GOLDEN STAR RESOURCES LTD
EXHIBIT 10.2
<DOCUMENT>
<TYPE>EX-10.2
<SEQUENCE>4
<FILENAME>v79641ex10-2.txt
<DESCRIPTION>EXHIBIT 10.2
<TEXT>
<PAGE>


                                                                    EXHIBIT 10.2



                                    AGREEMENT

                                  MADE BETWEEN

                               BOGOSO GOLD LIMITED

                                       AND

                         PRESTEA GOLD RESOURCES LIMITED

                                      DATED

                                NOVEMBER 16, 2001


<PAGE>


                                TABLE OF CONTENTS

Section  1       -    Definitions and Interpretation

         2       -    Scope and Understandings

         3       -    BGL Representations and Warranties

         4       -    PGR Representations and Warranties

         5       -    Closing

         6       -    Option

         7       -    Company Management

         8       -    Other Agreements

         9       -    Conditions Precedent

         10      -    General

Schedule  A      -    Infrastructure Mitigation Plan

          B      -    Joint Operating Agreement

          C      -    Lease Area

          D      -    Loan Agreement

          E      -    Management Agreement

          F      -    PGR Liabilities

          G      -    Shareholders' Agreement

          H      -    Working Capital and Spare Parts Requirements

          I      -    Toll Processing Agreement

          J      -    PGR Counsel Opinion

          K      -    PGR Shareholder Approval

<PAGE>


AGREEMENT made November 16, 2001 between Bogoso Gold Limited, a company
incorporated under the laws of Ghana ("BGL"), and Prestea Gold Resources
Limited, a company incorporated under the laws of Ghana ("PGR").

RECITALS

A.  The parties entered into a Letter Agreement dated May 21, 2001 pursuant to
    which, among other things, it was agreed that PGR would surrender a mining
    lease held by it and the parties would procure the issue of two new mining
    leases covering the same area, of which one would permit underground mining
    and the other surface mining for gold and related minerals.

B.  Subsequent to such date, PGR surrendered its existing lease, the Government
    of Ghana issued the BGL Lease and PGR Lease (as defined below) and GSR
    entered into and completed an agreement with Barnex Exploration Limited, all
    as provided for in the Letter Agreement.

C.  BGL has paid to PGR $500,000 in immediately available funds as the first
    installment of the First Option Payment (as defined below).

D.  The parties are entering into this definitive agreement, as provided for in
    the Letter Agreement.

IN CONSIDERATION OF THE MUTUAL COVENANTS IN THIS AGREEMENT, THE PARTIES AGREE AS
FOLLOWS:

                                   SECTION 1

1. As used in this Agreement:

"APPLICABLE LAW" means all applicable laws of the Republic of Ghana, including,
without limitation, the PNDCL 153;

"BARNEX" means Barnato Exploration Limited, a company incorporated under the
laws of South Africa;

"BARNEX COMPANIES" means, collectively, Barnex, Barnex (Ghana) Limited and
Barnex (Prestea) Limited;

"BARNEX RELEASE" means the Waiver and Release Agreement among the Government,
Prestea Goldfields Limited, SGMC and the Barnex Companies, a copy of which has
been delivered by BGL to PGR;

"BGL LEASE" means the mining lease dated June 29, 2001 issued by the Government
to BGL pursuant to Section 45 of the PNDCL 153 whereby BGL has been granted
exclusive mining rights over the Lease Area to mine for a period of 30 years for
gold and associated mineral

<PAGE>
                                      -2-


substances lying and being under the surface to a vertical depth 150.37 metres
below sea level (the "150 Metre Depth") as detailed on Schedule C and includes
all necessary consents and ratifications to perfect BGL's title thereunder;

"BUSINESS DAY" means any day on which the banks are open for the transaction of
business in Ghana;

"CLOSING" means the closing provided for in Section 5;

"CLOSING DATE" means the date by which the closing conditions specified in this
Agreement shall have been satisfied so as to permit the Closing to occur
(anticipated to be on or about November 30, 2001) and which shall, in any event,
be not later than December 31, 2001 unless the parties otherwise agree;

"CLOSING DOCUMENT" means any document delivered at or subsequent to the Closing
or as provided in, or pursuant to, this Agreement;

"COMMON FUND" means the fund so named constituted by PGR employee advances,
whose proceeds have been used by PGR for working capital;

"DAY" means a calendar day;

"DECOMMISSIONING" means closure of the Plant in compliance with the requirements
of Section 7.1(e);

"DOLLARS" or "$" means the currency that is from time to time, legal tender for
the payment of all private and public debts in the United States of America;

"FIRST OPTION PAYMENT" means the amount of $2,100,000 to be paid by BGL to PGR,
or as directed by PGR, in instalments of $500,000 (which amount has already been
paid) and $1,600,000 on the Closing Date;

"GMWU" means the Ghana Mineworkers Union of the TUC (Ghana)

"GOVERNMENT" means the duly constituted government of the Republic of Ghana or
any political subdivision thereof, whether Central, Regional, District or local,
or any judicial body, agency or instrumentality of any such government or
political subdivision (and is deemed to include, for the purposes of any
required approvals to be obtained hereunder, the Bank of Ghana);

"GSR" means Golden Star Resources Ltd., which beneficially owns 90% of BGL;

"INFRASTRUCTURE MITIGATION PLAN" means an infrastructure mitigation plan,
complying with the requirements of Schedule A, designed to set out the broad
understanding of the parties as to how surface infrastructure to be impacted by
the surface mining operations to be conducted by BGL under the BGL Lease will be
mitigated to ensure that there is no significant adverse impact on the
operations of PGR pursuant to their rights under the PGR Lease;

<PAGE>
                                      -3-


"JOINT OPERATING AGREEMENT " means the agreement to be entered into between BGL
and PGR on the Closing Date, complying with the requirements of Schedule B;

"LEASE AREA" means the area of approximately 129.05 square kilometres, as more
particularly described in Schedule C;

"LICENCE" means any licence, permit, approval, right, privilege, concession or
franchise issued, granted, conferred or otherwise created by the Government;

"LOAN AGREEMENT" means a loan agreement substantially in the form attached as
Schedule D;

"MINING LEASE", "MINERAL OPERATIONS", "MINING OPERATIONS", "MINERAL RIGHT" and
"MINERALS" shall have the meanings given to such terms in PNDCL 153;

"MINISTER" means the Minister responsible for mines in the Republic of Ghana;

"MANAGEMENT AGREEMENT" means the agreement to be entered into between BGL and
PGR on the Option Closing Date, substantially in the form attached as Schedule
E;

"MINING COMMENCEMENT DATE" means the date as of which BGL commences mining
operations on the BGL Lease in the area marked as "Plant Deposit" on Exhibit A
in Schedule C;

"OPTION" means the option granted by PGR to BGL to acquire shares in PGR, as
provided in Section 6;

"OPTION CLOSING DATE" means the date specified by BGL in a notice exercising the
Option given in accordance with Section 6.1(b);

"OPTION EXERCISE DATE" means the date on which the Option is exercised;

"PERSON" shall be broadly interpreted and includes an individual, body
corporate, partnership, joint venture, trust, association, unincorporated
organization, the Government (including any agency, authority, tribunal or
commission) or any other entity recognized by law;

"PNDCL 153" means the Minerals and Mining Law, 1986 (PNDCL 153) of Ghana, as
amended;

"PGR LEASE" means the mining lease dated June 29, 2001 issued by the Government
to PGR pursuant to Section 45 of the PNDCL 153, whereby PGR has been granted
mineral rights over the Lease Area for a period of 30 years for gold and other
associated mineral substances lying and being under the 150 Metre Depth and
includes all necessary consents and ratifications to perfect PGR's title
thereunder;

"PGR RELEASE" means the Release Agreement among PGR and the Barnex Companies
dated September 28, 2001, a copy of which has been provided to BGL;

"PLANT" means PGR's existing processing plant located on the Lease Area;

"PRESTEA ASSETS" means all assets owned by SGMC which are located on the
property covered by the PGR Lease;

<PAGE>
                                      -4-


"PRESTEA MINING AREA" means the area shown on Exhibits A, B and C to Schedule C
and marked as "Prestea Mining Area";

"SHAREHOLDERS' AGREEMENT" means the shareholders' agreement to be entered into
on the Option Closing Date among BGL, GMWU, the Investors, the Trust and the
Government in respect of their relations as shareholders of PGR and the
operation of PGR's business, substantially in the form attached as Schedule G;

"SGMC" means The State Gold Mining Corporation Limited;

"TRUST" means the independent non-profit-making body to be established by BGL
for the benefit of the residents of the Bogoso -- Prestea area whose income
shall be applied (following repayment of the indebtedness to be incurred in
favour of BGL) to undertake work programs directed to infrastructure and
alternative employment and whose affairs shall be administered by a board
consisting of one BGL representative, one GMWU representative, one Government
representative and three community representatives acceptable to BGL.

                                   SECTION 2

                            SCOPE AND UNDERSTANDINGS

2.1 In order to persuade BGL to enter into this Agreement, PGR has represented
to BGL and GSR that, subject to:

        (a) being provided with funds to be used to repay advances made by its
            employees;

        (b) being provided with additional funds to be used to pay employee
            salary arrears for April and May 2001;

        (c) being provided with working capital;

        (d) restructuring its share ownership; and

        (e) rationalizing its management and work force, which PGR undertakes to
            use its best efforts to accomplish within five (5) months of the
            Closing Date.

it expects to be able to increase its production and reduce its cash costs so as
to become profitable on a gross profit basis within six months of the last in
time of such actions occurring or being taken.

2.2 Based on such representations:

        (a) the PGR Release and the Barnex Release were executed and delivered.

        (b) the parties are entering into this Agreement to provide for the
            basis on which, at a closing to be held on the Closing Date, BGL
            will make a further payment of $1,600,000 to PGR, the Infrastructure
            Mitigation Plan will be adopted by BGL

<PAGE>
                                      -5-


            and PGR, the Joint Operating Agreement shall be entered into and the
            Option shall become effective;

        (c) subsequently, the parties will use their best commercial efforts to
            fulfil their respective obligations, so that BGL will be in a
            position to exercise the Option by the Option Exercise Date;

                                    SECTION 3

                 BGL REPRESENTATIONS, WARRANTIES AND AGREEMENTS

BGL represents, warrants and agrees to and with PGR that:

        (a) BGL is a company duly incorporated, organized, and validly existing
            in good standing under the laws of Ghana. No proceedings have been
            taken or authorized by BGL or, to the best of BGL's knowledge, by
            any other Person, with respect to the bankruptcy, insolvency,
            liquidation, dissolution or winding up of BGL.

        (b) BGL has all necessary power and capacity to execute and deliver, and
            to observe and perform its covenants and obligations under, the
            Agreement and the documents to be delivered hereunder to which it is
            or will be a party ("BGL Documents"). BGL has taken all corporate
            action necessary to authorize the execution and delivery of, and the
            observance and performance of its covenants and obligations under,
            the Agreement and the BGL Documents.

        (c) This Agreement has been, and each BGL Document will on Closing be,
            duly executed and delivered by BGL, and this Agreement constitutes,
            and each BGL Document will on Closing constitute, a valid and
            binding obligation of BGL enforceable against BGL in accordance with
            its terms.

        (d) None of the execution and delivery of, or the observance and
            performance by BGL of, any covenant or obligation under, the
            Agreement and the BGL Documents contravenes or results in (with or
            without the giving of notice or lapse of time, or both) or will
            contravene or violate in any material respect or result in any
            material breach or default of, or acceleration of any obligation
            under:

                (i)   any Applicable Law;

                (ii)  the Regulations, directors' or shareholders' resolutions
                      of BGL;

                (iii) any agreement, lease, mortgage, security document,
                      obligation or instrument to which BGL is a party or by
                      which BGL or its assets is affected or bound.

        (e) No consent, approval, authorization, registration or declaration of,
            or filing with, the Government is required by BGL in connection with
            (i) the Closing; (ii) the execution and delivery by BGL of this
            Agreement or any BGL Document, or (iii)

<PAGE>
                                      -6-


            the observance and performance by BGL of its obligations under this
            Agreement or any BGL Documents.


                                    SECTION 4

                 PGR REPRESENTATIONS, WARRANTIES AND AGREEMENTS

PGR represents, warrants and covenants to and with BGL that:

        (a) the first instalment of the First Option Payment was used solely for
            the purposes of satisfying employee salary arrears.

        (b) PGR is a company duly incorporated, organized, and validly existing
            in good standing under the laws of Ghana. No proceedings have been
            taken or authorized by PGR or, to the best of PGR's knowledge, by
            any other Person, with respect to the bankruptcy, insolvency,
            liquidation, dissolution or winding up of PGR.

        (c) PGR has all necessary power and capacity to execute and deliver, and
            to observe and perform its covenants and obligations under, the
            Agreement and the documents to be delivered hereunder ("PGR
            Documents"). PGR has taken all corporate action necessary to
            authorize the execution and delivery of, and the observance and
            performance of its covenants and obligations under, the Agreement
            and the PGR Documents.

        (d) This Agreement has been, and each PGR Document delivered on the
            Closing Date and the Option Closing Date will be, duly executed and
            delivered by PGR, and this Agreement constitutes, and each PGR
            Document will on Closing constitute, a valid and binding obligation
            of PGR enforceable against PGR in accordance with its terms.

        (e) None of the execution and delivery of, or the observance and
            performance by PGR of, any covenant or obligation under, the
            Agreement and the PGR Documents contravenes or results in (with or
            without the giving of notice or lapse of time, or both) or will
            contravene or violate in any material respect or result in any
            material breach or default of, or acceleration of any obligation
            under:

                (i)   any Applicable Law;

                (ii)  the Regulations, directors' or shareholders' resolutions
                      of PGR;

                (iii) any agreement, lease, mortgage, security document,
                      obligation or instrument to which PGR is a party or by
                      which PGR or its assets is affected or bound.

<PAGE>
                                      -7-


        (f) No consent, approval, authorization, registration or declaration of,
            or filing with, the Government is required by PGR in connection with
            (i) the Closing; (ii) the execution and delivery by PGR of this
            Agreement or any PGR Document, or (iii) the observance and
            performance by PGR of its obligations under this Agreement or any
            PGR Documents.

        (g) PGR has all necessary power and authority to own or lease its assets
            and to carry on all activities as it presently carries on. PGR
            possesses all licences, permits and authorizations material to the
            conduct of all activities as it presently carries on.

        (h) The authorized capital of PGR consists of one billion common shares,
            of which 200,000 common shares have been validly issued and are
            outstanding as fully paid and non-assessable shares, of which
            200,000 shares have been issued to GMWU;

        (i) No person, other than BGL, has any oral or written agreement,
            option, warrant, right, privilege or any other right capable of
            becoming any of the foregoing (whether legal, equitable, contractual
            or otherwise), for the purchase, subscription or issuance of any
            unissued securities of the Company.

        (j) PGR has conducted and is conducting its activities in compliance
            with all Applicable Laws, and not in breach of any Applicable Laws
            except for breaches which in the aggregate are not material to PGR.

        (k) Except for the matters in respect of which the Barnex Release and
            PGR Release were delivered, there is no claim, demand, suit, action,
            cause of action, dispute, proceeding, litigation, investigation,
            grievance, arbitration, governmental proceeding or other proceeding
            including appeals and applications for review, in progress against,
            by or relating to PGR nor are any of the same pending or threatened.
            PGR is not aware of any state of facts which would provide a valid
            basis for any of the foregoing.

        (l) PGR has not given nor agreed to give, and is not a party to or bound
            by, any guarantee of indebtedness or other obligations of third
            parties nor any other commitment by which PGR is, or is
            contingently, responsible for such indebtedness or other
            obligations.

        (m) PGR shall use the proceeds from the second instalment of the First
            Option Payment to repay the advances made to the Common Fund and to
            acquire the working capital items set out in Schedule G.

                                    SECTION 5

                                     CLOSING

At a closing to be held at the offices of BGL in Accra, Ghana commencing at 2:00
PM on the Closing Date:

<PAGE>
                                      -8-


        (a) PGR shall have established the Restricted Account, the signatories
            of which will be two signatories nominated by PGR and one signatory
            nominated by BGL. BGL shall have the right at its sole discretion to
            only sign off on disbursements from the Restricted Account when it
            has been satisfied that the disbursements from the Restricted
            Account are being made for the purpose intended as set out in
            Section 4(m);

        (b) BGL shall pay $1,600,000 to PGR in immediately available funds to be
            deposited into a restricted account (the "Restricted Account") as
            the second installment of the First Option Payment;

        (c) each party shall confirm to the other that the Infrastructure
            Mitigation Plan to be initialled for identification is in form
            acceptable to each of them and will remain in force unless and until
            amended by further agreement;

        (d) the Joint Operating Agreement will be executed and delivered by the
            parties;

        (e) PGR will acknowledge to BGL that the First Option Payment has been
            paid in full;

        (f) each of the conditions precedent for BGL's benefit set out in
            Section 9 shall be satisfied or waived; and

        (g) such other actions shall be taken and documents delivered as the
            parties may agree to be necessary or desirable.

                                   SECTION 6

                                     OPTION

6.1 GRANT OF OPTION

PGR hereby irrevocably grants to BGL the option ("Option") to purchase shares of
PGR ("Optioned Shares") constituting 35% of PGR's issued share capital at the
date of issue (after giving effect to the exercise of the Option), on the
following terms and conditions:

        (a) the date ("Option Exercise Date") by which the Option must be
            exercised, failing which it will lapse and terminate, is the date
            which is the latest to occur of (1) the 180th day after the Closing
            Date, (2) the date as of which the Plant shall have been demolished
            and the Mining Commencement Date have occurred, and (3) the first
            anniversary of the Closing Date if the requirement of subclause (2)
            shall not have been satisfied by the date specified in such
            subclause; provided that PGR shall be entitled to give notice to BGL
            at any time following the Closing Date that the Plant is available
            for Decommissioning, in which event the Option Exercise Date shall
            be the later to occur of (1) the 180th day after the Closing Date
            and (2) the 90th day after receipt of such notice.

<PAGE>
                                      -9-


        (b) the Option shall be exercised by written notice ("Exercise Notice")
            to be given not later than 5:00 PM on the Option Exercise Date
            specifying a closing date ("Option Closing Date") which shall be not
            more than 10 days after the date of the Exercise Notice;

        (c) following the delivery of an Exercise Notice, BGL shall be
            irrevocably bound to complete its purchase of the Optioned Shares,
            subject only to compliance by PGR with its obligations and the
            performance by GMWU (as described below), the Trust (as described
            below) and the Government of their respective obligations;

        (d) for greater certainty, in the event that BGL fails to exercise its
            Option prior to the Option Exercise Date, BGL's right to a
            shareholding in, and management contract with, PGR shall lapse and
            PGR shall be entitled to grant similar rights to other investors;

        (e) the purchase price shall of the Optioned Shares shall be $4,000,000,
            being the aggregate of the First Option Payment and a further
            payment ("Second Option Payment") of $1,900,000, which shall be
            payable in immediately available funds to PGR on the Option Closing
            Date;

        (f) the purchase price shall be credited to PGR's shareholders' capital
            account, as to $1,750,000 to the credit of BGL, as to $1,750,000 to
            the credit of the GMWU and, as to the balance of $500,000, to the
            credit of the Trust;

        (g) the amounts so credited to the GMWU and the Trust shall constitute
            advances made by BGL to PGR on their behalf, repayable
            preferentially out of dividends to GMWU and the Trust in accordance
            with the Loan Agreement to be entered into by each of them with BGL
            on the Option Closing Date;

        (h) the proceeds of the Second Option Payment (following the
            satisfaction of all salary arrears and Common Fund claims) will be
            used by PGR solely for the purpose of paying terminal benefits to
            PGR's workforce, whose employment will be terminated effective no
            later than the Option Closing Date, it being understood and agreed
            that they will then be selectively rehired to constitute an optimal
            workforce whose make-up will be determined by PGR in consultation
            with BGL;

        (i) in the event the parties determine that the rationalization of PGR's
            workforce prior to the Option Closing Date is desirable having
            regard to the best interests of the parties, the workforce and the
            community as a whole, BGL may, in accordance with an agreement to be
            entered into with PGR as to the number of severances and the amount
            of benefits, advance by way of loan prior to the Option Date on
            account of the Second Option Payment an amount not exceeding
            $1,900,000 to fund the rationalization costs, such loan to be
            secured by a first charge of the PGR Lease, to be non-interest
            bearing until the 180th day after the Second Closing Date and
            thereafter to bear interest at LIBOR plus 3% unless and until the
            later of repayment on the Option Closing Date or repayment on the
            first anniversary of the Closing Date;

<PAGE>
                                      -10-


        (j) following the Option Exercise Date, selected individual Ghanaian
            investors of high repute (the "Investors") acceptable to PGR and the
            Shareholders will be offered up to 10% of PGR's shares for an
            aggregate subscription price of $500,000, provided that the
            Investors undertake to become a party to the Shareholders Agreement;
            any of such shares not so subscribed for within three months of the
            Option Exercise Date will be subscribed and paid for at the same
            price per share equally by BGL and GMWU on the Option Closing Date;
            provided that, in the event that either of BGL or GMWU does not
            subscribe for any of the shares offered to it, the other party may
            subscribe and pay for all the shares not subscribed for by the
            Investors;

        (k) prior to the Option Exercise Date, PGR shall establish the Trust
            and, commencing on the Option Closing Date, BGL shall hold 10% of
            the PGR shares for the benefit of the Trust; it being agreed that
            BGL shall irrevocably be entitled to exercise all voting rights with
            respect to such PGR shares; and

        (l) the shareholdings of PGR following the Option Closing Date shall,
            assuming the participation of the Investors, be:

<TABLE>
<CAPTION>
<S>                                                       <C>
                      BGL                  -              35%
                      GMWU                 -              35%
                      BGL in Trust         -              10%
                      Investors            -              10%
                      Government           -              10%
</TABLE>

6.2 OPTION CLOSING

On the Option Closing Date a closing shall occur at the offices of BGL at Accra,
Ghana commencing at 2:00 PM at which:

        (a) BGL shall make the Second Option Payment in immediately available
            funds;

        (b) the Investors and/or BGL/GMWU shall pay an aggregate of $500,000 as
            the subscription price for shares constituting 10% of PGR's share
            capital;

        (c) certificates shall be issued to BGL, GMWU, the Trust, the Investors
            and the Government (collectively, the "Shareholders") for the number
            of shares to be issued to them in accordance with the foregoing
            provisions of this Section 6;

        (d) the Shareholders shall enter into the Shareholders' Agreement;

        (e) the Shareholders shall appoint a board of directors of PGR complying
            with the requirements of the Shareholders' Agreement;

        (f) the newly appointed directors shall meet for the purposes of
            appointing officers, authorizing the execution of all required
            agreements and dealing with all such other business as may be
            required such that PGR shall comply in all respects with the
            requirement of the Shareholders' Agreement;

<PAGE>
                                      -11-


        (g) each of the conditions precedent for BGL's benefit set out in
            Section 9 shall be satisfied or waived, except to the extent they
            were satisfied or waived on the Closing Date; and

        (h) all such other documents shall be executed and delivered and actions
            taken as may be required to give effect to the foregoing provisions
            of this Section 6.

                                    SECTION 7

                               COMPANY MANAGEMENT

7.1 INFRASTRUCTURE MITIGATION PLAN

The parties recognize the importance of, and need for, the adoption and
implementation of an Infrastructure Mitigation Plan ("Plan") designed to
minimize the impact of surface mining operations to be conducted by BGL under
the BGL Lease. In that regard:

        (a) on an interim basis, the parties have adopted the Plan attached as
            Schedule A;

        (b) PGR hereby grants BGL the right to acquire for $1.00 such of the
            Prestea Assets that BGL is required to replace or relocate as a
            result of the implementation of the Plan; provided that (i) such
            replaced or relocated assets shall become the property of PGR, and
            (ii) BGL may acquire title to such replaced or relocated assets by
            paying to PGR an amount not in excess of the consideration paid by
            PGR to SGMC to acquire them plus reasonable expenses incurred in the
            acquisition;

        (c) PGR agrees to transfer to BGL, for nominal consideration, such of
            the Prestea Assets as are agreed between the parties to be necessary
            for BGL's own operations by a transfer agreement in form and
            substance satisfactory to the parties;

        (d) BGL shall be entitled to realize whatever value possible, directly
            or indirectly, from the Prestea Assets acquired by it in accordance
            with clause (b) to defray its costs and expenses incurred in
            executing the Plan;

        (e) with regard to the Plant, BGL will be obligated to make available to
            PGR, so as to permit surface mining operations, alternative
            processing facilities ("Alternative Facilities") and will use its
            best commercial endeavours to provide such Alternative Facilities
            prior to Decommissioning. The Alternative Facilities will consist
            of, at BGL's option but subject to PGR's approval, not to be
            unreasonably withheld, either the relocation of the Plant or the
            acquisition and upgrading, with the use of existing plant equipment,
            of the processing plant currently used by Prestea Sankofa Gold
            Limited, subject to its being available for this purpose. In this
            regard:

                (i)   Decommissioning shall occur on a date to be agreed on
                      between the parties but, in any event, shall not be more
                      than two days after ore has ceased to be delivered to the
                      Plant;

<PAGE>
                                      -12-


                (ii)  immediately following Decommissioning, BGL will have the
                      right to secure the Plant. PGR employees will be granted
                      access, on a 24-hour basis, for seven consecutive days
                      immediately thereafter in order to effect a clean-up of
                      the Plant and its inventories. During this period, PGR
                      employees shall have the right to process any gold-bearing
                      material in order to produce a smelted product ("Gold
                      Dore"). Only Gold Dore and left-over reagents, inclusive
                      of loaded carbon, will remain the property of PGR and may
                      be removed during the aforementioned seven-day period.
                      After such seven-day clean-up period, any remaining
                      materials will become the property of BGL; and

                (iii) BGL shall have the right to monitor all clean-up
                      operations conducted by PGR after Decommissioning.
                      Physical clean-up may be conducted on all machinery and
                      structures within the Plant boundary, provided such
                      cleaning actions are non-destructive, and provided no
                      dismantling or disassembly of any equipment takes place.
                      No cleaning may take place which, in BGL's opinion, will
                      physically alter, degrade or render unserviceable any
                      civil or mechanical structure;

        (f) the Alternative Facilities shall be constructed with due regard to
            the metallurgical flowsheet, capacity and performance of the Plant
            and their designed overall unit cost per tonne shall not be more
            than and, recovery shall not be less than, those of the Plant;

        (g) the Alternative Facilities shall, until the Mining Commencement
            Date, be and remain the property of BGL and shall be made available
            to PGR for so long as it needs them without charge; provided that
            (i) PGR shall be responsible for maintaining the Alternative
            Facilities in good repair and operating condition, and (ii) shall
            not be entitled to modify them without BGL's prior consent, not to
            be unreasonably withheld;

        (h) On the Mining Commencement Date, BGL shall transfer the Alternative
            Facilities to PGR for a purchase price equal to the difference
            between (i) the cost of the Alternative Facilities, and (ii) the
            price paid by PGR or BGL to SGMC for the Plant. The purchase
            consideration shall be a non-interest bearing demand loan note
            re-payable on December 31, 2999 secured by a fixed charge over the
            Alternative Facilities.

        (i) for the duration of the period when neither the Plant nor the
            Alternative Facilities is available for processing ore, BGL will
            treat ore mined by PGR on a toll processing basis under the terms
            and conditions set out in Schedule I; and

        (j) the parties may agree to continue such toll processing arrangement
            in lieu of BGL making the Alternative Facilities available.

<PAGE>
                                      -13-


7.2 JOINT OPERATING AGREEMENT

The parties recognize the need for an agreement ("Joint Operating Agreement")
which shall set out the protocols and procedures to be observed by BGL and PGR
in the day-to-day operations of their surface and underground mining operations
on the Lease Area. In that regard:

        (a) the provisions of the Joint Operating Agreement shall include, but
            not be limited to, safety, communication between the parties,
            access, disturbances, mitigation of disturbances, air and water
            ingress to the underground mine from the surface excavations,
            blasting operations, notification of blasting operations, survey and
            notification of underground openings, community relations,
            confidentiality, statements to the media, joint emergency response,
            security operations,

        (b) the contents of Schedule B, the Joint Operating Agreement, shall
            form the basis for the parties' discussions and negotiations as to
            its terms; and

        (c) the parties shall prosecute such discussions and negotiations, so
            that the terms of the Joint Operating Agreement shall have been
            settled not later than the Second Closing Date.

7.3 MANAGEMENT AGREEMENT

It is further agreed that, so long as BGL is the holder of at least 30% of PGR's
outstanding shares, it will be entitled to provide PGR with management services
under a management agreement ("Management Agreement"). In that regard:

        (a) under the Management Agreement, BGL shall be responsible for the
            day-to-day management, conduct and control of the operations of PGR,
            subject to approved work plans and budgets and the direction of the
            board of directors of PGR; BGL shall have the exclusive right and
            obligation to execute and carry out all approved work plans and
            budgets; BGL shall keep adequate records of accounts and operations
            and will keep the board of directors of PGR advised of all
            operations by submitting to them monthly progress reports and
            quarterly financial reports containing technical, financial,
            commercial and legal information concerning the project; BGL shall
            ensure that operations are conducted in accordance with (i) the
            terms and conditions of any applicable mining title and any
            legislative and regulatory requirements applicable to BGL and its
            business, and (ii) good mining industry practices, including such
            requirements as may be applicable to safety, community relations and
            environmental rehabilitation; and

        (b) the Management Agreement shall be in substantially the form attached
            as Schedule E.

7.4 WORKFORCE

In connection with PGR's workforce, it is agreed that joint consultation and
agreement will be required as to:

<PAGE>
                                      -14-


        (a) the timing, extent and implementation of any rationalization,
            severance or redundancy of the PGR workforce as well as the
            calculation of the severance benefits; and

        (b) the optimal workforce that will be required following the
            rationalization, the employees to be reemployed and the remuneration
            benefits of their new engagement, it being understood and agreed
            that, in the first instance past employees of PGR will be given
            first preference for any new engagements provided that they have the
            requisite qualifications, skills, and experience.

7.5 SHAREHOLDERS' AGREEMENT

It is agreed that the relations between the Shareholders as shareholders of PGR
and the management of PGR with effect from the Option Closing Date will be
governed by the Shareholders' Agreement. BGL will, at the appropriate time
having regard to the Option Exercise Date, prepare a draft Shareholders'
Agreement which shall form the basis for the required discussions and
negotiations, such that the Shareholders' Agreement can be executed on the
Option Closing Date.

                                    SECTION 8

                                OTHER AGREEMENTS

8.1 CONDUCT OF BUSINESS

From the date hereof until the Option Closing Date, PGR shall conduct its
operations (including its mining operations) within the Lease Area in the
ordinary course of business and, without the prior written consent of BGL, shall
not (i) waive, or agree to waive, any right it may have in the Lease Area or the
PGR Lease, (ii) sell, dispose of or otherwise transfer any rights it may have in
the Lease Area or the PGR Lease (iii) incur liabilities or make expenditures,
other than in the ordinary course of business, in an amount individually or in
the aggregate in excess of $10,000, (iv) make, or agree to make, any loan or
advance to its shareholder, or any of its officers, directors, employees,
consultants, agents or other representatives, or make any other loan or advance
of any type whatsoever otherwise than in the ordinary course of business, (v)
grant any person a security interest in, suffered the incurrence of any lien
upon, or otherwise encumber, the Lease Area or the PGR Lease, or (vi) incur or
guarantee any indebtedness for borrowed money or the like and shall notify BGL
within three business days after it has knowledge of any actions or proceedings
of any type whatsoever that, from the date hereof, are threatened or commenced
against PGR or in respect of the Lease Area or the PGR Lease.

8.2 DUE DILIGENCE

Prior to the Option Exercise Date, BGL shall be entitled, through its employees
and authorized representatives, to continue its investigation of the Lease Area
(including any technical information relating to the Lease Area) and the other
assets, properties, business and operations of PGR and to continue its
examination of the books, records and financial condition of PGR,

<PAGE>
                                      -15-


and for this purpose shall have the right to enter the Lease Area. Any such
investigation and examination shall be conducted at reasonable times and under
reasonable circumstances and PGR and its directors, officers and employees shall
cooperate fully therein.

8.3 BUESICHEM

From the date hereof until the Closing Date, BGL shall, subject to any required
governmental approvals, have the sole and exclusive working right at its sole
cost and risk to enter on and conduct mining operations, on that portion of the
Property that is known in Ghana as the Buesichem area (the "Buesichem Area"),
the boundaries of which are delineated in red on the plan of the Property
attached hereto as Exhibit B to Schedule C, as BGL in its sole and absolute
discretion may decide. BGL shall have quiet and exclusive possession of the
Buesichem Area from the date of this Agreement until the Closing Date, with,
subject to any required governmental approvals, full power and authority to BGL,
its servants, agents, workers or contractors, to carry on mining operations in
such manner as BGL in its sole and absolute discretion may determine, including
the right to erect, bring and install within the Buesichem Area all buildings,
plant, machinery, equipment, tools, appliances or supplies as BGL shall deem
necessary and proper to prepare the Buesichem Area for mining immediately after
the Closing, and the right to remove from the Buesichem Area reasonable
quantities of rocks, ores and minerals and to transport them for the purposes of
sampling, metallurgical testing and assaying. All mining operations conducted by
BGL shall be in accordance with good exploration, development and mining
practices recognized in Ghana, and in compliance with the terms of the PGR Lease
or any successor or other mineral right then in effect and all applicable laws.
In the event that this agreement is terminated for any reason whatsoever prior
to the Closing Date, BGL's liability to rehabilitate the Buesichem Area shall be
limited to its own activity and any undertakings made in the application for the
required governmental approvals. In the event that the termination was for any
reason other than a default or breach of the agreement by BGL, then BGL shall
make no payment to PGR in respect of any gold mined from the Buesichem area
prior to the Closing Date.

8.4 SIGNPOSTING

PGR shall put up signposts (to be provided by BGL) within the Prestea Mining
Area, to put on notice any third party, that, as provided for by PNDCL 153,
farming and building are not permitted within the Prestea Mining Area, other
than with the permission of the lease holder. PGR shall regularly consult with
BGL on the actions to be taken within the Prestea Mining Area, including the
number and nature of the signposts that are customarily required in Ghana to
prevent squatters and other third parties from invading the Prestea Mining Area.

PGR shall, at the Closing Date, provide BGL with the details of any farming,
building or small scale mining on the Prestea Mining Area, that has been
authorized by PGR during the period from January 1, 1999 through the Closing
Date. From the Closing Date, PGR shall not authorize any further farming,
building or small-scale mining on the Prestea Mining Area, other than as
provided for in the Joint Operating Agreement.

<PAGE>
                                      -16-


8.5 SHAREHOLDER APPROVAL

PGR shall submit this Agreement and the transactions contemplated hereby to its
shareholders on terms whereby the board of directors shall recommend to the
shareholders that this Agreement and the transactions contemplated hereby be
approved, pursuant to the laws of Ghana. Notice of the approval of the PGR
shareholders contemplated in this clause shall be communicated to BGL in
writing. PGR shall provide to BGL written evidence of shareholder approval
substantially in the form attached as Schedule K.

8.6 NO SOLICITING

PGR shall not, nor shall it permit, any of its subsidiaries or any officer,
director, employee or any investment banker, attorney, accountant or other agent
retained by PGR or any of its subsidiaries to, initiate or solicit, directly or
indirectly, inquiries or the making of any proposal with respect to, or engage
in negotiations concerning, provide any confidential information or data to, or
have any discussions with, any person relating to, any acquisition, business
combination or purchase of all or any significant portion of the assets
(including the PGR Lease and the Property) of, or any equity interest in, PGR or
its subsidiaries, or otherwise facilitate any effort or attempt to do or seek
any of the foregoing. PGR shall notify BGL immediately if any such inquiries or
proposals are received by, any such information is requested from, or any such
negotiations or discussions are initiated or continued with, PGR.

8.7 COVENANTS

After the Closing Date and until the Option Closing Date, PGR shall not, without
the prior written consent of BGL:

        (a) accept any investment in any form whatsoever (including in the form
            of stock purchases or loans) by its then employees, directly or
            indirectly, in PGR or in the underground mining operations conducted
            within the Property;

        (b) issue any securities;

        (c) sell, transfer, convey or assign any assets having a value of more
            than $5,000 on an individual basis or $25,000 in the aggregate;

        (d) incur any debts outside of the ordinary course of business or in
            excess of $25,000;

        (e) give, or become a party to or bound by, any guarantee of
            indebtedness or other obligations of third parties or any other
            commitment by which PGR may become responsible for such indebtedness
            or other obligations;

        (f) enter into any new contracts, agreements, leases, obligations, or
            commitments which are not terminable on 30 days notice without
            penalty.

<PAGE>
                                      -17-


8.8 REORGANIZATION

PGR shall use its best commercial efforts to restructure its shareholder
holdings so that BGL will be able to exercise the Option, in accordance with its
terms, not later than the Option Exercise Date.

8.9 SCOPING STUDY

Subject to the Option being exercised in accordance with its terms, PGR shall
prepare and complete the Scoping Study using the $500,000 of funding provided by
the investment by the Investors and/or BGL/GMWU from the subscription for the
10% of the BGL equity, to compile , under BGL's supervision, all the past
underground mining records and plans with respect to the Property as the first
phase prior to a decision to commence a more detailed feasibility study to
assess the longer term potential for a new underground mining development within
the Property.

8.10 PUBLIC RELATIONS

BGL and PGR shall jointly cooperate with Barnex and GMWU to communicate with and
sensitize the local leaders and opinion makers to the benefits to the local
community of the transactions contemplated hereby. BGL and PGR shall jointly
issue a written release to the local press explaining the benefits to the local
community at Prestea of the transactions contemplated hereby.

8.11 PGR BOARD REPRESENTATIVE

For the duration of the period commencing with the Closing Date and ending on
the Option Closing Date, BGL shall be entitled to nominate one member of PGR's
board of directors.

8.12 RIGHT OF SET-OFF

        (a) BGL shall have the right to deduct from any monies payable to PGR
            pursuant to Section 5 (b) and Section 6.2 (a) and (b) the sum of any
            amounts owing to BGL and its affiliates by PGR at the respective
            payment dates (unless and to the extent that the parties have agreed
            to rescheduled payment dates).

        (b) BGL may deliver to PGR at the Closing Date up to $500,000 of working
            capital and spare parts items from the list itemized in Schedule J.
            The value of the working capital and spare parts delivered shall be
            deducted from the monies payable to PGR on the Closing Date pursuant
            to Section 5 (b).

                                    SECTION 9

                              CONDITIONS PRECEDENT

9.1 CONDITIONS PRECEDENT TO BGL'S OBLIGATIONS AT CLOSING

BGL's obligation to enter into and complete the Closing and, to the extent
applicable, complete its exercise of the Option on the Option Closing Date shall
be subject, at its option, to the

<PAGE>
                                      -18-


fulfillment of the following conditions (any of which may be waived in whole or
in part by BGL):

        (a) all permits and approvals (including, without limitation, the
            approval of the Government, the approval of the shareholders of PGR
            and any applicable regulatory and stock exchange approvals),
            required for the Closing (which term shall be deemed to mean and
            refer to the closing provided for on the Closing Date or the closing
            provided for on the Option Closing Date as the context requires)
            shall have been obtained;

        (b) PGR shall have set up the Restricted Account as contemplated in
            Section 5(a);

        (c) the representations and warranties of PGR contained in this
            Agreement being true and correct on the Closing Date (which term
            shall be deemed to mean and refer to the Closing Date or the Option
            Closing Date as the context requires);

        (d) there being no material change in the business, affairs or financial
            condition of PGR between the date of this Agreement and the Closing
            Date; the understanding of the parties of the total liabilities and
            obligations of PGR as at the date of signing of this Agreement being
            appended as Schedule F;

        (e) receipt of a legal opinion from Ghanaian counsel to PGR dated the
            Closing Date, together with any required confirmations by the
            Government substantially in the form attached as Schedule J;

        (f) all consents, permits and approvals from parties to any contracts or
            other agreements with PGR that may be required in connection with
            the performance by PGR of its obligations under this Agreement as at
            the Closing Date shall have been obtained;

        (g) as at the Closing Date, no action, suit, or proceeding involving PGR
            shall have been instituted before any court or governmental or
            regulatory body, or instituted or threatened by any governmental or
            regulatory body, to restrain, modify or prevent the carrying out of
            the transactions contemplated hereby, or to seek damages or a
            discovery order in connection with such transactions, or that has or
            may have a materially adverse effect on the assets, prospects or
            financial position of PGR;

        (h) all of the covenants and obligations that PGR is required to perform
            or to comply with pursuant to this Agreement at or prior to the
            Closing Date (considered collectively) and each of these covenants
            (considered individually), shall have been performed or complied
            with in any and all respects;

        (i) BGL and its advisors shall have been provided full access to PGR's
            accounting and other records, and its personnel, for the purpose of
            completing a due diligence review of PGR's financial situation at
            the Closing Date.

<PAGE>
                                      -19-


        (j) the PGR directors and shareholders shall undertake, prior to the
            Option Exercise Date, in accordance with Section 134 of the
            Companies Code, to remove its present auditors and to appoint
            PricewaterhouseCoopers, or such other international firm of
            accountants agreed in writing by the parties, as auditors to PGR in
            their place, unless BGL determines, acting reasonably, that PGR's
            present auditors are recognized internationally as having equivalent
            stature to PricewaterhouseCoopers;

        (k) the Government shall have transferred the Prestea Assets for nominal
            consideration to PGR;

        (l) PGR shall have executed and delivered the transfers and other
            documents required to comply with the requirements of clauses (b)
            and (c) of Section 7.1;

        (m) the Government shall have agreed, in form and substance satisfactory
            to BGL in its sole and absolute discretion, to indemnify PGR and its
            shareholders from and against any and all liabilities and
            obligations incurred on or before the Closing Date with respect to
            the Lease Area and any and all pre-existing liabilities and
            obligations at the Closing Date, other than operating losses;

        (n) the Government shall have agreed, in form and substance satisfactory
            to BGL in its sole and absolute discretion, to indemnify PGR and its
            shareholders for a period of five years from the Closing Date from
            and against any and all liabilities with respect to the Lease Area
            that may not currently comply with BGL's and GSR's internal
            standards or to the relevant Ghanaian laws and regulations, it being
            agreed that, during such period, PGR will endeavour through a
            process of continuous improvement to achieve conformance to the
            relevant standards, laws and regulations;

        (o) The Government shall have granted an Environmental Permit to BGL
            approving the commencement of mining activities from the area known
            generally as Buesichem, or waived in writing, in form and substance
            satisfactory to BGL in its sole and absolute discretion, the
            application of any and all environmental assessment requirements of
            any applicable environmental law of Ghana.

        (p) the Volta River Authority shall confirm the existence of a pending
            lawsuit against PGR but shall not have instituted any new lawsuit
            for the recovery of outstanding electricity charges and will have
            agreed in writing, in form and substance satisfactory to BGL in its
            sole and absolute discretion, to relocate at BGL's cost the power
            lines located on a portion of the Lease Area known as the
            "Plant/North deposit" to a location acceptable to BGL in its sole
            and entire discretion;

        (q) The Electricity Company of Ghana, the Volta River Authority and/or
            the Government shall have agreed, in form and substance satisfactory
            to BGL in its sole and absolute discretion, to make the power supply
            of any mine located within the Lease Area independent from the power
            supply of the town of Prestea;

<PAGE>
                                      -20-


        (r) PGR shall have perfected, to the satisfaction of BGL at its sole and
            absolute discretion, all matters with respect to its formation;
            annual returns, reports and filings to Government; audited financial
            statements; and shareholder structure; and

        (s) BGL and PGR shall have entered into a non-competition agreement
            pursuant to which PGR shall agree not to compete with BGL with
            respect to the acquisition, directly or indirectly, of any interest
            in Prestea Sankofa, or in that certain mining lease granted on May
            12, 1994, by the Government to Prestea Sankofa or any other rights
            of Prestea Sankofa with respect to the Property.

9.2 CONDITIONS PRECEDENT TO PGR'S OBLIGATIONS AT CLOSING

PGR's obligation to enter into and complete the Closing and, to the extent
applicable, complete its exercise of the Option on the Option Closing Date shall
be subject, at its option, to the fulfillment of the following conditions (any
of which may be waived in whole or in part by PGR):

        (a) All permits and approvals (including, without limitation, the
            approval of the Government, the approval of the shareholders of PGR
            and any applicable regulatory and stock exchange approvals),
            required for the Closing (which term shall be deemed to mean and
            refer to the closing provided for on the Closing Date or the closing
            provided for on the Option Closing Date as the context requires)
            shall have been obtained.

        (b) The representations and warranties of BGL contained in this
            Agreement being true and correct on the Closing Date (which term
            shall be deemed to mean and refer to the Closing Date or the Option
            Closing Date as the context requires); and

        (c) All of the covenants and obligations that PGR is required to perform
            or to comply with pursuant to this Agreement at or prior to the
            Closing Date (considered collectively) and each of these covenants
            (considered individually), shall have been performed or complied
            with in any and all respects.

                                   SECTION 10

                                     GENERAL

10.1 PUBLIC ANNOUNCEMENTS

Except as and to the extent required by applicable law or stock exchange rules
and regulations, without the prior written consent of the other party, neither
party will, and each will direct its representatives not to make, directly or
indirectly, any public comment, statement or communication with respect to, or
otherwise to disclose or to permit the disclosure of the existence of any
discussions regarding, a possible transaction between the parties or any of the
terms, conditions or other aspects of the transactions provided for in this
Agreement. If a party is

<PAGE>
                                      -21-


required by applicable law or stock exchange rules and regulations to make any
such disclosure, it must provide the other party the content of the proposed
disclosure, the reasons that such disclosure is required by law, and the time
and place that the disclosure will be made as well as a reasonable opportunity
to comment on such disclosure. It is however understood and agreed by the
parties that, notwithstanding anything to the contrary herein, this transaction
will be material to GSR and therefore in accordance with its stock exchange
rules and regulations will have to be released. GSR will allow BGL and PGR a
reasonable amount of time to review and comment on the content of the release.

10.2 ASSIGNMENT

BGL may assign in whole or in part its rights and obligations under this
Agreement to any of its affiliates that are ultimately controlled by GSR. In
such event, BGL will remain liable for all its obligations under this Agreement
after such assignment as if such assignment had not taken place. Except as
provided herein, neither BGL nor PGR may assign any of their rights or
obligations hereunder without the prior written consent of the other party,
which consent may not be unreasonably withheld.

10.3 APPROVALS

PGR shall use its reasonable commercial efforts to (i) assist BGL in obtaining
the approval of any third party to any of the transactions contemplated in this
agreement, and the consent of the Government to this Agreement, and (ii) cause
the conditions in Section 9 to be satisfied on or before the Closing Date and
the Option Closing Date, respectively.

10.4 PROGRESS UPDATES

The parties shall at all times keep each other informed of all its efforts in
the implementation of its obligations hereunder.

10.5 TERMINATION

This Agreement may be terminated by notice given at or prior to the Closing
Date:

        (a) by either party if the other has committed a material breach of any
            provision of this Agreement and such breach has not been waived;

        (b) by BGL if any of the conditions precedent to its obligation to
            complete the Closing has not been satisfied as of the Closing Date
            or if satisfaction of such condition is or becomes impossible and
            BGL has not waived such condition on or before the Closing Date;

        (c) by mutual consent;

        (d) by either party, if the other, or its controlling shareholder,
            becomes insolvent, bankrupted, files a petition seeking to take
            advantage of any other law relating to

<PAGE>
                                      -22-


            bankruptcy, insolvency, reorganization, or winding-up, makes a
            general assignment for the benefits of its creditors, or admits in
            writing its inability to pay its debts as they become due;

        (e) by either party, if the Closing has not occurred (other than through
            the failure of the party seeking to terminate to comply fully with
            its obligations) on or before the Closing Date; and

        (f) by BGL in the event that the written approvals by PGR's directors
            and shareholders, in the form provided for in Schedule K, shall not
            have been provided to BGL by 5:00 PM on the fifth business day
            following the date of the execution of this Agreement.

10.6 REMEDIES

Each party's right of termination is in addition to any other rights it may have
under this Agreement or otherwise, and the exercise of a right of termination
will not be an election of remedies. If this Agreement is terminated, all
further obligations and liabilities of the parties under this Agreement will
terminate, save and except as may be otherwise specified in this Agreement;
provided, however, that if this Agreement is terminated by a party because of a
breach of the Agreement by the other party or because one or more of the
conditions to the terminating party's obligations under this Agreement is not
satisfied as a result of the other party's failure to comply with this
obligations under this Agreement, the terminating party's right to pursue all
legal remedies will survive such termination unimpaired.

10.7 COSTS

Each party will be responsible for and bear all of its own costs and expenses
(including, without limitation, any broker's or finder's fees and the expenses
of its representatives) incurred at any time in connection with pursuing,
negotiating and consummating the transactions contemplated hereby. Each party
will indemnify, defend and hold harmless the other against the claims of any
brokers or finders claiming by, through or under the indemnifying party.

10.8 PGR INDEMNITY

PGR hereby agrees to indemnify, save and hold harmless BGL, its employees,
agents, representatives and shareholders, from and against any and all losses,
costs, damages, claims and expenses of any kind, including, without limitation,
attorneys' fees and expenses, relating to or arising out of any failure by it to
perform its obligations hereunder. This provision shall survive any termination
of this Agreement.

10.9 NOTICES

All notices and communications which may be or are required to be given by
either party to the other shall be in writing and hand-delivered, sent by fax or
sent by internationally recognized air-courier (such as Federal Express or DHL)
to the parties, at their following respective addresses, and shall be effective
upon receipt:

<PAGE>
                                      -23-


(a)     If to Bogoso Gold Limited:

        32 Akosombo Road,
        Airport Residential Area,
        PO Box 16075, Airport,
        Accra
        GHANA
        Fax. +233 21 777700
        Attention:  Managing Director

        With a copy to:
        Golden Star Resources Ltd.
        10579 Bradford Road, Suite 103
        Littleton, Colorado  80127-4247
        USA
        Fax. (303) 830-9094

        Attention:  President

(b)     If to Prestea Gold Resources Limited:

        PO Box 701,
        Accra

        GHANA

        Fax: 021 665563
        Attention: Chairman

10.10 GOVERNING LAW

The formation, interpretation, and performance of this Agreement shall be
governed by the laws of the Republic of Ghana.

Any terms or agreements herein which by their nature may or must be performed or
occur after termination of this Agreement shall survive such termination.

10.11 DISPUTE RESOLUTION

Any dispute, controversy or claim arising under or in connection with this
Agreement, and which cannot be resolved within 60 days of good faith
negotiations between the parties, shall be settled by arbitration in accordance
with this Section.

Matters subject to arbitration shall be settled by arbitration in accordance
with the rules and regulations of the London Court of International Arbitration
in effect on the date of this Agreement, which are hereby incorporated by
reference into this clause. The place of arbitration

<PAGE>
                                      -24-


shall be London, England, or such other location agreed upon by the parties. The
language of the arbitration shall be English. The arbitration shall be the sole
and exclusive forum for resolution of the dispute or controversy and the award
shall be final and binding. Any court having jurisdiction may enter judgement
thereon.

A party may demand arbitration by delivering a written notice thereof to the
other party setting forth a complete, concise statement of the issue(s) in
dispute, the amount involved and the remedy requested. The arbitrators shall
render a written decision within six months after having been appointed.

Notwithstanding anything herein, the arbitral panel shall have the power to
decide any dispute ex aequo et bono, with the objective of deciding such matters
fully in accordance with the intent of the parties as indicated by this
Agreement. The arbitrator(s) shall have the right to award or include in their
award any relief which they deem proper in the circumstances, including, without
limitation, money damages (with interest on unpaid amounts from date due),
specific performance, injunctive relief and legal fees and costs in accordance
with this Section; provided, however, that the arbitrator(s) shall not have the
authority to award exemplary, punitive, consequential or special damages, and
each party shall be limited to the recovery of any actual damages sustained by
it.

The number of arbitrators shall be three. One arbitrator shall be nominated by
each of the parties and shall then agree on the appointment of a third
arbitrator, who shall be disinterested in the dispute and shall have no
connection with any party. All of the arbitrators shall be persons having
experience in the minerals industry. Unless the three arbitrators have been
appointed within 30 days after the date on which either party requests the
settlement of any dispute by arbitration pursuant to this Section, the London
Court of International Arbitration shall appoint the three arbitrators referred
to above. The appointing authority may appoint from among nationals of any
country, whether or not a Party is a national of that country.

10.12 ENTIRE AGREEMENT

This sets forth the entire agreement between the parties and supersedes all
prior understandings and communications between the parties or any of them, oral
or written. This Agreement shall inure to the benefit of and be binding on the
parties and their respective heirs, executors, administrators, successors and
permitted assigns. The parties shall, without further consideration, from time
to time execute and deliver further instruments and assurances as may be
reasonably required to carry out the terms and intent of this Agreement.

10.13 INVALIDITY

In case any one or more of the provisions of this Agreement or any application
thereof shall be invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions of this Agreement and
other application thereof will not in any way be affected or impaired thereby.

<PAGE>
                                      -25-


10.14 COUNTERPARTS

This Agreement may be executed in separate counterparts, each of which shall be
deemed to be an original but all of which, taken together, shall constitute one
and the same instruments.

10.15 NO THIRD PARTY BENEFITS

Nothing contained in this Agreement shall confer any rights upon any person who,
or entity which, is not a party or assignee of a party to this Agreement.

In witness whereof the parties have executed this Agreement as of the date first
above written

                                            BOGOSO GOLD LIMITED

                                            By:
                                               ---------------------------------
                                               Name: Peter Bradford
                                               Title: Chairman


                                            By:
                                               ---------------------------------
                                               Name:  Richard Gray
                                               Title: Managing Director


                                            PRESTEA GOLD RESOURCES LIMITED

                                            By:
                                               ---------------------------------
                                               Name: Robert Cole
                                               Title: Chairman


                                               By:
                                               ---------------------------------
                                               Name: Jerome Essilfie
                                               Title: Mine Manager

<PAGE>

                                   SCHEDULE A

               INFRASTRUCTURE MITIGATION PLAN -- INTERIM AGREEMENT

The following list identifies all infrastructure belonging to, used by or to be
acquired by PGR within the initial areas to be subject to surface mining south
of the Ankobra river. These areas include the proposed excavation area and a
surface mining buffer zone (the "Buffer Zone"). For the avoidance of doubt there
is no infrastructure belonging to, used by or to be acquired by PGR north of the
Ankobra River.

Generally, most infrastructure within the area to actually be excavated would
need to be relocated, although it may be possible to mine around some
installations, ie dewatering and ventilation raises.

Generally, most infrastructure within the Buffer Zone would be safe to remain in
place, but this has been considered on a case by case basis. It is proposed that
the majority of mine infrastructure within the Buffer Zone not be relocated
except for buildings for which the main purpose is for accommodation or
recreation. It is proposed that the majority of non-mine infrastructure within
the Buffer Zone be relocated. A significant exception would be the VRA
substation.

PLANT NORTH AREA

<TABLE>
--------- -------------------- ----------------------------- -------- --------------------------------
 ITEM       INFRASTRUCTURE                 USE                 ZONE             MITIGATION
--------- -------------------- ----------------------------- -------- --------------------------------
<S>       <C>                  <C>                           <C>      <C>
1.        Ankobra Shaft        Downcast & future                -     Not affected by open pits
                               dewatering from L6
--------- -------------------- ----------------------------- -------- --------------------------------
2.        North Shaft          Downcast & future fill           *      -  Current pit design leaves
                               reclaim from L2-11                         shaft intact. Geotechnical
                                                                          confirmation required.

                                                                       -  Ventilation regime
                                                                          unaffected through use of
                                                                          appropriate barricades

                                                                       -  Drainage into u/g to be
                                                                          controlled through seals
                                                                          below open pit workings
                                                                          and a sump on Level 6
--------- -------------------- ----------------------------- -------- --------------------------------
3.        Power Compressor     Two compressors, need            *     Relocation agreed -- new site
          House                replacement                            identified] and new structure
                                                                      designed and costed.
                                                                      Outstanding issue is sizing of
                                                                      water cooling tanks, and
                                                                      adequate power supply.
--------- -------------------- ----------------------------- -------- --------------------------------
4.        Sankofa Plant-site   Active                          [ ]    Not affected by open pits
--------- -------------------- ----------------------------- -------- --------------------------------
5.        Sankofa Tailings     Active containment dam          [ ]    Not affected by open pits
          Dam
--------- -------------------- ----------------------------- -------- --------------------------------
6.        Prestea Tailings     Active valley fill              [ ]    Not affected by open pits. PGR
          Dam                                                         to acquire pumps to enable PGR
                                                                      tails to be pumped to an
                                                                      approved tailings
--------- -------------------- ----------------------------- -------- --------------------------------
</TABLE>

<PAGE>
                                      -2-


<TABLE>
<S>       <C>                  <C>                           <C>      <C>
--------- -------------------- ----------------------------- -------- --------------------------------
                                                                      storage.
--------- -------------------- ----------------------------- -------- --------------------------------
7.        Apantoo Shaft.       Not in use -- caved in          */-    Not material to u/g operation.
                                                                      Will be mined out by open pit.
--------- -------------------- ----------------------------- -------- --------------------------------
8.        Plant Mill           Active                           *     Investigate further
--------- -------------------- ----------------------------- -------- --------------------------------
9.        Prestea Shaft.       Not in use -- caved in           -     Not material to u/g operation.
                                                                      Currently falls outside of the
                                                                      pit perimeter
--------- -------------------- ----------------------------- -------- --------------------------------
10.       Workshops & Stores   Active                           *     Relocation agreed -- suitable
                                                                      site identified at Central
                                                                      Shaft, but still discussion
                                                                      regarding dimensions.
--------- -------------------- ----------------------------- -------- --------------------------------
11.       Slime Sub Station    Active -Main PGR substation     [ ]    Not affected by open pits
--------- -------------------- ----------------------------- -------- --------------------------------
12.       Club House (Senior   Active                           -     Relocation agreed -- potential
          Staff)                                                      site identified.
--------- -------------------- ----------------------------- -------- --------------------------------
13.       Transport Yard       Vehicle compound and             *     Relocation agreed
                               maintenance
--------- -------------------- ----------------------------- -------- --------------------------------
14.       Ropeway Hauling      Active                          *-     Replace following final
          System                                                      decision on PGR process plant
--------- -------------------- ----------------------------- -------- --------------------------------
15.       Security Barracks    Occupied                        [ ]    Not affected by open pits
--------- -------------------- ----------------------------- -------- --------------------------------
16.       Mine Office          Active                           -     Not affected by open pits
--------- -------------------- ----------------------------- -------- --------------------------------
17.       Provision Stores     Active                          [ ]    Not affected by open pits
--------- -------------------- ----------------------------- -------- --------------------------------
18.       Cold Store           Active                          [ ]    Not affected by open pits
--------- -------------------- ----------------------------- -------- --------------------------------
19.       Central Shaft        Men & material, 2                -     Not affected by open pits
                               compartment, 30ktpm
--------- -------------------- ----------------------------- -------- --------------------------------
20.       "Job 600" Sub        Power to township & Bondaye      -      Not affected by open pits
          Station
--------- -------------------- ----------------------------- -------- --------------------------------
21.       Residential Areas    Occupied                       *-[ ]   Some buildings may need
          for PGR                                                     relocation, others unaffected
                                                                      by the open pits.
--------- -------------------- ----------------------------- -------- --------------------------------
22.       Magazine             Active (below ground)           [ ]    Not affected by open pits
--------- -------------------- ----------------------------- -------- --------------------------------
23.       Magazine area        Active                          [ ]    Not affected by open pits
          substation
--------- -------------------- ----------------------------- -------- --------------------------------
24.       Main Bore Hole       Process & potable water (3      */-    Not affected by open pits
          Pump House           pumps)
--------- -------------------- ----------------------------- -------- --------------------------------
</TABLE>

BETA BOUNDARY AREA

<TABLE>
--------- -------------------- ----------------------------- -------- --------------------------------
ITEM      INFRASTRUCTURE       USE                           ZONE     MITIGATION
--------- -------------------- ----------------------------- -------- --------------------------------
<S>       <C>                  <C>                           <C>      <C>
25.       South Waste Shaft    Upcast (Main)                   [ ]    Not affected by open pits
--------- -------------------- ----------------------------- -------- --------------------------------
26.       Alpha Shaft          Downcast & future ore            -     Not affected by open pits
                               transport
--------- -------------------- ----------------------------- -------- --------------------------------
27.       Jnr Staff            Occupied                        [ ]    Not affected by open pits
          Residential Area
--------- -------------------- ----------------------------- -------- --------------------------------
28.       Anfarga township     Occupied                        [ ]    Not affected by open pits
--------- -------------------- ----------------------------- -------- --------------------------------
29.       Nakaba Township      Occupied                         -     Investigate further
--------- -------------------- ----------------------------- -------- --------------------------------
30.       Gamma Shaft          Not in use, future ore           *     Investigate further
                               transport
--------- -------------------- ----------------------------- -------- --------------------------------
31.       Beta Shaft           Not in use, collapsed            *     Investigate further
--------- -------------------- ----------------------------- -------- --------------------------------
32.       International        Active                           -     Investigate further
          School
--------- -------------------- ----------------------------- -------- --------------------------------
</TABLE>

<PAGE>

                                       -3-

<TABLE>
<S>       <C>                  <C>                           <C>      <C>
--------- -------------------- ----------------------------- -------- --------------------------------
33.       Wooden bungalows     Occupied                         -     Provide alternative bungalows
--------- -------------------- ----------------------------- -------- --------------------------------
34.       Boundary Shaft       Downcast                         *     Investigate further
--------- -------------------- ----------------------------- -------- --------------------------------
35.       Domestic Pump        Township water from river        -     Replace for goodwill
          Houses               and sumps
--------- -------------------- ----------------------------- -------- --------------------------------
36.       Junior Staff         Occupied                        [ ]    Not affected by open pits
          Quarters (Abrow
          Gari)
--------- -------------------- ----------------------------- -------- --------------------------------
37.       Ekotokroo Shaft      Upcast (Main)                    -     Investigate further
--------- -------------------- ----------------------------- -------- --------------------------------
38.       Magazine             Active, below ground            [ ]    Not affected by open pits
--------- -------------------- ----------------------------- -------- --------------------------------
39.       Main Shaft           Men & material, 2               [ ]    Not affected by open pits
                               compartment, capacity?
--------- -------------------- ----------------------------- -------- --------------------------------
40.       Main Shaft           Active                          [ ]    Not affected by open pits
          Substation & Stores
--------- -------------------- ----------------------------- -------- --------------------------------
41.       Bondaye              Occupied                        [ ]    Not affected by open pits
          Residential Areas
--------- -------------------- ----------------------------- -------- --------------------------------
42.       New Boundary Shaft   Not in use                      [ ]    Not affected by open pits
          (Prestea)
--------- -------------------- ----------------------------- -------- --------------------------------
43.       Tuapim Shaft         Not in use, future ore          [ ]    Not affected by open pits
                               transport
--------- -------------------- ----------------------------- -------- --------------------------------
44.       A.D.C.@ Central      Downcast (Main)                 [ ]    Not affected by open pits
          Shaft
--------- -------------------- ----------------------------- -------- --------------------------------
45.       Bondaye North Shaft  Downcast                         -     Not affected by open pits
--------- -------------------- ----------------------------- -------- --------------------------------
46.       "A" Compound'        Occupied                        [ ]    Not affected by open pits
--------- -------------------- ----------------------------- -------- --------------------------------
</TABLE>

NOTES:

"Downcast" means downcast ventilation,
"Upcast" means upcast ventilation.

*    Inside Pit
-    Inside Buffer Area
[ ]  Outside Buffer Area

NON-MINE INFRASTRUCTURE

The following list identifies the non-mine infrastructure that may be impacted
by surface mining activities and sets out BGL's proposed mitigation action. PGR
hereby confirms its agreement with the proposed mitigation measures, and its
irrevocable undertaking to (i) support such measures, and (ii) to assist BGL to
negotiate the mitigation measures with the relevant authorities and companies
and to implement such measures.:

<TABLE>
-------- ----------------------- ---------------------------- --------- -----------------------
 ITEM        INFRASTRUCTURE                 OWNER              ZONE      POSSIBLE MITIGATION
-------- ----------------------- ---------------------------- --------- -----------------------
<S>      <C>                     <C>                          <C>       <C>
1.       VRA High Tension Lines  VRA                           *-[ ]    Relocate
-------- ----------------------- ---------------------------- --------- -----------------------
2.       Railway Lines           Ghana Railways                *-[ ]    Check future use
-------- ----------------------- ---------------------------- --------- -----------------------
3.       V.R.A Substation        VRA                            [ ]     Not affected by open
                                                                        pits but add flyrock
                                                                        protection
-------- ----------------------- ---------------------------- --------- -----------------------
4.       Performance             Private company                */-     Relocate
         Laboratories
-------- ----------------------- ---------------------------- --------- -----------------------
5.       Filling Station         Private company                 -      Relocate
         (Shell)
-------- ----------------------- ---------------------------- --------- -----------------------
6.       Police Station          Ghana police                  -/[ ]    Not affected by open
                                                                        pits but check
-------- ----------------------- ---------------------------- --------- -----------------------
</TABLE>

<PAGE>
                                      -4-


<TABLE>
<S>      <C>                     <C>                          <C>       <C>
-------- ----------------------- ---------------------------- --------- -----------------------
         Post Office             Ghana Post                    -/[ ]    Not affected by open
7.                                                                      pits but check
-------- ----------------------- ---------------------------- --------- -----------------------
8.       Hospital                Government                     [ ]     Not affected by open
                                                                        pits
-------- ----------------------- ---------------------------- --------- -----------------------
9.       Fire Services           National Fire Service          [ ]     Not affected by open
                                                                        pits
-------- ----------------------- ---------------------------- --------- -----------------------
10.      Labour Office           Dept of Labour                -/[ ]    Not affected by open
                                                                        pits but check
-------- ----------------------- ---------------------------- --------- -----------------------
11.      Residential Areas for   Government                    -/[ ]    Investigate
         Hospital
-------- ----------------------- ---------------------------- --------- -----------------------
12.      Residential Area for    Private company                [ ]     Not affected by open
         Bank Staffs                                                    pits
-------- ----------------------- ---------------------------- --------- -----------------------
13.      Court and Nurses        Government                    -/[ ]    Investigate
         quarters
-------- ----------------------- ---------------------------- --------- -----------------------
14.      Anfarga township        Public                         [ ]     Not affected by open
                                                                        pits
-------- ----------------------- ---------------------------- --------- -----------------------
15.      Nakaba Township         Public                        -/[ ]    Investigate
-------- ----------------------- ---------------------------- --------- -----------------------
</TABLE>

In addition to the specific infrastructure items detailed above, the various
roads and services (power, water, sewage, telephone etc) within the surface
mining envelope may be affected to various degrees and may need relocation or
replacement.

<PAGE>


                                   SCHEDULE B

                            JOINT OPERATING AGREEMENT

1. PARTIES

        - Bogoso Gold Limited

        - Prestea Gold Resources Limited

2. DEFINITION AND INTERPRETATION

"AFFILIATE" means any legal entity, wherever incorporated or constituted, which
directly or indirectly controls, is controlled by, or is under common control
with a Party and, for this purpose, "control" means the ownership of or right to
exercise control of more then fifty percent (50%) of the voting rights at a
general meeting of shareholders or other equivalent constitutional meeting and,
through such ownership or right, to elect at least a majority of the Board or
other persons with substantially equivalent power to manage and direct the
affairs of such legal entity.

"AGREEMENT" means this joint operating agreement and all schedules and
instruments in amendment or confirmation of it; "hereof', "hereto", and
"hereunder" and similar expressions mean and refer to this Agreement and not to
any particular Article, Section, Subsection or other subdivision; "Article",
"Section", "Subsection" or other subdivision of this Agreement followed by a
number means and refers to the specified Article, Section, Subsection or other
subdivision of this Agreement.

"BGL" means Bogoso Gold Limited, registration no. 29,939, a company incorporated
according to the laws of the Republic of Ghana.

"BGL LEASE" means the lease dated June 29, 2001 whereby BGL was granted mineral
rights in the Lease Area for gold and other associated mineral substances lying
and being under the surface to a vertical depth of 150 metres below sea level.

"BUSINESS DAY" means any day other than a Saturday, Sunday or official public
holiday in the city of Accra, Ghana or in the city of Denver, U.S.A.

"CHIEF INSPECTOR OF MINES" means the chief inspector of mines appointed from
time to time by the Minister in accordance with the Minerals and Mining Law,
1986, as amended.

<PAGE>
                                      -2-


"Control" means (i) in relation to a Person that is a corporation or company,
the ownership, directly or indirectly, together with Associates and Affiliates,
of Voting Securities of such Person carrying more than 50% of the voting rights
attaching to all Voting Securities of the corporation or company and which are
sufficient, if exercised, to elect a majority of its board of directors; (ii) in
relation to a Person that is a partnership, limited partnership, business trust
or other similar entity, the ownership, directly or indirectly, together with
Associates and Affiliates, of Voting Securities entitling such holders to
exercise control and direction over the activities of such entity; and (iii) in
relation to a Person that is a family trust or other similar entity,
trusteeships or ownership, directly or indirectly, of legal or beneficial
interests entitling the holders thereof to exercise control and direction over
the activities of such Person "Controls" and "Controlled" shall have similar
meanings.

"DOLLARS" OR "$" means the currency which is, from time to time, legal tender
for the payment of all private and public debts in the United States of America.

"EFFECTIVE DATE" means _________ 2001.

"FINANCIAL YEAR" means a period of twelve (12) months ending on December 31 or
such other date as may be determined by the Parties from time to time.

"FORCE MAJEURE" means any cause, whether foreseeable or unforeseeable, beyond a
party's reasonable control, including, without limitation, labour disputes
(however arising and whether or not employee demands are reasonable or within
the power of such party to grant); acts of God; laws, regulations, orders,
proclamations, instructions or requests of any government or governmental
entity; judgments or orders of any court; inability to obtain on reasonably
acceptable terms any public or private license, permit or other authorization;
curtailment or suspension of activities to remedy or avoid an actual or alleged,
present or prospective violation of federal, state or local environmental
standards; acts of war or conditions arising out of or attributable to war,
whether declared or undeclared; riot, civil strife, insurrection or rebellion;
fire, explosion, earthquake, storm, flood, sinkholes, drought or other adverse
weather condition; delay or failure by suppliers or transporters of materials,
parts, supplies, services or equipment; contractor' or subcontractors' shortage
of, or inability to obtain, labour, transportation, materials, machinery,
equipment, supplies, utilities or services; accidents; breakdown of equipment,
machinery or facilities; or any other cause whether similar or dissimilar to the
foregoing.

"GOVERNMENT" means the duly constituted government of the Republic of Ghana or
any political subdivision thereof, as recognized from time to time by the United
States of America, whether federal, state, local or foreign, or any judicial
body, agency or instrumentality of any such government or political subdivision.

<PAGE>
                                      -3-


"GMWU" means Ghana Mineworkers Union of the TUC (Ghana).

"LEASE AREA" means the area described in Schedule A with respect to which PGR
has an underground mining lease and BGL has a surface mining lease as provided
in the PGR Lease and the BGL Lease, respectively.

"MANAGEMENT AGREEMENT" means the management agreement between BGL and PGR dated
_____________, 2001.

"MANAGEMENT COMMITTEE" means the management committee as described in Section 4.

"PARTIES" means, collectively, BGL and PGR and "Party" means any one of them.

"PERSON" means an individual, partnership, corporation, trust, unincorporated
association, joint venture, governmental entity or other entity or other entity,
and pronouns have a similarly extended meaning.

"PGR" means Prestea Gold Resources Limited a company incorporated according to
the laws of the Republic of Ghana.

"PGR LEASE" means the lease dated June 29, 2001 whereby PGR was granted mineral
rights in the Lease Area for gold and other associated mineral substances lying
and being under the surface below a vertical depth of 150 metres below sea
level.

"SHAREHOLDERS AGREEMENT" means the shareholders agreement relating to PGR
between BGL, GMWU, the Investors, BGL on behalf of the Trust and Government
dated _______________, 2001.

"THIS AGREEMENT" means this agreement together with the schedules and annexures
hereto.

INTERPRETATION

-   Any reference in this Agreement to gender shall include all genders, and
    words importing the singular number only shall include the plural and vice
    versa.

<PAGE>
                                      -4-


-   The division of this Agreement into Articles, Sections, Subsections and
    other subdivisions and the insertion of headings are for convenience of
    reference only and shall not affect or be utilized in the construction or
    interpretation of this Agreement.

-   Any Article, Section, Subsection or other subdivision of this Agreement or
    any other provision of this Agreement which is, or becomes, illegal, invalid
    or unenforceable shall be severed from this Agreement and be ineffective
    only to the extent of such illegality, invalidity or unenforceability and
    shall not affect or impair the remaining provisions hereof.

-   This Agreement constitutes the entire agreement between the Parties
    pertaining to the subject matter hereof and supersedes all prior agreements,
    understandings, negotiations and discussions, whether oral or written, of
    the Parties.

-   This Agreement may only be amended, modified or supplemented by a written
    agreement signed by all of the Parties.

-   No waiver of any of the provisions of this Agreement by any Party shall be
    deemed to constitute a waiver of such provision by any other Party or a
    waiver by such Party of any other provision, (whether or not similar), nor
    shall such waiver constitute a continuing waiver unless otherwise expressly
    provided in writing duly executed by the Party to be bound thereby.

-   Where the word "including" or "includes" is used in this Agreement it means
    "including (or includes) and without limitation".

-   Any references herein to any law, by-law, rule, regulation, order or act of
    any government, governmental body or other regulatory body shall be
    construed as a reference thereto as enacted at the date hereof as such law,
    by-law, rule, regulation, order of or act may be amended, re-enacted or
    superseded from time to time.

-   In this Agreement, unless the context otherwise requires, any reference to a
    transfer of securities, Shares or Voting Securities of a Person shall
    include any agreement, arrangement or understanding by which legal title to
    or beneficial ownership of such securities passes from one Person to another
    Person, or to the same Person in a different legal capacity, whether or not
    for value, and a transfer shall include any sale, assignment, gift, exchange
    or conversion of such securities, or the granting of any security interest,
    lien, pledge, mortgage, hypothecation or charge in or to such securities.

3. SCOPE OF AGREEMENT

-   This Agreement sets out the protocols and procedures to be observed by BGL
    and PGR in the day-to-day operations of the surface and underground mining
    operations on the Lease Area. The Agreement shall include, but not be
    limited to, safety, communication between the parties, access, disturbances,
    mitigation of disturbances, air and water ingress to the underground mine
    from the surface excavations, blasting operations, notification of blasting
    operations, survey and notification of underground openings, community
    relations, confidentiality, statements to the media, joint emergency
    response, security operations, etc.

<PAGE>
                                      -5-


-   The Agreement does not constitute a commercial arrangement between the
    Parties and only deals with how the Parties will cooperate to ensure that
    their individual operations and activities on the Lease Area will have
    minimal impact on the operations and activities of the other Party.

4. CONSULTATION AND COOPERATION

-   The Parties will form a Management Committee.

-   The Management Committee shall be comprised of an equal number of members,
    but no more than ten (10), from BGL and PGR.

-   The Chairmanship of the Management Committee shall alternate between BGL and
    PGR. BGL shall chair the first meeting, then PGR shall chair the second
    meeting and so on.

-   The Management Committee shall meet as often as required but at least
    monthly.

-   The Management Committee will consider and decide on issues that affect the
    operations and activities of both BGL and PGR.

-   Issues will be decided by mutual agreement between the parties.

-   Undecided or unresolved issues will be deferred for further investigation by
    the Parties and consideration by the Management Committee.

-   Any unresolved issue or disputed issue will be resolved by arbitration as
    set out in Clause 8.

-   Minutes of all meetings of the Management Committee shall be recorded and
    then approved by the Parties at the next meeting of the Management
    Committee.

5. MINING PLANS

-   The Parties shall provide documented mining plans and schedules for each
    Financial Year to the other Party no later than 30 days prior to the
    commencement of the Financial Year.

-   The Parties shall provide a detailed mining plan and schedule to the other
    Party for each Month no later than seven days prior to the commencement of
    each Month.

-   No Party shall not deviate from any published mining plan or schedule
    without first having given the other Party ten days notice of its intentions
    to do so.

-   No Party shall conduct any mining operations or activities within 20 metres
    of the 150 Metre Depth without first having presented a Feasibility Study on
    the activity to the other Party and the Chief Inspector of Mines, and
    received their written Agreement to do so.

<PAGE>
                                      -6-


6. SYSTEMS AND PROCEDURES

-   The Parties shall establish systems and procedures to control their
    operations and activities.

-   The systems and procedures shall deal with blast times, blast monitoring,
    sharing of survey information, surface mining near voids, storm water
    control, dewatering, surface access and control, development of
    infrastructure by the Parties, on the Lease Area, authorisations to third
    parties to work or develop infrastructure on the Lease Area.

7. DEFAULT

-   A Party shall be in default under this Agreement if, at any time (a) such
    Party is in breach of any of its material obligations under this Agreement
    and which continues for seven (7) days after notice by the other Party
    specifying such breach; (b) bankruptcy, insolvency, etc.

8. DISPUTE RESOLUTION

-   Any dispute, controversy or claim arising under or in connection with this
    Agreement, and which cannot be resolved within sixty (60) days of attempted
    negotiations between the Parties, shall be settled by arbitration in
    accordance with this section.

-   Matters subject to arbitration shall be settled by arbitration in accordance
    with the rules and regulations of the London Court of International
    Arbitration in effect on the date of this agreement.

-   The place of arbitration shall be London England or such other place as the
    parties may agree.

-   The language of the arbitration shall be English.

-   The arbitration shall be the sole and exclusive forum for resolution of the
    dispute or controversy and the award shall be final and binding.

-   A Party may demand arbitration by delivering a written notice thereof to the
    other Party setting forth a complete, concise statement of the issue(s) in
    dispute, the amount involved and the remedy requested.

-   The arbitrators shall render a written decision within six months after
    having been appointed.

-   Notwithstanding anything herein, the arbitral panel shall have the power to
    decide any dispute ex aequo et bono, with the objective of deciding such
    matters fully in accordance with the intent of the Parties as indicated by
    this Agreement.

<PAGE>
                                      -7-


-   The arbitrators shall have the right to award or include in their award any
    relief which they deem proper in the circumstances, including, without
    limitation, money damages (with interest on unpaid amounts from date due),
    specific performance, injunctive relief and legal fees and costs in
    accordance with this section.

-   The arbitrators shall not have the authority to award exemplary, punitive,
    consequential or special damages and each Party shall be limited to the
    recovery of any actual damages sustained by it.

-   The number of arbitrators shall be three. One arbitrator shall be nominated
    by each of the Parties and shall then agree on the appointment of a third
    arbitrator, who shall be disinterested in the dispute and shall have no
    connection with any party.

-   All arbitrators shall be persons having relevant experience in the minerals
    industry.

-   Unless the three arbitrators have been appointed within thirty (30) days
    after the date on which either Party requests the settlement of any dispute
    by arbitration pursuant to this Section, the London court of International
    Arbitration shall appoint the three arbitrators referred to above. The
    appointing authority may appoint from among nationals of any country,
    whether or not a Party is a national of that country.

9. GENERAL

-   The interpretation and performance of the Agreement shall be governed by the
    laws of the Republic of Ghana.

-   The Party's obligations will be suspended for the duration of a Force
    Majeure event.

-   The Parties will be obligated to treat in confidence information about the
    other's business, assets and affairs disclosed to them for the purposes of
    the Agreement, and typical remedies will be included for breach.

-   All Notices shall be in writing and may be given by being delivered or sent
    by facsimile or mail to the authorized address of the Parties.

10. SHAREHOLDER WARRANTIES

-   Each of the Parties represents and warrants to each other that it has the
    capacity to enter into and perform this agreement and all the obligations
    contemplated herein and that all corporate and other actions required to
    authorize it to enter into and perform this Agreement have been properly
    taken.

-   that all of the foregoing representations and warranties will continue to be
    true and correct during the continuance of the Agreement.

<PAGE>


                                   SCHEDULE C

                                   LEASE AREA

EXHIBIT A: PRESTEA MAP (Plant/North to Beta/Boundary)

EXHIBIT B: PRESTEA MAP (Buesichem Area)

EXHIBIT C: PRESTEA LEASE AREA (Area is the same for both the PGR Lease and the
BGL Lease)

EXHIBIT D: VERTICAL SECTION SHOWING THE 150 METRE DEPTH

<PAGE>


                                   SCHEDULE D

            PROFORMA LOAN AGREEMENTS WITH EACH OF GMWU AND THE TRUST

                       [LETTERHEAD OF BOGOSO GOLD LIMITED]



-, 2001
GMWU/the Trust

Dear Sirs:

                                 Loan Agreement

This letter (the "Loan Agreement") sets out the terms of a US$- loan (the
"Loan") by Bogoso Gold Limited ("BGL") to - (the "Recipient") for the purpose of
funding its shareholder capital contribution to Prestea Gold Resources Limited
("PGR"). The terms of the Loan are as follows:

    1.     The Loan will disbursed at the Closing of a transaction between PGR
           and BGL pursuant to an Agreement dated November __, 2001 whereby BGL
           is exercising its option to purchase shares in PGR subject to the
           satisfaction of certain conditions precedent for its benefit.

    2.     The Loan will mature on _____________, 20__.

    3.     The Loan will bear interest at such rate not in excess of ____% as
           BGL shall specify from time to time by notice to the Recipient.

    4.     The Loan will be repaid preferentially from the first dividends, or
           any other proceeds whatsoever, paid to the Recipient by PGR as a
           distribution or return of capital on the shares held by the
           Recipient, including the Recipient's share of the proceeds from the
           winding up or sale of PGR, but will otherwise be non-recourse to the
           Recipient.

    5.     While the Loan is outstanding, the Recipient shall not sell, assign,
           promise, mortgage or in anyway encumber its shareholding in PGR.

If the foregoing correctly sets forth our agreement with respect to the subject
matter hereof, please so indicate by executing and returning to the undersigned
an executed copy of this Loan Agreement.

<PAGE>

                                   SCHEDULE E

                              MANAGEMENT AGREEMENT

THIS MANAGEMENT SERVICES AGREEMENT made effective as of the ____ day of
_________ 200_ between BOGOSO GOLD LIMITED, a company incorporated under the
laws of Ghana and having its registered office in Accra, Ghana (hereinafter
called "BGL") and PRESTEA GOLD RESOURCES LIMITED, a company incorporated under
the laws of Ghana and having its registered office in Accra, Ghana (hereinafter
called "PGR").

WHEREAS:

A.  BGL is a shareholder of PGR which has interests in a mine and mineral
    properties located in Ghana, Africa.

B.  PGR desires BGL to provide the management services and to formalize an
    agreement in writing with BGL with respect to such management services.


NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the mutual
covenants and agreements contained in this agreement, BGL and PGR agree as
follows:

1. DESCRIPTION OF MANAGEMENT SERVICES

During the term of this agreement, BGL shall furnish to PGR the following
services as required and requested by PGR:

        (a) general executive services, including without limitation periodic
            advice and consultation to the Board of Directors and management of
            PGR concerning general management of the affairs of PGR;

        (b) business planning and development services, including without
            limitation, assistance in the economic and technical evaluation,
            acquisition and disposition of assets;

        (c) cash management and investment services including without limitation
            opening and operating appropriate accounts with banks, brokers and
            others providing financial and investment services;

        (d) other assistance with accounting and financial services, including
            without limitation general accounting assistance, aid in preparation
            of financial statements in accordance with Canadian generally
            accepted accounting principles, aid in preparation of financial
            reports, coordination of external audits, performance of internal
            audits, advising on the application of Canadian generally accepted
            accounting principles and financial accounting standards and
            financial planning and budgeting;

        (e) corporate secretary services including without limitation assistance
            with and the maintenance of corporate records and minutes of
            meetings and assistance in convening meetings of directors and
            shareholders;

<PAGE>
                                      -2-


        (f) governmental relations services including without limitation
            assisting in the representation of PGR to governmental and other
            regulatory agencies;

        (g) risk management services including without limitation risk
            assessment, evaluation of insurance coverage, negotiation with
            insurance brokers, carriers and underwriters and the processing and
            administration of insurance claims and including loss prevention
            services, health and safety advisory services and property risk
            management and also foreign currency hedging and commodity hedging
            including the sale of gold and other precious metals and gold and
            other precious metals derivative products in international markets
            including negotiating and concluding forward contracts, deferred
            delivery contracts and option contracts in respect of gold and other
            precious metals;

        (h) legal and tax services including without limitation regular and
            periodic advice and consultation with respect to legal and corporate
            income tax matters related to PGR and the preparation and filing of,
            and assistance with respect to, federal, provincial, state and local
            income, property, excise and other tax returns and reports to
            governmental agencies and regulatory bodies, and negotiation and
            review of contracts, leases and other legal documents, the
            management of defense and prosecution of litigation and other legal
            services furnished by independent counsel and the making of
            recommendations with respect thereto (it being understood and agreed
            that the fees and expenses of independent counsel shall remain the
            expenses of PGR);

        (i) technical geological support services including without limitation
            research, development and evaluation services pertaining to
            equipment, processes and techniques related to mining, extractive
            metallurgy, minerals exploration and evaluation, environmental
            services (including such services as are necessary or desirable to
            assist PGR in complying with all environmental laws and regulations
            applicable to mining related matters), and related health and safety
            matters, and also including contract negotiation and engineering,
            technical and financial control for engineering, design,
            construction and operating contracts;

        (j) human resource and staffing services including without limitation
            advisory and administration services relating to employee hiring,
            employee relations, compensation programs, employee benefit programs
            and personnel and industrial relations matters;

        (k) overseas procurement and logistical services including negotiation
            of contracts for the acquisition of equipment, supplies and
            services, the administration of commercial agreements including
            shipping, invoicing and settlements; and

        (l) such other services as may be required by PGR and which BGL is able
            and willing to provide including without limitation general
            administrative services and facilities for telecommunications,
            transportation coordination, data processing and records management.

<PAGE>
                                      -3-


2. RECORDS AND COMPENSATION

(a) DETERMINATION OF COSTS. Subject to subsection 2(f), BGL shall keep or cause
    to be kept complete and accurate records in accordance with Canadian
    generally accepted accounting principles of all costs and expenses incurred
    by BGL in the performance of BGL's obligations under this agreement. All
    such records shall be kept so as to be readily susceptible to standard
    auditing tests. Costs and expenses shall include without limitation all
    direct costs and expenses incurred by BGL in the performance of such
    obligations and fully allocated indirect costs and expenses, including
    salaries and benefits of BGL personnel providing services to BGL under this
    agreement, based on such reasonable policies and procedures for allocation
    as may be agreed on by BGL and PGR, provided that salaries and benefits of
    BGL personnel providing services to PGR under this agreement, other than
    management services referred to in subsection 2(f), shall be allocated in
    accordance with subsection 5(b) hereof. Without limiting the generality of
    the foregoing, it is acknowledged that costs shall include travel and
    transportation and telecommunication expenses to and from or within Canada,
    the United States and Ghana, third party services referred to in section 5
    herein and, with respect to employees of BGL assigned to work in Ghana, the
    cost of all benefits paid for or to such employees including overseas
    allowances and premiums, home leave and vacation allowances, housing, cost
    of living and environmental allowances, insurance and other expenses
    incurred by BGL in relation to such employees.

(b) ACCESS TO RECORDS. PGR or its duly authorized representative shall have the
    right, at its expense, during reasonable business hours during the term of
    this agreement and for one year thereafter to inspect the records and
    accounts of BGL pertaining hereto and make such audit thereof as PGR may
    deem necessary. BGL and PGR may from time to time agree upon accounting
    procedures to eliminate unnecessary detailing of indirect and overhead costs
    and other matters. BGL shall have the right, at its expense, to free access
    during PGR's normal business hours to inspect the records and information of
    PGR for the purpose of calculating the compensation payable to BGL pursuant
    to this agreement.

(c) PERMANENTLY ASSIGNED PERSONNEL. BGL employees who are permanently assigned
    to work on a full-time basis for and under the direction and control of PGR
    shall be transferred to PGR's payroll and become employees of PGR if their
    employment by PGR is permitted under applicable law. PGR and BGL shall
    cooperate to effect any such permitted transfers.

(d) REIMBURSEMENT OF COSTS. Subject as hereinafter provided in subsections 2(e)
    and (f) in respect of certain costs and certain personnel, PGR agrees to
    reimburse BGL for all of the costs not otherwise reimbursed or compensated
    hereunder which BGL incurs in the performance of this agreement.

(e) PART-TIME ASSIGNMENT TO PGR. For the services of BGL employees other than
    management personnel referred to in subsection 2(f) that (i) work part-time
    on projects or assignments for PGR, or (ii) are assigned full-time on
    projects or assignments for PGR that are not intended to be permanent
    assignments, PGR shall pay BGL an amount equal

<PAGE>
                                      -4-


    to 150% of the allocated Salary Costs incurred by BGL in respect of
    providing the services of such employees. In addition, BGL will be entitled
    to reimbursement of costs, not being Salary Costs, to which it may be
    entitled pursuant to subsections 2(a) and 2(d).

(f) SERVICES BY BGL MANAGEMENT PERSONNEL. BGL and PGR acknowledge that it will
    not be practicable for the BGL management personnel who will provide
    periodic advice and consultation and other general executive services, to
    maintain detailed records of the amount of time they devote to PGR's affairs
    relative to BGL's affairs. Accordingly, it is agreed that BGL shall not be
    obliged to maintain records in respect to such personnel with respect to the
    amount of time they devote to PGR's affairs relative to BGL's affairs. For
    the services of said personnel and expenses related to such services, PGR
    shall pay BGL a fixed management cost/fee of U.S.$15,000 per month during
    the term of this agreement.

(g) SERVICE FEE ON PURCHASES. In respect of procurement and logistical services
    including negotiation of contracts for the purchase of equipment, goods,
    supplies and services (collectively "purchase contracts") made by BGL on
    behalf of PGR, at PGR's request, and the administration of such purchase
    contracts, PGR shall pay BGL a one-time fee in respect of each such purchase
    contract, such fee to be calculated as follows: at each calendar year end,
    if the aggregate purchase price paid for purchase contracts entered into in
    such calendar year is equal to or less than U.S.$3,000,000, BGL shall
    receive a fee equal to 5% of such aggregate purchase price and, if the
    aggregate purchase price paid for purchase contracts entered into in such
    calendar year is greater than U.S.$3,000,000, BGL shall receive a fee equal
    to 5% of U.S.$3,000,000 and 3% of the aggregate purchase price paid for
    purchase contracts entered into in such calendar year in excess of
    U.S.$3,000,000. For purposes of this subsection, "purchase price paid for
    purchase contracts" means the aggregate price or the value of the
    consideration payable by the purchaser of the equipment, goods, supplies or
    services, as the case may be, pursuant to the purchase contract.

(h) CONTRACT GUARANTEES. If BGL, at PGR's request, provides or has provided at
    any time, a financial guarantee in favor of a third party in respect of the
    payment by PGR of any financial obligation under any contract with a third
    party, BGL shall be entitled to charge a fee for each year or any portion
    thereof (on a pro rata basis) that the guarantee remains in effect
    calculated at the rate of 3% per annum on the aggregate maximum amount of
    the financial obligation in each year. For the purposes of this provision a
    year means each consecutive 12-month period during which a financial
    obligation is guaranteed commencing on the day that BGL's guarantee becomes
    effective.

(i) ANNUAL REVIEW. The provisions of subsections 2(e), (f), (g) and (h),
    including as to determinations of compensation criteria and categories and
    amounts payable thereunder, shall be subject to review and renegotiation
    each year in connection with the preparation of the annual budgets of the
    parties and the revision agreed upon between the parties shall be effective
    as of the 1st day of January of such year. The purpose of the revision of
    this agreement is to ensure that the amounts payable hereunder are neither
    insufficient or excessive, as the case may be, for either PGR or BGL.

<PAGE>
                                      -5-


(j) BGL will act in good faith in the determination of the costs and fees
    charged to PGR under this agreement and shall, among other things, ensure
    that there is no duplication of such costs and fees.

3. INVOICES AND PAYMENTS

BGL shall submit a detailed invoice each month for costs to be reimbursed and
fees and other compensation to which it is entitled in accordance with the
preceding provisions of this agreement. Each invoice shall describe in
reasonable detail the costs for which reimbursement is sought and the fees or
other compensation for which payment is sought, all of which shall be expressed
in United States dollars. Payment shall be made by PGR within 30 days after
receipt of the invoice in United States dollars at BGL's offices at Bogoso,
Accra or at such other place as BGL shall designate by notice to PGR. To the
extent it is necessary to secure the consent of any government or governmental
agency to any payment to BGL by PGR in United States dollars, PGR agrees to use
reasonable efforts to secure such consent but in the event the making of any
payment due to BGL in United States dollars is not possible or consent cannot be
obtained on a timely basis then BGL at its option may (i) agree to extend the
time for payment while reserving its rights under the following subclause (ii),
or (ii) take payment in another currency selected by PGR. Upon request of PGR,
BGL will prepare and submit an estimate of the costs and/or fees or other
compensation of any assistance requested by PGR pursuant to this agreement prior
to the rendering thereof.

4. TAXES ON THIS AGREEMENT

PGR shall withhold and pay all registration fees, remittance fees, stamp taxes
and similar taxes and charges, if any, in Ghana that are assessed upon this
agreement or upon payments made hereunder provided however that PGR shall not be
liable for taxes in the nature of income taxes upon the income of BGL in
relation to the payment of compensation to BGL in excess of BGL's costs under
this agreement.

5. PERSONNEL MATTERS

(a) QUALIFIED PERSONNEL. The general executive services described in subsection
    1(a) include providing personnel with suitable qualifications and
    experience. Subject to subsection 2(d), all such executives provided under
    this agreement will remain employees of BGL and will be eligible to
    participate in all benefit and bonus plans and programs of BGL. The salaries
    and other compensation payable for the services of such personnel and
    contractors will, subject to section 6, be paid by BGL, which will be
    reimbursed by PGR in accordance with the provisions of sections 2 and 3.

(b) NON-EXCLUSIVE SERVICES. PGR acknowledges that BGL is not required to devote
    its personnel and resources exclusively to or for the benefit of PGR and
    that there can be no assurance that the services to be provided by BGL will
    be available at all times and it is acknowledged that as a result of
    services to be performed for BGL, the personnel of PGR

<PAGE>
                                      -6-


    (who are also employees of BGL) will generally be available to devote only a
    portion of their time to the business of PGR.

(c) SPECIALISTS. If BGL needs to send a specialist (hereafter a "Specialist") or
    a team of Specialists (hereafter a "Team") to PGR's premises and mines owned
    by PGR the following provisions shall apply regardless of whether each such
    Specialist is a BGL employee or a third party contractor:

(d) The Specialist or the Team shall use his or its own equipment and/or
    materials or such equipment and/or materials that shall have been supplied
    by or through BGL, except for any such equipment and/or materials made
    available to them by PGR for this purpose, as described hereafter.

(e) It is specifically agreed that BGL will retain, under all circumstances, the
    total control and the absolute right of instruction with respect to all work
    done by the Specialist or the Team. In this capacity, BGL shall be solely
    responsible for defining the Specialist's or the Team's tasks and for making
    all necessary decisions in this regard.

(f) BGL shall keep PGR fully informed of the work progress and program of the
    Specialist or the Team. PGR, for its part, shall have the right to inform a
    BGL representative (hereinafter the "Representative"), in writing, of any
    concerns or observations it may have in this regard from time to time,
    provided that it shall be understood that BGL will have the sole discretion
    to deal with any such concerns or observations as it sees fit.

(g) BGL shall give written notice to PGR of the name of the Representative. The
    Representative will be granted authority to make any decisions with respect
    to the work progress and program of the Specialist or the Team. The
    Specialist or the Team shall be, at all times, under the hierarchical and
    disciplinary control of BGL, as represented on-site by the Representative.
    PGR shall not, at any time, communicate with the Specialist or the Team
    directly with respect to any conduct or situation which may possibly give
    rise to disciplinary action except in cases of emergency or for security
    reasons.

(h) BGL shall undertake all necessary measures to ensure that the Specialist and
    Team observes all of PGR's policies with respect to work hours, internal
    policies and procedures, as well as health and safety measures. PGR shall
    inform the Representative of any observations on its part of non-compliance
    with these policies or discrepancies in the enforcement of these policies.

(i) PGR shall provide the Specialist or the Team with access to offices, a
    secretary, a fax, a telephone, and company vehicle.

(j) It is expressly agreed that, subject to any requirements for PGR to directly
    pay a third party contractor in accordance with section 6, the Specialist or
    the Team will remain on BGL's payroll or be otherwise directly compensated
    by BGL, as the case may be, and PGR will reimburse BGL wages and
    compensation paid to the Specialist or the Team according to sections 2 and
    3.

<PAGE>
                                      -7-


6. THIRD PARTY SERVICES

If requested by PGR, BGL may, but will not be obligated to, contract for and pay
for services, which in BGL's reasonable judgment are customarily and more
effectively performed by third parties, such as law firms, engineering firms,
consultants, and independent accountants. BGL may, but need not, contract for
such services on behalf of PGR as agent for PGR and the costs of such services
may be charged directly to and in such case shall be paid by PGR. BGL will
retain total control and absolute right of instruction over such third parties
in connection with services contracted for the purposes of this agreement
regardless of the manner in which their services are contracted. Notwithstanding
the foregoing, nothing herein shall preclude PGR from directly retaining outside
third party contractors for such purposes as PGR deems appropriate. Nothing
herein shall oblige BGL to provide any financial or other guarantees in favor of
third parties in respect of any obligations of PGR to third parties.

7. TERM OF THE AGREEMENT

Subject to section 2 i), this agreement shall be for a term of five years
commencing ________, and ending _______________, provided that this agreement
may be earlier terminated by either party upon giving written notice of
termination to the other party not less than 180 days prior to the termination
date designated in such notice. If such notice is given this agreement shall
terminate on the termination date so designated.

8. AUTHORIZATION

PGR represents that PGR's Board of Directors has approved the terms of this
agreement.

9. LOSSES AND LIABILITIES

Except as herein otherwise provided, neither party (the "first party") shall be
liable to the other party (the "second party") for any losses or liabilities
sustained or incurred by the second party, except such losses and liabilities as
may result from the first party's gross negligence or willful misconduct or from
the willful and intentional breach by the first party of one or more of the
provisions of this agreement, and then only to the extent that such losses and
liabilities are not covered by the second party's insurance.

Under no circumstances shall either party be liable to the other for indirect or
consequential damages. Under no circumstance shall BGL be responsible for any
damages, loss, costs or expenses suffered, incurred or sustained by PGR in
respect of financial contracts including without limitation contracts with
respect to the purchase and/or sale of foreign currency whether losses are the
result of exchange rate fluctuations or otherwise, entered into in good faith by
BGL on behalf of PGR or otherwise for the purposes of this agreement.

Notwithstanding subsection 9(a) but subject to subsection 9(b), PGR hereby
indemnifies and agrees to hold BGL harmless from and against any and all claims,
demands, suits, actions, losses, damages and liability of whatsoever nature
arising directly or indirectly out of the performance

<PAGE>
                                      -8-


or purported performance of services or other obligations under this agreement
by BGL or its employees, agents or contractors, except only as and to the extent
the same arise directly from the gross negligence or willful misconduct of or
the willful and intentional breach of this agreement by BGL or its employees or
agents. PGR will indemnify BGL as aforesaid in respect of claims by and
liability to anyone sustained by BGL by reason of anyone relying on information
furnished by or purporting to be furnished by PGR to BGL for the purposes of
this agreement. PGR will also bear all risk and will indemnify BGL as aforesaid
in respect of claims by and liability to anyone sustained by BGL by reason of
BGL, its employees or agents acting or admitting to act on instructions and
authorization of PGR or accepted by BGL in good faith as being made with the
authority of PGR.

10. FORCE MAJEURE

If BGL is unable, wholly or in part, by reason of any occurrence beyond the
reasonable control of BGL, to carry out any obligation under this agreement, the
performance of such obligation, to the extent and during the time that it is so
affected, shall be suspended. BGL shall notify PGR promptly of such
circumstances and exercise due diligence in attempting to perform its
obligations. Fees under this agreement shall be reduced proportionally to
reflect the non-performance of those services suspended under this provision.
BGL shall use its best efforts to reinstate the services suspended under this
provision as soon as practicable and to mitigate the adverse effects on PGR of
such suspension.

11. CONFIDENTIALITY

BGL shall not, without the prior written consent of PGR, disclose to any third
party any information about PGR acquired or developed pursuant to the
performance of this agreement, except as provided in subsection 11(b).

The consent required by subsection 11(a) shall not apply to the following
disclosure, provided that in cases (ii) and (iii) below that BGL shall use its
reasonable best efforts to preserve the confidentiality of such information
against further disclosures:

        (a) information disclosed as required by law or the regulations of any
            stock exchange on which any shares of BGL are listed or as may be
            required by the regulations or policies of any securities commission
            or other securities regulatory agency, governmental agency or other
            authority of competent jurisdiction and the requirements of any
            court (and BGL shall notify PGR of any such disclosure); or

        (b) information disclosed as necessary for debt or equity financing
            purposes; or

        (c) information disclosed that BGL acting reasonably deems to be
            necessary to be disclosed for the proper performance of its
            obligations under this agreement including without limitation
            disclosure of information to consultants and other third parties
            engaged by or assisting BGL in accordance with the terms of this
            agreement in order to carry out the purposes of this agreement.

<PAGE>
                                      -9-


12. COMPLIANCE WITH LAW

BGL shall comply, and use its best efforts to ensure compliance by all of its
employees, agents and contractors, with all applicable laws, statutes, rules,
regulations, orders, and permit and license terms and conditions of all federal,
state or provincial, and local governments and governmental agencies, and all
applicable orders of courts and administrative tribunals of competent
jurisdiction, affecting BGL or the business and operations of PGR managed by
BGL.

13. POWER OF PGR

Nothing herein shall affect the overall powers and duties of the Board of
Directors and management of PGR to manage the affairs of PGR.

14. ASSIGNMENT

This agreement shall not be assigned in whole or in part by either party without
the prior written consent of the other party; provided that this section shall
not preclude or restrict BGL from engaging such contractors (subject to the
applicable provisions of this agreement) as it deems necessary or prudent to
perform in whole or in part any of the services required to be provided by BGL
under this agreement.

15. NOTICES

All notices and other communications required or permitted to be given under
this agreement shall be in writing and shall be deemed given when actually
delivered to an officer of the addressee party; or five days after being
deposited in the official mail system of the country of the party giving such
notice or other communication, postage pre-paid for air mail delivery, addressed
to the addressee party as provided below; or when given by facsimile
transmission to the addressee party facsimile number given below and written
confirmation of satisfactorily completed transmission is received. The addresses
of the parties for purposes of this section 15 are as follows, and either party
may change its address or facsimile number by notice given to the other party
pursuant to this section 15:

        BGL:

        Bogoso Gold Limited
        32 Akosombo Road,
        Airport Residential Area,
        PO Box 16075, Airport,
        Accra
        GHANA
        Fax. +233 21 777700
        Attention:  Managing Director

<PAGE>
                                      -10-


        PGR:

        Prestea Gold Resources Limited
        PO Box 701,
        Accra
        GHANA
        Fax: 021 665563
        Attention: Chairman

16. WAIVER

Any delay or omission or failure to exercise any right or remedy provided in
this agreement shall not constitute a waiver of any provision of this agreement
and shall not limit any party's right thereafter to enforce any provision or
exercise any right.

17. GOVERNING LAW

This agreement shall be deemed to have been made in and shall be governed by and
construed in accordance with the laws of Ghana.

18. ASSURANCES

Each of the parties hereto shall sign all documents and do all such things as
may be reasonably necessary or desirable to give full effect to this agreement.

19. COUNTERPARTS

This agreement may be executed in two counterparts, each of which when so
executed shall be deemed to be an original, and such counterparts together shall
constitute one and the same agreement.

IN WITNESS WHEREOF, the parties hereto have executed this agreement as of the
date first above written.

BOGOSO GOLD LIMITED

By:
   --------------------------------         ------------------------------------
      Richard Gray                          Witness
      Managing Director

PRESTEA GOLD RESOURCES LIMITED

By:
   --------------------------------         ------------------------------------
      Robert Cole                           Witness
      Chairman

<PAGE>


                                   SCHEDULE F

                                 PGR LIABILITIES

PGR has delivered to BGL a list of liabilities as at 30 September, 2001
aggregating $5,976,845.70. It will be obligated to deliver on the Closing Date a
revised list showing changes, additions and deletions as of the Closing Date.

<PAGE>

                                   SCHEDULE G

                             SHAREHOLDERS AGREEMENT

1. PARTIES

        - Bogoso Gold Limited

        - GMWU

        - Government of Ghana

        - Investors

        - Prestea Gold Resources Limited

        - Trust

2. DEFINITION AND INTERPRETATION

"AFFILIATE" means any legal entity, wherever incorporated or constituted, which
directly or indirectly controls, is controlled by, or is under common control
with a Shareholder and, for this purpose, "control" means the ownership of or
right to exercise control of more then fifty percent (50%) of the voting rights
at a general meeting of shareholders or other equivalent constitutional meeting
and, through such ownership or right, to elect at least a majority of the Board
or other persons with substantially equivalent power to manage and direct the
affairs of such legal entity.

"AGREEMENT" means this shareholders' agreement and all schedules and instruments
in amendment or confirmation of it; "hereof", "hereto", and "hereunder" and
similar expressions mean and refer to this Agreement and not to any particular
Article, Section, Subsection or other subdivision; "Article", "Section",
"Subsection" or other subdivision of this Agreement followed by a number means
and refers to the specified Article, Section, Subsection or other subdivision of
this Agreement.

"BGL" means Bogoso Gold Limited, registration no. 29,939, a company incorporated
according to the laws of the Republic of Ghana.

"BOARD" means the board of directors of the Company constituted in accordance
with the provisions of this Agreement and "DIRECTOR" means any member thereof
who has been elected or appointed to the Board in accordance with the provisions
of this Agreement.

"BUSINESS DAY" means any day other than a Saturday, Sunday or official public
holiday in the city of Accra, Ghana.

"CODE" means the Companies Code 1963 (Act 179).

"COMPANY" means Prestea Gold Resources Limited.

"CONTROL" means (i) in relation to a Person that is a corporation or company,
the ownership, directly or indirectly, together with Associates and Affiliates,
of Voting Securities of such Person carrying more than 50% of the voting rights
attaching to all Voting Securities of the corporation

<PAGE>
                                      -2-


or company and which are sufficient, if exercised, to elect a majority of its
board of directors; (ii) in relation to a Person that is a partnership, limited
partnership, business trust or other similar entity, the ownership, directly or
indirectly, together with Associates and Affiliates, of Voting Securities
entitling such holders to exercise control and direction over the activities of
such entity; and (iii) in relation to a Person that is a family trust or other
similar entity, trusteeships or ownership, directly or indirectly, of legal or
beneficial interests entitling the holders thereof to exercise control and
direction over the activities of such Person "Controls" and "Controlled" shall
have similar meanings.

"DOLLARS" OR "$" means the currency which is, from time to time, legal tender
for the payment of all private and public debts in the United States of America.

"EFFECTIVE DATE" means _________ 200__.

"FINANCIAL YEAR" means a period of twelve (12) months ending on December 31 or
such other date as may be determined by the Board from time to time.

"FISCAL YEAR" means the fiscal period of the Company, which initially shall be
the calendar year, as such Fiscal Year may from time to time be changed in
accordance with the provisions this Agreement.

"FORCE MAJEURE" means any cause, whether foreseeable or unforeseeable, beyond a
party's reasonable control, including, without limitation, labour disputes
(however arising and whether or not employee demands are reasonable or within
the power of such party to grant); acts of God; laws, regulations, orders,
proclamations, instructions or requests of any government or governmental
entity; judgments or orders of any court; inability to obtain on reasonably
acceptable terms any public or private license, permit or other authorization;
curtailment or suspension of activities to remedy or avoid an actual or alleged,
present or prospective violation of federal, state or local environmental
standards; acts of war or conditions arising out of or attributable to war,
whether declared or undeclared; riot, civil strife, insurrection or rebellion;
fire, explosion, earthquake, storm, flood, sinkholes, drought or other adverse
weather condition; delay or failure by suppliers or transporters of materials,
parts, supplies, services or equipment; contractor' or subcontractors' shortage
of, or inability to obtain, labour, transportation, materials, machinery,
equipment, supplies, utilities or services; accidents; breakdown of equipment,
machinery or facilities; or any other cause whether similar or dissimilar to the
foregoing.

"GOVERNMENT" means the duly constituted government of the Republic of Ghana or
any political subdivision thereof, whether federal, state, local or foreign, or
any judicial body, agency or instrumentality of any such government or political
subdivision.

"GMWU" means the Ghana Mineworkers Union of TUC (Ghana).

"LEASE AREA" means the area described in Schedule A to the Mining Lease.

"MANAGER" means BGL in its capacity as the manager under the Management
Agreement.

<PAGE>
                                      -3-


"MANAGEMENT AGREEMENT" means the management agreement between BGL and the
Company dated _____________, 200__.

"REGULATIONS" means the Regulations of the Company in force at the date hereof,
as such Regulations may from time to time be amended in accordance with the
provisions of this Agreement.

"MINING LEASE" means the lease dated June 29, 2001 whereby the Company was
granted mineral rights in the Lease Area for gold and other associated mineral
substances lying and being under the surface below a vertical depth of 150
metres below sea level.

"PARTIES" means, collectively, the Company and the Shareholders and "Party"
means any one of them.

"PERSON" means an individual, partnership, corporation, trust, unincorporated
association, joint venture, governmental entity or other entity or other entity,
and pronouns have a similarly extended meaning.

"SHAREHOLDERS" means, collectively, BGL, GMWU, the Investors, BGL on behalf of
the Trust, Government and any other Person to whom Shares are transferred in
accordance with the provisions of this Agreement.

"SHARES" means the shares in the capital of the Company, as presently
constituted.

"TRUST" means the independent non-profit making body established by Deed of
Trust dated ________, 200__ that shall be the beneficiary of 10% of the shares
of PGR.

"THIS AGREEMENT" means this agreement together with the schedules and annexures
hereto.

INTERPRETATION

-   Any reference in this Agreement to gender shall include all genders, and
    words importing the singular number only shall include the plural and vice
    versa.

-   The division of this Agreement into Articles, Sections, Subsections and
    other subdivisions and the insertion of headings are for convenience of
    reference only and shall not affect or be utilized in the construction or
    interpretation of this Agreement.

-   Any Article, Section, Subsection or other subdivision of this Agreement or
    any other provision of this Agreement which is, or becomes, illegal, invalid
    or unenforceable shall be severed from this Agreement and be ineffective
    only to the extent of such illegality, invalidity or unenforceability and
    shall not affect or impair the remaining provisions hereof.

-   This Agreement constitutes the entire agreement between the Parties
    pertaining to the subject matter hereof and supersedes all prior agreements,
    understandings, negotiations and discussions, whether oral or written, of
    the Parties.

-   This Agreement may only be amended, modified or supplemented by a written
    agreement signed by all of the Parties.

<PAGE>
                                      -4-


-   No waiver of any of the provisions of this Agreement by any Party shall be
    deemed to constitute a waiver of such provision by any other Party or a
    waiver by such Party of any other provision, (whether or not similar), nor
    shall such waiver constitute a continuing waiver unless otherwise expressly
    provided in writing duly executed by the Party to be bound thereby.

-   Where the word "including" or "includes" is used in this Agreement it means
    "including (or includes) and without limitation".

-   Any references herein to any law, by-law, rule, regulation, order or act of
    any government, governmental body or other regulatory body shall be
    construed as a reference thereto as enacted at the date hereof as such law,
    by-law, rule, regulation, order of or act may be amended, re-enacted or
    superseded from time to time.

-   In this Agreement, unless the context otherwise requires, any reference to a
    transfer of securities, Shares or Voting Securities of a Person shall
    include any agreement, arrangement or understanding by which legal title to
    or beneficial ownership of such securities passes from one Person to another
    Person, or to the same Person in a different legal capacity, whether or not
    for value, and a transfer shall include any sale, assignment, gift, exchange
    or conversion of such securities, or the granting of any security interest,
    lien, pledge, mortgage, hypothecation or charge in or to such securities.

3. SHAREHOLDERS' RELATIONSHIP

Effective the date hereof the Shares of the Company are held as follows:

       -  BGL           - Shares
       -  GMWU          - Shares
       -  BGL in Trust  - Shares
       -  Investors     - Shares
       -  Government    - Shares

-   Effective the date of this Agreement the relationships among the
    Shareholders shall be governed by the provisions of this Agreement and by
    the Memorandum and Articles, it being understood and agreed that, in the
    event of any inconsistency between the two, the provisions of this Agreement
    shall prevail.

-   This Agreement represents the entire Agreement between the Shareholders
    relating to the subject matter hereof and supercedes all prior agreements
    and arrangements between the Shareholders or any of them and their
    predecessors.

-   The Shareholders hereby agree that: (a) they will so act as Shareholders;
    and (b) they will cause their nominees who are Directors to so act as
    Directors, as to give effect to the provisions of this Agreement.

-   The Trust acknowledges to the other Parties that it has entered into an
    instrument whereby BGL is irrevocably and unconditionally authorized to vote
    the Shares beneficially owned by the Trust on all matters on which such
    shares may be voted.

-   This Agreement shall continue in effect so long as there is more than one
    Shareholder or until the parties agree otherwise in writing.

-   During the continuance of this Agreement, none of the Shareholders shall
    deal with any Shares or any interest therein or transfer or agree to
    transfer any Shares now or hereafter held

<PAGE>
                                      -5-


    by such Shareholder except in accordance with this Agreement. A purported
    transfer of any Shares in violation of this Agreement shall not be valid and
    the Company shall not register, nor permit any transfer agent to register,
    any such Shares on the securities register of the Company, nor shall any
    voting rights attaching to or relating to such Shares be exercised, nor
    shall any purported exercise of such voting rights be valid or effective,
    nor shall any dividend or distribution be paid or made on such Shares. Each
    Shareholder who purports to make a transfer of any Shares in violation of
    this Agreement agrees to donate and hereby donates to the Company all
    dividends and distributions paid or made on such Shares during the period of
    such prohibited transfer. The provisions of the immediately preceding
    sentence are in addition to, and not in lieu of, any other remedies to
    enforce the provisions of this Agreement.

4. BUSINESS OF THE COMPANY

The business of the Company shall be the operation of an underground mine in
accordance with the provisions of the Mining Lease, the Joint Operating
Agreement, and Business Plans adopted by the Board from time to time on the
recommendations of the Manager.

5. SHARE CAPITAL

CASH CALLS

-   Future exploration, development and mining costs for the Company will be
    funded from cash flow from operations.

-   The Parties, other than the Government, may have to contribute additional
    funds in the form of shareholders loans or additional share subscriptions to
    the Company or suffer dilution.

-   In the event that the rationalizing of the Company's assets and reducing its
    inventory (by consignment stock agreements) does not provide sufficient
    working capital: the Shareholders, other than the Government, will support
    the Company, by undertaking to provide additional funds in proportion to
    their respective shareholdings at the time the new funds are deemed required
    by the Board.

-   On the basis of an adopted budget, the Company will submit to each
    Shareholder, other than the Government, prior to the last day of each month,
    a billing for estimated cash requirements for the next month.

-   Within 15 days of receipt of each billing, each Shareholder will be required
    to advance to the Company its proportionate share, based on its then
    shareholding, of the estimated amount.

NON-PAYMENT OF CASH CALLS

-   The additional working capital is to be provided as shareholder loans will
    bear interest at LIBOR plus 2%.

-   In the event that one or more Shareholders are unable to fund their portion
    of a cash call made by the Company pursuant to an adopted budget, then the
    remaining parties may advance the defaulting Shareholders portion.

-   The advance made by a non-defaulting Shareholder on behalf of the defaulting
    party will be treated as a demand note and will bear interest at LIBOR plus
    3%.

<PAGE>
                                      -6-


-   The defaulting Shareholder will have sixty (60) days after written notice of
    default is given to (a) cure the default and either participate in the cash
    call or reimburse the demand loan made by the non-defaulting Shareholder, or
    (b) dilute as provided below.

DILUTION

-   Upon failure to cure the default, the defaulting Shareholder's shareholding
    will be diluted on a straight line basis in accordance with the standard
    industry practice as outlined in Rocky Mountain Mineral Law Foundation's
    Form 5A.

FUNDING BY THIRD PARTY LOANS

-   In the event of funding requirements which cannot be funded by cashflow, BGL
    shall be permitted to arrange debt financing from third parties.

-   The Board and Shareholders of the Company shall provide all the necessary
    approvals required for the establishment of third party loans, including but
    not limited to the provision of any security over the mining title and
    assets of the Company and commitment to gold refining, sales and hedging
    undertakings.

6. BOARD OF DIRECTORS

-   The business of the Company shall be conducted by the Board in the best
    interests of the Company on sound commercial profit-making principles and in
    accordance with the guidelines, principles and standards agreed and adopted
    by the Shareholders from time to time, so as to generate the maximum
    achievable maintainable profits available for distribution to Shareholders.

-   The Board will consist of seven directors and seven alternates, of whom
    three directors and three alternates will be nominated by BGL, two directors
    and two alternates by GMWU, and one director and one alternate by each of
    the Investors and the Government of Ghana.

-   Directors' fees commensurate with the custom and practice of Ghana will be
    paid to any Directors that are not full time employees of the Company, BGL
    or its affiliates.

-   Any reasonable expenses incurred by the Directors in performing their
    responsibilities and attending meetings will be paid by or reimbursed by the
    Company, upon presentation of appropriate documentation.

BOARD MEETINGS AND VOTING

-   Meetings will be held in Ghana.

-   The Chairman will be appointed by BGL and will have a casting vote in the
    event of a tie on any resolution.

-   Directors may be represented by alternates or substitutes to the extent
    allowed by Ghana law.

-   A quorum will be four directors (including those represented by alternates
    or substitutes) of whom at least one is a BGL nominee and one is a GMWU
    nominee. If at any meeting a quorum shall not be present by reason only of
    the fact that the nominees are absent, then, the meeting shall stand
    adjourned to the same day and time three weeks later and at that meeting the
    quorum requirements shall be any two directors.

<PAGE>
                                      -7-


DECISIONS OF DIRECTORS

-   A decision of the Board must be approved either by a resolution passed by
    the affirmative vote of not less than that number of directors present and
    constituting a quorum at a meeting of directors duly called or by an
    instrument signed by all the directors.

-   The Board has the authority to deal with everything except items
    specifically required by Ghanaian law to be dealt with by the Shareholders
    and except any decision to suspend, significantly curtail or cease
    operations.

-   No resolution will be effective unless it has been passed by the affirmative
    vote of at least one nominee of BGL and one nominee of GMWU.

PROCEEDINGS AND MINUTES OF BOARD

-   The Secretary of the Company shall keep minutes of each meeting and shall
    provide a copy of such minutes in draft form to each Director and alternate
    or substitute in attendance as soon as practicable but in any event no later
    then fourteen (14) days after each meeting.

-   Following receipt of draft minutes of any meeting, Directors and alternates
    or substitutes who were in attendance shall provide to the Secretary within
    a further period of ten (10) days a copy of the draft marked to show
    suggested additions, revisions and deletions to the draft minutes. The
    Secretary shall then circulate a revised draft reflecting such suggestions.
    A Director or substitute in attendance who fails to provide a draft showing
    suggested additions, revisions and deletions within such a time period shall
    be deemed to have approved the minutes in the form circulated by the
    Secretary. At the next following Board meeting the draft minutes shall be
    discussed by the Board in light of all suggested additions, revisions and
    deletions following which the Secretary shall prepare and circulate revised
    minutes reflecting the results of the Board Discussion.

-   Within ten (10) days following such Board meeting the Secretary shall
    provide a copy of the final text of such minutes to each director and
    alternate and substitute. If no further comments are received by the expiry
    of a further period of ten (10) days the minutes as so provided by the
    secretary shall be deemed to have been approved by the Board and shall be
    signed. If further comments are received prior to the expiry of such a
    period, the minutes shall be discussed and finalized by Majority Decision at
    the next Board meeting, following which they shall again be circulated and
    finalized in accordance with the procedures set out in the immediately
    preceding sentence. Pending finalization the Company shall be entitled,
    unless the Board by Majority Decision in any specific case resolves
    otherwise, to conduct its business on the assumption that Board decisions
    included in draft minutes provided to each Director and alternate by the
    Secretary have been made as set out in the draft minutes.

BOARD COMMITTEES

-   The Board will have such committees as is determined by Board resolution.

7. SHAREHOLDERS AND VOTING

-   Shareholders meetings shall be held annually for the purposes of appointing
    the Board and transacting the other business; and at such other times as may
    be required to transact any other business.

<PAGE>
                                      -8-


-   A quorum for a meeting of Shareholders shall be at least two individuals
    present in person and holding or representing by valid proxy not less than
    25% of the outstanding Shares.

-   All matters requiring shareholder approval shall be approved by a majority
    of the votes cast at a meeting or by a written resolution signed by
    Shareholders holding 50% of the Shares, subject to any higher percentage
    required by the Code for specific items.

-   Any decision to suspend, significantly curtail or cease operations will
    require the affirmative vote of holders of not less than 70% of the Shares.

8. MANAGEMENT

-   The Company will have a Chairman who will be the nominee of BGL.

-   The Company will have a Managing Director and a Secretary who will each have
    such duties and responsibilities as are determined by the Board.

-   Day to day management shall be performed by the Manager, who, as long as BGL
    owns at least 30% of the Shares, will be BGL, in accordance with the
    Management Agreement.

9. FINANCIAL

-   The Company shall maintain proper company and accounting records and shall
    cause monthly and annual financial statements to be prepared in accordance
    with generally accepted accounting principles.

-   PricewaterhouseCoopers, or such other internationally recognized firm of
    accountants agreed in writing between the Parties, shall be auditors of the
    Company.

-   Budgets shall be approved annually based on draft budgets presented by the
    Managing Director.

-   Prior to the commencement of each Financial Year, the Company will send to
    the Directors draft Budgets for each category of activity to be undertaken
    by the Company in such Financial Year.

-   The draft budget will be circulated to the Board for consideration, to be
    approved annually no later then 30 days after the commencement of each year.


10. RESTRICTION ON TRANSFER

-   No Share transfers will permitted except as provided in this Agreement.

-   Neither the GMWU nor the Trust may transfer any of their respective Shares
    so long as either of them is indebted to BGL in respect of any portion of
    the subscription price.

-   BGL will be entitled to transfer its Shares to any Affiliate or third party
    who agrees to be bound by the terms of this Agreement.

-   The Investors will be permitted to transfer Shares amongst themselves or to
    Affiliates who agree to be bound by the terms of this Agreement.

-   No Shareholder will be entitled to pledge its Shares unless the pledgee
    agrees to be bound by the terms of this Agreement.

<PAGE>
                                      -9-


-   Subject to the foregoing, a Shareholder wishing and entitled transfer any of
    its Shares must first offer its Shares to the other Shareholders (except the
    Government), on a pro rata basis, at the same price and on the same terms on
    which they would sell them to a third party.

-   If Shareholders holding in the aggregate of not less than -% of the
    outstanding Shares wish to sell all of their shares to a third party, the
    remaining Shareholders (except the Government) may be required by such
    selling Shareholders to sell their shares to such third party on the same
    terms and conditions under which that party is purchasing the Shares from
    the selling Shareholders.

11. DEFAULT

-   A Shareholder shall be in default under this agreement if, at any time (a)
    such Shareholder is in breach of any of its material obligations under this
    Agreement and which continues for seven (7) days after notice by the Company
    specifying such breach given to all Shareholders; (b) bankruptcy, insolvency

-   Non defaulting Shareholders may acquire the defaulting Shareholder's shares
    for their fair market value.

12. DISPUTE RESOLUTION

-   Any dispute, controversy or claim arising under or in connection with this
    Agreement, and which cannot be resolved within sixty (60) days of attempted
    negotiations between the Parties, shall be settled by arbitration in
    accordance with this section.

-   Matters subject to arbitration shall be settled by arbitration in accordance
    with the rules and regulations of the London Court of International
    Arbitration in effect on the date of this agreement.

-   The place of arbitration shall be London England.

-   The language of the arbitration shall be English.

-   The arbitration shall be the sole and exclusive forum for resolution of the
    dispute or controversy and the award shall be final and binding.

-   A Party may demand arbitration by delivering a written notice thereof to the
    other Party setting forth a complete, concise statement of the issue(s) in
    dispute, the amount involved and the remedy requested.

-   The arbitrators shall render a written decision within six months after
    having been appointed.

-   Notwithstanding anything herein, the arbitral panel shall have the power to
    decide any dispute ex aequo et bono, with the objective of deciding such
    matters fully in accordance with the intent of the Parties as indicated by
    this Agreement.

-   The arbitrator(s) shall have the right to award or include in their award
    any relief which they deem proper in the circumstances, including, without
    limitation, money damages (with interest on unpaid amounts from date due),
    specific performance, injunctive relief and legal fees and costs in
    accordance with this section.

-   The arbitrator(s) shall not have the authority to award exemplary, punitive,
    consequential or special damages and each Party shall be limited to the
    recovery of any actual damages sustained by it.

<PAGE>
                                      -10-


-   The number of arbitrators shall be three. One arbitrator shall be nominated
    by each of the Parties and shall then agree on the appointment of a third
    arbitrator, who shall be disinterested in the dispute and shall have no
    connection with any party.

-   All arbitrators shall be persons having experience in the minerals industry

-   Unless the three arbitrators have been appointed within thirty (30) days
    after the date on which either Party requests the settlement of any dispute
    by arbitration pursuant to this Section, the London court of International
    Arbitration shall appoint the three arbitrators referred to above. The
    appointing authority may appoint from among nationals of any country,
    whether or not a Party is a national of that country.

13. GENERAL

-   The interpretation and performance of the Agreement shall be governed by the
    laws of the Republic of Ghana.

-   The Party's obligations will be suspended for the duration of a Force
    Majeure event.

-   Confidentiality and non-disclosure obligations.

-   All Notices shall be in writing and may be given by being delivered or sent
    by facsimile or mail to the authorized address of the Shareholder and the
    Company.


14. SHAREHOLDER WARRANTIES

-   Each of the Shareholders represents and warrants to each other Shareholder
    that it has the capacity to enter into and perform this agreement and all
    the obligations contemplated herein and that all corporate and other actions
    required to authorize it to enter into and perform this Agreement have been
    properly taken

-   that such Shareholder owns beneficially and of record the number of Shares
    which are expressed to be owned by such Shareholder in the Agreement, that
    such Shares are not subject to any mortgage, lien, charge, pledge,
    encumbrance, security interest or adverse claim and that no Person has any
    rights to become a holder or possessor of any of such Shares or of the
    certificates representing the same;

-   if such Shareholder is an individual, that such Shareholder has the capacity
    to enter into and give full effect to this Agreement;

-   if such Shareholder is a corporation, that it is duly incorporated and
    validly existing under the laws of its jurisdiction of incorporation and
    that it has the corporate power and capacity to own its assets and to enter
    into and perform its obligations under this Agreement;

-   if such Shareholder is a trust, partnership or joint venture, that it is
    duly constituted under the laws which govern it and that it has the power to
    own its assets and to enter into and perform its obligations under this
    Agreement;

-   that this Agreement has been duly authorized and duly executed and delivered
    by such Shareholder and constitutes a valid and binding obligation
    enforceable in accordance with its terms, subject to the usual exceptions as
    to bankruptcy and the availability of equitable remedies;

-   that the execution, delivery and performance of this Agreement does not and
    will not contravene the provisions of its articles, by-laws, constating
    documents or other

<PAGE>
                                      -11-


    organizational documents or the documents by which it was created or
    established or the provisions of any indenture, agreement or other
    instrument to which such Shareholder is a party or by which such Shareholder
    may be bound;

-   that all of the foregoing representations and warranties will continue to be
    true and correct during the continuance of the Agreement.

<PAGE>

                                   SCHEDULE H

          DETAILED LIST AND COSTING OF WORKING CAPITAL AND SPARE PARTS
                              REQUIREMENTS FOR PGR





BGL has received the list contained in PGR's letter dated 27th October, 2001
detailing requirements for $500,000.


<PAGE>

                                   SCHEDULE I

                            TOLL PROCESSING AGREEMENT

1. BGL OBLIGATIONS

-   to purchase 100% of ore produced by PGR from the PGR Lease Area during the
    term of the Agreement, which shall be crushed to a closed size set of 10.16
    cm. (4 inches) containing more than 3 g/t of gold per ton measured over a
    period of 24 hours and delivered at a rate greater than 100 tonnes per day
    for the duration of a 7-day measurement period ("PGR Ore");

-   to take delivery of PGR Ore at PGR's Central Shaft headgear bin, title and
    risk therefore passing to BGL at the point where the PGR Ore discharges from
    the conveyor known as CV 4 and enters into the cylindrical ropeway bin;

-   to intermingle PGR Ore with its own ore and process it in such manner as BGL
    deems appropriate;

-   to provide, maintain, calibrate and operate tonnage measurement and sampling
    facilities satisfactory to PGR acting reasonably and to maintain and operate
    such cylindrical ropeway bin and loading facilities as BGL may require;

-   to permit PGR and its duly authorized technical representatives unrestricted
    access to measurement and sampling facilities;

-   to perform gold assay either at BGL's facilities or at an independent
    facility selected by BGL;

-   to permit PGR to check at its expense all assayed samples; and

-   to pay PGR, as provided under "Payment", for all ounces of fine gold hoisted
    in PGR Ore.

2. PGR OBLIGATIONS

-   to provide 100% of PGR Ore for purchase and treatment by BGL during the term
    of the Agreement;

-   to maintain and operate all ore handling facilities from underground up to
    and including CV 4;

-   to provide BGL's employees and representatives with unrestricted access to
    the weighing, loading and sampling facilities to carry out their
    operational, supervisory, maintenance, calibration and security duties; and

-   to pay all taxes and royalties on the gold produced from PGR Ore.

<PAGE>
                                      -12-


3. MEASUREMENT AND ASSAY

-   Moisture sampling to determine percentage of dry solids shall be conducted
    on a shift basis, and total tonnage hoisted shall be adjusted to dry tonnage
    prior to calculating gold hoisted.

-   Dry tonnes hoisted per shift shall be computed against the weighted average
    of gold grade for the relevant shifts to determine the cumulative ounces of
    gold hoisted over a seven (7) day period.

-   Each sample shall be split into three (3) identical portions of which: the
    first portion shall be submitted to the BGL laboratory, or an independent
    laboratory of BGL's choice, for gold analysis; the second portion shall be
    made available to PGR; and the third portion shall remain in safekeeping for
    use in disputes.

-   Sample analysis shall make use of the Catalyst Cyanide Assaying technique
    wherein large samples are bottle rolled in Leach WELL catalyst for one hour.

-   This laboratory technique is specified in order to eliminate the effects of
    "free gold scatter and to reduce assay time, thereby allowing faster
    determination of the PGR Ore grade.

-   LeachWELL(TM) 60X shall be used as the catalyst; industry approved
    procedures shall be employed.

-   PGR or BGL may at any time submit a written request to review the assay
    methodology, which may then be amended accordingly by agreement between the
    parties.

4. PAYMENT

-   Payment for the PGR Ore hoisted in each seven-day period ending at 8:00 AM
    Monday (the "Measurement Period") shall be made by 5:00 PM on the following
    Monday.

-   Payment shall be calculated as follows:


    PAYMENT      =       DMT X WAG X MRF                UOC X 31.1035
                         ---------------   *   [  LGF - ------------- ]
                             31.1035                        WAG

- Where:

        (i)   PAYMENT is the amount calculated in United States dollars to be
              paid to PGR on the Monday following each Measurement Period.
              Payment shall be made in a combination of Ghanaian Cedi and United
              States dollars, in accordance with the provisions of the Foreign
              Exchange Retention Agreement entered into between BGL and the
              Government of Ghana.

        (ii)  DMT is the number of dry metric tonnes of PGR Ore hoisted during
              the Measurement Period.

<PAGE>
                                      -3-


        (iii) WAG is the weighted average grade in grams per tonne of the PGR
              Ore hoisted during the Measurement Period.

        (iv)  MRF is the metallurgical recovery percentage factor for the PGR
              Ore, which is agreed to be 81%. PGR or BGL may at any time submit
              a written request to review the MRF, which may then be amended
              accordingly by agreement between the parties.

        (v)   31.1035 is the number of grams in each troy ounce.

        (vi)  LGF is the London PM Gold Fix by the LME in United States dollars
              per troy ounce of gold on the Wednesday immediately following the
              Measurement Period.

        (vii) UOC is the Unit Operating Cost, which is estimated to be $17.80
              per tonne of PGR Ore, based on the PGR published production and
              cost figures for the period January 2000 to August 2001 and
              subject to final agreement between the parties.The UOC will be
              subject to a rise and fall formula based on the input cost of key
              variables to be agreed between the parties.

-   For the duration of any period (other than a force majeure period which
    would have affected the PGR plant) during which BGL is unable to transport
    or treat PGR Ore, BGL shall be obligated to purchase all PGR Ore produced by
    PGR and make payments to PGR as if such PGR Ore had been transported and
    treated by BGL in accordance with the provisions of the Agreement. For
    greater certainty, BGL shall be responsible for all additional costs
    incurred during such period.

5. EXCLUSIONS

-   BGL shall not be obligated treat or pay for PGR Ore hoisted, which otherwise
    complies with the requirements for PGR Ore as defined above but whose
    weighted average assay return is less than 3 g/t for a seven-day period.

-   Where the weighted average assay return for any 24-hour period is less than
    3 g/t, BGL may, having taken reasonable steps to inform PGR thereof,
    stockpile all PGR Ore at an area close to Central Shaft designated by PGR,
    until such time as the weighted average assay return is once again more than
    3 g/t.

-   Title and risk of PGR Ore so stockpiled shall return to PGR. In the event
    that BGL subsequently agrees to accept such stockpiled ore, title and risk
    shall be assumed by BGL once the ore has been reloaded;

-   All costs incurred in stockpiling such ore as well as any rehandling, will
    be for PGR's account and may be offset by BGL from any future payments due
    to PGR.

-   BGL shall not be obligated to, pay for or treat PGR Ore hoisted, whose total
    metric tonnage is less than 700 tonnes for a seven-day period.

<PAGE>
                                      -4-


6. DISPUTES

-   In the event that the independent laboratory assays for a 24-hour period
    differ by more than 10% from those of the BGL laboratories, either party
    will have the right to declare a dispute.

-   In the event that a continuous difference between the two laboratories is
    observed of greater than 5% over a seven-day period, either party will have
    the right to declare a dispute.

-   In the event of a dispute being declared, the third "dispute sample" shall
    be submitted to a mutually acceptable third laboratory for independent
    analysis. The assay return from this analysis shall be accepted by both
    parties without reservation or right of appeal.

-   The party declaring the dispute shall pay for the third party assay costs.

-   Payment of the disputed amount shall be made based on BGL's calculation and
    any over or under payment will be deducted or added to the first payment to
    be made to PGR after the dispute has been resolved.

7. TERM AND TERMINATION

-   The agreement will come into effect within 24 hours of the Decommissioning
    and shall remain in effect unless and until terminated as provided below.

-   The Alternative Facility has been provided in accordance with a time
    schedule to be agreed and subject to acceptance of the Alternative Facility
    by PGR, which shall not unreasonably be withheld.

-   The date of Decommissioning shall be agreed and confirmed by both parties,
    on not less than 60 days' prior notice. In the event of Decommissioning
    occurring without a 60-day agreed notification period, the agreement shall
    commence within 60 days of Decommissioning.

-   PGR may suspend treatment of PGR Ore by giving BGL not less than thirty (30)
    days' written notice thereof.

-   In the event PGR is unable to give the required notice, it will reimburse
    BGL for all reasonable costs incurred to demobilise the weighing, sampling
    and transportation arrangements.

-   For the period of the suspension, PGR will reimburse BGL for all reasonable
    costs, including, but not limited to, security, transportation standby, care
    and maintenance, etc.

-   PGR may terminate the agreement at any time by giving 30 days' written
    notice to BGL, whereupon BGL shall be released (1) from all future
    obligations to purchase or treat PGR Ore and (2) from any obligation to
    provide an Alternative Facility as defined in the agreement to which this is
    a Schedule.

-   BGL may terminate the agreement at any time by giving 30 days' written
    notice to PGR, which shall specify that an the Alternative Facility as
    defined in the agreement is now available, whereupon the agreement shall
    terminate on the date specified in such notice,

<PAGE>
                                      -5-


    subject only to the acceptance of the Alternative Facility by PGR, which
    shall not unreasonably be withheld.

-   In the event PGR fails to supply PGR Ore or to comply with the requirements
    of the definition set out above under "BGL Obligations" averaged over a
    three-month period, BGL shall be entitled to terminate the agreement and be
    released from its obligations.

-   Either party may terminate the agreement upon the bankruptcy or insolvency
    of the other.

8. OTHER

-   Interpretation and performance shall be governed by Ghana law.

-   The parties' obligations will be suspended for the duration of a force
    majeure event.

-   Notices will be given in the manner provided for in the Agreement to which
    this is a schedule.

<PAGE>

                                   SCHEDULE J

                           FORM OF PGR COUNSEL OPINION

November ___, 2001


Bogoso Gold Limited
32 Akosombo Road,
Airport Residential Area,
PO Box 16075, Airport,
Accra
GHANA

Dear Sirs,

        AGREEMENT DATED NOVEMBER - , 2001 BETWEEN BOGOSO GOLD LIMITED AND

                         PRESTEA GOLD RESOURCES LIMITED

We are a firm of legal practitioners duly qualified, licensed and of good
standing under the laws of the Republic of Ghana.

We have acted as legal advisors to Prestea Gold Resources Limited (the
"Company") in connection with the above-referred Agreement (the "Agreement") and
the transactions provided for therein ("Transactions"), including the grant by
the Company to Bogoso Gold Limited ("BGL") of an option (the "Option") to
acquire shares in the Company:

We have reviewed:

1. the Agreement;

2. the Resolutions of the shareholders of the Company dated November -, 2001
approving the Agreement and the Transactions;

3. the Regulations and minute books of the Company;

4. the approval letter issued by the Ministry of Mines of the Republic of Ghana
dated ________________, 2001;

5. the approval letters issued by the __________________ dated ________________,
2001;

6. the mining lease (the "Mining Lease") dated June 29, 2001 between the
Government and the Company; and

7. [OTHER DOCUMENTS]

<PAGE>
                                      -2-


We have considered all such questions of law, examined all such other
agreements, documents and instruments, as we have considered necessary for the
purpose of rendering the opinions set forth herein. With respect to the various
questions of fact material to our opinion, we have relied on the various
representations contained in such agreements, documents and instruments.

Capitalized terms and expressions used in this opinion letter have the meanings
ascribed to them in the Agreement.

In our examination, we have assumed the authenticity of all documents submitted
to us as originals, the conformity to original documents of all documents
submitted to us as certified or photostatic copies and the authenticity of the
originals of such latter documents. In addition we have assumed: (i) the
genuineness of all signatures, (ii) the due authorization, execution and
delivery of all documents by the parties thereto other than BGL; and (iii) the
due authority of all persons executing such documents.

Based on the foregoing we are of the opinion that:

1. The Company has been duly incorporated, is validly existing under the laws of
the Republic of Ghana, is in good standing and is duly qualified to do business
in the Republic of Ghana.

2. The Company's authorized capital stock consists of - equity shares of which -
have been issued as fully paid and non-assessable shares, made up of - Class "A"
shares (the "Class `A' Shares") and - Class "B" shares (the "Class `B' Shares").
There is no material difference between the rights, privileges and restrictions
attached to the Class "A" Shares and the Class "B" shares except that only the
Government may hold Class "B" Shares and is entitled at all times to hold 10% of
the issued and outstanding shares in the capital of the Company for no
consideration.

3. The Government is the registered owner of - fully paid and non-assessable
Class "B" Shares, representing 10% of the issued and outstanding shares in the
capital of BGL.

4. The Ghana Mineworkers Union ("GMWU) is the registered owner of - fully paid
and non-assessable Class "A" Shares, representing - % of the issued and
outstanding shares in the capital of the Company.

5. All governmental and regulatory consents and approvals required from the
Republic of Ghana, the Government or any ministry or other department of the
Government (including without limitation the Bank of Ghana and the Ministry of
Mines of the Republic of Ghana) required in connection with (i) the Agreement;
and (ii) the Transactions, including the Option, have been obtained.

6. The Company has the corporate power and authority to execute and deliver the
Agreement and each PGR Document to be delivered on the Closing Date and the
Option Closing

<PAGE>
                                      -3-


Date and to perform its obligations under, and to carry out and consummate all
transactions and actions provided for, or contemplated by, the Agreement. All
corporate action required on the part of the directors and shareholders of the
Company in connection with the Agreement and the Transactions has been taken,
and none of the foregoing conflicts with the Regulations of the Company or any
other agreement to which it is a party or by which any of its properties or
assets is bound.

7. The Agreement is, and each PGR Document delivered or to be delivered on the
Closing Date and the Option Closing Date, respectively, will be, the valid and
binding obligation of the company enforceable in accordance with its terms.

8. The only registrations and filings in public offices or registries required
in connection with the Agreement and the Transactions and their implementation
are:

        (i)            -                     -       -

9. No stamp duty or other taxes or duties are payable in respect of the
Agreement or the Transactions except on ___________________.

10. The Mining Lease grants the Company the exclusive right to work, develop and
produce gold in the 95 square kilometer area identified in the Mining Leases
(the "Mining Lease Area") including the processing, storing and transportation
of ore and materials.

11. The Mining Lease is valid for a period of thirty (30) years and may be
extended for a further period subject to the Company giving the Government not
less than six (6) months notice of its intention to do so before the expiration
of the applicable term.

12. To the best of our knowledge, after reasonable inquiry, the Mining Lease is
not subject to any mortgage, charge, encumbrance or other security interest.

13. To the best of our knowledge, after reasonable inquiry, there are no
actions, suits, claims or proceedings legal or administrative with respect to
the Mining Lease Area is excess of US$5,000 individually, or US$50,000 in the
aggregate.

Our opinion expressed in paragraph 13 above is qualified to the extent that:

(a) the enforceability of any provision of any ____________________ may be
limited by bankruptcy, insolvency or similar laws of general application
affecting the rights of creditors and secured parties generally;

(b) a particular court may refuse to grant certain equitable remedies including
specific performance with respect to the provisions of any
______________________.

Our opinion is limited solely to the laws of the Republic of Ghana in effect on
the date hereof and no opinion is expressed herein as to any matters governed by
the laws of any other jurisdiction.

<PAGE>
                                      -4-


This opinion is furnished to you solely in connection with the Agreement and the
Transactions and may not be relied upon or described or quoted by any other
person, firm or entity other than the addressees without, in each instance, our
prior written consent.

Yours sincerely,

<PAGE>

                                   SCHEDULE K

                            PGR SHAREHOLDER APPROVAL

Resolution of the shareholders of PRESTEA GOLD RESOURCES LIMITED (the "Company")
passed on November ____, 2001 pursuant to section 174 (1) of the Companies Code.

WHEREAS:

A.  The Honourable Minister for Lands, Forestry and Mines by letter (ref:
    DB-44/124/07) dated March 29, 2001 to the Company, Bogoso Gold Limited
    ("BGL"), and Prestea Sankofa Gold Limited instructed the same to enter into
    tripartite negotiations according to terms of reference communicated to the
    Mediator, John Bentum-Williams by letter (ref: DB-44/124/07) dated March 29,
    2001;

B.  The Company and BGL entered into a Letter Agreement dated May 21, 2001,
    which contemplates the entering into of a definitive agreement between them.


C.  As contemplated by the Letter Agreement, BGL's 90% shareholder, Golden Star
    Resources Ltd, entered into an agreement with Barnato Exploration Limited
    dated June 21, 2001, which was subsequently completed on October 2, 2001,
    whereby for valuable consideration which has been delivered, Barnex
    abandoned its claims and rights to what is known as the Prestea Property in
    Ghana;

D.  The Company surrendered its mining lease dated November 1, 2000 to the
    Government of Ghana ("Government") in return for a new mining lease over the
    Prestea Property below a depth of 150.37 metres below sea level granted on
    June 29, 2001;

E.  BGL was granted a mining lease over the Prestea Property to a depth of
    150.37 metres below sea level on June 29, 2001; and

F.  BGL and PGR entered into an Agreement, dated November ________, 2001 (the
    "Agreement"), complying with the terms of the Letter Agreement


BE IT RESOLVED THAT:

1.  The Agreement be and is hereby approved, ratified and confirmed, subject
    only to the obtaining of the necessary consents and approvals, including but
    not limited to, the approval of Government.

2.  Without limiting the generality of the foregoing, the following specific
    provisions of this Agreement are hereby approved, ratified and confirmed:

<PAGE>
                                      -2-


        (i)   The adequacy of payment of US$4.0 million (of which US$0.5 million
              has already paid) as consideration for the property and rights
              conveyed and granted by PGR;

        (ii)  The formation of the Trust by BGL and issuance of a 10%
              shareholding in the Company to the Trust, as contemplated in the
              Agreement;


        (iii) The offering of 10% shareholding in the Company to individual
              Ghanaian Investors for US$0.5 million, which if not subscribed to
              will be made available to Ghana Mine Workers Union and BGL in
              equal proportions unless one of the parties does not take up their
              subscription in which case the other party can take up the whole
              subscription; and

        (iv)  The appointment of PricewaterhouseCoopers as the Auditors of the
              Company on or before the Option Exercise Date.

3.  The officers of the Company be and each of them hereby is, authorised,
    empowered and directed, in the name of and on behalf of the Company or
    otherwise, to do and perform (or cause to be done or performed) all acts and
    things and to execute, deliver and file, or cause to be executed, delivered
    and filed, any such agreements, documents, payments, applications,
    instruments, certificates, and undertakings (with such changes or
    modifications as they may deem advisable or appropriate), and to take such
    other and further actions, in the name and on behalf of the Company, as they
    may deem to be proper, necessary, desirable or appropriate to carry out and
    effectuate the purpose and intent of the foregoing resolutions, to comply/
    with the requirements of the agreements approved by the foregoing
    resolutions, and the authority for the taking of such actions and the
    making, execution, delivery or filing of such agreements, documents,
    payments, applications, instruments or certificates shall be conclusively
    evidenced thereby, and that all acts and things previously done and
    performed (or caused to be done or performed) in the name of and on behalf
    of the Company or otherwise prior to the date of these resolutions in
    connection with the transactions contemplated by the foregoing resolution.

    These resolutions may be executed by the Shareholders in as many
    counterparts as may be necessary, each of which so signed (including those
    transmitted by electronic facsimile) shall be deemed to be an original, and
    such counterparts together shall constitute one and the same instrument and
    notwithstanding the date of execution shall be deemed to bear the date first
    above written.

    Signed:___________________



    Signed:___________________

    GHANA MINEWORKERS UNION of the TUC (Ghana)


</TEXT>
</DOCUMENT>
