[LETTER HEAD OF RIO TINTO]







PRIVATE AND CONFIDENTIAL

------------------------



Guyanor Ressources S.A.

Lotissement Calimbe II

Route du Tigre

97337 Cayenne

French Guiana



Attention: President



And



Societe de Travaux Publics et

de Mines Auriferes en Guyane SARL

Lotissement Calimbe II

Route du Tigre

97337 Cayenne

French Guiana



Attention: President





29 December 2000

Ref: 201036b.KHH





Dear Sirs:



           Paul-Isnard Option and Joint Venture - Heads of Agreement



We refer to our recent discussions concerning Guyanor Resources S.A. ("Guyanor

Ressources") and its wholly owned subsidiary, Societe de Travaux Publics et de

Mines Auriferes en Guyane SARL ("SOTRAPMAG"), pursuant to which you have agreed

to grant Rio Tinto Mining and Exploration Limited ("Rio Tinto") an option to

acquire an interest in and enter into a joint venture for the purpose of

exploration and later possible evaluation, development and mining of that

certain area in French Guiana known as the Paul-Isnard Property (the

"Property").  For ease of reference, Guyanor Ressources and SOTRAPMAG are

collectively referred to herein as "Guyanor".



Certain of the mineral rights comprising the Property are directly held by

Guyanor Ressources and others are held by SOTRAPMAG. Guyanor Ressources hereby

undertakes to retain and exercise control of SOTRAPMAG to the extent necessary

to fulfil the obligations of Guyanor Ressources and SOTRAPMAG hereunder to Rio

Tinto.



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Rio Tinto understands that, on June 4, 1996, SOTRAPMAG entered into an Option

and Joint Venture Agreement (the "La Source JVA") with ASARCO Incorporated

("ASARCO") and La Source Developpement SAS ("La Source") with respect to the

Property.  ASARCO's rights and obligations under the La Source JVA were

terminated on May 28 1998 pursuant to a letter of termination.  La Source's only

remaining right under the La Source JVA is the 2.5% Net Profit Interest referred

to in Clause 9.1(c) hereunder.



It is the intent of the parties that these Heads of Agreement will be replaced

by a more detailed Option and Joint Venture Agreement (the "Joint Venture

Agreement") to be executed by the parties within twelve (12) months of the date

of this letter. The Joint Venture Agreement will contain super majority

provisions to protect Guyanor's minority rights in the Joint Venture as set out

in Clause 4.3 below. Until superseded by the more detailed Joint Venture

Agreement, these Heads of Agreement shall govern the rights and obligations of

the parties with respect to the subject matter hereof.



1.     Scope of the Option and Possible Joint Venture



1.1    From the date hereof until the third anniversary of these Heads of

       Agreement, Guyanor grants to Rio Tinto an exclusive option to establish a

       joint venture (the "Joint Venture"), with respect to Guyanor's right,

       title and interest in the Property for the purpose of exploration and

       later possible evaluation, development and mining of minerals within the

       Property. For the purposes of these Heads of Agreement and the Joint

       Venture Agreement, the "Property" shall consist of the mineral rights and

       concessions or parts thereof listed in Schedule 1.1-A and the location of

       which are approximately shown on the map in Schedule 1.1-B of these Heads

       of Agreement.



1.2    While these Heads of Agreement and the Joint Venture Agreement remain

       current, the parties agree to make available, for the benefit of their

       joint undertaking described herein and the Joint Venture, any

       prospecting, exploration or mining rights held or applied for by them or

       their affiliates (including such rights as are held at the date of this

       letter) within the outermost boundaries of the Property.



1.3    Areas of Interest



       1.3.1   While these Heads of Agreement and the Joint Venture Agreement

               remain current, the parties agree that if either of them acquires

               an interest in the two concessions known as the Tanon

               concessions - those being concessions nos. 01/32 and 01/33 - or

               to any other from of mineral right within the area of the Tanon

               concessions, those acquired rights shall be included under the

               terms of this agreement.



       1.3.2   While these Heads of Agreement and the Joint Venture Agreement

               remain current Guyanor hereby grants Rio Tinto a right of first

               offer in respect of that part of Permis A no 75/99 lying outside

               the Property. That right of first offer will be as per the

               definition of Right of First Offer in Clause 11.1 hereunder

               except that where that Clause 11.1 reads "Property" it shall

               refer to the area referred to in this Clause 1.3.3 for the

               purpose of the first right of offer referred to in this Clause

               1.3.3.



1.4    For avoidance of doubt, nothing contained in these Heads of Agreement or

       the Joint Venture Agreement shall restrict the ability of the parties to

       engage in and receive the full



                                                                    Page 2 of 17

{PAGE}



       benefit of their business activities outside the Property except as

       provided for in Clause 1.3.



2.     Rio Tinto Earn-In rights



2.1    Rio Tinto's undivided beneficial interest in the Property and its

       participating interest in the Joint Venture (collectively a

       "Participating Interest") shall be zero percent until it has fulfilled

       the requirements set out herein to acquire its 40% Participating Interest

       and until that time Guyanor's Participating Interest shall be 100%.



2.2    Rio Tinto shall have the right, but not the obligation, to acquire a 40%

       Participating Interest by sole funding work expenditures within the

       Property up to a total of US$2,250,000 before the third anniversary of

       this Heads of Agreement.



2.3    Upon completion of US$2,250,000 in work expenditures funded by Rio Tinto

       within the Property before the third anniversary hereof, Rio Tinto shall

       have earned a 40% Participating Interest free and clear of all

       encumbrances other than proportionate responsibility for the 2.5% Net

       Profits Interest that may become payable to La Source. Rio Tinto may then

       elect at its sole option to earn a further 30% Participating Interest in

       the Joint Venture by sole funding a further US$6,750,000 in work

       expenditures by the fifth anniversary of these Heads of Agreement.



2.4    For the avoidance of doubt, during any period during which Rio Tinto

       shall be earning in a Participating Interest in the Joint Venture, be it

       40% or the additional 30%, Guyanor shall be carried by Rio Tinto and

       therefore shall not be required to contribute to any program and budget

       of the Joint Venture nor shall Guyanor's Participating Interest be

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