GERALD METALS, INC. LETTERHEAD] April 10, 1997 Alta Gold Co. 601 Whitney Ranch Drive Suite 10 Henderson, NV 89014

                              10.06



                  [GERALD METALS, INC. LETTERHEAD]
                                
                                                   April 10, 1997
                                                                 
Alta Gold Co.
000 Xxxxxxx Xxxxx Xxxxx
Xxxxx 00
Xxxxxxxxx, XX  00000

ATTN:  Xx. Xxxxxx X. Xxxxx

Gentlemen:

This Agreement sets forth the provisions in fulfillment of margin
obligations  by  Alta  Gold  Co.  in  connection  with  presently
outstanding and future contracts entered into from time  to  time
between  Alta  Gold  Co. ("Alta Gold") and  Xxxxxx  Metals,  Inc.
("Xxxxxx") for the purchase and sale of gold and gold options.

1.   DEFINITIONS

     A.   "Forward  Contract"  means  any  contract  between  the
          parties  for  the  purchase or sale of  gold  having  a
          maturity  date more than two (2) business days forward.
          A  Forward  Contract is outstanding until  payment  and
          performance are completed in accordance with its terms.
          
     B.   "Contract  Value"  of any Forward  Contract  means  the
          product obtained by multiplying (i) the number of  fine
          xxxx ounces of gold covered by that Forward Contract by
          (ii) the price per xxxx ounce specified in that Forward
          Contract.
          
     C.   "Market  Value"  for  margin purposes  of  any  Forward
          Contract  means  the  product obtained  by  multiplying
          (i)  the number of fine xxxx ounces of gold covered  by
          that  Forward Contract by (ii) the settlement quotation
          of  gold  on  the  commodity Exchange,  Inc.  ("Comex")
          corresponding  to the delivery month specified  in  the
          contract or if no such quotation is available then  the
          settlement  quotation of gold for such month  shall  be
          determined  in good faith by Xxxxxx.  However,  in  the
          event  the spot quotation of gold on the Comex  changes
          more  than  the  limit change allowed for  the  forward
          quotations then the settlement quotation of the forward
          months  shall be adjusted to reflect the excess  market
          move.
          


Alta Gold Co.
April 10, 1997
Page 2

     D.   "Business Day" shall mean a day on which banks  in  New
          York City and the Comex are open for business.
          
     E.   "Metal"  shall mean gold in the form of 400  fine  xxxx
          ounce  (minimum .995 fine) bars, subject to  variations
          permitted in the trade.
          
     F.   "Call  Option"  shall mean that the purchaser  has  the
          right but not the obligation to purchase Metal.
          
     G.   "Put  Option"  shall mean that the  purchaser  has  the
          right but not the obligation to sell Metal.
          
     H.   "Option"  or "Options" shall mean Put and Call  Options
          collectively.
          
     I.   "Metal   Quantity" for any Option means the  number  of
          xxxx  ounces of Metal covered by that Option as  stated
          in the confirming telex, as defined in paragraph 2.
          
     J.   The  term "Metal Value" of any Option on any day, shall
          mean  the value of Metal for delivery on the expiration
          date   as   extrapolated  from   Comex   gold   futures
          settlements  per  xxxx ounce multiplied  by  the  Metal
          Quantity of that option.
          
     K.   "Strike  Price" of any Option means the price fixed  by
          the  Option  for the purchase (in the case  of  a  Call
          Option)  or  the sale (in the case of a Put Option)  of
          the Metal Quantity covered thereby.  "Strike Value"  of
          any  Option  shall mean an amount equal to  its  Strike
          Price multiplied by its Metal Quantity.
          
     L.   "Intrinsic  Value" at any time shall mean, (i)  in  the
          case  of a Call Option, an amount in U.S. Dollars equal
          to the amount, if any, by which its Metal Value exceeds
          its  Strike Value and (ii) in the case of a Put Option,
          an  amount in U.S. Dollars equal to the amount, if any,
          by which its Strike Value exceeds its Metal Value.
          
     M.   "Time  Value"  at  any time shall mean the  theoretical
          value  as  calculated using a standard formula accepted
          in  the  industry, using as volatility  input  Xxxxxx's
          best  estimate  of  appropriate  volatility.   Whenever
          appropriate, volatility will be calculated so as to  be
          in  line  with the volatility of respective Comex  gold
          option contracts.
          


Alta Gold Co.
April 10, 1997
Page 3


     N.   "Option  Value" shall mean the sum of Intrinsic  Value,
          if any, plus Time Value.
          
     O.   "Funds"  shall mean U.S. Dollars paid by wire  transfer
          in  immediately  available funds to  the  bank  account
          designated by the party receiving payment.
          
     P.   "Grantor" shall mean the party writing an Option.
          
     Q.   "Holder"  shall mean the party to which  an  Option  is
          granted.
          
     R.   "Expiration Date" shall mean 9:30 a.m. (New York  Time)
          on the date agreed to by the Grantor and the Holder and
          set  forth  in the confirmation of the transaction,  at
          which  time  the  Option shall expire worthless  unless
          previously exercised in accordance herewith.
          
     S.   "Premium  Amount" shall mean the consideration  for  an
          Option paid by the Holder to the Grantor.
          
     T.   "European  Option" shall mean an option  which  may  be
          exercised  only on the agreed Expiration  Date  of  the
          option,  although  irrevocable  notice  of  intent   to
          exercise  a  European  Option may  be  given  prior  to
          Expiration Date.
          
2.   OPTION CONFIRMATION

Each Option purchased and sold hereunder shall be evidenced by  a
written or telex confirmation listing:

     a)   trade date                 e) metal type (gold)
     b)   premium payment due date   f) metal quantity
     c)   premium amount             g) option type (European)
     d)   strike price               h) option expiration date and time
          
3.   OPTION TERMS AND CONDITIONS

     A.   The  Premium  Amount for any Option  granted  hereunder
          shall  be  paid  by the Holder of such  Option  to  the
          Grantor two Business Days after the date such Option is
          entered into.
          


Alta Gold Co.
April 10, 1997
Page 4


     B.   In  the  event  an Option is exercised, on  the  second
          Business  Day after the date of exercise,  (i)  in  the
          case  of a Put Option, the Grantor shall pay the Strike
          Value of that Option to the Holder and the Holder shall
          deliver  the  Metal  Quantity of  that  Option  to  the
          Grantor  and  (ii)  in the case of a Call  Option,  the
          Grantor  shall deliver to the Holder the Metal Quantity
          of  that  Option, and the Holder shall pay  the  Strike
          Value of that Option to the Grantor; except that at the
          Holder's option, expressed by irrevocable notice to the
          Grantor at the time the Option is entered into,  or  at
          any  other time by mutual agreement of the parties, the
          Option may be settled in cash (and thus no delivery  of
          Metal  will take place) by the Grantor transferring  to
          the  Holder on such second Business Day after the  date
          of exercise an amount equal to the Option Value of such
          Option  at the time of exercise adjusted for any margin
          advances, if any, for the specific Option.
          
4.   PAYMENT AND DELIVERY

     A.   All  amounts  payable hereunder and under  any  Forward
          Contract or Option shall be paid in Funds.
          
     B.   Delivery of Metal under any Forward Contract or  Option
          shall be effected by credit of the appropriate type  of
          Metal  (in form and purity qualifying as such)  to  the
          unallocated  account specified in the Forward  Contract
          or Option, or such other location as mutually agreed.
          
5.   MARGIN

In  order to secure Alta Gold's obligations to Xxxxxx under  this
Agreement and any outstanding Forward Contracts and Options, Xxxx
Xxxx agrees to margin its obligations under Forward Contracts and
Options in the following manner:

     A.   The  amount  of exposure under all Options  outstanding
          between  Xxxxxx and Xxxx Gold shall be the sum  of  the
          Option Value of all outstanding options granted by Alta
          Gold   less  the  sum  of  the  Option  Value  of   all
          outstanding   Options  granted  by  Xxxxxx,   hereafter
          referred to as the "Option Exposure".
          


Alta Gold Co.
April 10, 1997
Page 5

     B.   It  is  agreed  that  the  purchaser  under  a  Forward
          Contract, has an unrealized gain if the Market Value of
          such  contract exceeds its Contract Value and that  the
          seller under a Forward Contract, has a unrealized  gain
          if  the  Contract  Value of such contract  exceeds  its
          Market  Value.   At  the  close  of  business  on  each
          Business  Day, the net unrealized gain of  all  Forward
          Contracts  then  outstanding  shall  be  calculated  by
          (i) determining the difference between the Market Value
          and   Contract  Value  of  each  Forward  Contract  and
          (ii) netting these amounts against each other.  The net
          unrealized  gain is referred to herein as  the  "Market
          Exposure", and the party having the net unrealized gain
          is referred to as the party then "Market Exposed".
          
     C.   For  purposes  of  all margin calculations  under  this
          Agreement, all purchase and sales of Forward  Contracts
          shall  be netted.  Furthermore, the combination of  the
          Option Exposure and the Market Exposure is referred  to
          as the "Total Exposure".
          
     D.   During  the  period  that  any  Forward  Contracts  are
          outstanding  and  Xxxxxx's  Total  Exposure  equals  or
          exceeds   US  $1,500,000  (One  Million  Five   Hundred
          Thousand U.S. Dollars) (the "Margin Line") Xxxxxx shall
          receive a margin deposit from Alta Gold for amounts  in
          excess  of  US  $1,500,000 (One  Million  Five  Hundred
          Thousand  U.S. Dollars) in the form of Funds, or  other
          mutually  agreed  upon  forms of  margin.   Thereafter,
          margin  cover  shall be deposited or returned  whenever
          Xxxxxx's  Total Exposure, less margin already deposited
          increases  or  decreases by US  $150,000  (One  Hundred
          Fifty Thousand U.S. Dollars).  All  margin deposits  or
          returns shall be made by the close of business  on  the
          business day following notification.  In no event shall
          Xxxxxx  return  funds  greater  than  the  total  funds
          received from Alta Gold.
          


Alta Gold Co.
April 10, 1997
Page 6

     X.   Xxxxxx  received in the form of cash shall be  credited
          with  interest at a rate equal to the overnight federal
          funds rate as published by the New York Federal Reserve
          Bank, basis a 360 day year.  Interest charges shall  be
          credited  and  paid  monthly by wire  transfer  to  the
          account of Alta Gold.
          
6.   SECURITY INTEREST

     Each party hereby represents that it is now, and will at all
     times during the continuance of this Agreement be, the  sole
     and  absolute owner of any property delivered by such  party
     as  margin hereunder, free and clear of any and all charges,
     liens, encumbrances or security interests of any kind  other
     than  the interest of the other party provided for  in  this
     paragraph 6.  Without prejudice to any other rights which  a
     party  may have hereunder, any margin delivered to  a  party
     hereunder  shall be and hereby is pledged to such  party  by
     way  of  a first priority security interest as security  for
     all  obligations of the party delivering such  margin  under
     all contracts and transactions relating or pursuant thereto.
     The  security  interest  provided for  herein  is  to  be  a
     continuing    security    interest,   notwithstanding    any
     intermediate  payment or settlement of any such obligations.
     Neither  this  Agreement nor the security interest  provided
     for  herein  shall be terminated, affected or prejudiced  by
     any bankruptcy, liquidation, amalgamation, reorganization or
     reconstruction of, or merger involving, the party delivering
     margin to which such security interest attaches.
     
7.   NON-PERFORMANCE

     Notwithstanding any other provisions hereof or  any  Forward
     Contract  or Option, in the event Alta Gold (a) defaults  in
     the  payment  or  performance of any  obligation  to  Xxxxxx
     hereunder   or  under  any  other  agreements  with   Xxxxxx
     including  any  loan  agreements, (b) filed  a  petition  or
     otherwise  commences  or authorizes the  commencement  of  a
     proceeding under any bankruptcy or similar law or  have  any
     such  petition  filed  or proceeding commenced  against  it,
     (c)  discontinues  operation of a material  portion  of  its
     business  for any reason, (d) is unable to pay its debts  as
     they fall due; then in any such event Xxxxxx shall have  the
     right at any time:
     


Alta Gold Co.
April 10, 1997
Page 7

     A.   To  reduce the Margin Line as specified herein to  U.S.
          $1.00 (One U.S. Dollar) (the "Reduced Margin Line") and
          thereby  accelerate  any  and  all  of  Xxxxxx's  Total
          Exposure  as margin due and payable to Xxxxxx  by  Xxxx
          Gold, by the close of business in New York on the  next
          Business Day.  Margin cover shall be deposited  in  the
          form  of  cash  or  other mutually acceptable  form  of
          margin.   Thereafter, the Reduced Margin Line shall  be
          effective until Xxxxxx notifies Alta Gold, in  writing,
          as to otherwise;
          
     B.   To  liquidate any or all Forward Contracts and  Options
          then outstanding by:
          
          (i)  Closing  out each Forward Contract and  Option  at
               the  time of liquidation so that each such Forward
               Contract and Option is canceled and market damages
               equal  to  their then Total Exposure is calculated
               and  a  settlement payment in an amount  equal  to
               such Total Exposure, if any, less any margin held,
               is then due the party then Market Exposed.
               
          (ii) Setting  off  against  each other  all  settlement
               payments  which  Xxxxxx xxxx to  Xxxx  Gold  as  a
               result  of  such  liquidation and  all  settlement
               payments  which   Alta Gold owes to  Xxxxxx  as  a
               result  thereof,  and  all  other  settlements  or
               payments due or payable under any other Agreements
               including any margin deposits or other collateral,
               so  that  all such amounts are netted to a  single
               liquidated  amount payable by  one  party  to  the
               other  party.  The net amount so determined  shall
               be  paid  by the close of business in New York  on
               the next Business Day.  Xxxxxx's rights under this
               paragraph  6 shall be in addition to, and  not  in
               limitation or exclusion of, any other rights which
               Xxxxxx  xxx have, whether by agreement,  operation
               of law or otherwise;
               
     C.   To   terminate  performance  of  any  or  all  of   its
          obligations to Alta Gold;
          
     D.   To draw on any Letter of Credit or otherwise convert to
          cash  any  margin deposits and set off such amounts  in
          accordance with paragraph 7 B. (ii);
          
     E.   Claim  and  receive  payment from  Alta  Gold  for  all
          expenses  including reasonable legal expenses  incurred
          in   the  exercise  of  the  foregoing  and  any  other
          remedies.
          


Alta Gold Co.
April 10, 1997
Page 8

8.   MISCELLANEOUS

     A.   Each  Forward Contract shall be governed by the  "terms
          and  conditions"  set  forth on  the  reverse  side  of
          Xxxxxx's  "Confirmation of Contract" annexed hereto  as
          an  exhibit.  In case of conflict with this  Agreement,
          this Agreement will prevail.
          
     B.   This Agreement and each Forward Contract and Option  is
          for  the  benefit  of the parties and their  respective
          successors and permitted assigns.  No other  person  or
          entity  (including without limitation any  customer  of
          either  party)  shall  have  any  rights  hereunder  or
          thereunder.   This Agreement and each Forward  Contract
          and  Option  and  the  rights  and  duties  under  this
          Agreement or any Forward Contract or Option may not  be
          assigned by either party (in whole or in part)  without
          the  written  consent of the other party,  except  that
          Xxxxxx xxx assign this agreement and any or all Forward
          Contracts and Options entered into between the  parties
          for financing purposes.
          
     C.   Neither  this  Agreement nor any  Forward  Contract  or
          Option  may  be amended except by a writing  signed  by
          both  parties or by a telex sent by each party  to  the
          other.  The paragraph headings are for convenience  and
          reference only and shall not affect the confirmation or
          interpretation of any provisions hereunder.
          
     D.   This  Agreement shall be governed by the  laws  of  the
          State  of  New York without giving effect to principles
          of conflict of laws.  Each party hereto consents to the
          exclusive  jurisdiction of the courts of the  State  of
          New  York  and/or of any U.S. Federal Court located  in
          the  City  of  New  York over any disputes  arising  in
          connection with the transaction contemplated hereby and
          thereby.  Final judgment in any action shall be binding
          upon  the  parties hereto and may be enforced  in  such
          courts  or  in  the  courts of  any  country  to  which
          jurisdiction  the  party against  whom  the  action  is
          brought  is subject.  ALTA GOLD AND XXXXXX EACH  WAIVES
          TRIAL  BY  JURY  IN  ANY  LEGAL ACTION,  PROCEEDING  OR
          COUNTERCLAIM  BROUGHT BY EITHER  OF  THEM  AGAINST  THE
          OTHER   ON  ANY  MATTER  WHATSOEVER  ARISING  HEREUNDER
          (INCLUDING, WITHOUT LIMITATION, ANY ACTION,  PROCEEDING
          OR  COUNTERCLAIM ARISING OUT OF OR IN ANY WAY CONNECTED
          WITH  THIS  AGREEMENT, ANY OTHER DOCUMENTS EXECUTED  IN
          CONNECTION   HEREWITH  OR  ANY  OF   THE   TRANSACTIONS
          CONTEMPLATED HEREIN OR THEREIN).
          


Alta Gold Co.
April 10, 1997
Page 9

     E.   This Agreement, together with all Forward Contracts and
          Options   entered   into,  shall  be   considered   one
          integrated contract.  Performance by any party  on  any
          day  hereunder or under any Forward Contract or  Option
          is  conditional on performance then due  by  the  other
          party  hereunder  or  thereunder.  The  parties  hereby
          acknowledge   that   all   transactions   under   these
          Agreements are commercial transactions.
          
     F.   Each  party hereto represents and warrants to the other
          that  it possesses all necessary power, authority  and,
          to  the extent applicable, approvals necessary to enter
          into  this  Agreement  and  any  Forward  Contracts  or
          Options   it  enters  into,  that  the  execution   and
          implementation  hereof or thereof will not  cause  such
          party to be in violation of any other agreement or law,
          regulation, order or court process or decision to which
          it is a party or to which it is in any way subject, and
          that  this  Agreement  and each  Forward  Contract  and
          Option  constitutes  its valid  and  binding  agreement
          enforceable against it in accordance with its terms.
          
     G.   Each  party hereto represents and warrants to the other
          that,  on the date hereof, and at the time any  Forward
          Contract  or Option is entered into, it is a  producer,
          processor or commercial user of, or a merchant handling
          gold  or  the products or by-products thereof,  and  is
          entering  into this Agreement and any Forward  Contract
          or  Option  solely for the purpose of its  business  as
          such.
          
     H.   In case any one or  more of the provisions contained in
          this   Agreement   should  be   invalid,   illegal   or
          unenforceable  in  any respect, the validity,  legality
          and   enforceability   of  the   remaining   provisions
          contained  herein shall not in any way be  affected  or
          impaired thereby.  The parties shall endeavor  in  good
          faith  negotiations to replace the invalid, illegal  or
          unenforceable  provisions  with  valid  provisions  the
          economic effect of which comes as close as possible  to
          that   of   the   invalid,  illegal  or   unenforceable
          provisions.
          
     I.   Each party reserves the right to review and/or withdraw
          this  Agreement  in  accordance  with  changing  market
          and/or  financial conditions.  In no  event  will  such
          withdrawal   of   this  Agreement  affect   outstanding
          transactions or obligations.
          


Alta Gold Co.
April 10, 1997
Page 10

     X.   Xxxxxxx  a  failure nor a delay on the part  of  either
          party  in  exercising  any right, power  or  privilege,
          hereunder, shall operate as a waiver thereof, nor shall
          a single or partial exercise thereof preclude any other
          or future exercise, or the exercise of any other right,
          power or privilege.
          
9.   NOTICES

     All  notices  hereunder shall be in writing or by  telex  or
     telefax  and  deemed given when received at  the  respective
     party's  address  set forth below unless sent  by  telex  or
     telefax  in  which case the same shall be deemed given  when
     sent to the telex or telefax address of the respective party
     set  forth  below and for telex confirmed by the  respective
     answerback  specified  below, and for telefax  confirmed  as
     being received by the respective party.
     
     If to Xxxxxx:                If to Alta Gold:
                                  
     Xxxxxx Metals, Inc.          Alta Gold Co.
     P.O. Box 10134               000 Xxxxxxx Xxxxx Xxxxx
     Xxxx-Xxxxx Xxxx              Xxxxx 00
     Xxxxxxxx, XX  00000          Xxxxxxxxx, XX  00000
                                  
     ATTN:  Xxxxx X. Xxxxxxxx     ATTN:  Xxxxxx X. Xxxxx
     Telefax:  (000) 000-0000     Telefax:
     cc:  Treasurer
          
     ACCEPTED BY:

     ALTA GOLD CO.                 XXXXXX METALS, INC.
     
     By:                           By:  
                                        Xxxxxx X. Xxxxxx
                                        Vice President
                                        
     Date:                         By:  
                                        Xxxx X. Xxxxxxxxx
                                        Director, Structured Finance