  Limited
                Suite  517,  2  Old  Brompton  Road
                London,  SW7  3DQ,  United  Kingdom

                Attention:  John  James
                            -----------

                Facsimile  No.  011-44-207-581-4445

     (b)  In  the  case  of  a  notice  to  the  Optionee,  at:

                Billiton  UK  Resources  B.V.
                c/o  Billiton  International  Development  Limited
                1 - 3  Strand
                London,  WC2N  5HA,  United  Kingdom

                Attention:  Alain  Liger
                ------------------------

                Facsimile  No.  011-44-207-747-3909

          with  a  copy  to:

                McCarthy  T  trault
                Barristers  and  Solicitors
                P.O.  Box  10424,  Pacific  Centre
                1300 - 777  Dunsmuir  Street
                Vancouver,  British  Columbia
                V7Y  1K2  Canada

                Attention:  George  W.  Holloway
                --------------------------------

                Facsimile  No.  (604)  643-7900

or  at such other address or addresses as the parties to whom such writing is to
be  given  shall  have  last  notified  the  party giving the same in the manner
provided  in this Section 1.46.  Any notice delivered to the party to whom it is
addressed  hereinbefore provided shall be deemed to have been given and received
on  the day it is so delivered at such address, provided that if such day is not
a  Business Day, then the notice shall be deemed to have been given and received
on  the  second Business Day next following such day.  Any notice transmitted by
facsimile  or  other  form of recorded communication shall be deemed to be given
and  received  on  the  first  Business  Day  after  its  transmission.

                                      -18-
<PAGE>
                            ARTICLE 19  -  GENERAL

1.47. No  consent  or waiver expressed or implied by any party in respect of any
     breach  or  default  by any other party in the performance by such other of
     its  obligations hereunder shall be deemed or construed to be or consent to
     or  a  waiver  of  any  other  breach  or  default.

1.48. No  investigation  made by or on behalf of the Optionee or the Optionor or
     any  of  their  respective  advisors  or  agents at any time shall have the
     effect  of  waiving,  diminishing  the  scope of or otherwise affecting any
     representation  or  warranty  made herein by the other party hereto or made
     pursuant  thereto.  No  waiver  by  the  Optionee  or  the  Optionor of any
     condition,  in  whole  or  in  part, shall operate as a waiver of any other
     condition.

1.49. Notwithstanding  any right of either party hereto fully to investigate the
     affairs of the other, and notwithstanding any knowledge of facts determined
     or determinable by the other party hereto pursuant to such investigation or
     right of investigation, each of the Optionee and the Optionor has the right
     to  rely  fully  upon  the  representations,  warranties,  covenants  and
     agreements  of  the  other  contained  in  this  Agreement  and  of  their
     affiliates,  officers  and  agents  delivered  pursuant  to this Agreement.

1.50. All  statements contained in any certificate or other instrument delivered
     by  or  on  behalf  of  any party pursuant hereto or in connection with the
     transactions  contemplated  by this Agreement shall be deemed to be made by
     such  party  hereunder.

1.51. The  Optionor or the Optionee, as the case may be (hereinafter referred to
     as  the "Indemnifying Party"), hereby covenants and agrees to indemnify and
     save  harmless  the  other  (hereinafter  referred  to  as the "Indemnified
     Party"),  effective  as  and from the Closing, from and against any claims,
     demands,  actions,  causes  of  action,  damage,  loss, costs, liability or
     expense,  including  reasonable legal expenses (hereinafter in this Section
     1.51  called "Claims") which may be made or brought against the Indemnified
     Party  and/or which it may suffer or incur as a result of, in respect of or
     arising  out of any non-fulfilment of any covenant or agreement on the part
     of  the  Indemnifying Party under this Agreement or any incorrectness in or
     breach  of  any  representation  or  warranty  of  the  Indemnifying  Party
     contained  herein  or in any certificate or other document furnished by the
     Indemnifying  Party  pursuant  or  in  relation  thereto.  The  foregoing
     obligation of indemnification in respect of such claims shall be subject to
     the  requirement that the Indemnifying Party shall, in respect of any Claim
     made  by any third party, be afforded an opportunity at its sole expense to
     resist,  defend  and  compromise  the  same  in  a  timely  manner.

1.52. The  Optionor  covenants  that it will, as soon as reasonably practicable,
     take  all such steps as are necessary to exercise the High Marsh Option and
     acquire  the  subject  mineral  property  interest  thereunder.

                                      -19-
<PAGE>
1.53. Notwithstanding  anything  to the contrary contained in this Agreement the
     rights  and  obligations  hereunder  and  the  Option  granted  hereby  are
     assignable  by  either  party  hereto  in  its  absolute  discretion  to an
     Affiliate  of  such  party  provided  that  such  Affiliate first agrees in
     writing  to  retransfer  such  Interest  to  the originally assigning party
     immediately  before  ceasing  to  be  an  Affiliate  of  such  party.

1.54. The  parties shall promptly execute or cause to be executed all documents,
     deed,  conveyances  and  other instruments of further assurance and do such
     further  and  other  acts which may be reasonably necessary or advisable to
     carry out fully and effectively the intent and purpose of this Agreement or
     to record wherever appropriate the respective interest from time to time of
     the  parties  in  the  Optioned  Properties.

1.55. This  Agreement  shall  enure  to  the  benefit of and be binding upon the
     parties  and  their  respective  successors  and  permitted  assigns.

1.56. This  Agreement  shall be governed by and construed in accordance with the
     laws  of  England  and  shall  be subject to the approval of all securities
     regulatory  authorities having jurisdiction, such approvals to be sought in
     a  timely  and  diligent  manner.

1.57. Time  shall  be  of  the  essence  in  this  Agreement.

1.58. The  preamble  and  Schedules  attached  hereto  shall  be  deemed  to  be
     incorporated  in,  and  to  form  part  of,  this  Agreement.

1.59. Wherever  the  neuter  and  singular is used in this Agreement it shall be
     deemed  to  include the plural, masculine and feminine, as the case may be.

1.60. Nothing  contained  in  this  Agreement  shall be deemed to constitute any
     party  hereto  the  partner  of  the other, nor, except as otherwise herein
     expressly  provided,  to  constitute either the Optionor or the Optionee as
     the agent or legal representative of the other, nor to create any fiduciary
     relationship between them. It is not the intention of the parties hereto to
     create,  nor  shall  this  Agreement  be  construed  to create, any mining,
     commercial  or  other  partnership.  Neither  the Optionor nor the Optionee
     shall  have  any  authority  to  act  for  or  to  assume any obligation or
     responsibility  on behalf of the other party, except as otherwise expressly
     provided  herein.  The  rights,  duties, obligations and liabilities of the
     parties  hereto  shall  be  several  and  not  joint  or  collective.

1.61. All  monetary  amounts  referred  to  herein are  in United States dollars
     unless  otherwise  specified.

                                      -20-
<PAGE>
     IN  WITNESS  WHEREOF  the parties hereto have executed this Agreement as of
the  day  and  year  first  above  written.

                                      AURORA  METALS  (BVI)  LIMITED

                                      By:
                                          -----------------------------------

                                      BILLITON  UK  RESOURCES  B.V.

                                      By:
                                           ----------------------------------

                                      -21-
<PAGE>AMENDED AND RESTATED
                              EMPLOYMENT AGREEMENT

     THIS  AGREEMENT  is made as of the 1st day of January, 2001 (the "Effective
Date"), between FLAG Financial Corporation, a Georgia corporation ("FLAG"); FLAG
Bank, a bank subsidiary of FLAG (the "Bank") (collectively, the "Employer"); and
J.  Daniel  Speight,  Jr.,  a resident of the State of Georgia (the "Employee").

                                    RECITALS:

     The  Employer  employs  the  Employee, respectively, as the Chief Executive
Officer  of  FLAG and as President and Chief Executive Officer of the Bank under
the  terms  of  that  certain  Employment  Agreement  dated  April  1, 1998 (the
"Employment  Agreement").

     The  Employer  and  Employee  desire  to  amend  and restate the Employment
Agreement  on  the  terms  and  conditions  set  forth  herein.

     In  consideration  of  the  above  premises  and  the  mutual  agreements
hereinafter  set  forth,  the  parties  hereby  agree  as  follows:

1.  DEFINITIONS.  Whenever used in this Agreement, the following terms and their
    -----------
variant  forms  shall  have  the  meaning  set  forth  below:

     1.1     "Agreement" shall mean this Agreement and any exhibits incorporated
              ----------
herein  together with any amendments hereto made in the manner described in this
Agreement.

     1.2     "Affiliate"  shall  mean any business entity which controls FLAG or
              ---------
is  controlled  by  or  is  under  common  control  with  FLAG.

     1.3     "Area"  shall  mean  the  geographic  area within the boundaries of
              ----
Crisp,  Troup,  Dooly,  Macon  and Telfair Counties, Georgia.  It is the express
intent  of  the parties that the Area as defined herein is in the area where the
Business  of  the  Employer  is  conducted  as  of  the  Effective  Date.

     1.4     "Average  Monthly Compensation"  shall mean the quotient determined
              -----------------------------
(a)  by  dividing the sum of the Employee's then current Base Salary (as defined
below)  and  most recently paid Incentive Compensation (as defined below) (b) by
twelve.

     1.5     "Bank"  shall  mean  FLAG  Bank  or  its  successor(s).
              ----

     1.6     "Business of the Employer" shall mean the business conducted by the
              ------------------------
Employer,  which  is the business of banking, including the solicitation of time
and  demand  deposits  and  the  making of residential, consumer, commercial and
corporate  loans.

     1.7.     "Cause"  shall  mean:
               -----

<PAGE>
               1.7.1  With  respect  to  termination  by  the  Employer:

               (a)  A  material  breach  of  the  terms of this Agreement by the
          Employee,  including,  without  limitation, failure by the Employee to
          perform  the  Employees' duties and responsibilities in the manner and
          to  the  extent  required  under  this Agreement, which breach remains
          uncured  after  the  expiration  of  thirty  (30)  days  following the
          delivery  of  written  notice  of  such  breach to the Employee by the
          Employer;

               (b)  Conduct  by  the  Employee  that  (i)  constitutes  fraud,
          dishonesty, gross malfeasance of duty or conduct grossly inappropriate
          to  the  Employee's  office and (ii) is demonstrably likely to lead to
          material  injury to the Employer or resulted or was intended to result
          in  direct or indirect gain to or personal enrichment of the Employee;
          provided,  however,  that  such  conduct  shall not constitute "Cause"
          unless  there  shall  have  been  delivered  to the Employee a written
          notice  setting  forth  with specificity the reasons that the Employer
          believes  the  Employee's conduct meets the standard set forth in this
          Section  1.7.1(b),  the  Employee  shall  have  been  provided with an
          opportunity  to  be  heard in person by the Board of Directors of FLAG
          (with  the assistance of counsel, if desired) and, in the event of any
          such  hearing,  the  decision  of  the  Employer  is  evidenced  by  a
          resolution  adopted  by  two-thirds  of  the  members  of the Board of
          Directors  of  FLAG  after  the  hearing;

               (c)  Conduct  resulting  in  the  conviction of the Employee of a
          felony;  or

               (d) Conduct by the Employee that results in the permanent removal
          from  the Employee's position as an officer or employee of FLAG or the
          Bank  pursuant  to  a  written  order  by  any  regulatory agency with
          authority  or  jurisdiction over FLAG or the Bank, as the case may be.

               1.7.2  With  respect  to  termination  by  the  Employee:

               (a) a material diminution in the powers, responsibilities, duties
          or total compensation of the Employee hereunder by the Employer, which
          condition  remains  uncured  after  the expiration of thirty (30) days
          following  the  delivery  of  written  notice of such condition to the
          Employer  by  the  Employee;

               (b) the failure of the Board of Directors of FLAG to maintain the
          Employee's  appointment  to the office of its Chief Executive Officer;
          the  failure  of  the  Board  of Directors of the Bank to maintain the
          Employee's  appointment  to  the  offices  of  its President and Chief
          Executive Officer; or the failure of the shareholders of FLAG to elect
          Employee  as  a  director  of  FLAG;

               (c)  a  material  breach  of  the  terms of this Agreement by the
          Employer,  which breach remains uncured after the expiration of thirty
          (30)  days  following the delivery of written notice of such breach to
          the  Employer  by  the  Employee;  or

                                        2
<PAGE>
               (d)  a  material  diminution  in  the powers, responsibilities or
          duties  of  the Executive Committee of the Board of Directors of FLAG,
          which  condition  remains  uncured after the expiration of thirty (30)
          days following the delivery of written notice of such condition to the
          Employer  by  the  Employee.

     1.8     "Employer  Information"  means  Confidential  Information and Trade
              ---------------------
Secrets.

     1.9     "Confidential  Information"  means data and information relating to
              -------------------------
the  Business  of  the  Employer  (which  does not rise to the status of a Trade
Secret)  which is or has been disclosed to the Employee or of which the Employee
became  aware  as a consequence of or through the Employee's relationship to the
Employer  and  which has value to the Employer and is not generally known to its
competitors.  Without  limiting  the  foregoing,  Confidential Information shall
include:

               (a)  all items of information that could be classified as a trade
          secret  pursuant  to  Georgia  law;

               (b)  the  names,  addresses  and  banking  requirements  of  the
          customers  of the Bank and the nature and amount of business done with
          such  customers;

               (c)  the  names  and  addresses  of  employees and other business
          contacts  of  the  Bank;

               (d) the particular names, methods and procedures utilized by FLAG
          and  the  Bank  in  the  conduct  and  advertising  of their business;

               (e)  application,  operating  system,  communication  and  other
          computer  software  and  derivatives  thereof,  including,  without
          limitation,  sources  and  object  codes,  flow charts, coding sheets,
          routines, subrouting and related documentation and manuals of FLAG and
          the  Bank;  and

               (f)  marketing  techniques,  purchasing  information,  pricing
          policies,  loan  policies,  quoting procedures, financial information,
          customer  data  and  other  materials  or  information relating to the
          Bank's  manner  of  doing  business.

Confidential Information shall not include any data or information that has been
voluntarily  disclosed  to  the public by the Employer (except where such public
disclosure has been made by the Employee without authorization) or that has been
independently  developed  and  disclosed by others, or that otherwise enters the
public  domain  through  lawful  means.

     1.10     "Change  in  Control"  means  any  one  of  the  following  events
               -------------------
occurring  after  the  Effective  Date:

               (a) the acquisition by any person or persons acting in concert of
          the  then  outstanding  voting  securities  of  FLAG,  if,  after  the
          transaction, the acquiring person (or persons) owns, controls or holds
          with  power  to vote twenty-five percent (25%) or more of any class of
          voting  securities  of  FLAG  or  such  other  transaction  as  may be
          described  under 12 C.F.R. Section 225.41(c) or any successor thereto;

                                        3
<PAGE>
               (b)  within  any  twelve-month  period (beginning on or after the
          Effective  Date)  the  persons  who were directors of FLAG immediately
          before  the  beginning  of  such  twelve-month  period (the "Incumbent
          Directors")  shall  cease  to  constitute  at least a majority of such
          board  of directors; provided that any director who was not a director
          as  of  the Effective Date shall be deemed to be an Incumbent Director
          if  that director was elected to such board of directors by, or on the
          recommendation  of or with the approval of, at least two-thirds of the
          directors  who  then  qualified  as  Incumbent Directors; and provided
          further  that  no  director  whose  initial assumption of office is in
          connection  with  an  actual  or  threatened election contest (as such
          terms  are used in Rule 14a-11 of Regulation 14A promulgated under the
          Securities Exchange Act of 1934) relating to the election of directors
          shall  be  deemed  to  be  an  Incumbent  Director;

               (c) the approval by the stockholders of FLAG of a reorganization,
          merger  or  consolidation,  with respect to which persons who were the
          stockholders  of FLAG immediately prior to such reorganization, merger
          or  consolidation  do not, immediately thereafter, own more than fifty
          percent  (50%)  of  the  combined voting power entitled to vote in the
          election  of  directors  of  the  reorganized,  merged or consolidated
          company's  then  outstanding  voting  securities;  or

               (d)  the sale, transfer or assignment of all or substantially all
          of  the  assets  of  FLAG  and  its  subsidiaries  to any third party.

     1.11     "Initial  Term"  shall  mean that period of time commencing on the
               -------------
Effective  Date  and  running  until  the  day  immediately  preceding the third
anniversary  of  the  Effective  Date.

     1.12     "Permanent  Disability"  shall mean a condition for which benefits
               ---------------------
would  be payable under any long-term disability coverage (without regard to the
application of any elimination period requirement) then provided to the Employee
by the Bank or, if no such coverage is then being provided, the inability of the
Employee  to  perform  the  material aspects of the Employee's duties under this
Agreement  for  a  period  of  at  least  180 consecutive days as certified by a
physician  chosen  by  the  Employee  and reasonably acceptable to the Employer.

     1.13.     "Term" shall mean the term of this Agreement and shall consist of
                ----
the  Initial  Term; provided, however, that the Initial Term shall automatically
renew  each  day  after the Effective Date so that the Term remains a three-year
term  until either party provides written notice to the other of the intent that
the  automatic renewals shall cease, in which case, the Term shall expire on the
third  anniversary  of  the  date  of  the  written  notice  so  provided.

     1.14     "Trade  Secrets"  means information including, but not limited to,
               --------------
technical  or  nontechnical  data,  formulas,  patterns, compilations, programs,
devices,  methods,  techniques,  drawings,  processes, financial data, financial
plans,  product  plans  or  lists  of actual or potential customers or suppliers
which  (a) derives economic value, actual or potential, from not being generally
known  to, and not being readily ascertainable by proper means by, other persons
who can obtain economic value from its disclosure or use; and (b) is the subject
of  efforts that are reasonable under the circumstances to maintain its secrecy.

                                        4
<PAGE>
2.  DUTIES.
    ------

     2.1     The  Employee  shall  perform and discharge well and faithfully the
authority,  duties  and  responsibilities  which may be assigned to the Employee
from  time  to time by the Board of Directors of the Employer in connection with
the  conduct of the Business of the Employer; provided, however, that, in making
its  assignments,  the Board of Directors of the Employer shall assign only such
authority,  duties  and  responsibilities  assigned to the Employee from time to
time  as  are, in the aggregate, consistent with the duties and responsibilities
as  would  be customarily assigned to a person occupying a the positions held by
the Employee pursuant to the terms of this Agreement, including, but not limited
to,  those  set  forth  on  Exhibit  A  attached  hereto.

     2.2     In  addition  to  the  duties  and  responsibilities  specifically
assigned  to  the  Employee  pursuant to Section 2.1 hereof, the Employee shall:
(a)  devote  substantially  all  of the Employee's time, energy and skill during
regular  business  hours  to  the  performance  of  the duties of the Employee's
employment  (reasonable  vacations  and  reasonable  absences  due  to  illness
excepted)  and  faithfully and industriously perform such duties; (b) diligently
follow  and  implement all management policies and decisions communicated to the
Employee  by  the  Board  of Directors of the Employer which are consistent with
this  Agreement; and (c) timely prepare and forward to the Board of Directors of
the  Employer  all  reports  and accounting as may be requested of the Employee.

     2.3     The  Employee  shall  devote  the  Employee's entire business time,
attention  and energies to the Business of the Employer and shall not during the
term  of this Agreement be engaged (whether or not during normal business hours)
in  any other business or professional activity, whether or not such activity is
pursued  for  gain,  profit  or other pecuniary advantage; but this shall not be
construed  as preventing the Employee from (a) investing the Employee's personal
assets  in businesses which (subject to clause (b) below) are not in competition
with the Business of the Employer and which will not require any services on the
part  of  the Employee in their operation or affairs and in which the Employee's
participation  is solely that of an investor, (b) purchasing securities or other
interests  in  any  entity  provided  that such purchase shall not result in the
Employee's  collectively  owning  beneficially  at any time five percent (5%) or
more  of  the equity securities of any business in competition with the Business
of  the  Employer  and  (c)  participating in civic and professional affairs and
organizations  and  conferences,  preparing  or  publishing  papers  or books or
teaching  so  long as the Board of Directors of FLAG approves of such activities
prior  to  the  Employee's  engaging  in  them.  Notwithstanding anything to the
contrary  in  the  preceding  provisions  of  this Section 2.3, the Employee may
continue  to serve on any board of directors that the Employee serves upon as of
the  Effective  Date.

3.  TERM  AND  TERMINATION.
    ----------------------

     3.1     Term.     This  Agreement  shall  remain  in effect for the Term or
             ----
until  a  termination  of  this Agreement prior to the expiration of the Term in
accordance  with  the  remaining  provisions  of  this  Section.

                                        5
<PAGE>
     3.2     Termination.  During the Term, the employment of the Employee under
             -----------
this  Agreement  may  be  terminated  only  as  follows:

     3.2.1  By  the  Employer:

               (a)  For Cause, following approval of such action by at least 75%
          of  the  membership  of  the Board of Directors of FLAG and only after
          providing  Employee with at least thirty (30) days' written notice, in
          which  event  the  Employer  shall  have  no further obligation to the
          Employee  except  for  the  payment  of  any amounts payable as of the
          effective  date  of  termination;  or

               (b)  Without  Cause at any time, provided that the Employer shall
          give  the Employee sixty (60) days' prior written notice of its intent
          to  terminate,  in  which event the Employer shall be required to meet
          its  obligations  to  the  Employee  under  Section  3.3  below.

     3.2.2  By  the  Employee:

               (a) For Cause, with no prior notice except as provided in Section
          1.7.2,  in  which  event  the  Employer  shall be required to meet its
          obligations  to  the  Employee  under  Section  3.3  below;  or

               (b)  Without  Cause,  provided  that  the Employee shall give the
          Employer  sixty  (60)  days'  prior  written  notice of the Employee's
          intent to terminate, in which event the Employer shall have no further
          obligation  to  the Employee except for payment of any amounts payable
          as  of  the  effective  date  of  the  termination.

          3.2.3  By  the  Employee within the period commencing three (3) months
     prior  to  and  ending  twelve (12) months after a Change in Control of the
     Employer  (the  "Election  Period"),  provided that the Employee shall give
     thirty  (30) days written notice prior to the end of the Election Period to
     the  Employer  of  the Employee's intention to terminate this Agreement, in
     which  event  the Employer shall be required to meet its obligations to the
     Employee  under  Section  3.3  below.

          3.2.4  At  any  time upon mutual, written agreement of the parties, in
     which  event  the Employer shall have no further obligation to the Employee
     except  for  the payment of any amounts payable as of the effective date of
     the  termination.

          3.2.5  Notwithstanding anything in this Agreement to the contrary, the
     Term  shall  expire  automatically  upon  the Employee's death or Permanent
     Disability, in which event the Employer shall have no further obligation to
     the  Employee  except  for  the  payment  of  any amounts payable as of the
     effective  date  of  termination  and, if the reason for termination is the
     Employee's  Permanent Disability, the Employer shall pay to the Employee as
     liquidated damages an amount equal to Average Monthly Compensation for each
     full  month following such termination until the earlier of the month prior
     to  the month for which the Employee's long-term disability benefits become
     payable or six full months commencing with the month following the month in
     which  the  date  of  termination  occurs.

                                        6
<PAGE>
     3.3     Termination  Payments.  In  the  event  Employee's  employment  is
             ---------------------
terminated  under  this  Agreement  prior to the expiration of the Term pursuant
Section  3.2.1(b),  Section 3.2.2(a) or Section 3.2.3, the Employer shall pay to
the  Employee as severance pay and liquidated damages a lump sum amount equal to
the  product of (a) Average Monthly Compensation multiplied by (b) the number of
months  (including  partial  months)  from the effective date of the termination
through  the  then  unexpired  portion  of  the Term or, if greater, twelve.  In
addition,  from the effective date of the termination through the then unexpired
portion of the Term (or, if greater, for a period of twelve months following the
effective  date  of the termination (the "Severance Period"), the Employer shall
continue  to  provide  the  Employee  the  benefits described in Section 4.6 and
Section  4.8  and shall pay an amount equal to what would be the Employee's cost
of  COBRA  health continuation coverage for the Employee and eligible dependents
for  the greater of the Severance Period or the period during which the Employee
and those eligible dependents are entitled to COBRA health continuation coverage
from  the  Employer.

     Notwithstanding  any  other provision of this Agreement to the contrary, if
the  aggregate  of  the  payments  provided  for in this Agreement and the other
payments  and  benefits  which  the  Employee  has the right to receive from the
Employer  (the  "Total  Payments")  would  constitute  a "parachute payment," as
defined  in  Section  280G(b)(2)  of  the Internal Revenue Code, as amended (the
"Code"),  the Employee shall receive the Total Payments unless the (a) after-tax
amount  that  would  be  retained by the Employee (after taking into account all
federal,  state and local income taxes payable by the Employee and the amount of
any  excise  taxes  payable  by the Employee under Section 4999 of the Code that
would  be  payable by the Employee (the "Excise Taxes")) if the Employee were to
receive  the  Total Payments has a lesser aggregate value than (b) the after-tax
amount  that  would  be  retained by the Employee (after taking into account all
federal,  state  and local income taxes payable by the Employee) if the Employee
were to receive the Total Payments reduced to the largest amount as would result
in  no portion of the Total Payments being subject to Excise Taxes (the "Reduced
Payments"),  in  which  case  the Employee shall be entitled only to the Reduced
Payments.  If  the  Employee  is  to  receive the Reduced Payments, the Employee
shall  be  entitled  to  determine which of the Total Payments, and the relative
portions  of  each,  are  to  be  reduced.

4.  COMPENSATION.  The  Employee shall receive the following salary and benefits
    ------------
during  the  Term:

     4.1     Base  Salary.  The  Employee shall be compensated at a base rate of
             ------------
Two  Hundred  Fifty  Thousand  Dollars  ($250,000)  per year, as the same may be
increased  from  time  to  time  in  accordance  with the immediately succeeding
sentence  ("Base Salary").  The Employee's salary shall be reviewed by the Board
of  Directors  of  the  Employer annually, and the Employee shall be entitled to
receive annually an increase in such amount, if any, as may be determined by the
Board  of  Directors  of the Employer based upon the performance of the Bank and
its  compliance  with  regulatory  standards.  Such  salary  shall be payable in
accordance  with  the  Employer's  normal  payroll  practices.

     4.2     Incentive  Compensation.  The  Employee  shall  be entitled to
             -----------------------
participate  in  such bonus, incentive and other executive compensation programs
as  are  made  available  to senior management of FLAG and the Bank from time to
time  (the  "Incentive  Compensation").

                                        7
<PAGE>
     4.3     Stock  Options.  FLAG  shall  grant  to  the Employee stock options
             --------------
commensurate  with  the  Employee's position taking into account options held by
the Employee as of the Effective Date.  Any such options shall be reflected by a
separate  written  award.

     4.4     Benefits.  The  Employee  shall be entitled to such benefits as may
             --------
be  available  from  time  to  time  for  senior executives of FLAG and the Bank
similarly  situated  to  the  Employee.  All  such benefits shall be awarded and
administered  in  accordance  with  FLAG  and  the  Bank's standard policies and
practices.  Such  benefits  may  include, by way of example only, profit sharing
plans,  retirement  or  investment  funds,  dental,  health  and  life insurance
benefits  and  such  other  benefits  as  the  Employer  deems  appropriate.

     4.5     Disability Insurance.  The Employer shall provide the Employee with
             --------------------
amounts,  as  additional  compensation,  as  and  when  necessary,  to allow the
Employee  to  pay  the  premiums  that  become due under the personal disability
insurance  policy  currently  owned  by  the  Employee.

     4.6     Automobile.  The  Employer  shall  provide  the  Employee  with  an
             ----------
automobile  of  a  type consistent with its policy in effect as of the Effective
Date,  with such automobile to be used by the Employee for business and personal
purposes.  The automobile shall be replaced with a new, comparable automobile no
less  frequently  than  every  twenty-four  (24)  months.  The Employer will pay
expenses  associated  with  the  operation  and  maintenance  of the automobile,
including  taxes, insurance and repairs.  To the extent the Employee contributes
to  the  cost  of an automobile's loan or lease payments in excess of the amount
required  by  the Employer's obligation under this Agreement, the Employee shall
be granted a share of any equity in such an automobile pursuant to a methodology
mutually  agreed  to  between  the  parties.

     4.7     Business  Expenses.  The  Employer shall reimburse the Employee for
             ------------------
reasonable  business  (including  travel)  expenses  incurred by the Employee in
performance  of  the  Employee's  duties  hereunder; provided, however, that the
Employee  shall,  as  a  condition  of reimbursement, submit verification of the
nature  and  amount  of  such expenses in accordance with reimbursement policies
from  time  to  time  adopted by the Employer and in sufficient detail to comply
with  rules  and  regulations  promulgated  by  the  Internal  Revenue  Service.

     4.8     Memberships.  The  Employer  shall  reimburse  the Employee for the
             -----------
annual  dues  associated with membership in two country or eating clubs selected
by  the  Employee;  provided,  however,  that the aggregate annual dues for such
memberships  shall  not  exceed  five percent (5%) of the Employee's Base Salary
then  in effect, and for memberships in such professional associations which are
commensurate  with the Employee's position; provided, however, that the Employee
shall,  as  a  condition of reimbursement, submit verification of the nature and
amount  of  such expenses in accordance with reimbursement policies from time to
time  adopted  by the Employer and in sufficient detail to comply with rules and
regulations  promulgated  by  the  Internal  Revenue  Service.

     4.9     Vacation.  On a non-cumulative basis the Employee shall be entitled
             --------
to a minimum of four (4) weeks of vacation annually, during which the Employee's
compensation  shall  be  paid  in  full.

                                        8
<PAGE>
     4.10     Withholding.  The  Employer  may  deduct  from  each  payment  of
              -----------
compensation  hereunder  all  amounts  required  to  be deducted and withheld in
accordance  with applicable federal and state income, FICA and other withholding
requirements.

5.  EMPLOYER  INFORMATION.
    ---------------------

     5.1     Ownership  of  Information.   All  Employer Information received or
             --------------------------
developed  by  the  Employee while employed by the Employer will remain the sole
and  exclusive  property  of  the  Employer.

     5.2     Obligations  of  the  Employee.  The  Employee  agrees  (a) to hold
             ------------------------------
Employer  Information  in  strictest  confidence, and (b) not to use, duplicate,
reproduce, distribute, disclose or otherwise disseminate Employer Information or
any  physical embodiments thereof and may in no event take any action causing or
fail  to  take any action necessary in order to prevent any Employer Information
from losing its character or ceasing to qualify as Confidential Information or a
Trade Secret.  In the event that the Employee is required by law to disclose any
Employer  Information,  the  Employee  will not make such disclosure unless (and
then only to the extent that) the Employee has been advised by independent legal
counsel  that  such  disclosure  is  required  by  law and then only after prior
written  notice  is  given  to the Employer when the Employee becomes aware that
such disclosure has been requested and is required by law.  This Section 5 shall
survive  for  a  period  of  twelve  (12)  months  following termination of this
Agreement  with  respect  to  Confidential  Information,  and  shall  survive
termination  of  this  Agreement for so long as is permitted by the then-current
Georgia  Trade  Secrets  Act  of 1990, O.C.G.A. Sec.Sec. 10-1-760-10-1-767, with
respect  to  Trade  Secrets.

     5.3     Delivery  upon  Request  or  Termination.  Upon  request  by  the
             ----------------------------------------
Employer,  and  in  any event upon termination of the Employee's employment with
the  Employer,  the  Employee will promptly deliver to the Employer all property
belonging  to  FLAG  or  the  Bank,  including  without  limitation all Employer
Information  then  in  the  Employee's  possession  or  control.

6.  NON-COMPETITION.  The  Employee  agrees  that  during  his employment by the
    ---------------
Employer  hereunder  and,  in  the  event  of  his termination other than by the
Employer  without  Cause pursuant to Section 3.2.1(b), by the Employee for Cause
pursuant  to Section 3.2.2(a), or by the Employee pursuant to Section 3.2.3, for
a  period  of  twelve  (12)  months thereafter, the Employee will not (except on
behalf  of  or with the prior written consent of the Employer), within the Area,
either  directly or indirectly, on his own behalf or in the service or on behalf
of  others,  as  an  executive  employee or in any other capacity which involves
duties and responsibilities similar to those undertaken for the Employer, engage
in  any business which is the same as or essentially the same as the Business of
the  Employer.

7.  NON-SOLICITATION  OF  CUSTOMERS.  The  Employee  agrees  that  during  the
    -------------------------------
Employee's  employment by the Employer hereunder and, in the event of Employee's
termination  other  than  by  the  Employer  without  Cause  pursuant to Section
3.2.1(b),  by  the  Employee  for  Cause pursuant to Section 3.2.2(a), or by the
Employee  pursuant  to  Section  3.2.3,  for  a  period  of  twelve  (12) months
thereafter, the Employee will not (except on behalf of or with the prior written
consent  of  the  Employer), within the Area, on the Employee's own behalf or in
the service or on behalf of others, solicit, divert or appropriate or attempt to
solicit,  divert  or  appropriate, directly or by assisting others, any business
from  any  of  the  Bank's  customers,  including  actively  sought  prospective
customers,  with  whom  the Employee has or had material contact during the last
two  (2)  years of the Employee's employment, for purposes of providing products
or  services  that  are  competitive  with  those  provided  by  the  Bank.

                                        9
<PAGE>
8.  NON-SOLICITATION  OF  EMPLOYEES.  The  Employee  agrees  that  during  the
    -------------------------------
Employee's  employment  by  the  Employer  hereunder  and,  in  the event of the
Employee's  termination  other  than  by  the Employer without Cause pursuant to
Section  3.2.1(b), by the Employee for Cause pursuant to Section 3.2.3(a), or by
the  Employee  pursuant  to  Section  3.2.3,  for a period of twelve (12) months
thereafter, the Employee will not, within the Area, on the Employee's own behalf
or  in  the  service  or  on  behalf of others, solicit, recruit or hire away or
attempt  to  solicit, recruit or hire away, directly or by assisting others, any
employee  of FLAG or its Affiliates, whether or not such employee is a full-time
employee  or  a  temporary employee of FLAG or its Affiliates and whether or not
such  employment  is  pursuant  to  written  agreement  and  whether or not such
employment  is  for  a  determined  period  or  is  at  will.

9.  REMEDIES.  The  Employee  agrees  that the covenants contained in Sections 5
    --------
through  8  hereof  are  of  the  essence  of  this  Agreement; that each of the
covenants  is  reasonable  and  necessary to protect the business, interests and
properties  of  the  Employer;  and  that  irreparable  loss  and damage will be
suffered  by the Employer should he breach any of the covenants.  Therefore, the
Employee  agrees  and consents that, in addition to all the remedies provided by
law  or  in  equity,  the  Employer shall be entitled to a temporary restraining
order  and  temporary  and  permanent  injunctions  to  prevent  a  breach  or
contemplated  breach  of  any  of  the covenants.  The Employer and the Employee
agree  that  all  remedies  available  to  the  Employer  or  the  Employee,  as
applicable,  shall  be cumulative.  In addition, in the event the Employee fails
to  comply  with  any  of  the  covenants contained in Section 5 hereof and such
failure shall not be cured to the reasonable satisfaction of the Employer within
thirty  (30) days after receipt of written notice thereof from the Employer, the
Employer  shall  thereupon  be  relieved  of  liability for all obligations then
remaining  under  Section  3.3  hereof.

10.  SEVERABILITY.  The  parties  agree  that each of the provisions included in
     ------------
this  Agreement is separate, distinct and severable from the other provisions of
this  Agreement  and  that  the  invalidity or unenforceability of any Agreement
provision shall not affect the validity or enforceability of any other provision
of this Agreement.  Further, if any provision of this Agreement is ruled invalid
or  unenforceable  by  a  court  of competent jurisdiction because of a conflict
between  the  provision  and  any applicable law or public policy, the provision
shall be redrawn to make the provision consistent with and valid and enforceable
under  the  law  or  public  policy.

11.  NO  SET-OFF BY THE EMPLOYEE.  The existence of any claim, demand, action or
     ---------------------------
cause  of action by the Employee against FLAG, or any Affiliate of FLAG, whether
predicated  upon  this Agreement or otherwise, shall not constitute a defense to
the  enforcement  by  the  Employer  of  any  of  its  rights  hereunder.

12.  NOTICE.  All  notices  and other communications required or permitted under
     ------
this Agreement shall be in writing and, if mailed by prepaid first-class mail or
certified  mail, return receipt requested, shall be deemed to have been received
on the earlier of the date shown on the receipt or three (3) business days after
the postmarked date thereof.  In addition, notices hereunder may be delivered by
hand,  facsimile  transmission  or  overnight courier, in which event the notice
shall  be deemed effective when delivered or transmitted.  All notices and other
communications  under this Agreement shall be given to the parties hereto at the
following  addresses:

                                       10
<PAGE>
          (a)     If  to  the  Employer,  to  it  at:

                  FLAG  Financial  Corporation
                  235  Corporate  Center
                  Stockbridge,  GA  30281
                  Attn:  Chairman

          (b)     If  to  the  Employee,  to  the  Employee  at:

                  ______________________________
                  ______________________________
                  ______________________________

13.  ASSIGNMENT.  Neither  party hereto may assign or delegate this Agreement or
     ----------
any  of  its rights and obligations hereunder without the written consent of the
other  party  hereto; provided, however, that this Agreement shall be assumed by
and  shall  be  binding  upon  any  successor  to  the  Employer.

14.  WAIVER.  A  waiver  by  the Employer of any breach of this Agreement by the
     ------
Employee  shall  not be effective unless in writing, and no waiver shall operate
or  be  construed  as  a  waiver  of  the same or another breach on a subsequent
occasion.

15.  ARBITRATION.  Any  controversy  or claim arising out of or relating to this
     -----------
contract,  or  the  breach  thereof,  shall be settled by binding arbitration in
accordance  with  the  Commercial  Arbitration Rules of the American Arbitration
Association.  The Employer and the Employee agree that they will seek to enforce
any arbitration award in the Superior Court of Henry County. The decision of the
arbitration  panel shall be final and binding upon the parties and judgment upon
the  award  rendered by the arbitration panel may be entered by any court having
jurisdiction.  The Employer and the Employee agree to share equally the fees and
expenses  associated  with  the  arbitration  proceedings.

16.  ATTORNEYS' FEES.  With respect to arbitration of disputes and if litigation
     ---------------
ensues  between  the parties concerning the enforcement of an arbitration award,
each  party  shall  pay its own fees, costs and expenses; provided, however, the
Employer  shall  advance  to  the  Employee  reasonable fees, costs and expenses
incurred by the Employee in preparing for and in initiating or defending against
any  proceeding  or  suit  brought to enforce rights or obligations set forth in
this  Agreement.  Such  advances  shall  be  made  within thirty (30) days after
receiving  copies of invoices presented by the Employee for such fees, costs and
expenses.  The  Employee  shall  have  the  obligation to reimburse the Employer
within  sixty (60) days following the final disposition of the matter (including
appeals)  to  the  full  extent  of  the  aggregate advances unless the panel of
arbitrators  or court, as the case may be, has ruled in favor of the Employee on
the  merits  of  the  substantive  issues  in  dispute.

                                       11
<PAGE>
17.  APPLICABLE  LAW.  This  Agreement shall be construed and enforced under and
     ---------------
in accordance with the laws of the State of Georgia.  The parties agree that the
Superior  Court of Henry County, Georgia, shall have jurisdiction of any case or
controversy  arising  under  or in connection with this Agreement and shall be a
proper  forum  in  which  to  adjudicate  such  case or controversy. The parties
consent  to  the  jurisdiction  of  such  courts.

18.  INTERPRETATION.  Words  importing  any  gender includes all genders.  Words
     --------------
importing the singular form shall include the plural, and vice versa.  The terms
"herein," "hereunder," "hereby, "hereto, "hereof" and any similar terms refer to
this  Agreement.  Any  captions,  titles  or  headings preceding the text of any
article,  section  or  subsection herein are solely for convenience of reference
and  shall  not  constitute  part  of  this  Agreement  or  affect  its meaning,
construction  or  effect.

19.  ENTIRE  AGREEMENT.  This  Agreement embodies the entire and final agreement
     -----------------
of  the  parties on the subject matter stated in the Agreement.  No amendment or
modification  of  this  Agreement shall be valid or binding upon the Employer or
the  Employee  unless  made  in  writing  and signed by both parties.  All prior
understandings  and  agreements relating to the subject matter of this Agreement
are  hereby  expressly  terminated; provided, however, that this Agreement shall
not  alter,  limit  or otherwise impair the Employee's rights under the Citizens
Bank  Executive  Indexed  Retirement  Program,  under  that  certain  Insurance
Agreement  between  the  Employee  and  Citizens Bank, dated November 2, 1992 or
under any tax-qualified retirement plan in which the Employee is or may become a
participant.

20.  RIGHTS  OF THIRD PARTIES.  Nothing herein expressed is intended to or shall
     ------------------------
be  construed  to confer upon or give to any person, firm or other entity, other
than  the  parties  hereto  and  their permitted assigns, any rights or remedies
under  or  by  reason  of  this  Agreement.

21.  SURVIVAL.  The  obligations  of the Employer pursuant to Sections 3.2.5 and
     --------
3.3  and  the  obligations of the Employee pursuant to Sections 5, 6, 7, 8 and 9
shall  survive  the  termination of the employment of the Employee hereunder for
the  period  designated  under  each  of  those  respective  sections.

                  [REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]

                                       12
<PAGE>
     IN  WITNESS  WHEREOF,  the  parties  hereto  have  hereunto  executed  this
Agreement  in  accordance  with  the  provisions  hereof.

                                       FLAG  FINANCIAL  CORPORATION

                                       /s/ FRED A.  DURAND,  III
                                       ----------------------------------------

                                       Print  Name:   Fred A. Durand, III
                                                   ----------------------------

                                       Date:     February  17, 2001
                                            -----------------------------------

ATTEST:

   /s/  RICKY  SMITH,  ASST.  SECRETARY
------------------------------------------

Date:  February  17,  2001
------------------------------------------

                                       FLAG  BANK

                                       /s/ JOHN  S.  HOLLE
                                       ----------------------------------------

                                       Print  Name:   John S. Holle, Chairman
                                                   ----------------------------

                                       Date:    February  20,  2001
                                            -----------------------------------

ATTEST:

   /s/  RICKY  SMITH,  ASST.  SECRETARY
------------------------------------------

Date:  February  20,  2001
------------------------------------------

                                       /s/  J.  DANIEL  SPEIGHT,  JR.
                                       ----------------------------------------
                                       J.  Daniel  Speight,  Jr.

                                       13
<PAGE>
                                    EXHIBIT A
                                    ---------

                             DUTIES OF THE EMPLOYEE

-    Foster  a  corporate  culture  that  promotes ethical practices, encourages
     individual  integrity,  fulfills social responsibility, and is conducive to
     attracting,  retaining  and  motivating  a  diverse  group  of  top-quality
     employees  at  all  levels.

-    Work  with  the  Board  of Directors of the Employer to develop a long-term
     strategy  for  the  Employer  that  creates  shareholder  value.

-    Develop  and  recommend  to  the  Board of Directors of the Employer annual
     business  plans and budgets that support the Employer's long-term strategy.

-    Manage  the  day-to-day  business  affairs  of  the Employer appropriately.

-    Use  best  efforts  to achieve the Employer's financial and operating goals
     and  objectives.

-    Improve the quality and value of the products and services provided by each
     Employer.

-    Ensure  that  the  Employer  maintains  a satisfactory competitive position
     within  its  industry.

-    Develop an effective management team and an active plan for its development
     and  succession.  Have  responsibility  for hiring, firing and transferring
     members  of  Employer  management  team  and  other  employees.  Have
     responsibility  for  making  recommendations  for  the  promotion  and
     compensation  of  members  of Employer management team and other employees.

-    Implement,  administer,  interpret,  and  ensure  compliance  with  major
     corporate  policies  adopted  by  the  Board  of  Directors.

-    Execute contracts on behalf of the Employer and delegate to other employees
     the  right  to  execute  contracts  on  behalf  of  the  Employer.

-    Perform  such  duties  as  are  required  by  laws  and  regulations.

-    Report  to  the  Executive  Committee  of  the  Board  of  Directors.

-    Ensure that the Employer achieves maximum profits while taking into account
     the best interests of the Employer's customers, shareholders and employees.

-    Serve  on  all  committees  of the Board of Directors, other than the Audit
     Committee.

-    Develop,  supervise  and  administer  the  Employer's  policy.

-    Establish  contact,  coordinate and negotiate with the Employer's potential
     acquisition  targets.

-    Ensure  that  all  banks  uphold  the  Employer's  image.

-    Manage  general  and  active  financial  affairs  of  the  Employer.

                                       14
<PAGE>

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