AMAX GOLD INC, 10-K, 1996-03-29

AMAX GOLD INC
10-K, 1996-03-29
GOLD AND SILVER ORES

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<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 1995

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the transition period from to
-------------- --------------

Commission file number 1-9620

AMAX GOLD INC.
(Exact name of registrant as specified in its charter)

DELAWARE 06-1199974
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)

9100 EAST MINERAL CIRCLE 80112
ENGLEWOOD, COLORADO (Zip Code)
(Address of principal executive offices)

Registrant's telephone number, including area code: (303) 643-5500

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
<TABLE>
<CAPTION>
============================================================================================================================
Title of each class Name of each exchange on which registered
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C>
Common Stock, $0.01 par value (96,449,978 shares New York Stock Exchange, Inc.
outstanding at March 26, 1996) The Toronto Stock Exchange
New York Stock Exchange, Inc.
$3.75 Series B Convertible Preferred Stock, $1.00 par
value (1,840,000 shares outstanding
at March 26, 1996)
</TABLE>

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.

Yes X No
------ ------

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained,
to the best of the registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K or any amendments to this Form 10-K. ______

The aggregate market value of voting stock held by non-affiliates at the
closing price of $7-1/8 on March 26, 1996, was approximately $334,500,000.

Portions of the following document are incorporated by reference into this
Form 10-K: registrant's definitive Proxy Statement for the 1996 annual
meeting of stockholders to be filed within 120 days of the end of the
fiscal year.<PAGE>
PART I

ITEMS 1 AND 2. BUSINESS AND PROPERTIES

Amax Gold Inc. ("Amax Gold" or the "Company") and its subsidiaries are
engaged in the mining and processing of gold and silver ore and in the
exploration for, and acquisition and development of, gold-bearing
properties, principally in North and South America and Russia. The
Company's share of production from its operating properties in the
United States and Chile totalled 238,255 ounces during 1995, and its
share of reserves as of December 31, 1995 in all its properties
totalled approximately 242 million tons of ore reserves with an
average grade of 0.029 ounces of gold per ton, with 7.0 million
contained ounces of gold. The Company has agreed to acquire, subject
to certain conditions, from Cyprus Amax Minerals Company ("Cyprus
Amax") the Kubaka gold project in the Russian Federation with 2.7
million tons of ore reserves with an average grade of 0.460 ounces of
gold per ton, with 1.25 million contained ounces. The Company expects
to complete the acquisition of the Kubaka project mid-1996.

The Company was incorporated in Delaware in 1987 and reincorporated in
1995. Cyprus Amax owns approximately 51.2 percent of the Company's
outstanding common stock and has the right to acquire additional
shares in connection with the Kubaka acquisition and under certain
financing arrangements.

The Company's operating properties consist of a 50 percent interest in
the Refugio Mine in Chile; a 90 percent interest in the Guanaco Mine
in Chile; a 100 percent interest in the Hayden Hill Mine in Lassen
County, California; a 100 percent interest in the Sleeper Mine in
Humboldt County, Nevada; and a 100 percent interest in the Wind
Mountain Mine in Washoe County, Nevada. In addition, the Company owns
a 100 percent interest in the Fort Knox Project near Fairbanks,
Alaska; and a 62.5 percent joint venture interest in the Haile Project
in Lancaster County, South Carolina. The Company has agreed to
acquire an indirect 50 percent interest in the Kubaka Project in far
eastern Russia. The location of Amax Gold's operations and properties
is shown on the map on page 2, and a description of operations and
properties is set forth below.

Unless otherwise indicated, the term "reserves" when used herein
refers to proven and probable reserves, and all reserve information is
given as of December 31, 1995. Except as otherwise noted, references
to "tons" and "ounces" are to short tons of 2,000 pounds and to troy
ounces of 31.103 grams, respectively. Production is defined as gold
or silver produced in the form of dore plus any inventory in mill
carbon circuits. Tons mined include removal of waste required to
access ore. Cash production costs include all operating costs at the
mine site, including overhead, proceeds taxes and royalties, and are
net of credits for silver by-product.

All of the Company's operating properties are open pit mines. Except
for mining equipment owned by contract miners at Guanaco and Refugio,
the Company owns its mining and processing equipment, which is
maintained in good operating condition. Ore is processed by milling
or heap leaching. Milling is the traditional process for recovering
gold from ore. After ore is crushed, the gold and silver are
concentrated and then smelted into dore which is shipped to refiners
for further processing. The milling process is typically used for
higher recovery oxide and sulfide ores.

Heap leaching is a lower cost processing method principally applied to
oxidized ores. The heap leach recovery rate is generally lower than
for milling. In the heap leaching process, crushed and/or run-of-mine
ore is loaded onto impermeable leach pads. The ore is irrigated with
a weak cyanide solution which penetrates the ore, dissolving the gold
and silver. The pregnant solution is collected and pumped through
activated carbon or a Merrill Crowe zinc precipitation plant to remove
the metals from the solution. After the gold and silver is stripped
from the carbon or processed from the zinc precipitate, it is smelted
into dore which is shipped to refiners for final processing.

The terms Amax Gold and the Company when used herein may refer
collectively to Amax Gold Inc. and its subsidiaries or to one or more
of them depending on the context.

<PAGE>

[MAP OF THE WORLD INDICATING THE LOCATIONS OF THE COMPANY'S OPERATING
MINES, DEVELOPMENT PROPERTIES AND EXPLORATION PROJECTS.]

-2-<PAGE>
REFUGIO MINE

In January 1993 the Company acquired a 50 percent interest in the
Refugio Mine, consisting of three gold deposits located in the
Maricunga Mining District in central Chile, approximately 75 miles
east of Copiapo. The property, situated between 13,800 feet and
14,800 feet above sea level, is held by Compania Minera Maricunga
("CMM"), a Chilean contractual mining company indirectly owned 50
percent by the Company and 50 percent by Bema Gold Corporation, a
publicly traded company based in Vancouver, British Columbia.

Operations. Construction of the Refugio Mine was substantially
completed by year-end 1995 with the development of an open pit mine
and a three stage crushing and heap leach operation capable of
processing 33,000 tons of ore per day, or 11.9 million tons per year.
Production is expected to commence in April 1996. Carbon adsorption,
stripping and electrowinning are being used to recover gold from the
leach solutions. Electrowon cathodes will be smelted to dore bars for
shipment. The mine and plant are designed to produce an estimated
200,000 to 250,000 ounces of gold per year of which the Company's
share would be 50 percent. Facilities include a permanent camp with
access to the site from Copiapo provided by existing roads. Power is
supplied by on-site diesel powered generators. Water extraction
rights expected to be sufficient to supply the mine are owned by CMM.

Property Position. The Refugio property position comprises
approximately 14,500 acres, consisting of mineral rights, surface
rights and water rights sufficient to allow development of the
project. The principal ore deposit is held by mining claims which are
owned by CMM. Essentially all of the mineral rights surrounding the
claims are held by a joint venture formed by Bema and the former owner
of the Refugio claims. CMM has agreements in place with this joint
venture that will allow CMM to mine any extensions of major ore
deposits found on CMM property that extend onto surrounding mineral
rights and to use the surrounding areas for project needs. CMM owns
or controls surface rights covering the known mineralization and the
mining operation under two leases from the Chilean Army which expire
in 2001 and 2005 and may be extended for an additional ten years.

The Company, through its 50 percent ownership of CMM, is responsible
for payment of a net smelter return royalty to the former owners of
the Refugio property that is expected to average 2.5 percent of the
Company's share of production from the currently defined ore reserves.
An additional sliding scale net smelter return royalty related to net
profits and ranging from 2.5 to 5 percent is payable on the Company's
share of any production in excess of current reserves.

Geology and Ore Reserves. The Refugio property encompasses the Verde,
Pancho and Guanaco gold deposits, which are disseminated gold porphyry
deposits containing minor amounts of copper. Gold mineralization is
contained within a strong stockwork system hosted by silicified
intrusive rocks. The Verde deposit contains all the current reserves
and consists of oxide, mixed and unoxidized ore types. It is open at
depth and additional exploration potential also exists in the Guanaco
and Pancho deposits. The Refugio property lies at the southern end of
a 90 mile long belt of late volcanic origin that contains a number of
large disseminated gold-silver deposits. The following table sets
forth the proven and probable reserves in the Verde deposit.

Refugio Mine
Proven and Probable Ore Reserves in the Verde Deposit
As of December 31, 1995

<TABLE>
<CAPTION>
Gold Content
(000 oz.)
Gold ------------------------
Tons Avg. Grade The Company's
(000) (oz./ton) Total 50% Share
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Heap Leach Ore 117,976 0.029 3,343 1,672
- ----------------------------------------------------------------------------------------------------------------

</TABLE>

-3-<PAGE>
The year-end 1995 Refugio reserves were calculated by the CMM staff
from year-end 1994 reserves incorporating new development drill data,
a multiple indicator kriging program and a revised mine plan. The
cutoff grade for the pit design was based on a $375 per ounce gold
price while the cutoff grade for ore within the pit was based on a
$400 per ounce gold price. The Company expects the average ultimate
recovery rate from the total ore body using the heap leach process to
be approximately 66 percent depending upon the type of ore.

GUANACO MINE

The Company owns a 90 percent interest in and operates the Guanaco
Mine, located in the Guanaco Mining District in northern Chile
approximately 145 miles southeast of Antofagasta, Chile. Under
existing shareholder arrangements, the Company receives 100 percent of
production until certain conditions are met. Management currently
does not believe these conditions will be met; therefore, 100 percent
of Guanaco's reserves have been included in the Company's reserve
table.

Operations. The operation consists of an open pit mine, heap leach
facilities capable of processing up to 2.4 million tons of ore per
year and permanent camp facilities. The facility includes three
stages of crushing, permanent pad heap leaching and Merrill Crowe zinc
precipitation of gold. The Company has retained an experienced mining
contractor with its own equipment to drill, blast, load and transport
all ore and waste. Access to the mine from Antofagasta is provided by
the Pan American Highway (approximately 120 miles south) and a gravel
surface road (approximately 25 miles east). Power is supplied by an
on-site power plant. The water supply for mine operations comes
primarily from nearby wells and from nearby surface springs which also
provide potable water.

The Guanaco Mine began production in April 1993. Production was
hampered in 1993 by ordinary start-up delays and initial crusher
throughput problems and in 1994 by process water shortages which were
resolved in the fourth quarter of 1994. During 1995, despite
continued problems with crusher throughput, production at Guanaco
increased primarily due to higher grades and recoveries. Management
is implementing further operational efficiencies and cash production
costs are expected to decrease as a result.

The following table presents operating data for the Guanaco Mine for
the years ended December 31, 1995 and 1994 and the period from
commencement of production in April 1993 through December 31, 1993.

Guanaco Mine
Operating Data

<TABLE>
<CAPTION>
1995 1994 1993
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Tons mined 13,389,543 12,699,988 9,547,075
Tons of ore to heap leach 2,030,848 2,172,746 1,460,427
Average grade to heap leach (oz. per ton) 0.063 0.050 0.055
Heap leach recovery rate (%) 55.30 53.20 36.40

Ounces of gold produced 70,850 57,675 29,862
Ounces of silver produced 268,066 295,940 136,687

Cost per ounce of gold produced:
Cash production costs<F1> $375 $420 $664
Depreciation and depletion 151 147 142
- --------------------------------------------------------------------------------------------------------

Total production costs $526 $567 $806
- --------------------------------------------------------------------------------------------------------
<FN>
<F1> During 1994, the Company changed its method of accounting for ore loaded on heap leach pads, which decreased
1994 cash production costs at the Guanaco Mine by $65 per ounce.
</FN>
</TABLE>

-4-<PAGE>
Property Position. The Guanaco property position is comprised of
approximately 25,000 acres consisting of mineral claims leased from
Empresa Nacional de Mineria ("ENAMI"), an entity of the Chilean
government, and certain other mineral rights. Nearly all of the
reserves are located on land covered by the ENAMI lease, which expires
in 2006 and may be extended by the Company for additional five-year
terms thereafter. The lease is subject to royalties varying with the
level of production, with the royalty on gold ranging from a 7 percent
gross royalty to a 3 percent gross royalty plus a 2 percent net
profits royalty; there is a gross royalty of 2 percent for all other
metals. The property remains subject to a 1.1 percent net smelter
return royalty to the minority owners for metals other than gold.

Geology and Ore Reserves. The Guanaco deposit contains gold
mineralization in steeply dipping vein-like zones within a silicified
volcanic host rock. The following table sets forth the proven and
probable reserves at the Guanaco Mine.

Guanaco Mine
Proven and Probable Ore Reserves
As of December 31, 1995
<TABLE>
<CAPTION>
Gold Gold
Tons Avg. Grade Content
(000) (oz./ton) (000 oz.)
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Heap Leach Ore 4,858 0.078 378<F1>
- --------------------------------------------------------------------------------------------------------
<FN>
<F1> Represents 100 percent of Guanaco's reserves.
</FN>
</TABLE>

Ore reserves for 1995 were calculated by the Company. Revisions to
the 1994 Guanaco reserve model were made in order to reconcile the
significantly higher grades encountered in production blastholes to
those which were forecast. There was an upward adjustment of
operating costs in the model to reflect more accurately actual costs
in 1995. The pit was designed using a $375 per ounce gold price while
ore within the pit was based on a $400 per ounce price. No attempt
has been made to quantify a silver reserve, but the current operation
is recovering about four times as much silver as gold. Beneath the
designed gold pit, there are drill intersections of sulfide copper;
however, the intersections are too widely spaced to quantify a
resource at this time. The 1995 year-end reserve is based on a
revised reserve model with redesigned pits that reconciled 1995
production and used updated operating costs.

HAYDEN HILL MINE

The Company owns 100 percent of the Hayden Hill Mine in Lassen County,
California, approximately 120 miles northwest of Reno, Nevada.

Operations. The mine began production in June 1992. Milling
operations were discontinued in 1993 due to the lack of an adequate
supply of high-grade mill ore and the mine was reconfigured as a heap
leach only operation. The Hayden Hill operation is an open pit mine
with two pits, heap leach pads and tailings disposal facilities.
Access to the mine is provided by a county road that connects to a
state highway. Power for operations is purchased from the local rural
electric association. Water for mining and processing operations is
provided by two wells located in close proximity to the mine. Potable
water is supplied by truck.

-5-<PAGE>
The following table presents operating data for the Hayden Hill Mine
for the years indicated.

Hayden Hill Mine
Operating Data
<TABLE>
<CAPTION>
1995 1994 1993
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Tons mined 8,522,982 12,922,500 11,262,609
Tons of ore to heap leach 5,538,965 5,132,694 4,993,742
Average grade to heap leach (oz. per ton) 0.024 0.017 0.017
Heap leach recovery rate (%) 60.10 74.10 48.30
Tons of ore milled - - 423,884
Average mill-head grade (oz. per ton) - - 0.032
Mill recovery (%) - - 90.7

Ounces of gold produced:
Heap leach 80,031 65,785 41,468
Mill - - 11,570
- --------------------------------------------------------------------------------------------------------

Total 80,031 65,785 53,038
- --------------------------------------------------------------------------------------------------------

Ounces of silver produced 227,125 137,570 144,438

Cost per ounce of gold produced:
Cash production costs<F1> $275 $406 $470
Depreciation and depletion 87 105 149
- --------------------------------------------------------------------------------------------------------

Total production costs $362 $511 $619
- --------------------------------------------------------------------------------------------------------
<FN>
<F1> During 1994, the Company changed its method of accounting for ore loaded on heap leach pads, which increased
1994
cash production costs at the Hayden Hill Mine by $39 per ounce.
</FN>
</TABLE>

Property Position. The Company controls approximately 6,300 acres
through ownership of federal patented and unpatented mining claims and
fee lands and a long-term lease of federal unpatented mining claims,
which has an indefinite term. Approximately 75 percent of the current
reserves are subject to a gross receipts net smelter return royalty
ranging from 2 percent to 5 percent.

Geology and Ore Reserves. The Hayden Hill deposit occurs within a
Miocene-aged volcaniclastic sequence, comprised of dacitic tuffs and
breccias, lahars and tuffaceous lake bed sediments. At its base, this
mine sequence has siltstones which are intercalated with sandstones
and some andesites. The dacite breccia overlies the basal units and
averages approximately 200 feet thick. The deposit is dominantly
hosted by the dacitic breccia and overlying units, which were
extensively hydrothermally altered during the mineralizing event. The
following table sets forth the proven and probable reserves at the
Hayden Hill Mine.

-6-<PAGE>
Hayden Hill Mine
Proven and Probable Ore Reserves
As of December 31, 1995

<TABLE>
<CAPTION>
Gold Gold
Tons Avg. Grade Content
(000) (oz./ton) (000 oz.)
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Heap Leach Ore 10,202 0.027 273
- --------------------------------------------------------------------------------------------------------

</TABLE>

Reserves for 1995 were calculated by the Company and are based upon an
assumed gold price of $400 per ounce and variable cut-off grades. The
net reduction of the Hayden Hill reserves from year-end 1994 to year-
end 1995 is 108,000 contained ounces and resulted from 1995 production
partially offset by an increase resulting from changes in the modeling
procedures for the Providence pit and lower processing costs and
changes to the design criteria in the Lookout pit.

SLEEPER MINE

The Sleeper Mine, located in Humboldt County, Nevada approximately 28
miles north of Winnemucca, is 100 percent owned by Amax Gold.

Operations. Gold production in 1996 is expected to decrease from 1995
levels. Mining was completed as planned in the first quarter of 1996.
Milling is expected to continue until the third quarter of 1996, and
production from residual leaching is expected to continue into 1997.
Access to the mine is provided by a gravel road that connects to a
paved public highway. Power is purchased from the local rural
electric association. Water for mining and processing operations at
Sleeper is provided by a well system that dewaters the pits, and
potable water is supplied by truck. The operation includes an open
pit mine, mill, heap leach pads and tailings disposal facilities.

-7-<PAGE>
The following table presents operating data for the Sleeper Mine for
the years indicated.

Sleeper Mine
Operating Data
<TABLE>
<CAPTION>
1995 1994 1993
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Tons mined 14,467,900 18,639,300 18,608,500
Tons of ore milled 857,284 802,534 899,791
Average mill-head grade (oz. per ton) 0.095 0.110 0.078
Mill recovery rate (%) 67.30 80.60 72.70
Tons of ore to heap leach 2,779,000 5,012,600 6,327,600
Average grade to heap leach (oz. per ton) 0.018 0.016 0.019
Heap leach recovery rate (%) 55.50 44.90 41.60

Ounces of gold produced
Mill 54,731 70,750 51,257
Heap leach 27,331 36,162 48,761
- --------------------------------------------------------------------------------------------------------
Total 82,062 106,912 100,018
- --------------------------------------------------------------------------------------------------------
Ounces of silver produced 98,694 142,597 254,692
Cost per ounce of gold produced
Cash production costs<F1> $342 $273 317
Depreciation and depletion 50 92 132
- --------------------------------------------------------------------------------------------------------
Total production costs $392 $365 $449
- --------------------------------------------------------------------------------------------------------
<FN>
<F1>During 1994, the Company changed its method of accounting for ore loaded on heap leach pads, which increased
1994
cash production costs at the Sleeper Mine by $5 per ounce.
</FN>
</TABLE>

Property Position. The property was discovered by an AMAX Inc.
geologist in 1982 and development of the mine was completed in March
1986. Current facilities occupy approximately 2,000 acres of
unpatented mining claims. No royalties are payable on production from
the Sleeper Mine.

Geology and Ore Reserves. The Sleeper deposit lies within volcanic
rocks believed to have been erupted from a volcanic field of nested
calderas. Ore occurs as high-grade veins, breccias, stockworks and as
mineralized vein fragments within alluvium. The veins are localized
along steeply-dipping fractures and faults. The following table sets
forth the proven and probable reserves at the Sleeper Mine.

Sleeper Mine
Proven and Probable Ore Reserves
As of December 31, 1995

<TABLE>
<CAPTION>
Gold Gold
Tons Avg. Grade Content
(000) (oz./ton) (000 oz.)
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Mill Ore 607 0.071 43
Heap Leach Ore 260 0.019 5
- --------------------------------------------------------------------------------------------------------
Total 867 0.055 48
- --------------------------------------------------------------------------------------------------------

</TABLE>

-8-<PAGE>
Reserves were calculated by the Company and are based upon an assumed
gold price of $400 per ounce and a variable cutoff grade. The net
reduction of the Sleeper reserves from year-end 1994 to year-end 1995
is 107,000 contained ounces. The reduction from mining and processing
was offset by a gain resulting from production experience, increased
operating efficiencies and additions to the stockpile. Process
recoveries are variable due to grade, oxidation, pyrite and clay, but
based on production experience, they are expected to average 44
percent for heap leach ore and 57 percent for mill ore in 1996.

WIND MOUNTAIN MINE

Mining operations at the Company's 100 percent owned Wind Mountain
Mine were completed in January 1992. The leach pads have not been
irrigated with cyanide solution since the second quarter of 1994, and
gold recovery from residual leaching is expected to be completed in
the first half of 1996. Reclamation should be completed during 1996.

The following table presents operating data for the Wind Mountain Mine
for the years indicated.

Wind Mountain Mine
Operating Data
<TABLE>
<CAPTION>
1995 1994 1993
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Ounces of gold produced 5,312 10,513 19,296
Ounces of silver produced 7,487 72,609 86,515

Cost per ounce of gold produced:
Cash production costs $217 $164 $167
Depreciation and depletion - - -
- --------------------------------------------------------------------------------------------------------

Total production costs $217 $164 $167
- --------------------------------------------------------------------------------------------------------

</TABLE>

FORT KNOX PROJECT

The Company owns a 100 percent interest in the Fort Knox Project,
located in the Fairbanks Mining District, 15 miles northeast of
Fairbanks, Alaska.

Development. The Fort Knox operation, currently under construction,
will include an open pit mine, a conventional 36,000 tons per day
(13.1 million tons per year) process plant, a tailings storage
facility and a reservoir to supply process water. The process
facilities are designed as a zero discharge system. Power is supplied
by the public utility serving the area over a distribution line paid
for by the Company. Access is provided by paved highway for 21 miles
from Fairbanks and then for five miles by unpaved road. The mine and
plant are designed to operate year round and to produce approximately
300,000 to 350,000 ounces of gold per year with the higher rates
expected during the early years.

Property Position. The Fort Knox Project covers approximately 41,000
acres and consists of two state mining leases, approximately 1,400
state mining claims and seven patented federal mining claims and the
mineral rights to 38 patented federal mining claims. The Fort Knox
property is held by deeds, mining leases, option agreements and mining
claim locations. The leases and option agreements have expiration
dates ranging from 1996 to 2014, with provisions for extension in some
cases. The current reserve is located on approximately 1,150 acres of
land held under a state mining lease which expires in 2014 and may be
renewed for a period not to exceed 55 years. This lease is subject to
a 3 percent royalty based on net income payable to the State of
Alaska. Claims surrounding the current reserve are subject to net
smelter return royalties ranging from 3 percent to 6 percent on the
state mining claims, and both

-9-<PAGE>
a 1 percent net smelter return royalty and a 10 percent overriding net
profits interest on certain of the patented federal mining claims.

Geology and Ore Reserves. The Fort Knox gold deposit occurs as
porphyry-style mineralization of the type usually associated with
copper and molybdenum ore bodies. The ore is hosted within the upper
margins of a granitic intrusion in a stockwork of small quartz veins
and shear zones. The veins and shears are fractions of an inch to 10
inches wide with erratic and widely-spaced distribution. The gold
occurs as fine grains of free gold disseminated within and along the
margins of the veins and shears. In plan view, the deposit has a
dimension of about 4,000 by 2,000 feet, elongated in an east-west
direction and extending to depths of 1,000 feet. The geology is
relatively simple and the rocks are weakly altered. Grade is usually
related to the degree of fracturing and veining of the rocks. Because
of the low grade and erratic distribution of gold, the Company plans
to mine on a bulk tonnage basis. The following table sets forth the
proven and probable reserves for the Fort Knox Project.

Fort Knox Project
Proven and Probable Ore Reserves
As of December 31, 1995

</TABLE>

The current reserve was calculated by the Company. In 1994, Mineral
Resources Development, Inc. ("MRDI") made an independent evaluation of
this reserve using conditional simulation and found it to be a
reasonable estimate of proven and probable reserves. No changes were
made in 1995 to the year-end 1994 reserve. Reserves are based upon an
assumed gold price of $375 per ounce and a variable cutoff grade. The
Company has determined that calculating the reserves at $400 per ounce
would not materially change the results. The Company estimates that
mill recovery will be approximately 90 percent.

Capital Requirements. Due to difficult site conditions, expanded
excavation work and design enhancements, the Company believes that
Fort Knox capital costs could exceed its current estimate of $331
million, revised earlier this year from the original $256 million
estimate. The Company is reviewing various options to minimize this
increase. Current plans project production to commence around the
beginning of 1997. Management expects no change in the original
estimates of production of 350,000 ounces per year and average cash
costs of about $215 per ounce for the first five years. See "Item 7.
Management's Discussion and Analysis of Financial Condition and
Results of Operations" and Note 15 to the Company's Consolidated
Financial Statements for further discussion.

HAILE PROJECT

The Company owns a 62.5 percent joint venture interest in the Haile
Project in Lancaster County, South Carolina. The remaining 37.5
percent interest is owned by Kershaw Gold Company, Inc., a wholly
owned subsidiary of Piedmont Mining Company, Inc. ("Piedmont"). The
Company is considering various options with respect to its interest in
Haile.

Development. Piedmont operated a small-scale gold heap leach
operation at the site of the Haile Project until late 1992. Piedmont
agreed to indemnify the Company and its affiliates from environmental
liabilities arising from matters occurring or existing on the Haile
property prior to March 15, 1991 (the date of the option agreement
under which the Company acquired its interest in the Project). The
Company is involved in a dispute with Piedmont regarding the joint
venture agreement. See "Item 3. Legal Proceedings."

-10-<PAGE>
Property Position. The Haile Project covers approximately 3,600 acres
and consists entirely of fee property which is either owned by the
venture participants, leased from third parties under leases that can
be extended to 2001 or controlled by purchase agreements. The leased
property is burdened by a 4 percent net smelter return royalty.

Geology and Ore Reserves. Ore grade mineralization on the Haile
property is generally hosted within silicified and pyritized
fine-grained metasedimentary rocks near the folded and faulted contact
with overlying volcaniclastic and metavolcanic rocks. Current
reserves are contained in four separate deposits. The following table
sets forth the proven and probable reserves at the Haile Project.

Haile Project
Proven and Probable Ore Reserves
As of December 31, 1995

<TABLE>
<CAPTION>
Gold Content
(000 oz.)
Gold ------------------------
Tons Avg. Grade The Company's
(000) (oz./ton) Total 62.5% Share
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Mill Ore 8,736 0.089 780 488
- ----------------------------------------------------------------------------------------------------------------

</TABLE>

The reserves were calculated by the Company and verified by Derry,
Michner, Booth & Wahl in its April 1994 audit. No changes were made
to reserves during 1995. Pits were designed on the basis of a $375
per ounce gold price while ore within the pits was summarized using a
gold price of $400 per ounce. The Company estimates ultimate gold
recoveries would range from 65 percent to 85 percent.

KUBAKA PROJECT (ACQUISITION PENDING)

During October 1995, Amax Gold announced that it would acquire,
subject to certain conditions, Cyprus Amax's wholly-owned subsidiary,
Cyprus Magadan Gold Corporation, which owns a 50 percent interest in
Omolon Gold Mining Company ("Omolon"). Omolon is developing the
Kubaka Project in the Magadan Oblast of the Russian Federation. The
Company's share of proven and probable reserves will be 2.7 million
tons with an average grade of 0.460 ounces of gold per ton with 1.25
million contained ounces.

The Kubaka Project is an open pit, mill recovery, gold mining project
located in the Magadan Region of the Russian Far East, approximately
200 miles south of the Arctic Circle and 600 miles northeast of the
major port city of Magadan. The Kubaka Project's remote location in
this sub-Arctic region requires the Company to plan for operations in
extreme cold and provision of all services and facilities on site.
Engineering for the Project is approximately 95 percent complete and
construction of the Project is approximately 32 percent complete.
Production is anticipated to commence in early 1997 with anticipated
cash costs averaging $184 per ounce.

Omolon holds the license from the Russian government to develop the
Kubaka Project and to explore and develop the Evenskoye property, also
in the Magadan region (the "Kubaka License"). The Kubaka License is
for a period of 18 years, subject to extension of up to an additional
two years, and limits the ownership of a foreign party (i.e., the
Company) in Omolon to a maximum of 50 percent. The Kubaka License
establishes certain production requirements for Kubaka and requires
Omolon to complete exploration activities, a feasibility study and its
assessment of the reserves at Evenskoye prior to year-end 1998.

Capital Requirements. The Kubaka Project has been funded with $80
million in equity contributions by Cyprus Amax and the Russian
partners and $100 million in project financing provided by the
European Bank for Reconstruction and Development and the Overseas
Private Investment Corporation. The Company currently estimates
higher capital costs to complete the Project. These increases reflect
a possible delay in start-up and certain higher local costs and
contingency provisions. Final project estimates are currently being
developed.

-11-<PAGE>
EXPLORATION

The Company's primary exploration objective continues to be the
acquisition and evaluation of near-surface gold deposits that can be
mined by open pit methods.

Pursuant to an Exploration Joint Venture Agreement effective since
January 1994, the Company and Cyprus Amax have agreed to pool their
efforts for the principal purpose of discovering and developing future
gold prospects, with Cyprus Amax providing 75 percent and the Company
providing 25 percent of the initial exploration funding for such
prospects. A Cyprus Amax subsidiary manages exploration activities,
with equal participation by Amax Gold in decisions affecting property
acquisition and divestiture. The Agreement will terminate
December 31, 1997 unless extended by mutual agreement. Amax Gold has
the first right to acquire any gold property owned by the joint
venture and Cyprus Amax has the first right to acquire properties
containing deposits of minerals other than gold or silver. During
1995, the joint venture conducted exploration activities in the United
States, Canada, Mexico, Panama, Peru, Argentina, Chile, Ghana, Zambia,
South Africa, Spain, Russia, China and Australia.

The Company also continued exploration activity on its 100 percent-
owned Fort Knox property and its 90 percent-owned Guanaco property as
well as on the Robertson property in Nevada, which the Company plans
to relinquish. The Company expects to increase its exploration
activities in the Russian Federation following the acquisition of
Kubaka. Exploration expenditures were $5.9 million in 1995 compared
to $6.2 million in 1994. Exploration expenditures for 1996 are
expected to be approximately $5.0 million.

GOLD MARKET AND PRICES

Gold has two principal uses: product fabrication and bullion
investment. Fabricated gold has a wide variety of end uses, including
jewelry manufacture (the largest fabrication component), electronics,
dentistry, industrial and decorative uses, medals, medallions and
official coins. The Company sells all of its refined gold to banks
and other bullion dealers, using a variety of hedging techniques, and
substantially all of the Company's 1995 sales were export sales made
in Europe.

The profitability of the Company's operations is significantly
affected by the market price of gold. The price of gold has
fluctuated widely and is affected by numerous factors, including
international economic trends, currency exchange fluctuations,
expectations for inflation, consumption patterns (such as purchases of
gold jewelry and the development of gold coin programs), sales of gold
bullion holdings by central banks or other large gold bullion holders
or dealers and global and regional political events, particularly in
the Middle East and major gold-producing countries such as South
Africa and the Commonwealth of Independent States (the former Soviet
Union). Gold prices also are affected by worldwide production levels
and on occasion have been subject to rapid short-term changes because
of market speculation.

The following table sets forth for the years indicated the high and
low selling prices of gold, first position, as provided by the
Commodity Exchange, Inc. ("COMEX") in New York.

<TABLE>
<CAPTION>
High Low
---- -----
Year (dollars per ounce)
---- -----------------
<S> <C> <C>
1991 $403.20 $344.30
1992 359.30 329.70
1993 407.00 326.30
1994 398.00 370.60
1995 395.40 372.20
</TABLE>
-12-<PAGE>
REFINING, SALES AND HEDGING ACTIVITIES

Refining arrangements are in place with third parties for the
Company's production. Because of the availability of refiners other
than those with whom such arrangements have been made, the Company
believes that no adverse effect would result if any of these
arrangements were terminated.

The Company employs a number of hedging techniques with the objective
of mitigating the impact of downturns in the gold market and providing
adequate cash flow for operations while maintaining significant upside
potential in a market upswing. During 1995 and 1994 the Company's
hedging efforts resulted in average realized prices of $406 an ounce
and $401 an ounce, respectively, compared to the average COMEX price
of approximately $384 an ounce for both 1995 and 1994.

AGREEMENTS WITH CYPRUS AMAX

Amax Gold has entered into the following agreements with Cyprus Amax.

Financing Arrangements with Cyprus Amax. As a result of projected
cost increases in completing the Fort Knox Project and other projected
cash needs in 1996, the Company has renegotiated the $250 million Fort
Knox loan. The renegotiated loan agreement reduces the margin over
LIBOR or the gold lease rate paid as interest to the banks from 2.25
percent to 0.50 percent and eliminates all financial and most other
covenants of the Company. As part of the renegotiations, Cyprus Amax
has agreed to guarantee the loan until economic completion, and the
Company has agreed not to make additional draws under its $100 million
line of credit with Cyprus Amax without the prior consent of Cyprus
Amax. In addition, Cyprus Amax has agreed to provide the Company with
a demand loan facility to fund additional costs at the Fort Knox
Project and for general corporate purposes, with such funding to be
provided at the discretion of Cyprus Amax. The Company will pay
Cyprus Amax the interest differential and a fee of 2.5% based upon the
total financings and guaranties made available. The Company has
agreed to reimburse Cyprus Amax for any payments it makes under the
guaranty; any reimbursement obligation will be payable to Cyprus Amax
on demand and will bear interest at LIBOR plus 3.25 percent. All
fees, interest and repayments of advances from Cyprus Amax may be paid
by the Company at the election of Cyprus Amax in cash or, following
the approval of the Company's stockholders, in the Company's Common
Stock valued at the average closing price for the five day period
prior to such election.

In April 1994, Cyprus Amax agreed to make loans to the Company under a
revolving credit agreement from time to time until December 31, 2001
in an aggregate principal amount not to exceed at any time $100
million. The Company may elect to repay amounts of outstanding
indebtedness either by payment in cash or payment in shares of its
$2.25 Series A Convertible Preferred Stock and Cyprus Amax may convert
any indebtedness into Common Stock of the Company at a stated
conversion price.

Pursuant to a subsequent revolving credit agreement, Cyprus Amax
provided the Company with an additional $80 million line of credit
under which any indebtedness could be converted by Cyprus Amax into
Common Stock of the Company at a stated conversion price. Cyprus Amax
exercised its option to purchase 14,919,806 shares of Common Stock,
the full amount available, and as a result, this agreement has been
terminated.

Stock Issuance Agreement. In September 1995, the Company and Cyprus
Amax entered into an Agreement Regarding Stock Issuance pursuant to
which, with the agreement of both parties, obligations owing from the
Company to Cyprus Amax from time to time may be paid in shares of
Common Stock valued at the most recent 30-day average closing price.
Of the 879,500 shares issuable, 128,042 shares have been issued to
Cyprus Amax as payment for $835,473 due Cyprus Amax under the $80
million credit line.

Acquisition Agreement. Pursuant to the Agreement and Plan of Merger
and Reorganization, dated as of January 24, 1996 (the "Acquisition
Agreement"), the Company will acquire, subject to the satisfaction of
certain conditions, Cyprus

-13-<PAGE>
Amax's indirect interest in the Kubaka Project for a purchase price
payable in shares of the Company's Common Stock as follows: (i)
approximately 11.8 million shares of Common Stock to be paid upon
closing the Acquisition Agreement, (ii) approximately 4.2 million
shares of Common Stock to be paid within ten days of commencement of
commercial production of the Kubaka gold property, and (iii) a
contingent payment in shares of Common Stock (a) equal to $10 per gold
equivalent ounce (up to a maximum of $45 million) of the Company's pro
rata share of proven and probable reserves which the Company acquires
the right to mine in the Russian Federation, excluding properties
covered by the Kubaka License or acquired by the Company's joint
venture with Cyprus Amax, on or before June 30, 2004, and (b) valued
at the then current ten-day average stock price. See "--Kubaka
Project (Acquisition Pending)."

Exploration Joint Venture Agreement. Under the Exploration Joint
Venture Agreement, the Company and Cyprus Amax have agreed to pool
their efforts for the principal purpose of discovering and developing
future gold prospects. See "--Exploration."

Services Agreement. Pursuant to the Services Agreement, the Company
and Cyprus Amax provide a variety of managerial and other services to
each other on a full cost-reimbursement basis. The Company paid
Cyprus Amax approximately $4.3 million for 1995 services, including
insurance coverage, and Cyprus Amax paid the Company approximately
$0.6 million, including reimbursement for services at the Kubaka
Project.

Net Operating Loss Agreement. Pursuant to the Net Operating Loss
Agreement, the Company agreed to allow Cyprus Amax to use the
Company's 1993 net operating loss resulting in a refund of taxes paid
by Cyprus Amax in a prior year, and Cyprus Amax will reimburse the
Company at the time the Company would have received the benefit for
the 1993 net operating loss had the Company elected to carry it
forward.

Employee Transfer Agreement. Pursuant to the Employee Transfer
Agreement, the Company and Cyprus Amax have amended their respective
benefit plans to allow employees to transfer between the companies
with minimal effect on an employee's benefits.

EMPLOYEES

At December 31, 1995, the Company and its consolidated subsidiaries
employed 695 persons in addition to 94 contract miners at its Guanaco
Mine. The hourly employees at the Guanaco Mine are represented by the
Sociedad Contractual Minera Guanaco labor union and are covered by a
labor contract which expires at the end of May 1996. None of the
Company's employees in the United States are organized and the Company
considers its employee relations to be good. The Company obtains
certain administrative and other services from Cyprus Amax.

COMPETITION

The Company competes with other companies in the acquisition of
mineral interests and the recruitment and retention of qualified
employees. A number of these companies are larger than the Company in
terms of annual gold production and total reserves and have been
engaged in gold mining and exploration longer than the Company.
Management does not believe, however, that such competition has had a
material effect on the development of the Company's business or the
sale of its products.

FOREIGN OPERATIONS

Foreign operations and investments such as those which the Company has
in Chile and expects to acquire in Russia may be adversely affected by
exchange controls, currency fluctuations, taxation and laws or
policies of particular countries or by political events in those
countries as well as by laws and policies of the United States
affecting foreign trade, investment and taxation.

-13-<PAGE>
REGULATION AND ENVIRONMENTAL MATTERS

The Company's mining and processing operations and exploration
activities in the United States, Chile, Russia and other countries are
subject to various laws and regulations governing the protection of
the environment, exploration, development, production, exports, taxes,
labor standards, occupational health, waste disposal, toxic
substances, mine safety and other matters. New laws and regulations,
amendments to existing laws and regulations, or more stringent
implementation of existing laws and regulations could have a material
adverse impact on the Company, increase costs, cause a reduction in
levels of production and/or delay or prevent the development of new
mining properties. Amax Gold expects to be able to comply with all
existing environmental laws and regulations. Such compliance requires
significant expenditures and increases the Company's mine development
and operating costs.

Following the issuance of an order in June 1995 by the California
Regional Water Control Board for alleged violations of waste discharge
requirements and a related permit at the Hayden Hill Mine, the Company
increased the process solution storage capacity, improved drainage
control and relocated acid generating waste rock. The Company
believes that it has complied with the order. The alleged violations
occurred during a period of extreme precipitation and no monetary
penalties or fines were levied.

EXECUTIVE OFFICERS OF THE REGISTRANT

As of December 31, 1995, the names, ages and offices of all executive
officers of the Company were as follows.

<TABLE>
<CAPTION>
Name Age Office
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
Milton H. Ward 63 Chairman of the Board and Chief Executive Officer
Roger A. Kauffman 52 President and Chief Operating Officer
Richard B. Esser 49 Vice President
Deborah J. Friedman 43 Vice President, General Counsel and Secretary
Mark A. Lettes 46 Vice President and Chief Financial Officer
David L. Mueller 45 Vice President, Controller and Assistant Secretary
Neil K. Muncaster 60 Vice President
Andrew F. Pooler 37 Vice President

</TABLE>

Mr. Ward was elected Chairman of the Board and Chief Executive Officer
of the Company in November 1993 and served as President from November
1993 until February 1995. He has been Chairman of the Board,
President and Chief Executive Officer of Cyprus Amax since May 1992.
Prior to joining Cyprus Amax, Mr. Ward had been President and Chief
Operating Officer of Freeport-McMoRan Inc. and Chairman and Chief
Executive Officer of Freeport McMoRan Copper & Gold Inc. since 1984.

Mr. Kauffman was elected President of the Company in February 1995 and
has served as Chief Operating Officer since February 1994. He served
as Senior Vice President from February 1994 until February 1995. From
1986 to February 1994, he was Vice President-Industrial Minerals for
Hecla Mining Company.

Mr. Esser has been Vice President of the Company responsible for human
resource matters since August 1989. Prior to August 1989, he held
various management positions in the Company's human resources
department. Mr. Esser will retire from the Company in March 1996.

Ms. Friedman was elected Vice President, General Counsel and Secretary
of the Company in September 1994. From 1982 through 1993, she held
various positions in the law department of Cyprus Amax, including
General Counsel and Associate General Counsel. In 1994, she served as
a legal consultant handling various matters for Cyprus Amax.

-15-<PAGE>
Mr. Lettes was elected Chief Financial Officer of the Company in
January 1994. He has held various management positions in the
Company's financial departments since 1987, including Vice President
since August 1989 and Treasurer from May 1988 to February 1991.

Mr. Mueller was elected Vice President, Controller and Assistant
Secretary in October 1994. He was Director of Financial Reporting at
Echo Bay Mines, Ltd. from October 1990 until 1994. Prior to October
1990, he was a Senior Manager at Ernst & Young LLP.

Mr. Muncaster was elected Vice President of the Company in February
1991 and is responsible for exploration. He was Vice President,
Exploration for Echo Bay Mines, Ltd. from 1986 to 1991. Mr. Muncaster
will retire from the Company in April 1996.

Mr. Pooler was elected Vice President of the Company in February 1992
and is responsible for the Company's operations in the continental
United States and for the Guanaco Mine in Chile. From May 1988 until
February 1992 he was General Manager of the Wind Mountain Mine.

Each executive officer holds office subject to removal at any time by
the Board of Directors of Amax Gold.

ITEM 3. LEGAL PROCEEDINGS

On October 20, 1995, a purported derivative action was filed in the
Court of Chancery of Delaware on behalf of a purported stockholder of
the Company entitled Harbor Finance Partners v. Allen Born, et al. and
-------------------------------------------------
v. Amax Gold, Inc., as nominal defendant, C.A. No. 14637, with respect
- ------------------
to the proposed Kubaka transaction. The complaint alleges that the
individual defendants have breached their fiduciary duty in connection
with the sale of Cyprus Magadan to Amax Gold, that the price to be
paid for Cyprus Magadan substantially exceeds its fair market value in
an arms-length transaction, and that by agreeing to the transaction,
defendants have wrongfully enabled Cyprus Amax to increase its control
over the Company and have caused the Company to waste its assets. The
complaint seeks, among other things, rescission of the proposed
transaction and damages in an unspecified amount. The Company
believes that the complaint is without merit and intends to defend the
matter vigorously.

There is presently pending in United States District Court for the
District of South Carolina, Rock Hill Division, litigation filed by
Kershaw Gold Company, Inc., Piedmont Mining Company's subsidiary which
owns 37.5 percent of the Haile project, against Amax Gold alleging
that Amax Gold tortiously interfered with the performance by its
subsidiaries, Lancaster Mining Company Inc. and Haile Mining Company,
of their obligations under the Haile Mining Venture Agreement and
Management Agreement. Kershaw alleges that, among other things, Amax
Gold caused Lancaster to fail to complete the exploration expenditures
authorized in the 1994 venture budget and initiated attempts to sell
its interest in the Haile project without informing Kershaw. Kershaw
claims that damages of $38 to $60 million resulted from the alleged
breaches. Discovery is proceeding. The Company believes that the
complaint is without merit and intends to defend the matter
vigorously.

The litigation described above is part of a lawsuit filed originally
in South Carolina Circuit Court in March 1995 by Piedmont Mining
Company and Kershaw Gold Company, Inc. against Amax Gold Inc.,
Lancaster Mining Company Inc. and Haile Mining Company, alleging
breach of contract, fraud and tortious interference with contract
rights. Pursuant to motions filed by the defendants, all claims of
Piedmont and Kershaw were dismissed on the grounds that jurisdiction
was to be determined by arbitration, except the claim of Kershaw
against Amax Gold described above. The plaintiff's motion for
reconsideration is pending.

Pursuant to certain agreements between Piedmont, Kershaw and the
Company, Piedmont and Kershaw indemnified the Company from all
environmental and other liabilities arising from Piedmont's operations
or other conditions existing on the Haile property prior to July 1,
1992. Following Piedmont's and Kershaw's continued refusal to pay
environmental costs which the Company believed were covered by the
indemnity, the Company submitted its claim

-16-<PAGE>
for $1.4 million, the amount of such costs incurred through August
1995, to a panel of arbitrators in accordance with the dispute
resolution provisions of the Agreement. In March 1996, the
arbitration panel ruled that Piedmont and Kershaw must pay the $1.4
million to the Company. Piedmont and Kershaw have stated that they
plan to appeal the arbitrators' decision.

TMB Associates ("TMB"), a Nevada general partnership that is the
lessor under a 1987 lease of unpatented federal mining claims (as
amended, the "Lease") which comprise a substantial part of the Wind
Mountain Mine property, initiated arbitration in 1994 against the
Company asserting claims related to the formation and performance of,
and alleged breach of duties with respect to, the Lease. Arbitration
was commenced pursuant to a court order issued in litigation
proceedings described in previous years, and hearings were held in
late 1995 and early 1996. TMB's claims with respect to formation of
the Lease were dismissed after the hearings and the decision of the
arbitration panel regarding TMB's challenge to the formation of an
amendment to the Lease effecting a buydown of a portion of the royalty
owed on gold produced from the Wind Mountain Mine is expected in the
second quarter 1996. At this time, the Company's management does not
expect this action to have a material adverse effect on the Company's
financial condition or results of operations.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of security holders, through the
solicitation of proxies or otherwise, during the quarter ended
December 31, 1995.

-17-<PAGE>
Part II

ITEM 5. MARKET PRICE AND DIVIDENDS ON THE REGISTRANT'S
COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The Company's common stock is listed on the New York Stock Exchange
(AU) and The Toronto Stock Exchange (AXG). As of March 26, 1996,
96,449,978 shares of common stock were outstanding with approximately
8,800 stockholders of record. Cyprus Amax owns approximately 51.2
percent of the Company's outstanding common stock. The Company's
$3.75 Series B Convertible Preferred Stock is listed on the New York
Stock Exchange (AUPrB). As of March 8, 1996, 1,840,000 shares of
$3.75 Series B Convertible Preferred Stock were outstanding with
approximately 50 stockholders of record.

The following table sets forth for the periods indicated the high and
the low sale prices per share of the Company's Common and $3.75
Series B Convertible Preferred Stock as reported on the New York Stock
Exchange Composite Tape and the dividends paid on such stock.

<TABLE>
<CAPTION>
Stock Prices and Dividends Per Share

$3.75 Series B Convertible
Common Stock Preferred Stock
--------------------- -------------------------------------
Quarter High Low High Low Dividends
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1995
- ----
First $ 6 1/8 $ 4 1/2 $ 49 $ 42 3/4 $ .9375
Second 6 1/4 5 49 1/2 46 1/2 .9375
Third 6 7/8 5 1/2 52 1/2 47 7/8 .9375
Fourth 7 5/8 5 5/8 55 7/8 47 .9375

1994
- ----
First $ 8 1/4 $ 6 1/4 $ - $ - $ -
Second 8 1/4 6 5/8 - - -
Third 7 7/8 6 1/8 55 5/8 50 -
Fourth 7 5/8 5 5/8 56 1/4 47 7/8 .9791

</TABLE>

On March 4, 1994, the Company's Board of Directors decided to
eliminate the quarterly dividend on the Company's common stock to
reduce cash requirements.

The $3.75 Series B Convertible Preferred Stock was issued on August
11, 1994. The dividend paid on November 15, 1994 included the 94 day
period from date of issuance. Regular quarterly dividends are $.9375.

On January 8, 1996, 4,066,649 warrants to purchase common stock of the
Company expired.

-18-<PAGE>
ITEM 6. SELECTED FINANCIAL DATA

AMAX GOLD INC. AND SUBSIDIARIES
FINANCIAL AND OPERATING HIGHLIGHTS
(IN MILLIONS EXCEPT PER SHARE AMOUNTS, PERCENTAGES,
PRODUCTION AND SALES OUNCES AND AMOUNTS PER OUNCE)
YEARS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
1995 1994 1993 1992 1991
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
FOR THE YEAR:
Revenues $ 96.6 $ 94.6 $ 81.9 $ 99.7 $ 128.2
Earnings (loss) from operations<F1><F2> (17.2) (43.9) (116.0) 18.8 24.0
Earnings (loss) before cumulative
effect of accounting changes, net<F1><F2> (23.9) (43.0) (89.0) 13.0 21.2
Net earnings (loss)<F1><F2><F3> (23.9) (35.5) (104.2) 11.5 21.2
Per common share:
Earnings (loss) before cumulative
effect of accounting changes<F1><F2><F3> (.36) (.56) (1.14) .18 .35
Net earnings (loss)<F1><F2><F3> (.36) (.47) (1.34) .16 .35
Weighted average common shares outstanding 86.5 79.3 77.8 73.7 60.0
Capital and cash acquisition expenditures 206.2 23.0 23.4 113.7 60.0
Cash dividends to common stockholders - - 2.0 2.8 4.8
Dividends declared per common share - - .08 .08 .08
Cash dividends to preferred stockholders 6.9 1.8 - - -
Dividends declared per preferred share<F4> 3.75 .9791 - - -
AT YEAR-END:
Current assets 65.2 72.7 37.9 47.1 41.7
Total assets 611.1 403.2 381.0 477.6 198.3
Current liabilities 42.8 45.6 37.6 46.9 28.2
Long-term debt 238.2 83.2 136.5 103.1 24.1
Note payable to parent 5.0 - 24.7 - -
Stockholders' equity 296.3 245.5 173.3 257.2 136.3
Working capital 22.4 27.1 .3 .2 13.5
Book value per common share 2.16 1.93 2.22 3.45 2.27
Debt to total capitalization 45% 30% 42% 33% 16%
KEY OPERATING FACTORS FOR THE YEAR:
Total ounces of gold produced<F5> 238,255 240,885 210,880 253,603 300,233
Total ounces of gold sold 238,094 235,664 209,290 248,024 300,418
Average price per ounce sold $ 406 $ 401 $ 392 $ 402 $ 427
Average cost per ounce produced<F6>:
Cash production cost<F7> $ 326 $ 340 $ 388 $ 223 $ 195
Depreciation and depletion 91 105 122 87 82
- ----------------------------------------------------------------------------------------------------------------
Total production cost $ 417 $ 445 $ 510 $ 310 $ 277
- ----------------------------------------------------------------------------------------------------------------

<FN>
<F1> In 1994, the Company recorded an $18.6 million pre-tax ($14.4 million after-tax) write-down of the Hayden
Hill mill to its estimated salvage value and a $2.5 million pre-tax ($2.1 million after-tax) write-down of
other assets which increased the net loss by $16.5 million or $.21 per common share. In 1993, the Company
recognized a $64.1 million pre-tax ($41.9 million after-tax) write-down of Hayden Hill and a $23.6 million
pre-tax ($15.6 million after-tax) write-down of Sleeper, which increased the 1993 net loss by $57.5 million,
or $.74 per common share.

-19-<PAGE>
<F2> Effective January 1, 1994, the Company changed its method of accounting for the cost of ore loaded on heap
leach pads to record such costs as work-in-process inventory. The 1994 net loss is reduced by a $7.5
million, or $.09 per common share after-tax benefit relating to the cumulative effect of this accounting
change. Effective January 1, 1993, Amax Gold changed its exploration accounting policy such that prior
period exploration expenses would no longer be capitalized and restored to earnings when a property became
exploitable. The 1993 net loss includes a $13.4 million, or $.17 per common share, after-tax charge
relating to the cumulative effect of this accounting change. The 1992 net earnings include $8.9 million, or
$.12 per common share, of after-tax income related to prior year exploration expenditures on the Haile and
Guanaco Projects that were capitalized and restored to earnings.
<F3> The 1993 net loss includes a $1.8 million, or $.03 per common share, after-tax cumulative effect of the
January 1, 1993 adoption of Statement of Financial Accounting Standards (SFAS) No. 112, "Employers'
Accounting for Postemployment Benefits". Net earnings for 1992 include a $1.5 million, or $.02 per common
share, after-tax cumulative effect of the January 1, 1992 adoption of SFAS No. 106, "Postretirement Benefits
Other Than Pensions".
<F4> The Company issued 1.8 million preferred shares in August 1994. Preferred share dividends were $1.8 million
during the fourth quarter of 1994.
<F5> Gold production for 1992 reflects increased production of 4,733 ounces at the Sleeper Mine and 542 ounces at
the Waihi Mine relating to the cumulative effect of a change in accounting to include production in the mill
carbon circuit, effective January 1, 1992.
<F6> Average costs weighted by ounces of gold produced at each mine.
<F7> Cash production costs include all operating costs at the mine site, including overhead and, where
applicable, Nevada net proceeds tax, royalties and credits for silver by-products.
</FN>
</TABLE>

-20-<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

SUMMARY

Amax Gold reported a net loss of $23.9 million in 1995, a year of
transition from mines in the later stages of their producing lives
toward three new, major low-cost projects. The Company's primary
focus in 1995 was financing and constructing the Refugio and Fort Knox
Mines and negotiating the acquisition of the Kubaka Project from
Cyprus Amax. The addition of these properties should nearly triple
Amax Gold's annual production over the next two years. Approximately
$330 million borrowed in 1995 was used to repay existing debt and to
fund over $200 million of capital expenditures. The first gold pour
at Refugio is expected in early 1996 while the Fort Knox Project is
anticipated to commence production around the beginning of 1997. In
October 1995 the Company announced that it would acquire, subject to
certain conditions, Cyprus Amax's 50 percent interest in Omolon Gold
Mining Company, which is developing the Kubaka Project in the Russian
Federation. The acquisition of Kubaka will increase Amax Gold's
reserves by approximately 18 percent to 8.2 million contained ounces
of gold. These three projects are expected to provide the Company
with a source of low-cost reserves and allow for continued growth.

In the first quarter of 1996, the Company projected certain capital
cost increases at the Fort Knox Project which may exceed $75 million.
Final estimates are being developed. As a result of these projected
increases and other anticipated cash needs in 1996, the Company has
renegotiated the Fort Knox Loan Agreement and entered into certain
financing arrangements with Cyprus Amax. In addition, final project
estimates are being developed for the Kubaka Project, where higher
capital costs are now estimated. See "Liquidity and Capital
Resources" and Note 15 to the Company's Consolidated Financial
Statements.

RESULTS OF OPERATIONS

The 1995 net loss of $23.9 million compared to losses of $35.5 million
in 1994 and $104.2 million in 1993. The loss attributable to common
shares in 1995 was $.36 per share compared to a 1994 loss of $.47 per
share, including dividends on the Company's $3.75 Series B Convertible
Preferred Stock issued in August 1994, and a 1993 loss of $1.34 per
share. Results in 1994 included a $16.5 million after-tax asset
writedown, primarily for the Hayden Hill mill, partially offset by a
$7.5 million cumulative after-tax benefit from a change in accounting
for heap leach inventory and a $6.6 million deferred tax benefit.
Results in 1993 reflected an after-tax asset write-down of
$57.5 million for reductions in reserves at the Hayden Hill Mine in
California and the Sleeper Mine in Nevada, a $15.2 million after-tax
charge for the cumulative effect of a change in accounting for
exploration expenses and the adoption of a new accounting standard for
postemployment benefits, and an after-tax gain of $2.4 million from
the realization of the future economic benefit in the Waihi Mine in
New Zealand.

Revenue improved to $96.6 million in 1995 from $94.6 million in 1994
and $81.9 million in 1993. The increases are attributed to higher
realized prices and gold sales. Amax Gold's average realized price
was $406 per ounce in 1995, $401 per ounce in 1994 and $392 per ounce
in 1993 compared to average COMEX prices of $384 in 1995 and 1994 and
$360 in 1993. The Company sold 238,094 ounces of gold during 1995
compared to 235,664 ounces in 1994 and 209,290 ounces in 1993. The
increased sales volumes resulted from increased production in both
1995 and 1994 at Hayden Hill and Guanaco. Sleeper's gold production
and sales declined in 1995 compared to 1994 as reserves neared
depletion. Lower mill head grades and recovery rates are expected as
mining is completed in early 1996 and residual leaching commences.
Production at Sleeper increased from 1993 to 1994 due to higher mill
head grades and recovery rates.

Gold production was 238,255 ounces in 1995 compared to 240,885 ounces
in 1994 and 210,880 ounces in 1993. Increases in production at Hayden
Hill and Guanaco were offset by a decline in production at Wind
Mountain and Sleeper, which is nearing the end of its mine life.
Significant operating improvements were made in 1995 at both Hayden
Hill and Guanaco. Production at Hayden Hill increased by 22 percent
to 80,031 ounces in 1995 from 65,785 ounces in 1994 while Guanaco's
production increased 23 percent to 70,850 ounces in 1995 compared to
57,675 in

-21-<PAGE>
1994. The processing of higher grade ores which increased from .017
ounces per ton in 1994 to .024 ounces per ton in 1995 at Hayden Hill
and from .050 ounces per ton in 1994 to .063 ounces per ton in 1995 at
Guanaco contributed significantly to the increase in production.
Improved crusher throughput at Hayden Hill and an increased recovery
rate at Guanaco also contributed. The decline in production at
Sleeper was attributed to lower head grades and mill recovery rates.
The 14 percent increase in production from 1993 to 1994 was primarily
due to a full year of operations at Guanaco in 1994 versus only nine
months during 1993, when the Mine commenced production in April, as
well as the successful conversion of Hayden Hill to a heap leach only
operation during the latter part of 1993. Amax Gold expects
production to increase significantly in both 1996 and 1997 as Refugio,
Fort Knox and Kubaka are brought on line.

Cost of sales represents mining and processing costs for gold sold
during the year including labor, materials and supplies, repairs and
maintenance, fuel and utilities, proceeds taxes, royalties and
by-product credits. Also included are estimated reclamation costs at
each of the Company's mines, which are accrued over the expected mine
life using the units-of-production method. Reclamation costs are
estimates based on current federal, state and Chilean laws and
regulations. Changes in these laws and regulations could increase
future reclamation costs. Even with slight increases in sales volumes
in each year, cost of sales declined to $78.3 million during 1995 from
$79.0 million in 1994 and $79.7 million in 1993, primarily due to
lower cash costs.

Cash production costs declined to $326 per ounce in 1995 from $340 per
ounce in 1994 and $388 in 1993. Cash costs at Hayden Hill were
reduced from $406 per ounce in 1994 to $275 per ounce in 1995, despite
the negative impact of unusually high precipitation during the first
part of 1995, due to the use of existing ore stockpiles, higher silver
credits resulting from the processing of ore with higher silver grades
and reduced overhead spending. Mine management also implemented
numerous operational efficiencies during 1995, resulting in additional
savings. Cash costs at Guanaco declined from $420 per ounce in 1994
to $375 per ounce in 1995 despite lower crusher throughput.
Performance at Guanaco continues to be disappointing and management is
evaluating additional cost saving opportunities and operational
efficiencies which are expected to lower expenses further and increase
production during 1996. The decrease in cash costs at Hayden Hill and
Guanaco partially was offset by an increase in cash costs at Sleeper
due to 23 percent lower production in 1995. Lower recoveries of mill
ore processed and lower volumes of leach ore available for processing
caused the decline in production at Sleeper as reserves are depleted
during the first half of 1996. Consolidated cash costs decreased from
1993 to 1994 primarily as a result of a full year of operations at
Guanaco and the reconfiguration of the Hayden Hill Mine to a heap
leach only operation. Management anticipates the decline in cash
costs to continue at the current operating properties as well as
company-wide as Refugio, Fort Knox and Kubaka commence production.
The new properties are expected to be substantially lower cost mines
than the Company's currently producing properties.

Depreciation and depletion decreased to $21.5 million during 1995
mainly as a result of lower depletion rates at Sleeper and Hayden Hill
in 1995, partially offset by increased production at Guanaco which has
a higher depreciation rate. Increased estimates of future production
caused the decline in the Sleeper depletion rate, while at Hayden Hill
the write-off of the mill during the fourth quarter of 1994 and the
reduction in the estimate of capital expenditures required to produce
the remaining ounces resulted in a lower depletion rate. Depreciation
and depletion rates decreased from $105 per ounce in 1994 to $91 per
ounce in 1995. Depreciation and depletion decreased slightly in 1994
compared with 1993. Significant factors for the decrease were the
write-down of assets at Sleeper in December 1993 and at Hayden Hill in
June 1993, partially offset by the full year of production at Guanaco
in 1994.

General and administrative costs increased by $1.2 million in 1995
primarily as a result of higher litigation, financing, relocation and
severance costs. Staff reductions in 1994 resulted in a decline in
general and administrative costs from $8.4 million in 1993 to $6.9
million in 1994.

Exploration expense was $5.9 million in 1995 compared to $6.2 million
in 1994. The primary reason for the decrease in 1995 was reduced
exploration activity at the Cerro Quema property in Panama, an
advanced stage exploration project which the Company had an option to
purchase from Cyprus Amax. During the third quarter of 1995, Amax

-22-<PAGE>
Gold decided not to acquire Cerro Quema. The decrease in spending at
Cerro Quema partially was offset by higher spending on the Robertson
Project in Nevada relating to exploratory drilling and the preparation
of a feasibility study. Exploration expense increased by $1.0 million
in 1994 compared with 1993 due to increased activity in North, Central
and South America, partially offset by savings realized by the
Company's agreement to pool efforts with Cyprus Amax to discover new
gold properties. During 1996, exploration costs are expected to be
approximately $5.0 million.

Interest expense decreased by $1.5 million in 1995 as interest costs
associated with higher debt levels related to the Refugio and Fort
Knox financings were capitalized. Capitalized interest was $5.9
million in 1995 compared with $0.2 million in 1994. Interest expense
was $8.9 million in 1994 compared with $8.5 million in 1993 due to
higher interest rates during 1994, partially offset by a higher
average debt balance in 1993.

Interest income was $3.0 million in 1995 compared with $2.1 million in
1994 and $0.7 million in 1993. The increases are attributed to
interest earned on a $10 million loan to the Company's Refugio joint
venture partner and on the Refugio and Fort Knox borrowings in 1995
and the cash from the preferred share offering in 1994, held prior to
investment in capital projects.

Other income and expense increased to $2.3 million in 1995 primarily
as a result of expensing costs related to the Company's 62.5 percent
joint venture interest in the Haile gold property. Prior to 1995 such
costs were capitalized.

LIQUIDITY AND CAPITAL RESOURCES

Working capital was $22.4 million at December 31, 1995 compared to
$27.1 million at December 31, 1994. The decrease in working capital
was a result of the drawdown of cash and increase in accounts payable
due to spending of approximately $200 million on the construction of
Refugio and Fort Knox which were funded through external borrowings,
partially offset by a decline in the current portion of debt resulting
from refinancing. Cash generated from operations was $2.6 million
during 1995 compared to $3.1 million of cash used in operations during
1994.

Capital expenditures were nearly ten times higher in 1995 than 1994
due to the construction of Fort Knox and Refugio. Construction
substantially was completed by year-end at Refugio where the Company's
share of capital spending, excluding capitalized interest, totalled
approximately $50 million in 1995. At Refugio crushing is underway,
the leach pads are currently being loaded with ore and irrigation has
commenced. The initial gold pour is expected early in 1996. At Fort
Knox, capital spending during 1995 excluding capitalized interest was
approximately $150 million. Due to more difficult site conditions,
design enhancements and expanded excavation work, the remaining
capital costs estimates at Fort Knox are expected to increase and
could exceed the revised estimate of $331 million. Final estimates
for completion are being developed and the timing of start-up may
influence total costs. A portion of the projected capital increase
should reduce cash operating costs to levels below those in the
initial design. In addition, higher capital costs now are estimated
to complete the Kubaka project; reflecting a possible delay in start-
up and certain higher local costs and contingency provisions. Final
project estimates currently are being developed.

Net financing activities in 1995 generated cash of $205.7 million.
During the first quarter, Compania Minera Maricunga, a 50 percent
owned subsidiary of the Company which is developing the Refugio Mine,
borrowed $85 million ($42.5 million for the Company's share) drawn in
gold under a project financing arrangement with a group of banks. In
addition, the Company loaned $10 million to its Refugio joint venture
partner to be held in escrow as support for the partner's loan
guarantee. Amax Gold borrowed $80 million from Cyprus Amax under a
convertible line of credit to fund initial construction at Fort Knox
and to repay approximately $18 million in outstanding indebtedness
during the second and third quarters of 1995. In the third quarter of
1995, Cyprus Amax converted the outstanding amount, plus interest,
into approximately 15 million shares of Amax Gold common stock in
accordance with the credit agreement. The Company secured $250
million in project financing from a group of banks for the Fort Knox
Project during the fourth quarter of 1995 and had borrowed $200
million of that amount at year-end. Loans of approximately $86
million were repaid with proceeds from the Fort Knox financing. In
June 1995 the Company

-23-<PAGE>
borrowed $5 million under the 1994 $100 million convertible line of
credit with Cyprus Amax. Preferred dividends totalling $6.9 million
were paid during 1995.

Cash flows from operations during 1996 are expected to be sufficient
to fund operating and administrative expenses, exploration
expenditures and interest payments on outstanding debt. The Company
anticipates that further funding will be necessary for remaining
capital expenditures, working capital build-up associated with start-
up at Fort Knox and debt repayments and expects to complete additional
debt and/or equity financings during 1996. Currently $108 million of
equity and/or subordinated debt securities are available to Amax Gold
under a universal shelf registration statement.

As a result of projected cost increases in completing the Fort Knox
Project and other projected cash needs in 1996, the Company has
renegotiated the $250 million Fort Knox loan which Cyprus Amax has
guaranteed until economic completion. Until economic completion, the
Company will not make additional draws under the $100 million line of
credit without Cyprus Amax' prior consent. Amax Gold will consider
various options for additional funding, including the possibility of
accessing the equity markets. In addition, Cyprus Amax has informed
the Company it intends to make additional needed financing available
to Amax Gold. The Company will pay Cyprus Amax a fee of 2.5 percent
based upon the total of financings and guaranties made available. All
fees, interest and repayments of advances from Cyprus Amax may be paid
at the election of Cyprus Amax in cash or, following approval by the
Company's stockholders, in the Company's Common Stock valued at the
average closing price for the five-day period prior to such election.
See Note 15 to the Company's Consolidated Financial Statements for
further discussion.

"SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM
ACT OF 1995

Statements which are not historical facts contained in this report are
forward looking statements that involve risks and uncertainties that
could cause actual results to differ from projected results. Factors
that could cause actual results to differ materially include, among
others: general economic conditions, the market price of gold,
political events in the Russian Federation, the risks associated with
foreign operations generally, the timing of receipt of necessary
governmental permits, climatic conditions, labor relations,
availability and cost of material and equipment, the actual
configuration of ore bodies, delays in anticipated start-up dates,
environmental risks, the results of financing efforts and other risk
factors detailed in the Company's Securities and Exchange Commission
filings.

-24-<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and
Shareholders of Amax Gold Inc.

In our opinion, the accompanying consolidated balance sheet and the
related consolidated statements of operations, of shareholders' equity
and of cash flows present fairly, in all material respects, the
financial position of Amax Gold Inc. and its subsidiaries at
December 31, 1995 and 1994, and the results of their operations and
their cash flows for the two years then ended, in conformity with
generally accepted accounting principles. These financial statements
are the responsibility of the Company's management; our responsibility
is to express an opinion on these financial statements based on our
audits. We conducted our audits of these statements in accordance
with generally accepted auditing standards which require that we plan
and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements, assessing the accounting
principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for the opinion expressed
above.

As discussed in Note 5 to the consolidated financial statements, the
Company adopted a new method of accounting for heap leach ore costs,
effective January 1, 1994.

Price Waterhouse LLP

Denver, Colorado

February 14, 1996, except as to
Note 15, which is as of March 19, 1996

-25-<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS

To the Shareholders and
Board of Directors of Amax Gold Inc.:

We have audited the accompanying consolidated statements of
operations, shareholders' equity and cash flows of Amax Gold Inc. and
Subsidiaries (the Company) for the year ended December 31, 1993.
These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We
believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the results of
operations and cash flows of Amax Gold Inc. and Subsidiaries for the
year ended December 31, 1993 in conformity with generally accepted
accounting principles.

As discussed in Notes 6 and 9 to the consolidated financial
statements, during 1993 the Company changed its method of accounting
for exploration expenditures and postemployment benefits.

Coopers & Lybrand LLP

Denver, Colorado
February 4, 1994 except for
Note 8 for which the date
is March 18, 1994

-26-<PAGE>
REPORT OF MANAGEMENT

The management of Amax Gold Inc. is responsible for the integrity and
objectivity of the financial statements and other financial
information contained in this Annual Report. The financial statements
were prepared in accordance with generally accepted accounting
principles and include estimates that are based on management's best
judgment.

Amax Gold maintains an internal control system which includes formal
policies and procedures designed to provide reasonable assurance that
assets are safeguarded and transactions are properly recorded and
executed in accordance with management's authorization. Amax Gold's
internal audit function audits compliance with the internal control
system and issues reports to Amax Gold's management and the Audit
Committee of the Board of Directors.

Amax Gold's financial statements have been audited by independent
accountants, whose appointment is ratified yearly by the stockholders
at the annual stockholders' meeting. The independent accountants
conducted their audits in accordance with generally accepted auditing
standards. These standards include an evaluation of the internal
accounting controls in establishing the scope of audit testing
necessary to allow them to render an independent professional opinion
on the fairness of Amax Gold's financial statements.

The Audit Committee of the Board of Directors, composed solely of
outside directors, meets periodically with representatives of
management and the independent accountants to review their work and
ensure that they are properly discharging their responsibilities.

Milton H. Ward
Milton H. Ward
Chairman and Chief Executive Officer

Roger A. Kauffman
Roger A. Kauffman
President and Chief Operating Officer

Mark A Lettes
Mark A. Lettes
Vice President and Chief Financial Officer

-27-<PAGE>
AMAX GOLD INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(in millions except per share amounts)
Year Ended December 31,

<TABLE>
<CAPTION>
1995 1994 1993
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Revenues $ 96.6 $ 94.6 $ 81.9
Costs and operating expenses:
Cost of sales 78.3 79.0 79.7
Depreciation and depletion 21.5 25.3 25.7
General and administrative 8.1 6.9 8.4
Exploration 5.9 6.2 5.2
Asset write-downs - 21.1 87.7
Gain on Waihi transaction - - (8.8)
- --------------------------------------------------------------------------------------------------------------------
Total costs and operating expenses 113.8 138.5 197.9
- --------------------------------------------------------------------------------------------------------------------
Loss from operations (17.2) (43.9) (116.0)
Interest expense (7.4) (8.9) (8.5)
Interest income 3.0 2.1 0.7
Other (2.3) 1.1 1.0
- --------------------------------------------------------------------------------------------------------------------
Loss before income taxes and cumulative
effect of accounting changes (23.9) (49.6) (122.8)
Income tax benefit - 6.6 33.8
- --------------------------------------------------------------------------------------------------------------------
Loss before cumulative effect of
accounting changes (23.9) (43.0) (89.0)
Cumulative effect of accounting changes,
net of income tax provision of $2.0
in 1994 and benefit of $5.5 in 1993 - 7.5 (15.2)
- --------------------------------------------------------------------------------------------------------------------
Net loss (23.9) (35.5) (104.2)
Preferred stock dividends (6.9) (1.8) -
- --------------------------------------------------------------------------------------------------------------------
Loss attributable to common shares $ (30.8) $ (37.3) $(104.2)
- --------------------------------------------------------------------------------------------------------------------
Per common share:
Loss before cumulative effect of
accounting changes $ (.36) $ (.56) $ (1.14)
Cumulative effect of accounting changes - .09 (.20)
- --------------------------------------------------------------------------------------------------------------------
Net loss $ (.36) $ (.47) $ (1.34)
- --------------------------------------------------------------------------------------------------------------------

Dividends declared per common share $ - $ - $ .08
- --------------------------------------------------------------------------------------------------------------------

Weighted average common shares outstanding 86.5 79.3 77.8
- --------------------------------------------------------------------------------------------------------------------

The accompanying notes are an integral part of these statements.
</TABLE>

-28-<PAGE>
AMAX GOLD INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
December 31,
(Dollars in millions except share amounts)

<TABLE>
<CAPTION>
1995 1994
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Cash and equivalents $ 25.6 $ 36.7
Inventories 26.6 28.6
Receivables 2.7 2.9
Other 10.3 4.5
- ------------------------------------------------------------------------------------------------------------------
Total current assets 65.2 72.7

Property, plant and equipment, net 510.5 313.3
Other 35.4 17.2
- ------------------------------------------------------------------------------------------------------------------
Total assets $ 611.1 $ 403.2
- ------------------------------------------------------------------------------------------------------------------

LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable, trade $ 14.5 $ 4.6
Accrued and other current liabilities 16.2 15.1
Reclamation reserve, current portion 4.8 2.0
Current maturities of long-term debt 7.3 23.9
- ------------------------------------------------------------------------------------------------------------------
Total current liabilities 42.8 45.6

Long-term debt 238.2 83.2
Note payable to Cyprus Amax under line of credit 5.0 -
Reclamation reserve, noncurrent portion 11.1 11.1
Deferred income taxes 10.0 10.0
Other 7.7 7.8
- ------------------------------------------------------------------------------------------------------------------
Total liabilities 314.8 157.7

Commitments and contingencies (Notes 8 and 14) - -

Shareholders' equity:
Preferred stock, par value $1.00 per share, authorized
10,000,000 shares, of which 2,000,000 shares have been
designated as $2.25 Series A Convertible Preferred Stock,
no shares issued and outstanding; and 1,840,000 shares have
been designated as $3.75 Series B Convertible Preferred
Stock, issued and outstanding 1,840,000 shares 1.8 1.8
Common stock, par value $.01 per share, authorized
200,000,000 shares, issued and outstanding 96,427,838
shares in 1995 and 81,267,708 shares in 1994 1.0 0.8
Paid-in capital 339.8 258.4
Accumulated deficit (46.3) (15.5)
Common stock in treasury, at cost (1,991 shares in 1994) - -
- ------------------------------------------------------------------------------------------------------------------
Total shareholders' equity 296.3 245.5
- ------------------------------------------------------------------------------------------------------------------
Total liabilities and shareholders' equity $ 611.1 $ 403.2
- ------------------------------------------------------------------------------------------------------------------

The accompanying notes are an integral part of these statements.
</TABLE>

-29-<PAGE>
AMAX GOLD INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
Year Ended December 31,
(Dollars in millions)

<TABLE>
<CAPTION>
1995 1994 1993
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cash Flows from Operating Activities:
Net loss $ (23.9) $ (35.5) $(104.2)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation and depletion 21.5 25.3 25.7
Asset write-downs - 21.1 87.7
Increase in reclamation reserve 2.8 2.5 3.7
Cumulative effect of accounting changes - (7.5) 15.2
Decrease in deferred taxes - (6.6) (34.1)
Deferred hedging costs (3.2) (3.9) 1.1
Minority interest - (1.1) (1.1)
Other, net 0.8 (0.6) (0.6)
Gain on Waihi transaction - - (8.8)
Decrease (increase) in working capital:
Receivables 0.2 3.7 (3.5)
Accrued and other current liabilities (2.0) 0.4 2.7
Inventories 2.0 (0.8) (2.3)
Other assets 1.7 (0.4) (1.9)
Accounts payable, trade 2.7 0.3 (2.8)
- ------------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) operating activities 2.6 (3.1) (23.2)
- ------------------------------------------------------------------------------------------------------------------
Investing Activities
Capital expenditures (206.2) (23.0) (24.6)
Loan to joint venture partner (10.0) - -
Capitalized interest (5.9) (0.2) -
Proceeds from repayment of loans 1.2 - -
Other 1.5 (0.8) (0.2)
Net cash received on Waihi transaction - - 7.8
- ------------------------------------------------------------------------------------------------------------------
Net cash used in investing activities (219.4) (24.0) (17.0)
- ------------------------------------------------------------------------------------------------------------------
Financing Activities
Proceeds from financings 242.5 36.0 34.5
Repayments of financings (104.0) (55.8) (31.6)
Issuance of common stock to Cyprus Amax 80.8 20.7 -
Advances from Cyprus Amax 5.0 9.3 24.7
Repayments to Cyprus Amax - (34.0) -
Net proceeds from sale of convertible preferred stock - 88.3 -
Deferred financing costs (11.7) (3.4) -
Cash dividends paid:
Preferred (6.9) (1.8) -
Common - - (2.0)
Other - (3.0) (1.7)
- ------------------------------------------------------------------------------------------------------------------
Net cash provided by financing activities 205.7 56.3 23.9
- ------------------------------------------------------------------------------------------------------------------
Effect of exchange rate changes on cash and equivalents - - 0.1
- ------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in cash and equivalents (11.1) 29.2 (16.2)
Cash and equivalents at January 1 36.7 7.5 23.7
- ------------------------------------------------------------------------------------------------------------------
Cash and equivalents at December 31 $ 25.6 $ 36.7 $ 7.5
- ------------------------------------------------------------------------------------------------------------------

The accompanying notes are an integral part of these statements.
</TABLE>

-30-<PAGE>
AMAX GOLD INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
(In millions)
<TABLE>
<CAPTION>
Preferred Stock Common Stock Paid-In Retained Common
--------------- ------------ Paid-In Earnings Stock in
Shares Amount Shares Amount Capital (Deficit) Treasury
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1992 - $ - 74.5 $ 0.7 $125.5 $132.2 $(0.1)
Net loss - - - - - (104.2) -
Issuance of common shares:
Acquisitions - - 3.2 0.1 21.0 - -
Dividend reinvestment plan - - 0.5 - 4.2 (4.2) -
Employee and director plans - - - - - - 0.1
Common stock dividends - - - - - (2.0) -
- ------------------------------------------------------------------------------------------------------------------

Balance at December 31, 1993 - - 78.2 0.8 150.7 21.8 -
Net loss - - - - - (35.5) -
Issuance of common shares:
Employee and director plans - - 0.1 - 0.5 - -
Repayment of Cyprus Amax debt - - 3.0 - 20.7 - -
Issuance of preferred stock 1.8 1.8 - - 86.5 - -
Preferred stock dividends - - - - - (1.8) -
- ------------------------------------------------------------------------------------------------------------------

Balance at December 31, 1994 1.8 1.8 81.3 0.8 258.4 (15.5) -
Net loss - - - - - (23.9) -
Issuance of common shares:
Employee and director plans - - 0.1 - 0.7 - -
Repayment of Cyprus Amax debt,
including interest - - 15.0 0.2 80.7 - -
Preferred stock dividends - - - - - (6.9) -
- ------------------------------------------------------------------------------------------------------------------

Balance at December 31, 1995 1.8 $ 1.8 96.4 $ 1.0 $339.8 $(46.3) $ -
- ------------------------------------------------------------------------------------------------------------------

The accompanying notes are an integral part of these statements.

</TABLE>

-31-<PAGE>
AMAX GOLD INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions unless otherwise indicated and
except per share amounts and amounts per ounce)

1. NATURE OF OPERATIONS

Amax Gold Inc. and its subsidiaries (Amax Gold or the Company) are
engaged in the mining and processing of gold and silver ore and the
exploration for, and acquisition of, gold-bearing properties,
principally in the Americas and Russia. The Company's primary
products are gold and silver produced in the form of dore and then
shipped to refiners for final processing. The Company is currently
51.2 percent owned by Cyprus Amax Minerals Company (Cyprus Amax).

The Company produces gold and silver using both the traditional
milling process and heap leaching. All of the Company's operating
properties are open pit mines. Current operating properties consist
of the Sleeper Mine in Humboldt County, Nevada; the Hayden Hill Mine
in Lassen County, California; the Wind Mountain Mine in Washoe County,
Nevada; and, a 90 percent interest in the Guanaco Mine in Chile. In
addition, Amax Gold has completed construction of its 50-percent owned
Refugio Mine in Chile, is building the Fort Knox Project near
Fairbanks, Alaska, and has agreed, subject to the satisfaction of
certain conditions, to acquire the Kubaka Project in the Russian
Federation from Cyprus Amax in 1996, which is currently under
construction. The Company also owns a 62.5 percent interest in the
Haile Project in Lancaster County, South Carolina.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of Amax
Gold and the related entities which it controls. Investments in
companies over which the Company can exercise significant influence
but not control are accounted for using the equity method.
Investments in joint ventures are accounted for using proportionate
consolidation, consistent with accepted mining industry practice. All
material intercompany balances and transactions have been eliminated.
Certain 1994 and 1993 amounts have been reclassified to conform to the
1995 presentation.

CASH AND EQUIVALENTS
Cash and equivalents include cash and highly liquid investments with
an original maturity of three months or less. The Company invests
cash in time deposits maintained in high credit quality financial
institutions.

INVENTORIES
Gold inventory is valued at the lower of aggregate cost, computed on a
last-in, first-out (LIFO) basis, or market. Materials and supplies
are valued at average cost less reserves for obsolescence.

PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment, including development expenditures and
capitalized interest, are carried at cost. Expenditures for major
improvements are capitalized. Gains and losses on retirements are
included in earnings. Depreciation and depletion are computed using
the units-of-production method based on the estimated ounces of gold
to be recovered and estimated salvage values. Mobile equipment and
assets which have useful lives shorter than the mine life are
depreciated on a straight-line basis over estimated useful lives of
one to five years.

In the third quarter of 1995, Amax Gold adopted Statement of Financial
Accounting Standards (SFAS) No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed Of". In
the event that facts and circumstances indicate that the carrying
amount of an asset may not be recoverable and an estimate of future
undiscounted cash flows is less than the carrying amount of the asset,
an impairment loss will be recognized.

-32-<PAGE>
AMAX GOLD INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions unless otherwise indicated and
except per share amounts and amounts per ounce)

Adoption of SFAS No. 121 had no effect on the Company's results of
operations for the year ended December 31, 1995.

GOLD AND CURRENCY FINANCINGS
The Company uses various gold and currency financings to fund its
mining activities. To finance investments with gold loans the Company
borrows gold from banks and sells the gold on the open market. Gold
loans are recorded on the balance sheet at the price received when the
borrowed gold is sold. The banks are repaid from future gold
production at which time revenues are recorded. Gold loans bear
relatively low interest rates, result in a hedge against future gold
price fluctuations and limit realized prices to the amounts received
when the borrowed gold is sold.

Currency financings represent borrowings in hard currency, typically
U.S. dollars. The terms, including interest rates, are negotiated
with lenders based on market conditions at the time the financing is
arranged.

HEDGING ACTIVITIES
Forward sale contracts, generally on a spot deferred basis, put and
call option contracts and compound options are entered into from time
to time to hedge the effect of price changes on the Company's precious
metals that are produced and sold. Premiums paid for purchased
options and premiums earned on sold options are deferred and
recognized in income over the term of the related option. The results
of gold hedging activities are included in revenues at the time the
hedged production is sold. Silver hedging results are reflected as a
by-product credit.

Interest rate swap options are entered into as a hedge against
interest rate exposure on the Company's floating rate financing
facilities in order to fix the Company's interest costs. The
differences to be paid or received on swap options are included in
interest expense as incurred.

POSTRETIREMENT BENEFITS
Postretirement benefits other than pensions are calculated in
accordance with the provisions set forth in SFAS No. 106, "Employers'
Accounting for Postretirement Benefits Other Than Pensions", which
requires the expected cost of postretirement benefits other than
pensions to be accrued during the years the employee renders service.

POSTEMPLOYMENT BENEFITS
Postemployment benefits are calculated in accordance with the
provisions set forth in SFAS No. 112, "Employers Accounting for
Postemployment Benefits". SFAS No. 112 requires the Company to
expense postemployment benefits as they are earned by the employee for
services rendered, rather than as they are paid.

STOCK-BASED COMPENSATION
SFAS No. 123, "Accounting for Stock-Based Compensation", was issued in
1995 and is effective for fiscal years beginning after December 15,
1995. Amax Gold will adopt SFAS No. 123 in 1996 and has elected to
continue to measure compensation cost using the intrinsic value based
method of accounting prescribed by APB Opinion No. 25, "Accounting for
Stock Issued to Employees". Amax Gold will make pro forma disclosures
of net income and earnings per share as if the fair value based method
of accounting as defined in SFAS No. 123 had been applied.

EXPLORATION
Exploration expenditures are charged against earnings in the period
incurred.

-33-<PAGE>
AMAX GOLD INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions unless otherwise indicated and
except per share amounts and amounts per ounce)

RECLAMATION
Reclamation, site restoration and closure costs for each producing
mine are estimated based primarily upon environmental and regulatory
requirements and are accrued over the expected life of each mine using
the units-of-production method. Ongoing environmental and reclamation
expenditures are expensed as incurred.

INCOME TAXES
Income taxes are calculated in accordance with the provisions set
forth in SFAS No. 109, "Accounting for Income Taxes". Under SFAS No.
109, deferred income taxes are determined using an asset and liability
approach. This method gives consideration to the future tax
consequences associated with differences between the financial
accounting and tax bases of assets and liabilities and gives immediate
effect to changes in income tax laws. The income statement effect is
derived from changes in deferred income taxes on the balance sheet.

USE OF ESTIMATES
The preparation of Amax Gold's consolidated financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect amounts
reported in the financial statements and accompanying notes.
Management's estimates are made in accordance with mining industry
practice. Significant areas requiring the use of management estimates
relate to the determination of mineral reserves, reclamation and
environmental obligations, impairment of assets, post-retirement and
other employee benefits, useful lives for depreciation, depletion and
amortization, and valuation allowances for deferred tax assets.
Actual results could differ from those estimates.

3. TRANSACTIONS WITH AFFILIATES

In November 1993, AMAX Inc. (Amax), a New York corporation which owned
approximately 68 percent of the Company's outstanding common stock,
was merged with and into Cyprus Minerals Company, a Delaware
corporation. Immediately prior to the merger, Amax distributed to
Amax shareholders from the shares then held by Amax approximately 28
percent of the Company's outstanding common stock. As of December 31,
1995, the merged company, called Cyprus Amax Minerals Company (Cyprus
Amax), owned approximately 49 million common shares, or approximately
51 percent, of the Company's outstanding common stock. As discussed
below, the increase in Cyprus Amax's ownership resulted from various
financial transactions with Cyprus Amax. See also Notes 6 and 15 for
discussions related to the Kubaka acquisition agreement and certain
financing arrangements, respectively.

In April 1994, Cyprus Amax provided the Company with a $100 million
convertible line of credit. Outstanding amounts under the credit line
bear interest at LIBOR plus 0.3 percent and may be repaid through the
issuance of up to two million shares of $2.25 Series A Convertible
Preferred Stock. See Note 15 for current arrangements regarding
interest rates. Amax Gold may redeem the convertible preferred stock
by issuing up to 12,099,213 shares of common stock at a maximum price
of $8.265 per share and a minimum price of $5.874 per share. Cyprus
Amax may convert the line of credit, any outstanding indebtedness
and/or convertible preferred stock to 12,099,213 shares of Amax Gold
common stock valued at $8.265 per share. At December 31, 1995, $5.0
million was outstanding under this arrangement and is due in 2001.
The average annualized interest rate on this borrowing was 6.5 percent
for the year ended December 31, 1995.

In March 1995, Cyprus Amax provided the Company with an additional $80
million convertible line of credit. During 1995, the full amount was
borrowed by the Company and subsequently converted by Cyprus Amax to
14,919,806

-34-<PAGE>
AMAX GOLD INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions unless otherwise indicated and
except per share amounts and amounts per ounce)

shares of Amax Gold common stock at $5.362 per share, increasing
Cyprus Amax ownership in the Company to 51.2 percent at December 31,
1995.

In September 1995, the Company and Cyprus Amax entered into an
agreement regarding stock issuance pursuant to which obligations owing
from the Company to Cyprus Amax under existing or future contractual
arrangements may be paid in shares of common stock with the consent of
both parties. The stock will be valued based on the most recent 30-
day average closing price, and the maximum number of shares of common
stock that may be issued is 879,500 shares. In September 1995,
128,042 shares of such common stock were issued to Cyprus Amax as
payment for $835,473 due under the $80 million convertible line of
credit.

The Company has entered into several additional agreements with Cyprus
Amax. Under an exploration joint venture agreement the two companies
pool efforts to discover and develop new gold properties, with Cyprus
Amax providing 75 percent and the Company providing 25 percent of
initial funding. Amax Gold was charged $3.1 million and $1.1 million
under this agreement for the years ended December 31, 1995 and 1994,
respectively. Pursuant to a net operating loss agreement, the Company
agreed to allow Cyprus Amax to use the Company's net operating loss
generated in 1993 which would result in a refund of taxes paid by
Cyprus Amax in a prior year and Cyprus Amax agreed to reimburse the
Company at such time that the Company would have received the benefit
for the 1993 net operating loss had the Company elected to carry it
forward.

A services agreement governs the provision of and payment for general
administrative services between Cyprus Amax and the Company. For the
years ended December 31, 1995, 1994 and 1993, insurance, management
and other services were supplied to the Company on a full cost
reimbursement basis. The Company was charged $4.3 million, $4.8
million and $4.8 million, for the years ended December 31, 1995, 1994,
and 1993, respectively, for reimbursable costs. As of December 31,
1995 and 1994, the Company had outstanding amounts due to Cyprus Amax
of $0.5 million and $0.6 million, respectively, relating to such
services. For the year ended December 31, 1993, employee benefit
plans (medical and life insurance benefits) and employee pension and
thrift plan benefits were also provided. In October 1993, the Company
established separate medical and life insurance coverage for its
employees. Additionally, on November 15, 1993, a separate defined
benefit pension plan and thrift plan for Company employees became
effective. For the period from January 1, 1993 through November 14,
1993, Amax charged the Company approximately $.4 million for pension
costs. Pursuant to an employee transfer agreement, the Company and
Cyprus Amax have amended their respective benefit plans to allow
employees to transfer from the Company to Cyprus Amax or from Cyprus
Amax to the Company with minimal effect on an employee's benefits.

-35-<PAGE>
AMAX GOLD INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions unless otherwise indicated and
except per share amounts and amounts per ounce)

4. INCOME TAXES

Loss before income taxes consists of the following:

<TABLE>
<CAPTION>
1995 1994 1993
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Domestic $ (5.0) $ (32.9) $(108.8)
Foreign (18.9) (16.7) (14.0)
- -------------------------------------------------------------------------------------------------------------------
$ (23.9) $ (49.6) $(122.8)
- -------------------------------------------------------------------------------------------------------------------
</TABLE>

The income tax benefit consists of the following:

<TABLE>
<CAPTION>
1995 1994 1993
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Current:
Federal $ - $ - $ -
State - - -
Foreign - - .3
- -------------------------------------------------------------------------------------------------------------------
- - .3
Deferred:
Federal - (5.3) (36.9)
State - .7 (2.3)
Foreign - - (.4)
- -------------------------------------------------------------------------------------------------------------------
- (4.6) (39.6)
- -------------------------------------------------------------------------------------------------------------------
$ - $ (4.6) $ (39.3)
- -------------------------------------------------------------------------------------------------------------------
</TABLE>

The total income tax benefit is included in the financial statements
as follows:

<TABLE>
<CAPTION>
1995 1994 1993
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Income tax benefit $ - $ (6.6) $ (33.8)
Cumulative effect of accounting changes - 2.0 (5.5)
- -------------------------------------------------------------------------------------------------------------------
$ - $ (4.6) $ (39.3)
- -------------------------------------------------------------------------------------------------------------------

The components of deferred tax (assets) liabilities are as follows:

</TABLE>
<TABLE>
<CAPTION>
1995 1994
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Deferred Tax Assets:
Reclamation liabilities $ (5.0) $ (4.5)
Postretirement benefits (.8) (.9)
Accrued liabilities (10.6) (1.2)
Net operating loss carryforwards (37.3) (29.9)
Minimum tax credit carryforwards (2.8) (2.8)
Other (.5) -
- -------------------------------------------------------------------------------------------------------------------
Total Deferred Tax Assets (57.0) (39.3)
Valuation allowance 11.4 9.5
- -------------------------------------------------------------------------------------------------------------------
Net Deferred Tax Assets (45.6) (29.8)
Deferred Tax Liabilities:
Properties 55.6 39.8
- -------------------------------------------------------------------------------------------------------------------
Net Deferred Tax Liabilities $ 10.0 $ 10.0
- -------------------------------------------------------------------------------------------------------------------

</TABLE>

-36-<PAGE>
AMAX GOLD INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions unless otherwise indicated and
except per share amounts and amounts per ounce)

The following is a reconciliation between the amount determined by
applying the federal statutory rate of 34 percent to the loss before
taxes and the income tax benefit:

<TABLE>
<CAPTION>
1995 1994 1993
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Income taxes at statutory rate $ (8.1) $ (16.9) $ (41.7)
Increases (decreases) resulting from:
Losses with no expected tax benefit 9.1 10.1 5.1
State income taxes, net of federal benefit (.2) (.4) (1.4)
Percentage depletion (.8) (.2) (.5)
Waihi transaction gain - - 3.7
Other - .8 1.0
- -------------------------------------------------------------------------------------------------------------------
Income tax benefit - (6.6) (33.8)
- -------------------------------------------------------------------------------------------------------------------
Income tax provision (benefit) of cumulative
effect of accounting changes at statutory rate - 3.2 (7.0)
State income taxes, net of federal benefit - - (.2)
Foreign losses with no expected tax benefit - (1.2) 1.7
- -------------------------------------------------------------------------------------------------------------------
Income tax provision (benefit) of cumulative
effect of accounting changes - 2.0 (5.5)
- -------------------------------------------------------------------------------------------------------------------
$ - $ (4.6) $ (39.3)
- -------------------------------------------------------------------------------------------------------------------

</TABLE>

The valuation allowance increased $1.9 million due to uncertainties of
realizing loss carryforwards in the future.

At December 31, 1995, the Company had federal tax net operating loss
carryforwards of $88 million and alternative minimum tax net operating
loss carryforwards of $66 million expiring in the years 2002-2010 and
minimum tax credit carryforwards of $3 million which do not expire.
At December 31, 1995, the Company also had Chilean tax net operating
loss carryforwards of $86 million which do not expire.

The Company will file certain state income tax returns for 1995 on a
combined basis with Cyprus Amax. Tax expense and tax related
liabilities have been determined as if the Company filed separate
income tax returns. The Company is not included in the Cyprus Amax
federal income tax return. The Company is in the process of
negotiating a tax sharing agreement with Cyprus Amax.

5. INVENTORIES

Inventories at December 31, 1995 and 1994 consisted of the following:

<TABLE>
<CAPTION>
1995 1994
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Gold:
Finished goods $ 10.0 $ 10.3
Work-in-process 11.7 11.5
Materials and supplies 4.9 6.8
- -------------------------------------------------------------------------------------------------------------------
$ 26.6 $ 28.6
- -------------------------------------------------------------------------------------------------------------------

</TABLE>

-37-<PAGE>
AMAX GOLD INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions unless otherwise indicated and
except per share amounts and amounts per ounce)

The market value of the finished goods inventory at December 31, 1995
was $14.4 million, with an excess replacement cost (at market value)
over the LIFO basis of $2.5 million.

Effective January 1, 1994, the Company changed its method of
accounting for the costs of ore loaded on heap leach pads to record
such costs as work-in-process inventory. Previously, the Company had
expensed these costs as incurred. The cumulative after-tax effect of
the change in accounting for inventory for periods prior to 1994 was a
decrease in the net loss of $7.5 million or $.09 per common share.
The effect of the accounting change in 1994 was a reduction in cost of
sales of $.3 million. Assuming the inventory accounting change had
been applied retroactively, the unaudited pro forma effect in 1993
would be a reduction of net loss of $2.3 million or $.03 per share.

6. PROPERTY, PLANT AND EQUIPMENT AND WRITE-DOWNS

The components of property, plant and equipment at December 31, 1995
and 1994 were as follows:

<TABLE>
<CAPTION>
1995 1994
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Mining plant and equipment $ 167.9 $ 166.7
Mining properties 172.0 168.8
Development properties and construction-in-progress 435.7 224.1
- -------------------------------------------------------------------------------------------------------------------
775.6 559.6
Less accumulated depreciation, depletion
and write-downs (265.1) (246.3)
- -------------------------------------------------------------------------------------------------------------------
$ 510.5 $ 313.3
- -------------------------------------------------------------------------------------------------------------------

</TABLE>

ACQUISITION OF KUBAKA
The Company has agreed to acquire, subject to certain conditions, from
Cyprus Amax its indirect 50 percent interest in the Kubaka Project,
located in the Magadan Region of the Russian Federation. The
remaining 50 percent interest is held by various Russian entities.
The Kubaka Project has proven and probable reserves of approximately
2.5 million ounces of gold, of which the Company's share would be 1.25
million ounces. Additional gold and silver deposits, not classified
as reserves, are included in the acquisition.

The purchase price is payable in shares of the Company's common stock
with approximately 11.8 million shares payable at closing and 4.2
million shares paid upon commencement of commercial production, valued
at $5.9375 per share, the average closing price for the ten trading
days preceding the public announcement of the acquisition. In
addition, the Company will pay $10 per ounce, up to a maximum of $45
million, for the Company's pro rata share of any new proven and
probable gold reserves in the event the Company acquires the right to
mine other deposits in the Russian Federation prior to 2004.

The Kubaka Project is expected to commence commercial production in
early 1997 at capital costs in excess of its original estimate of $180
million. The increase reflects a possible delay in start-up and
certain higher local costs and contingency provisions. Final
estimates are currently being developed.

As of December 31, 1995, the Project had been funded through $80
million of equity contributions from the partners on a pro rata basis
to their ownership interests and borrowings of $30 million. Project
financing of $100 million is being provided by the European Bank for
Reconstruction and Development and the U.S. Overseas Private
Investment Corporation. Cyprus Amax has provided a completion
guarantee of the financing which will remain in place until

-38-<PAGE>
AMAX GOLD INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions unless otherwise indicated and
except per share amounts and amounts per ounce)

the Project meets certain completion tests. Amax Gold expects to
complete the acquisition at the Kubaka Project in mid-1996.

ASSET WRITE-DOWNS
A re-evaluation of the Hayden Hill operation completed in July 1993
resulted in the downward revision of proven and probable ore reserves
by approximately 400,000 contained gold ounces. During the last half
of 1993, the Hayden Hill Mine was reconfigured as a heap leach only
operation, with the mill maintained on stand-by status. As a result
the Company recorded a $64.1 million pre-tax write-down of the Hayden
Hill assets during 1993. After a successful year of full-scale heap
leach only operation at Hayden Hill in 1994, the Company determined
that a mill operation as originally designed would not be economic and
recognized an additional $18.6 million pre-tax write-down of Hayden
Hill assets during the fourth quarter of 1994. The Company also wrote
down $2.5 million pre-tax of other assets in 1994.

Mining experience and a reinterpretation of geologic data at the
Sleeper Mine during the fourth quarter of 1993 led to a reduction in
proven and probable ore reserves by approximately 300,000 contained
gold ounces. As a result, the Company recorded a $23.6 million
pre-tax write-down of its Sleeper assets during the fourth quarter of
1993.

WAIHI TRANSACTION
During 1993, the Company realized an $8.8 million gain from the sale
of the future economic benefit of the Company's 33.53 percent interest
in the Waihi Mine in New Zealand. The Company received gross proceeds
of $15.4 million and recorded a receivable of 15,500 ounces of gold to
be paid over a 5-year period. Following the transaction, the Company
sold forward, on a spot deferred forward basis, 15,500 gold ounces at
an average price of $365 per ounce. The spot-deferred forward price of
the remaining 7,750 ounces of gold receivable is $399 per ounce at
December 31, 1995.

EXPLORATION EXPENDITURES
During 1993, the Company changed its method of accounting for
exploration expenditures. Previously, the Company capitalized and
restored to earnings prior period exploration expense when a property
became exploitable. For the year ended December 31, 1993, the Company
recognized a $13.4 million ($.17 per common share) after-tax charge
(net of a deferred income tax benefit of $4.5 million) relating to the
cumulative effect for periods prior to 1993. The effect of the
accounting change was to reduce the 1993 net loss by $4.3 million.

-39-<PAGE>
AMAX GOLD INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions unless otherwise indicated and
except per share amounts and amounts per ounce)

7. LONG-TERM DEBT

<TABLE>
<CAPTION>
At December 31 1995 1994
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Term loan, 8.3% for 1995, due 1997 - 2001 $200.0 $ -
Gold loan, 5.4% for 1995, due 1996 - 2001 42.5 -
Note payable to bank, 5.4% for 1994, due 1997 - 40.9
Term loan, 7.7% for 1994, due 1997 - 35.0
Gold leases, 5.6% for 1994, due 1995 - 23.5
Chilean government agency debt, 8.3%
for 1995 and 1994, due 1996 3.0 6.1
Gold loan, 0.2% for 1994, due 1995 - 1.6
- -------------------------------------------------------------------------------------------------------------------
245.5 107.1
Less current portion 7.3 23.9
- -------------------------------------------------------------------------------------------------------------------
Long-term debt $238.2 $ 83.2
- -------------------------------------------------------------------------------------------------------------------

</TABLE>

Scheduled debt maturities as of December 31, 1995 (in millions) were
$7.3, $36.3, $64.0, $64.0, $64.0 and $9.9 for the years 1996 through
2001, respectively.

During October 1995, the Company completed a term loan agreement for
$250 million (the Fort Knox Loan) to be used for construction of the
Fort Knox Project and repayment of certain existing debt obligations.
The loan has a six year term with repayments beginning in 1997 and up
to $125 million may be drawn in gold. As of December 31, 1995 the
Company had borrowed $37 million in gold at $381 per ounce and $163
million in currency. During January 1996, an additional $34 million
in currency was borrowed. Interest on the loan is calculated at LIBOR
for the dollar portion and at the bank's lease rate for the gold
portion, plus 2.25 or 2.0 percent at certain intervals of construction
or plus 1.75 percent after completion tests are passed. Collateral
for the loan includes the assets and production of the Fort Knox and
Hayden Hill Mines and the stock of the subsidiaries owning the Sleeper
and Guanaco Mines. The loan agreement places restrictions on proceeds
of future equity offerings and borrowings, restricts dividends and
requires certain net worth and cash ratios be maintained. Interest
rate protection agreements must be in place for at least 50 percent of
any dollar portion of the borrowing. In addition, Amax Gold must
maintain gold reserve minimums and hedge a portion of future
production in order to obtain specified minimum cash flows. Due to
projected cost increases at the Fort Knox Project, the Fort Knox Loan
was renegotiated in March 1996. See Note 15 for further discussion.

In February 1995, Compania Minera Maricunga (CMM), a 50 percent owned
joint venture of Amax Gold, obtained $85 million in financing to build
the Refugio Mine in Chile (the Refugio Loan). The loan was drawn in
223,684 ounces of gold which were sold for $380 per ounce. The
Company and the other 50 percent owner are guarantors on a several
basis in proportion to their respective ownership interests until
completion tests are passed, at which time the loan becomes non-
recourse to the Company. The loan is a five year amortizing term loan
which can be transferred between gold and U.S. dollars. Interest on
the loan is calculated at LIBOR for any U.S. dollar portion and at the
bank's gold base rate for any gold portion, plus 1.75 percent during
the construction phase and 2.5 percent after completion tests are
passed.

During 1995, the Company repaid $104 million in third party debt with
proceeds from the Fort Knox Loan and the Cyprus Amax $80 million
convertible line of credit.

-40-<PAGE>
AMAX GOLD INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions unless otherwise indicated and
except per share amounts and amounts per ounce)

8. HEDGE CONTRACTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS

Precious metal hedge contracts include forward sales contracts, spot
deferred forward sales, put and call options and compound options.
Realization under these contracts is dependent upon the counterparties
performing in accordance with the terms of the contracts. The Company
does not anticipate nonperformance by the counterparties.

Forward sales contracts require the future delivery of gold at a
specified price. Forward sales contracts that are made on a spot
deferred basis allow the Company to defer the delivery of gold under a
forward sales contract to a later date at a renegotiated market price.
Various factors influence the decision to close a spot deferred
forward sales contract or to roll the contract forward to a later
date. A put option gives the put buyer the right, but not the
obligation, to sell gold to the put seller at a predetermined price on
or before a predetermined date. A call option gives the call buyer
the right, but not the obligation, to buy gold from the call seller at
a predetermined price on or before a predetermined date. The Company
also uses compound options to protect against decreases in gold prices
and to reduce the initial cash outlay needed to provide this
protection. The call portion of a compound option allows the Company
to purchase a put. The Company's risk in purchasing compound options
is limited to the premium paid.

As of December 31, 1995, the Company's outstanding hedge contracts
were as follows:

<TABLE>
<CAPTION>
Average
Realized Price
Gold Ounces Per Ounce Period
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Forward sales contracts<F1> 453,079 $410 Jan. 1996 - April 1996
Option contracts:
Purchased put options 945,000 $407 Jan. 1996 - Dec. 2001
Sold put options 202,700 $379 Jan. 1996 - Sept. 1999
Purchased call options 455,000 $448 Mar. 1996 - Dec. 1997
Sold call options 306,400 $419 Jan. 1996 - Dec. 1996

<FN>
<F1> Represents the net forward sales position which was made primarily on a spot deferred forward basis which
allows deferral of the delivery of gold ounces to a later date at a renegotiated gold price.
</FN>
</TABLE>

The market value of the Company's forward contracts and put and call
options at December 31, 1995 was approximately $22.6 million. Future
market valuations for these contracts are dependent on gold market
prices, option volatility and interest rates, which can vary
significantly. These contracts will be utilized in the future to
hedge against declines in gold market prices for the Company's future
gold production while maintaining benefits in the event of higher gold
market prices.

As a requirement of the Fort Knox Loan, the Company has entered into
interest rate swap option agreements to reduce the impact of changes
in interest rates. At December 31, 1995 the Company had purchased
interest rate swap options with the right to pay a fixed rate of 6.58
percent at an average term of 3.6 years on a principal amount of $160
million and sold interest rate swap options with the obligation to pay
a fixed rate of 5.70 percent at an average term of 3.4 years on a
principal amount of $170 million. Gains or losses realized on these
contracts will be amortized over the term of the loan. Amax Gold
would pay approximately $1.4 million to terminate these interest rate
swap agreements, given market interest rates at December 31, 1995;
however, by February 1996, due to changes in market

-41-<PAGE>
AMAX GOLD INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions unless otherwise indicated and
except per share amounts and amounts per ounce)

interest rates, this amount had decreased significantly. Due to the
requirements placed on the Company as a condition of its Fort Knox
borrowings, the Company does not expect to close these contracts.

The estimated fair values for financial instruments under SFAS No.
107, "Disclosures about Fair Value of Financial Instruments," are
determined at discrete points in time based on relevant market
information. These estimates involve uncertainties and cannot be
determined with precision. The estimated fair values of the Company's
financial instruments, as measured on December 31, 1995 and 1994, are
as follows:

<TABLE>
<CAPTION>
1995 1994
--------------------------------------------------------
Carrying Fair Carrying Fair
Amount Value Amount Value
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Cash and cash equivalents $ 25.6 $ 25.6 $ 36.7 $ 36.7
Long-term receivables 11.9 11.9 4.2 4.2
Long-term debt 245.5 245.5 107.1 106.9
Hedging contracts 8.2 22.6 5.0 13.0
Interest rate swap options - (1.4) - -

</TABLE>

The following methods and assumptions were used to estimate the fair
value of each class of financial instrument:

CASH AND CASH EQUIVALENTS
The carrying amounts approximate fair value because of the short
maturity of these instruments.

LONG-TERM RECEIVABLES
The fair value is estimated based on expected discounted future cash
flows, including applicable interest.

LONG-TERM DEBT
The fair value is estimated based on the quoted market prices for the
same or similar issues offered to the Company for debt of similar
maturities.

HEDGING CONTRACTS
The fair value of options is estimated based on the spot price while
the fair value of the forward sales is estimated based on the quoted
market price for the contracts at December 31, 1995.

INTEREST RATE SWAP OPTIONS
The fair value of interest rate swap option agreements is estimated by
obtaining quotes from financial institutions and represents the cost
to buy out the swaps at December 31, 1995 and 1994. The Company does
not expect to buy out these agreements.

9. EMPLOYEE BENEFITS

PENSION PLAN
Substantially all employees in the United States are covered by a
non-contributory defined benefit pension plan. Benefits are based
generally on years of service and compensation levels prior to
retirement. The Company makes annual contributions to the plan in
accordance with the requirements of ERISA. Effective July 1, 1994,
the Company

-42-<PAGE>
AMAX GOLD INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions unless otherwise indicated and
except per share amounts and amounts per ounce)

amended its plan to a career average plan from a final pay plan. The
change had the effect of reducing the projected benefit obligation and
annual pension expense. Plan assets are invested in a balanced fund
and small capital equity fund.

Net annual pension cost includes the following components:

<TABLE>
<CAPTION>
1995 1994 1993
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Service cost $ .5 $ .8 $ 1.0
Interest cost .3 .4 .4
Actual return on assets (.5) (.1) (.1)
Deferred gain (loss) .2 (.2) -
Net amortization of prior service
cost and losses (.1) .2 .3
- -------------------------------------------------------------------------------------------------------------------
Net periodic expense $ .4 $ 1.1 $ 1.6
- -------------------------------------------------------------------------------------------------------------------

</TABLE>

The following table summarizes the funded status of the plan and the
related amounts recognized in the Company's financial statements at
December 31:

<TABLE>
<CAPTION>
1995 1994
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Actuarial present value of accumulated benefit
obligation, including vested benefits of
$4.2 million in 1995 and $2.7 million in 1994 $ 5.1 $ 3.6
- -------------------------------------------------------------------------------------------------------------------

Projected benefit obligation $ (5.1) $ (3.6)
Plan assets at fair value 3.4 2.1
- -------------------------------------------------------------------------------------------------------------------
Plan assets less than projected benefit obligation (1.7) (1.5)
Unrecognized prior service cost (.8) (.9)
Unrecognized net loss 1.6 .9
- -------------------------------------------------------------------------------------------------------------------
Accrued pension cost $ (.9) $ (1.5)
- -------------------------------------------------------------------------------------------------------------------

</TABLE>

The following assumptions were used in calculating the funded status
of the plan at December 31 and the pension cost for the subsequent
year:

<TABLE>
<CAPTION>
1995 1994
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Expected long-term rate of return on assets 9.0% 9.0%
Discount rate 7.25% 8.75%
Rate of increase in compensation levels 5.25% 5.25%

</TABLE>

POSTRETIREMENT BENEFITS OTHER THAN PENSIONS
The Company also provides certain health care and life insurance
benefits for retired employees in the United States. The
postretirement health care plans are contributory in certain cases
based upon years of service, age and retirement date. The Company
currently does not fund postretirement benefits and may modify plan
provisions at its discretion. Net periodic postretirement benefit
costs for the years ended December 31, 1995, 1994 and 1993 were
insignificant.

-43-<PAGE>
AMAX GOLD INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions unless otherwise indicated and
except per share amounts and amounts per ounce)

The following table sets forth the status of the plan and the related
amounts recognized in the Company's financial statements at
December 31:

<TABLE>
<CAPTION>
1995 1994
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Accumulated postretirement benefit obligation:
Retirees $ .3 $ .4
Fully eligible active plan participants .1 .1
Other active plan participants 1.4 .9
- -------------------------------------------------------------------------------------------------------------------
Total accumulated postretirement benefit obligation 1.8 1.4
Plan assets at fair value - -
- -------------------------------------------------------------------------------------------------------------------
Accumulated postretirement benefit obligation
in excess of plan assets (1.8) (1.4)
Unrecognized prior service cost (1.5) (1.7)
Unrecognized net loss .5 .3
- -------------------------------------------------------------------------------------------------------------------
Accrued postretirement benefit cost $ (2.8) $ (2.8)
- -------------------------------------------------------------------------------------------------------------------

</TABLE>

The accumulated postretirement benefit obligation was determined using
a weighted average annual discount rate of 7.25 percent in 1995 and
8.75 percent in 1994. The assumed health care cost trend rate for
1996 is 11.5 percent declining gradually to 6 percent for 2007 and
thereafter. A one percent increase in the health care cost trend rate
used would have resulted in an insignificant increase in the 1995
postretirement benefit cost and the accumulated postretirement benefit
obligation at December 31, 1995.

POSTEMPLOYMENT BENEFITS
The Company also has a number of postemployment plans covering
severance, disability income and continuation of health and life
insurance for disabled employees. Effective January 1, 1993, the
Company adopted SFAS No. 112, "Employers' Accounting for
Postemployment Benefits". The pre-tax charge to 1993 earnings for the
cumulative effect of this accounting change was $2.8 million, with a
net earnings effect of $1.8 million. At December 31, 1995, the
Company's liability for postemployment benefits totalled $4.4 million
and is included in other liabilities.

10. PREFERRED STOCK

In August 1994, the Company sold publicly 1.8 million shares of $3.75
Series B Convertible Preferred Stock (Preferred Stock) for net
proceeds of $88.3 million. Preferred Stock is convertible at the
option of the holder at any time at an initial conversion price of
$8.25 per share (equivalent to a conversion rate of 6.061 shares of
common stock for each share of Preferred Stock), subject to adjustment
in certain events. If all of the Preferred Stock were to be
converted, an additional 11.2 million common shares would be issued.

The Preferred Stock is redeemable at the option of the Company at any
time on or after August 15, 1997, in whole or in part, for cash,
initially at a redemption price of $52.625 per share declining ratably
annually to $50.00 per share on or after August 15, 2004, plus accrued
and unpaid dividends.

Annual cumulative dividends of $3.75 per share are payable quarterly
on each November 15, February 15, May 15 and August 15, as and if
declared by the Board of Directors.

-44-<PAGE>
AMAX GOLD INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions unless otherwise indicated and
except per share amounts and amounts per ounce)

11. COMMON STOCK

In February 1992, the Company's Board of Directors approved a Dividend
Reinvestment Plan whereby shareholders of the Company may elect to
reinvest any future common stock dividend payments in additional
shares of the Company's common stock. Three million shares of the
Company's common stock are reserved for issuance pursuant to this
plan.

In 1994, the Company shareholders approved a plan to grant common
shares to non-employee directors under which 100,000 shares of common
stock were reserved for issuance. In each of June 1995 and August
1994, 7,500 shares were issued.

The Company issued warrants to purchase approximately 4 million shares
of common stock in connection with the acquisition of the Fort Knox
property. The warrants expired in January 1996.

During 1995, Amax Gold was reincorporated in Delaware and elected not
to be governed by Section 203 of the Delaware General Corporation Law,
permitting the Company to engage in business transactions with Cyprus
Amax without requiring the approval of 66 2/3 percent of all
stockholders excluding Cyprus Amax and its affiliates and associates.
As a result of the reincorporation, Amax Gold's treasury stock was
cancelled.

Earnings per common share have been calculated on the basis of the
average common shares outstanding. Outstanding Company warrants and
stock options were not considered in the earnings per share
calculation as these were anti-dilutive.

12. STOCK OPTION PLAN

The Company maintains a stock option plan for officers and salaried
employees to purchase common shares. Options are exercisable at
prices equal to the market value on the date of grant. Options vest
in two years and remain exercisable until ten years from date of
grant.

The following table summarizes activity under the stock option plan.

<TABLE>
<CAPTION>
Number Average Price
of Options Per Share
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
Options outstanding at December 31, 1994 776,425 $ 7.22
Options granted in 1995 350,400 $ 7.16
Options canceled in 1995 70,525 $ 7.48
Options outstanding at December 31, 1995 1,056,300 $ 7.18

Options exercisable at December 31, 1995 148,850 $ 8.75
- --------------------------------------------------------------------------------------------------------

</TABLE>

No options were exercised during 1995, 1994 or 1993. As of
December 31, 1995, 1.9 million common shares are reserved for future
grants.

During 1993, Amax Gold implemented a performance share plan. Under
this plan, officers of the Company may receive restricted stock awards
based on the rate of return received by investors in the Company's
common stock, compared to that of its peers in the gold industry.
Such awards may be deferred, accelerated or otherwise adjusted

-45-<PAGE>
AMAX GOLD INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions unless otherwise indicated and
except per share amounts and amounts per ounce)

based upon a strategic and comparative performance assessment. As of
December 31, 1995, 35,400 shares were awarded and 814,600 shares were
reserved for issuance. On December 13, 1995, an additional 52,550
shares were awarded to be effective January 1, 1996.

13. DOMESTIC AND FOREIGN OPERATIONS

The Company's foreign operations consist of the Guanaco and Refugio
Mines in Chile. The components of the Company's domestic and foreign
operations were as follows:

<TABLE>
<CAPTION>
1995 1994 1993
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Revenues:
United States $ 68.2 $ 74.9 $ 69.2
Foreign 28.4 19.7 12.7
- -------------------------------------------------------------------------------------------------------------------
$ 96.6 $ 94.6 $ 81.9
- -------------------------------------------------------------------------------------------------------------------

Loss from operations:
United States $ (6.6) $ (31.4) $(104.7)
Foreign (10.6) (12.5) (11.3)
- -------------------------------------------------------------------------------------------------------------------
$ (17.2) $ (43.9) $(116.0)
- -------------------------------------------------------------------------------------------------------------------

Net loss:
United States $ (11.9) $ (25.1) $ (84.0)
Foreign (18.9) (12.2) (20.2)
- -------------------------------------------------------------------------------------------------------------------
$ (30.8) $ (37.3) $(104.2)
- -------------------------------------------------------------------------------------------------------------------

Assets:
United States $ 468.0 $ 308.3 $ 294.6
Foreign 143.1 94.9 86.4
- -------------------------------------------------------------------------------------------------------------------
$ 611.1 $ 403.2 $ 381.0
- -------------------------------------------------------------------------------------------------------------------

</TABLE>

Substantially all of the Company's 1995, 1994 and 1993 sales were made
in Europe through a wholly owned subsidiary of the Company. The
Company's sales to major customers which exceeded 10 percent of total
sales were $58 million to two customers in 1995, $65 million to four
customers in 1994 and $38 million to two customers during 1993. The
Company believes that the loss of any of these customers would have no
material adverse impact on the Company because of the active worldwide
market for gold.

-46-<PAGE>
AMAX GOLD INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions unless otherwise indicated and
except per share amounts and amounts per ounce)

14. COMMITMENTS AND CONTINGENCIES

The Company currently accrues reclamation liabilities for the
following operations:

<TABLE>
<CAPTION>
Reclamation Costs Accrued
Total Anticipated -------------------------
Reclamation Cost Current Non-Current
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Sleeper Mine $ 10.4 $ 4.0 $ 5.8
Hayden Hill Mine 6.8 - 5.3
Wind Mountain Mine .8 .8 -
- ----------------------------------------------------------------------------------------------
Total $ 18.0 $ 4.8 $ 11.1
- ----------------------------------------------------------------------------------------------

</TABLE>

The anticipated reclamation costs for the Sleeper, Hayden Hill and
Wind Mountain mines are estimates based on current federal and state
laws and regulations. The anticipated costs of reclamation for the
Guanaco Mine, given current Chilean laws and regulations, are not
expected to be significant. Changes in the federal, state and Chilean
laws and regulations could impact these anticipated reclamation costs.

15. SUBSEQUENT EVENT - RENEGOTIATION OF FORT KNOX LOAN

In March 1996, as a result of projected higher capital costs to
complete the Fort Knox Project and other cash needs anticipated in
1996, the Company renegotiated the Fort Knox Loan and entered into
certain other financial arrangements with Cyprus Amax. Cyprus Amax
has guaranteed the loan until economic completion of the Fort Knox
Project, as defined in the loan agreement, and the Company has agreed
not to borrow without the consent of Cyprus Amax under the $100
million credit line previously provided by Cyprus Amax, which forms
part of the guaranty.

The renegotiated Fort Knox loan agreement reduces the margin over
LIBOR or the gold lease rate paid as interest to the banks from 2.25
percent to 0.50 percent and eliminates all financial and most other
covenants of the Company. In consideration for the guaranty, the
Company will pay Cyprus Amax the interest differential in addition to
a one-time guaranty fee of 2.5 percent of the guaranteed amount. At
the option of Cyprus Amax, these payments may be made in cash or the
Company's common stock (subject to approval of the Company's
shareholders) valued at a per share price equal to the average of the
closing prices over a five day period ending the day before the
election of Cyprus Amax. The Company is obligated to reimburse Cyprus
Amax for any payments it makes under the guaranty; any reimbursement
obligation will be payable to Cyprus Amax on demand and will bear
interest at LIBOR plus 3.25 percent.

Cyprus Amax also agreed in March to provide to the Company with a
demand loan facility to be used primarily to fund additional costs at
Fort Knox and for general corporate purposes. Funding will be
provided solely at the discretion of Cyprus Amax. The Company will
pay interest on funds borrowed under this facility at LIBOR plus
2.25 percent, increasing by 1 percent in the event of a default by the
Company, and amounts outstanding will be payable to Cyprus Amax on
demand. The Company also will pay a one-time financing fee which when
added to the guaranty fee will total 2.5 percent of the maximum amount
that can be made available to the Company under these arrangements.
All payments of fees, interest or repayments of loans to Cyprus Amax
may be made in cash or the Company's common stock at the election of
Cyprus Amax, valued as described above.
-47-<PAGE>
AMAX GOLD INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions unless otherwise indicated and
except per share amounts and amounts per ounce)

Amounts outstanding under the guaranty and the demand loan facility
are secured by a first priority interest in the collateral for the
Fort Knox Loan and by such additional security interests in the
Company's assets as Cyprus Amax may request from time to time.

Amax Gold will consider various options for additional funding,
including the possibility of accessing equity markets. In addition,
Cyprus Amax has informed the Company it intends to make additional
needed financing available to the Company.

16. QUARTERLY DATA (UNAUDITED)

Quarterly earnings data for the years ended December 31, 1995 and 1994
follow:
<TABLE>
<CAPTION>
1995 Quarters First Second Third Fourth
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues $ 22.7 $ 26.7 $ 23.7 $ 23.5
Loss from operations (4.9) (2.7) (2.9) (6.7)
Net loss (6.0) (4.5) (4.9) (8.5)
Loss attributable to common shares (7.7) (6.2) (6.6) (10.3)
- -------------------------------------------------------------------------------------------------------------------
Per common share:
Net loss $ (.09) $ (.08) $ (.08) $ (.11)
- -------------------------------------------------------------------------------------------------------------------

<CAPTION>
1994 Quarters<F1> First Second Third Fourth<F2>
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues $ 23.8 $ 27.9 $ 23.7 $ 19.2
Loss from operations (4.7) (1.9) (7.1) (30.2)
Loss before income taxes and
cumulative effect of accounting change (6.7) (3.5) (8.2) (31.2)
Net earnings (loss) 2.3 (3.5) (6.9) (27.4)
Earnings (loss) attributable to common
shares 2.3 (3.5) (6.9) (29.2)
- -------------------------------------------------------------------------------------------------------------------
Per common share:
Loss before cumulative
effect of accounting change $ (.07) $ (.05) $ (.09) $ (.36)
Cumulative effect of accounting change .09 - - -
- -------------------------------------------------------------------------------------------------------------------
Net earnings (loss) $ .02 $ (.05) $ (.09) $ (.36)
- -------------------------------------------------------------------------------------------------------------------

<FN>
<F1> Restated for the change in inventory accounting policy effective January 1, 1994, which resulted in a net
earnings increase of $8.1 million for the first quarter, $.2 million for the second quarter and $.7 million
for the third quarter.

<F2> The Company issued 1.8 million preferred shares in August 1994. Preferred share dividends were $1.8 million
during the fourth quarter of 1994.
</FN>
</TABLE>

-48-<PAGE>
AMAX GOLD INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions unless otherwise indicated and
except per share amounts and amounts per ounce)

17. RESERVE DATA (UNAUDITED)

The following table presents proven and probable ore reserves by
property at December 31. Ore reserves are calculated by the Company.

<TABLE>
<CAPTION>
Ore Reserves<F1>
(thousands, except average grades)
1995 1994 1993
--------------------------------------------------------------- ------------- ------------
Contained Contained Contained
Average ounces ounces ounces
grade Contained (the (the (the
(ounces ounces Company's Company's Company's
Tons per ton) (100%) share) share) share)
- ------------------------------------------------------------------------------------------------------------------
Gold
- ----
<S> <C> <C> <C> <C> <C> <C>
Producing mines:
Guanaco<F2> 4,858 0.078 378 378 481 570
Hayden Hill 10,202 0.027 273 273 381 451
Sleeper 867 0.055 48 48 155 250
-------------------------------------------------------

Total producing mines 699 699 1,017 1,271
-------------------------------------------------------

Properties under
construction:
Refugio 117,976 0.029 3,343 1,672 1,537 1,537
Fort Knox 161,835 0.025 4,094 4,094 4,094 4,117
-------------------------------------------------------

Total properties
under construction 7,437 5,766 5,631 5,654
-------------------------------------------------------

Development properties<F3>:
Haile 8,736 0.089 780 488 488 431
-------------------------------------------------------

Total gold 8,916 6,953 7,136 7,356
-------------------------------------------------------

<FN>
<F1> RESERVE. That part of a mineral deposit which could be economically and legally extracted or produced at
the time of the reserve determination.

PROVEN RESERVES. Reserves for which (a) quantity is computed from dimensions revealed in outcrops,
trenches, workings or drill holes; grade and/or quality are computed from the results of detailed sampling
and (b) the sites for inspection, sampling and measurement are spaced so closely and the geologic character
is so well defined that size, shape, depth and mineral content of reserves are well-established.

-49-<PAGE>
AMAX GOLD INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions unless otherwise indicated and
except per share amounts and amounts per ounce)

PROBABLE RESERVES. Reserves for which quantity and grade and/or quality are computed from information
similar to that used for proven (measured) reserves, but the sites for inspection, sampling and measurement
are farther apart or are otherwise less adequately spaced. The degree of assurance, although lower than
that for proven (measured) reserves, is high enough to assume continuity between points of observation.

These definitions comply with those issued by the Securities and Exchange Commission which are based on
definitions used by the United States Bureau of Mines and the United States Geological Survey.

<F2> The Company owns a 90 percent interest in the Guanaco Mine and under existing shareholder arrangements
receives 100 percent of production until certain conditions are met. Management currently does not believe
those conditions will be met; therefore 100 percent of Guanaco's reserves have been included in the
Company's reserve table for 1995.

<F3> The Company's construction and production decision at the Haile development property is dependent on the
issuance of appropriate permits, the resolution of legal disputes between the Company and its venture
partner and the ability of the Company to obtain required financing.
</FN>
</TABLE>

The Company reports extractable (mineable) ore reserves. Reserves do
not reflect losses in the milling or heap leaching processes, but do
include allowance for ore dilution in the mining process.

Recovery rates for 1995 were as follows:

<TABLE>
<CAPTION>
Heap
Leach Mill
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Guanaco 55.30% -
Hayden Hill 60.10% -
Sleeper 55.50% 67.30%

</TABLE>

Based on completed feasibility studies and the processes contemplated
therein, the estimated average gold recovery rates at the Company's
properties under construction and development properties are
approximately 66 percent at Refugio, 90 percent at Fort Knox, and 65
to 85 percent at Haile.

As previously discussed, the Company expects to complete the
acquisition of Kubaka in mid-1996. The addition of Kubaka will
increase the Company's reserves by 2.7 million tons with an average
grade of 0.460 ounces of gold per ton and 1.25 million contained
ounces of gold. Recovery at Kubaka is anticipated to average 97
percent.

-50-<PAGE>
ITEM 9. THERE WERE NO CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information required by this item appears in the Company's Proxy
Statement for the 1996 Annual Meeting of Stockholders to be filed
within 120 days after the end of the fiscal year.

ITEM 11. EXECUTIVE COMPENSATION

The information required by this item appears in the Company's Proxy
Statement for the 1996 Annual Meeting of Stockholders to be filed
within 120 days after the end of the fiscal year.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT

The information required by this item appears in the Company's Proxy
Statement for the 1996 Annual Meeting of Stockholders to be filed
within 120 days after the end of the fiscal year.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information required by this item appears in the Company's Proxy
Statement for the 1996 Annual Meeting of Stockholders to be filed
within 120 days after the end of the fiscal year.

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND
REPORTS ON FORM 8-K

(a) The following documents are filed as a part of this report:

10-K Page
---------
1. FINANCIAL STATEMENTS
Reports of Independent Accountants 24
Report of Management 26
Consolidated Statement of Operations for
each of the three years in the period ended
December 31, 1995 27
Consolidated Balance Sheet at December 31, 1995
and 1994 28
Consolidated Statement of Cash Flows for each
of the three years in the period ended
December 31, 1995 29
Consolidated Statement of Shareholders'
Equity for each of the three years in the
period ended December 31, 1995 30
Notes to Consolidated Financial Statements 31

-51-<PAGE>
2. FINANCIAL STATEMENT SCHEDULES

Financial statement schedules are not included in this
Form 10-K because they are not applicable.

3. EXHIBITS

Exhibit
Number Exhibit
- ------- -------

3(i) Certificate of Incorporation, dated April 13, 1995, and
filed with the Secretary of State of the State of Delaware
on April 26, 1995, filed as Appendix F to the Company's
Proxy Statement for the 1995 Annual Meeting of Stockholders
and incorporated herein by reference.

3(ii) Bylaws, adopted on April 26, 1995, as amended and restated
effective June 21, 1995, filed as Exhibit 3(ii) to the
Company's Registration Statement on Form 8-B filed June 21,
1995 and incorporated herein by reference.

4.1 Certificate of Designations for the $2.25 Series A
Convertible Preferred Stock, filed as Exhibit 4.1 to the
Company's Registration Statement on Form 8-B filed June 21,
1995 and incorporated herein by reference.

4.2 Certificate of Designations for the $3.75 Series B
Convertible Preferred Stock, filed as Exhibit 4.2 to the
Company's Form 8-B filed June 21, 1995 and incorporated
herein by reference.

10.1 Agreement regarding issuance of stock dated September 29,
1995 between the Company and Cyprus Amax, filed as Exhibit
10.1 to the Company's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1995 and incorporated herein by
reference.

10.2 Directors' Deferred Compensation Plan, filed as Exhibit
10.14.2 to the Company's Registration Statement No. 33-22645
and incorporated herein by reference.

10.3 Excess Benefit Plan, filed as Exhibit EX-10(g) to the
Company's Annual Report on Form 10-K for the year ended
December 31, 1993 and incorporated herein by reference.

10.4 Deferred Compensation Plan, filed as Exhibit EX-10(h) to the
Company's Annual Report on Form 10-K for the year ended
December 31, 1993 and incorporated herein by reference.

10.5 1992 Stock Option Plan, filed as Exhibit A to the Company's
Proxy Statement for the 1993 Annual Meeting of Stockholders
and incorporated herein by reference.

10.6 Performance Share Plan, filed as Exhibit B to the Company's
Proxy Statement for the 1993 Annual Meeting of Stockholders
and incorporated herein by reference.

10.7 Term Loan Agreement, dated October 31, 1995, between Amax
Gold Inc., Fairbanks Mining, Inc., Guanaco Mining Company,
Inc., Lassen Gold Mining, Inc., Melba Creek Mining Inc.,
Nevada Gold Mining, Inc. and a group of banks, filed as
Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q
for the quarter ended September 30, 1995 and incorporated
herein by reference; Amendment to Term Loan Agreement dated
December 7, 1995; and Cyprus Amax Guaranty, dated as of
March 19, 1996 by Cyprus Amax, in favor of the
administrative agent for the group of banks.

10.8 Exploration Joint Venture Agreement, effective January 1,
1994, between the Company and Cyprus Amax, filed as
Exhibit 10.1 to the Company's Registration Statement on
Form S-3 (Registration No. 33-53963) and incorporated herein
by reference; and Amendment to Exploration Joint Venture
Agreement, dated December 29, 1995, between the Company and
Cyprus Amax.

-52-<PAGE>
Exhibit
Number Exhibit
- ------- -------

10.9 Revolving Credit Agreement, dated as of April 15, 1994
between the Company and Cyprus Amax, filed as Appendix A to
the Company's Proxy Statement for the July 26, 1994 Special
Meeting of Stockholders and incorporated herein by
reference; and Amendment to Revolving Credit Agreement,
dated as of March 10, 1994, between the Company and Cyprus
Amax, filed as Exhibit 10.11 to the Company's Form 10-K for
the year ended December 31, 1994 and incorporated herein by
reference.

10.10 Revolving Credit Agreement, dated as of March 10, 1995,
between the Company and Cyprus Amax, filed as Exhibit 10.12
to the Company's Annual Report on Form 10-K for the year
ended December 31, 1994 and incorporated herein by
reference.

10.11 Loan Agreement, dated as of November 23, 1994, among
Compania Minera Maricunga, as borrower, Amax Gold Inc. and
Bema Gold Corporation, as guarantors, and certain banks, and
related documents, filed as Exhibit 10.13 to the Company's
Form 10-K for the year ended December 31, 1994 and
incorporated herein by reference.

10.12 Credit Agreement, dated as of March 19, 1996, between the
Company and Cyprus Amax; Guaranty Fee Agreement, dated as of
March 19, 1996, between the Company and Cyprus Amax; and
Reimbursement Agreement, dated as of March 19, 1996, between
the Company and Cyprus Amax.

10.13 Services Agreement, dated as of January 1, 1994, between the
Company and Cyprus Amax.

10.14 Agreement and Plan of Merger and Reorganization, dated as of
January 24, 1996 among the Company, Amax Russia Corporation,
Cyprus Amax, Cyprus Gold Company and Cyprus Magadan Gold
Company.

21 Subsidiaries of the Company.

23.1 Consent of Price Waterhouse LLP.

23.2 Consent of Coopers & Lybrand LLP.

23.3 Consent of Mineral Resources Development, Inc.

23.4 Consent of Derry, Michner, Booth & Wahl.

27 Financial Data Schedule.

(b) Reports on Form 8-K

There were no reports on Form 8-K filed during the fourth
quarter of 1995.

-53-<PAGE>
SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be
signed on its behalf by the undersigned, thereunto duly authorized.

AMAX GOLD INC.

Dated: March 28, 1996 By Mark A. Lettes
--------------------------------------
Mark A. Lettes
Vice President and Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934,
this Report has been signed below by the following persons on behalf of
the Registrant and in the capacities indicated on March 28, 1996.

Signature Title
- --------- -----

Milton H. Ward Chairman of the Board, Chief Executive
- ---------------------------- Officer (principal executive officer)
Milton H. Ward and Director

Mark A. Lettes Vice President and Chief Financial Officer
- ---------------------------- (principal financial officer)
Mark A. Lettes

David L. Mueller Vice President, Controller and Assistant
- ---------------------------- Secretary (principal accounting officer)
David L. Mueller

Allen Born Director
- ----------------------------
Allen Born

Gerald J. Malys Director
- ----------------------------
Gerald J. Malys

Rockwell A. Schnabel Director
- ----------------------------
Rockwell A. Schnabel

Vernon F. Taylor, Jr. Director
- ----------------------------
Vernon F. Taylor, Jr.

Russell L. Wood Director
- ----------------------------
Russell L. Wood

-54-
<PAGE>
EXHIBIT INDEX

Exhibit
No. Description
______________________________________________________________________

10.7 Amendment to Term Loan Agreement dated December 7,
1995; and Cyprus Amax Guaranty, dated as of March
19, 1996 by Cyprus Amax, in favor of the
administrative agent for the group of banks.

10.8 Amendment to Exploration Joint Venture Agreement, dated
December 29, 1995, between the Company and Cyprus Amax.

10.13 Services Agreement, dated as of January 1, 1994, between the
Company and Cyprus Amax.

10.14 Agreement and Plan of Merger and Reorganization, dated as of
January 24, 1996 among the Company, Amax Russia Corporation,
Cyprus Amax, Cyprus Gold Company and Cyprus Magadan Gold
Company.

21 Subsidiaries of the Company.

23.1 Consent of Price Waterhouse LLP.

23.2 Consent of Coopers & Lybrand LLP.

23.3 Consent of Mineral Resources Development, Inc.

23.4 Consent of Derry, Michner, Booth & Wahl.

27 Financial Data Schedule.

EXHIBIT 10.7

SECOND AMENDMENT AGREEMENT

THIS SECOND AMENDMENT AGREEMENT, dated as of March 19, 1996
(this "Agreement"), is made among (1) AMAX GOLD INC., a Delaware
---------
corporation (the "Borrower"), (2) FAIRBANKS GOLD MINING, INC., a
--------
Delaware corporation ("Fairbanks Gold"), GUANACO MINING COMPANY,
--------------
INC., a Delaware corporation ("Guanaco Mining"), LASSEN GOLD
--------------
MINING, INC., a Delaware corporation ("Lassen Gold"), MELBA CREEK
-----------
MINING, INC., an Alaska corporation ("Melba Creek"), and NEVADA
-----------
GOLD MINING, INC., a Delaware corporation ("Nevada Gold"; all of
-----------
the foregoing entities, collectively, the "Principal
---------
Subsidiaries", and together with the Borrower, the "Obligers"),
- ------------ --------
(3) MERRILL LYNCH CAPITAL CORPORATION, a Delaware corporation
("Merrill Lynch"), ABN AMRO BANK N.V., a bank organized under the
-------------
laws of The Netherlands ("ABN AMRO"), N M ROTHSCHILD & SONS
--------
LIMITED, a bank organized under the laws of England
("Rothschild"), and THE TORONTO-DOMINION BANK, a bank organized
----------
under the federal laws of Canada ("Toronto-Dominion"; all of the
----------------
foregoing entities, collectively, the "Arrangers"), (4) THE BANKS
---------
AND OTHER FINANCIAL INSTITUTIONS whose names appear on the
signature pages hereto under the heading "The Lenders"
(collectively, the "Lenders"),(5) MERRILL LYNCH, in its capacity
-------
as syndication agent for the Lenders (in such capacity, the
"Syndication Agent"), (6) TORONTO-DOMINION, in its capacity as
-----------------
documentation and technical agent for the Lender Parties (in such
capacity, the "Documentation and Technical Agent"), (7) LASALLE
---------------------------------
NATIONAL TRUST, N.A., a U.S. national banking association, in its
capacity as collateral agent for the Lender Parties (in such
capacity, the "Collateral Agent"), and (8) ROTHSCHILD, in its
----------------
capacity as administrative agent for the Lender Parties (in such
capacity, the "Administrative Agent").
--------------------

W I T N E S S E T H:

WHEREAS, the Borrower, the Principal Subsidiaries, the
Arrangers, the Lenders party thereto, the Syndication Agent, the
Documentation and Technical Agent, the Collateral Agent and the
Administrative Agent have entered into that certain Loan
Agreement, dated as of October 31, 1995 and amended as of
December 7, 1995 (as so amended, the "Original Loan Agreement");
----------------------

WHEREAS, increases in the actual and projected Capital
Expenditures necessary to construct and develop the Fort Knox
Mine have occurred;

WHEREAS, while the Obligors do not acknowledge that any
Default has occurred and is continuing or will occur in the
<PAGE>
future, the Obligors have requested that the Lender Parties waive
those Defaults that have occurred or may occur in the future and
suspend the effectiveness of certain provisions of the Original
Loan Agreement, in each case as set forth in greater detail in
Section 3.2 of this Agreement;
- -----------

WHEREAS, subject to the terms and conditions of this
Agreement, Cyprus Amax is willing to guarantee unconditionally
and irrevocably the payment obligations of the Borrower and each
other Obligor to the Lender Parties at all times prior to the
Fort Knox Economic Completion Date as set forth in greater detail
in the Cyprus Amax Guaranty; and

WHEREAS, it is a condition to the issue of the Cyprus Amax
Guaranty by Cyprus Amax that the assets and properties (and any
proceeds resulting therefrom) currently subject to the Liens in
favor of the Administrative Agent or the Collateral Agent (in
either case for the rateable benefit of the Lender Parties)
pursuant to the Security Documents (together with certain other
assets and properties of the Borrower and certain of the
Principal Subsidiaries as may be mutually agreed) are made
subject, pursuant to the Priority Agreement, to first-priority,
perfected Liens as may be granted in favor of Cyprus Amax as
security for all of the reimbursement obligations of the Borrower
and the Principal Subsidiaries in connection with the Cyprus Amax
Guaranty;

NOW THEREFORE, in consideration of the agreements herein
contained, the parties hereto hereby agree as follows:

ARTICLE 1. DEFINITIONS; INTERPRETATION
---------------------------------------

SECTION 1.1. ORIGINAL LOAN AGREEMENT TERMS. Terms for
which meanings are provided in the Original Loan Agreement are,
unless otherwise defined herein or the context otherwise
requires, used in this Agreement with such meanings. This
Agreement is a Loan Document and shall be interpreted in
accordance with applicable provisions contained in the Original
Loan Agreement (including Sections 1.4 and 1.11 thereof).
------------ ----

SECTION 1.2. ADDITIONAL TERMS. In this Agreement
(including its preamble and recitals), the following capitalized
terms shall have the following meanings:

"Amended Loan Agreement" means the Original Loan Agreement,
----------------------
as amended by this Agreement.

"Amendment Effective Date" is defined in Article 5.
------------------------ ---------

-2-<PAGE>
"Authorized Representative" means, relative to Cyprus Amax,
-------------------------
those of its officers whose signatures and incumbency shall have
been certified to the Administrative Agent pursuant to clause (b)
---------
of Section 5.2.
-----------

"Cyprus Amax Guaranty" means that certain Guaranty
--------------------
Agreement, from Cyprus Amax in favor of the Administrative Agent
(for the rateable benefit of the Lender Parties), substantially
in the form of Exhibit A attached hereto.
---------

"Priority Agreement" means that certain Collateral Sharing,
------------------
Priority and Agency Agreement among the Borrower, Fairbanks Gold,
Lassen Gold, Melba Creek, Fairbanks Canada, the Collateral Agent,
the Administrative Agent and Cyprus Amax, substantially in the
form of Exhibit B attached hereto.
---------

ARTICLE 2. AMENDMENTS TO ORIGINAL LOAN AGREEMENT, BORROWING
------------------------------------------------------------
REQUEST AND CONTINUATION/CONVERSION NOTICE
------------------------------------------

SECTION 2.1. AMENDMENTS TO SECTION 1.1 OF THE ORIGINAL LOAN
-----------
AGREEMENT. Section 1.1 of the Original Loan Agreement shall be
-----------
amended as set forth in this Section.

(a) Section 1.1 of the Original Loan Agreement shall
-----------
be amended by adding thereto the following definitions in
the appropriate alphabetical order:

"Cyprus Amax Guaranty" means that certain Guaranty
--------------------
Agreement, from Cyprus Amax in favor of the
Administrative Agent (for the rateable benefit of the
Lender Parties), substantially in the form of Exhibit A
---------
attached to the Second Amendment Agreement.

"Fort Knox Bridge Indebtedness" is defined in
-----------------------------
clause (i) of Section 7.2.2.
---------- -------------

"Fort Knox Industrial Revenue Bonds" is defined in
----------------------------------
clause (j) of Section 7.2.2.
---------- -------------

"Permitted Fort Knox Sale-Leaseback" means the sale and
----------------------------------
leaseback of mobile equipment owned by the Borrower or
Fairbanks Gold not in excess of $30,000,000 fair market
value on the date of implementation of such
arrangements.

"Priority Agreement" means that certain Collateral
------------------
Sharing, Priority and Agency Agreement among the
Borrower, Fairbanks Gold, Lassen Gold, Melba Creek,
Fairbanks Canada, the Collateral Agent, the
Administrative Agent and Cyprus Amax, substantially in

-3-<PAGE>
the form of Exhibit B attached to the Second Amendment
---------
Agreement.

"Second Amendment Agreement" means that certain Second
--------------------------
Amendment Agreement hereto, dated as of March 19, 1996,
among the Borrower, the Principal Subsidiaries, the
Arrangers, the Lenders party thereto, the Syndication
Agent, the Documentation and Technical Agent, the
Collateral Agent and the Administrative Agent.

"Second Amendment Effective Date" means the Amendment
-------------------------------
Effective Date under (and as defined in) the Second
Amendment Agreement.

(b) The definitions of "Applicable Margin",
-----------------
"Calculation Date", "Cash Flow Ratio", "Consolidated
---------------- --------------- ------------
Fixed Charge Coverage Ratio", "Fort Knox Economic
--------------------------- ------------------
Completion" and "Fort Knox Economic Completion Date"
---------- ----------------------------------
contained in Section 1.1 of the Original Loan Agreement
-----------
shall be amended in their entirety to read as set forth
below:

"Applicable Margin" means:
-----------------

(a) at any time prior to the Second Amendment
Effective Date, two and one-quarter percent (2.25%) per
---
annum;
-----

(b) at any time on or after the Second Amendment
Effective Date but prior to the Fort Knox Economic
Completion Date, the applicable percentage set forth
below based upon the ratings applicable from time to
time to Cyprus Amax' senior, unsecured, non-credit-
enhanced long-term Indebtedness for borrowed money
("Index Debt"):
----------

Percentage
----------

Category 1 0.50%
----------

Rating
------
BBB or higher by Standard & Poor's
Baa2 or higher by Moody's

Category 2 0.55%
----------

Rating
------
BBB- by Standard & Poor's
Baa3 by Moody's

-4-<PAGE>
Category 3 0.725%
----------

Rating
------
BB+ or lower by Standard & Poor's
Ba1 or lower by Moody's

For purposes of the foregoing: (i) if the ratings for
Index Debt established or deemed to have been
established by Moody's and Standard & Poor's shall fall
within different categories, the Applicable Margin
shall be determined by reference to the numerically
lower of such categories (i.e., the category
corresponding to the higher rating), (ii) if Moody's or
Standard & Poor's shall not have in effect a rating for
Index Debt (due to the creditworthiness of Cyprus Amax
or to any act or failure to act on the part of Cyprus
Amax, or because such rating agency shall no longer be
in the business of rating corporate debt obligations),
then the Applicable Margin shall be determined by
reference to Category 3 and (iii) if any rating
established or deemed to have been established by
Moody's or Standard & Poor's shall be changed (other
than as a result of a change in the rating system of
Moody's or Standard & Poor's), such change shall be
effective as of the date on which it is first announced
by the applicable rating agency. If the rating system
of Moody's or Standard & Poor's shall change, or if
either such rating agency shall no longer have in
effect a rating for Index Debt (other than for one of
the reasons referred to in clause (ii) above), the
Borrower and the Lenders, acting through the
Administrative Agent, shall negotiate in good faith to
amend the references to specific ratings in this
definition to reflect such changed rating system or the
non-availability of ratings from such rating agency;
and

(c) at any time on or after the Fort Knox Economic
Completion Date, (i) with respect to the portion, if any, of
the Dollar equivalent (calculated as at each day that any
such Loan may be outstanding) of the Principal Amount of
Loans then outstanding in an amount equal to the lesser of
(A) the 1994 DOCLOC Facility Fort Knox Portion or (B) the
aggregate Dollar equivalent of the Principal Amount of Loans
then outstanding, one percent (1%) per annum, and (ii) in
--- -----
the case of the remaining portion, if any, of the Principal
Amount of Loans then outstanding, one and three-quarters
percent (1.75%) per annum.
--- -----

-5-<PAGE>
"Calculation Date" means each of the Fort Knox Economic
----------------
Completion Date and each Quarterly Payment Date coinciding
therewith or occurring thereafter.

"Cash Flow Ratio" means, for any period, an amount equal to
---------------
the ratio, expressed as a percentage, of:

(a) the sum of

(i) Future Net Cash Flow for such period,

(ii) cash balances projected to be standing to
the credit of bank accounts maintained by, and Cash
Equivalent Investments projected to be owned by (valued
on a mark-to-market basis at the relevant prices in
effect at the relevant date of calculation of the Cash
Flow Ratio), the Borrower and its Subsidiaries measured
at the end of such period,

plus
----
(iii) the 1994 DOCLOC Facility Available Portion
projected to be outstanding as at the end of such
period;

to
--
(b) the sum of

(i) Funded Debt Service for such period,

plus
----
(ii) rental payments in respect of the Permitted
Fort Knox Sale-Leaseback for such period and, subject
to clause (l) of Section 7.2.3, payments in respect of
----------- -------------
the Fort Knox Industrial Revenue Bonds for such period.

"Consolidated Fixed Charge Coverage Ratio" means for any
----------------------------------------
Measurement Period, the ratio, expressed as a percentage,
of:

(a) the sum of:

(i) Consolidated Adjusted EBITDA for such
Measurement Period,

(ii) the 1994 DOCLOC Facility Available Portion as
at the last day of such Measurement Period,

plus
----

-6-<PAGE>
(iii) cash balances standing to the credit of
bank accounts maintained by, and Cash Equivalent
Investments owned by (valued on a mark-to-market basis
at the relevant prices in effect at the relevant date
of calculation of Consolidated Fixed Charge Coverage
Ratio), the Borrower and its Subsidiaries measured at
the last day of such Measurement Period;

to
--
(b) the sum of:

(i) Consolidated Cash Interest Expense for such
Measurement Period,

(ii) the Principal Amount of all Loans repaid or
prepaid during such Measurement Period (other than
pursuant to clause (a) of Section 3.1.1 and calculated,
---------- -------------
in the case of any such Principal Amount denominated in
Gold, on the basis of the Dollar equivalent thereof as
at the date of repayment or prepayment of such
Principal Amount),

(iii) Consolidated Capital Costs paid during such
Measurement Period,

(iv) income taxes paid by the Borrower and its
Subsidiaries during such Measurement Period,

(v) dividends on preferred equity share capital
actually paid in cash or in kind (other than through
the distribution of further shares of capital stock of
the Borrower) by the Borrower during such Measurement
Period,

plus
----
(vi) rental payments in respect of the Permitted
Fort Knox Sale-Leaseback during such Measurement Period
and, subject to clause (l) of Section 7.2.3, principal
---------- -------------
payments in respect of the Fort Knox Industrial Revenue
Bonds during such Measurement Period.

in each case without duplication and calculation on a
consolidated basis.

"Fort Knox Economic Completion" means the date following the
-----------------------------
Fort Knox Physical Completion Date on which:

(a) either (i) the Independent Consultant shall have
duly completed, certified and delivered to the

-7-<PAGE>
Administrative Agent the Fort Knox Economic Completion
Certificate (as such certificate shall be initially amended
by the Borrower with the consent of all Lenders acting in
their reasonable discretion in consultation with the
Independent Consultant to reflect criteria demonstrating
that the Fort Knox Mine is capable of producing Gold at or
in excess of the levels referred to in the Fort Knox Base
Case at an average cash cost which is lower than that
referred to in the Fort Knox Base Case, as amended pursuant
to Section 3.1 of the Second Amendment Agreement to reflect

the increased capital costs associated with the Fort Knox
Mine and as otherwise amended from time to time pursuant to
Section 1.8); provided, however, that subsequent amendments
----------- -------- -------
(other than amendments of the magnitude contemplated in the
previous parenthetical phrase, which shall be made with the
consent of all Lenders, acting in their reasonable
discretion) to the Fort Knox Economic Completion Certificate
shall be made in accordance with the terms of the Loan
Agreement; or

(ii) at the request of the Borrower, the Independent
Consultant shall have duly completed, certified and
delivered a certificate to the Administrative Agent (the
"Alternative Certificate") stating that the Fort Knox Mine
-----------------------
(x) has produced, during the Fort Knox Mine Operating Test
Period (as defined in the Fort Knox Economic Completion
Certificate), Gold at or in excess of the levels referred to
in the Fort Knox Base Case (as so amended) at an average
cash cost per ounce of Gold in the form of dore (plus the
refining costs incurred to upgrade Gold dore to bullion) not
greater than 105% of the forecasted said costs for the
corresponding period contained in the Fort Knox Base Case as
so amended and (y) has demonstrated the capability of
producing Gold at or in excess of the levels referred to in
the Fort Knox Base Case as so amended at an average cash
cost per ounce of Gold in the form of dore (plus the
refining costs incurred to upgrade Gold dore to bullion) not
greater than 105% of the forecasted said costs in the Fort
Knox Base Case as so amended until the then scheduled Final
Maturity Date;

(b) the Borrower shall have delivered: (i) a
certificate of an Authorized Representative of the Borrower
to the effect that no Default shall then have occurred and
be continuing or would occur assuming (and giving effect to)
the occurrence of the then contemplated Fort Knox Economic
Completion Date (including following termination of the
waivers contained in Section 3.2 of the Second Amendment
-----------
Agreement), (ii) a certificate of an Authorized
Representative of the Borrower attaching copies of the Base
Cases (as amended as set forth in clause (a)) as in effect
----------
on such date and (iii) a Compliance Certificate, dated as of

-8-<PAGE>
such date, demonstrating the Borrower's compliance, on an
actual and/or projected basis, as the case may be, with its
obligations under Section 7.2.4 as of such date and each
-------------
other Calculation Date (if any) scheduled to occur
thereafter; provided, however, that, with respect to the
-------- -------
obligations of the Borrower contained in clause (c) of
----------
Section 7.2.4, the calculation of the Consolidated Fixed
-------------
Charge Coverage Ratio contained in such Compliance
Certificate shall be computed on a projected basis with
respect to the period from the intended Fort Knox Economic
Completion Date to (and including) the Final Maturity Date;
and

(c) the Lenders shall have received such evidence as
they shall reasonably require to the effect that,
immediately following the release of the obligations of
Cyprus Amax under the Cyprus Amax Guaranty pursuant to the
terms thereof on the then contemplated Fort Knox Economic
Completion Date, the Liens granted to the Lender Parties
pursuant to the Security Documents shall (except as
permitted by Section 7.2.3) be first-priority perfected
-------------
Liens securing the relevant Obligations.

For purposes of clause (a)(ii), if the Independent
--------------
Consultant elects not to certify the Alternative Certificate,
within five (5) Business Days after notice to such effect, the
Lenders shall appoint an independent engineering firm, which firm
shall be one of Behre Dolbear & Company, Pincock, Allen & Holt,
Kilborn Engineering, Minerals Advisory Group, Chapman, Wood and
Griswold, Micon International Limited or The Harry Winters
Company (the "Second Consultant"). The list of firms contained
-----------------
in the preceding sentence may be modified from time to time by
mutual agreement of the Borrower, Cyprus Amax and the Required
Lenders. The Second Consultant shall review the Alternative
Certificate, the Fort Knox Base Case as then in effect, and such
other information as it shall determine is necessary or desirable
in consultation with the Borrower in order for it to deliver an
opinion with respect to the Alternative Certificate and shall
notify the Lenders, the Borrower and Cyprus Amax within twenty
(20) Business Days of its appointment that it either agrees or
does not agree with the decision of the Independent Consultant
not to certify the Alternative Certificate. Subject to the
protest procedures described in the immediately succeeding
paragraph (including clauses (x) and (y) thereof) and to
-------------------
compliance with the provisions of clauses (b) and (c), if the
----------- ---
Alternative Certificate is certified by either the Independent
Consultant or the Second Consultant, Fort Knox Economic
Completion shall then be deemed to have occurred.

For purposes of clause (a)(ii), if the Independent
--------------
Consultant elects to certify the Alternative Certificate but
(A) within ten (10) Business Days after the Administrative Agent

-9-<PAGE>
has notified the Lenders of such certification, one or more
Lenders (the "Protesting Lenders") notify the Borrower, Cyprus
------------------
Amax and the Administrative Agent that they do not, in their sole
discretion, accept such certification, and (B) at the end of ten
(10) further Business Days, having afforded to the Borrower and
Cyprus Amax reasonable opportunity to discuss such non-acceptance
with them, some or all of the Protesting Lenders determine that
Fort Knox Economic Completion has not occurred, the Borrower
shall have the option, subject to the provisos contained in
clause (y) of this paragraph, of electing one of the two
- ----------
procedures set forth in clauses (x) and (y) of this paragraph:
----------- ---

(x) Within five (5) Business Days of the notification
by the Protesting Lenders set forth in sub-clause (B) above
--------------
in this paragraph, the Lenders shall appoint the Second
Consultant from the list in the manner set forth in the
immediately preceding paragraph. The Second Consultant
shall review the Alternative Certificate, the Fort Knox Base
Case as then in effect, and such other information as it
shall determine is necessary or desirable in consultation
with the Borrower in order for it to deliver an opinion with
respect to the Alternative Certificate and shall notify the
Lenders, the Borrower and Cyprus Amax within twenty (20)
Business Days of its appointment that it either agrees or
does not agree with the decision of the Independent
Consultant to certify the Alternative Certificate. Subject
to the immediately succeeding paragraph and to compliance
with the provisions of clauses (b) and (c), if the
----------- ---
Alternative Certificate is confirmed by the Second
Consultant, Fort Knox Economic Completion shall then be
deemed to have occurred; or

(y) The Borrower may elect to replace one or more
Protesting Lenders with any one or more financial
institutions permitted by Applicable Law to lend to the
Borrower on the terms and conditions set forth in the Loan
Agreement and the other Loan Documents, subject to the
provisions set forth in Sections 10.10 (other than clause
-------------- ------
(a) thereof) and 10.11; provided, however, that (i) the
--- ----- -------- -------
election set forth in this clause shall not be available to
the Borrower if the Protesting Lenders hold an Outstanding
Percentage in excess of 25% of the Principal Amount of the
Loans and (ii) in connection with any such replacement, each
Protesting Lender shall have received in consideration
thereof an amount (denominated in Gold or Dollars, as may be
appropriate) equivalent to one hundred percent (100%) of the
aggregate of unpaid Principal Amounts of the Loans
outstanding to such Protesting Lender and all accrued but
unpaid interest, fees and other amounts (including any that
may arise pursuant to Section 4.3) in respect thereof to the
-----------
date of transfer.

-10-<PAGE>
The test in clause (x) of the immediately preceding
----------
paragraph shall be subject to the further condition that Fort
Knox Economic Completion shall not have occurred if (a) within
ten (10) Business Days after the Alternative Certificate is
certified by the Second Consultant, one or more Lenders (the
"Second Protesting Lenders") notify the Borrower, Cyprus Amax and
-------------------------
the Administrative Agent that they do not, in their sole
discretion, accept such certification, and (b) at the end of ten
(10) further Business Days, having afforded to the Borrower and
Cyprus Amax reasonable opportunity to discuss such non-acceptance
with them, some or all of the Second Protesting Lenders determine
that Fort Knox Economic Completion has not occurred. In such
circumstances, the Borrower may elect to replace the Second
Protesting Lenders pursuant to the procedures set forth in
clause (y); provided, however, that the election set forth in
- ---------- -------- -------
this paragraph shall not be available to the Borrower if the
Second Protesting Lenders hold an Outstanding Percentage in
excess of 25% of the Principal Amount of the Loans.

"Fort Knox Economic Completion Date" means the day on which
----------------------------------
(a) the Documentation and Technical Agent shall have
received counterparts of the Fort Knox Economic Completion
Certificate and (b) the other criteria referred to in the
definition of "Fort Knox Economic Completion" shall
-----------------------------
otherwise have occurred as set forth therein. For the
avoidance of doubt, no provision of this Agreement or any
other Loan Document shall be construed to imply the
occurrence or non-occurrence of the Fort Knox Economic
Completion Date (or the satisfaction of any of the criteria
of Fort Knox Economic Completion) at any time and any
obligations of any Person (including any obligations of
Cyprus Amax under the Cyprus Amax Guaranty) which are stated
to be in effect until the occurrence of Fort Knox Economic
Completion shall, if Fort Knox Economic Completion does not
occur, continue until payment in full of all Obligations
guaranteed thereby.

SECTION 2.2. AMENDMENT TO SECTION 2.4 OF LOAN AGREEMENT.
-----------
Clause (b) of Section 2.4 of the Original Loan Agreement shall be
- ---------- -----------
amended in its entirety to read as set forth below:

(b) unless, simultaneously with the effective date of such
Continuation/Conversion Notice: (i) the Borrower shall have made
any repayment or prepayment of Loans then required to be made
pursuant to this Agreement and (ii) the Borrower shall have,
during the period on or after the Fort Knox Economic Completion
Date, delivered to the Administrative Agent a Compliance
Certificate calculated as of such date, together with such
information concerning the calculations and assumptions used by
the Borrower in delivering such Compliance Certificate as the
Administrative Agent shall have requested; and

-11-<PAGE>
SECTION 2.3. AMENDMENT TO SECTION 3.1.1 OF THE ORIGINAL
-------------
LOAN AGREEMENT. Clauses (f) and (g) of Section 3.1.1 of the
----------- --- -------------
Original Loan Agreement shall be amended in their entirety to
read as set forth below:

(f) shall, at all times during the period on or after
the Fort Knox Economic Completion Date (and without
prejudice to clause (g)), within five (5) Business Days
----------
following the receipt of Net Issuance Proceeds
resulting from any issuance of Approved Subordinated
Indebtedness (Borrower) (excluding, however, any
Approved Subordinated Indebtedness (Borrower) issued
(following the giving of any required consent or waiver
pursuant to the Loan Documents) for the sole purpose of
refinancing any then outstanding Approved Subordinated
Indebtedness (Borrower)) or the receipt of Net Issuance
Proceeds resulting from any issuance of its equity
share capital (excluding, however, any such Net
Issuance Proceeds which are applied within five (5)
Business Days by the Borrower in repayment or
prepayment of amounts outstanding in respect of Fort
Knox Bridge Indebtedness at any time when no Default
shall have occurred and be continuing) to any Person,
make a mandatory prepayment of all Loans outstanding on
such date in a Principal Amount of (i) 100% of the
first $25,000,000 of the aggregate Net Issuance
Proceeds from all such issuances, (ii) 25% of all such
remaining Net Issuance Proceeds (in the case of any
such issue of equity share capital), and (iii) 100% of
all such remaining Net Issuance Proceeds (in the case
of any such issue of Approved Subordinated Indebtedness
(Borrower)).

(g) shall (without prejudice to the provisions of
Section 7.1.15 and of the DOCLOC Support Agreement), on
--------------
and after the Fort Knox Economic Completion Date,
within five (5) Business Days following the receipt by
the Borrower of any cash proceeds (i) resulting from
any exercise of the Lender's Purchase Option (as
defined in the 1994 DOCLOC Facility Agreement), or (ii)
remaining after the application against any amounts
outstanding under the 1994 DOCLOC Facility Agreement of
the proceeds of any other issuance of any equity share
capital by the Borrower to Cyprus Amax pursuant to the
1994 DOCLOC Facility Agreement, make a mandatory
prepayment of all Loans outstanding on such date in a
Principal Amount equal to such cash proceeds.

SECTION 2.4. AMENDMENT TO SECTION 5.2.1 OF THE ORIGINAL
-------------
LOAN AGREEMENT. Section 5.2.1 of the Original Loan Agreement
-------------
shall be amended in its entirety to read as set forth below:

-12-<PAGE>
SECTION 5.2.1. COMPLIANCE WITH WARRANTIES, NO DEFAULT,
ETC. The representations and warranties of Cyprus Amax
incorporated by reference into Article 4 of the Cyprus Amax
---------
Guaranty and of the Borrower set forth in Section 6.19 and
------------
of any Obligor set forth in any Security Document to which
it is a party (subject to the waiver set forth in Section
-------
3.2 of the Second Amendment Agreement) shall be true and
---
correct as of the date initially made, and both immediately
before and immediately after the making of the Loans (but,
if any Default of the nature of Section 8.1.5 shall have
-------------
occurred with respect to any other Indebtedness without
giving effect to the application, directly or indirectly, of
the proceeds of such Loans to such other Indebtedness):

(a) such representations and warranties shall be true
and correct with the same effect as if then made (unless
stated to relate solely to an earlier date, in which case
such representations and warranties shall be true and
correct as of such earlier date); and

(b) no Default shall have then occurred and be
continuing.

SECTION 2.5. AMENDMENT TO ARTICLE 6 OF THE ORIGINAL LOAN
---------
AGREEMENT. The first paragraph of Article 6 of the Original Loan
---------
Agreement shall be amended in its entirety to read as set forth
below:

In order to induce the Lender Parties to enter into this
Agreement and, in the case of the Lenders, to make,
maintain, continue and/or convert Loans hereunder, the
Borrower, individually for itself and for the other Obligors
and with respect to matters hereinafter relating to it and
each other Obligor, and each other Obligor individually for
itself and with respect to matters hereinafter relating to
it, represents and warrants unto each Lender Party as set
forth in this Article. The representations and warranties
set forth in this Article shall be made upon the Fort Knox
Economic Completion Date and upon the delivery of each
Continuation/Conversion Notice after the Fort Knox Economic
Completion Date requesting a conversion from one type of
Tranche B Loan to another (and, in the case of any
representation and warranty contained in Section 6.19, and
------------
in any Security Document (subject to the waiver set forth in
Section 3.2 of the Second Amendment Agreement), upon the
-----------
Second Amendment Effective Date, upon the delivery of any
Borrowing Request and the delivery of each
Continuation/Conversion Notice requesting a conversion from
one type of Tranche B Loan to another on or prior to the
Fort Knox Economic Completion Date).

-13-<PAGE>
SECTION 2.6. AMENDMENT TO SECTION 7.1 OF THE ORIGINAL LOAN
-----------
AGREEMENT. Section 7.1 of the Original Loan Agreement shall be
-----------
amended in its entirety to read as set forth below:

SECTION 7.1 CERTAIN AFFIRMATIVE COVENANTS. Each Obligor
agrees with each Lender Party that, at all times on and
after the Fort Knox Economic Completion Date (and, in the
case of any agreement contained in Sections 7.1.1 and
--------------
7.1.13, at all times prior to the Fort Knox Economic
------
Completion Date) until all Obligations have been paid and
performed in full, such Obligor will perform its respective
obligations set forth in this Section. Except where the
context specifically requires otherwise, the Borrower shall
use its best efforts to ensure that each relevant Subsidiary
complies with its respective obligations set forth in this
Section.

SECTION 2.7. AMENDMENT TO SECTION 7.1.1 OF THE ORIGINAL
-------------
LOAN AGREEMENT. Clause (a) of Section 7.1.1 of the Original Loan
---------- -------------
Agreement shall be amended in its entirety to read as set forth
below:

(a) (i) each of the Borrower, Fairbanks Gold and
Melba Creek will deliver, promptly when available, and in
any event within 90 days after the close of each Fiscal Year
of such Obligor:

(x) in the case of the Borrower, the consolidated
balance sheet at the close of such Fiscal Year and the
related consolidated statements of operations, cash
flows and shareholders' equity (for the Fiscal Year
then ended) of the Borrower and its Subsidiaries; and

(y) in the case of Fairbanks Gold and Melba
Creek, its balance sheet at the close of such Fiscal
Year and its related statements of operations and cash
flows for such Obligor,

in each case with comparable information at the close of and
for the prior Fiscal Year and (A) solely in the case of the
Borrower, reported on without Impermissible Qualification by
Price Waterhouse LLP, or another independent certified
public or chartered accountant of recognized international
standing, together, for any Fiscal Year ending on or after
the Fort Knox Economic Completion Date, with a certificate
from such accountant in form and substance reasonably
satisfactory to the Administrative Agent (including with
respect to any disclaimers for legal matters) (1) certifying
that to the best of its knowledge no Default has occurred,
or, if such a Default has occurred, specifying the nature
and extent thereof, and (2) setting forth in reasonable

-14-<PAGE>
detail the calculations (including (without prejudice to
Section 1.5) the impact of any adjustments between GAAP as
-----------
in effect on the Effective Date and GAAP as in effect at the
time of preparation of the relevant financial statements
referred to above) required to demonstrate the due
observance and performance of the covenants and agreements
contained in Article 7 and (B) in the case of Fairbanks Gold
---------
and Melba Creek, certified by an accounting or financial
Authorized Representative of such Obligor; and

SECTION 2.8. AMENDMENT TO SECTION 7.1.1 OF THE ORIGINAL
-------------
LOAN AGREEMENT. Clause (k) of Section 7.1.1 of the Original Loan
---------- -------------
Agreement shall be amended in its entirety to read as set forth
below:

(k) without duplication of any other clause of this
Section, (i) as soon as possible and in any event within
three (3) Business Days after the occurrence of any Default,
the Borrower will deliver a statement of its chief financial
Authorized Representative setting forth details of such
Default and the action which the relevant Obligor has taken
and proposes to take with respect thereto and (ii) during
the period prior to the Fort Knox Economic Completion Date,
as soon as possible and in any event within three (3)
Business Days after the occurrence of any event of the
nature hereinafter referred to in this clause, the Borrower
will deliver a statement of its chief financial Authorized
Officer setting forth the details of any Default which would
have occurred in the performance of any Obligation if,
notwithstanding (but without prejudice to) the waiver
contained in Section 3.2 of the Second Amendment Agreement,
-----------
the provisions of Articles 6 and 7 had been in full force
---------- -
and effect during the period commencing on the Second
Amendment Effective Date and ending on the Fort Knox
Economic Completion Date;

SECTION 2.9. AMENDMENT TO SECTION 7.2 OF THE ORIGINAL LOAN
-----------
AGREEMENT. Section 7.2 of the Original Loan Agreement shall be
-----------
amended in its entirety to read as set forth below:

SECTION 7.2 CERTAIN NEGATIVE COVENANTS. Each Obligor
agrees with each Lender Party that, at all times on and
after the Fort Knox Economic Completion Date until all
Obligations have been paid and performed in full, such
Obligor will perform its respective obligations set forth in
this Section. Except where the context specifically
requires otherwise, the Borrower shall use its best efforts
to ensure that each relevant Subsidiary complies with its
respective obligations set forth in this Section.

-15-<PAGE>
SECTION 2.10. AMENDMENT TO SECTION 7.2.2 OF THE ORIGINAL
-------------
LOAN AGREEMENT. Section 7.2.2 of the Original Loan Agreement
-------------
shall be amended in its entirety to read as set forth below:

SECTION 7.2.2 INDEBTEDNESS. The Borrower shall not, and
shall not permit any Subsidiary to, create, incur, assume,
or suffer to exist or otherwise become or be liable in
respect of any Indebtedness other than:

(a) Indebtedness in respect of the Loans and other
Obligations;

(b) Indebtedness in respect of Hedging Agreements or
Interest Rate Protection Agreements entered into by the
Borrower in accordance with Section 7.1.10 or 7.1.11 or,
-------------- ------
without prejudice to the provisions of clause (b) of Section
---------- -------
7.1.10, other Hedging Obligations incurred in the ordinary
------
course of business;

(c) until the Initial Borrowing Date, Bridge Loan
Existing Indebtedness, Guanaco Existing Indebtedness, Hayden
Hill Existing Indebtedness and other Indebtedness in the
amounts described in Item 2 ("Indebtedness to be Paid") of
------ -----------------------
the Disclosure Schedule;

(d) solely in the case of the Borrower, Indebtedness
which is identified in Item 10 ("Ongoing Borrower
------- ----------------
Indebtedness") of the Disclosure Schedule;
------------

(e) at any date (i) unsecured Indebtedness outstanding
at such date incurred by way of open accounts of less than
270 days extended by suppliers, or letters of credit opened
for the benefit of suppliers, on normal trade terms in
connection with purchases of goods and services in the
ordinary course of business of such Subsidiary which
constitute Consolidated Costs (and excluding, for the
avoidance of doubt, Indebtedness incurred through the
borrowing of money) (ii) Indebtedness of any Obligor not in
excess of $500,000 at any one time outstanding in respect of
such Obligor incurred to suppliers of equipment constituting
Consolidated Capital Costs (other than pursuant to the
Construction Contract) in respect of the deferred purchase
price of such equipment and (iii) Indebtedness evidenced by
the Project Documents as in effect on the Effective Date;

(f) without duplication of clause (i), Approved
----------
Subordinated Indebtedness;

(g) Indebtedness (other than Indebtedness of the
nature referred to in the foregoing clauses) in an aggregate

-16-<PAGE>
principal amount not in excess of $5,000,000 (or the
equivalent thereof in any other currency) for the Borrower
and its Subsidiaries at any one time outstanding;

(h) Indebtedness of any Subsidiary to the Borrower or
any other Subsidiary incurred in connection with any
Investment permitted to be made pursuant to clause (a), (d),
---------- ---
(e) or (f) of Section 7.2.6;
--- --- -------------

(i) Indebtedness of the Borrower ("Fort Knox Bridge
----------------
Indebtedness") to Cyprus Amax or any other Person by way of
------------
borrowings incurred prior to the Fort Knox Economic
Completion Date for purposes of funding the payment of
Consolidated Costs incurred in connection with the Fort Knox
Project and constituting Approved Subordinated Indebtedness
(Borrower) of the nature referred to in clause (b) of the
----------
definition of such term; and

(j) Indebtedness of the Borrower in a principal amount
not in excess of $40,000,000 at any one time outstanding in
respect of industrial revenue bonds (the "Fort Knox
---------
Industrial Revenue Bonds") issued on or prior to the Fort
------------------------
Knox Economic Completion Date to finance the completion of
the Fort Knox Project and constituting Approved Subordinated
Indebtedness (Borrower) of the nature referred to in
clause (b) of the definition of such term or otherwise on
----------
terms and conditions satisfactory to the Required Lenders;

provided, however, that no Indebtedness of the nature referred to
- -------- -------
in clause (f), (g) or (h) may be incurred if, immediately before
---------- --- ---
or after giving effect thereto, any Default shall have occurred
and be continuing.

SECTION 2.11. AMENDMENT TO SECTION 7.2.3 OF THE ORIGINAL
-------------
LOAN AGREEMENT. Section 7.2.3 of the Original Loan Agreement
-------------
shall be amended in its entirety to read as set forth below:

SECTION 7.2.3 LIENS. The Borrower shall not, and
shall not permit any Subsidiary to, create, incur, assume or
suffer to exist any Lien upon any of its properties,
revenues or assets, whether now owned or hereafter acquired,
except:

(a) Liens in favor of the Administrative Agent and/or
the Collateral Agent (for the rateable benefit of the Lender
Parties) granted pursuant to any Loan Document;

-17-<PAGE>
(b) Liens securing Existing Hayden Hill Indebtedness,
which Liens shall be released in full on the Initial
Borrowing Date;

(c) Liens securing Indebtedness of the type permitted
by and described in clause (d) of Section 7.2.2, and
---------- -------------
disclosed in Item 11 ("Ongoing Borrower Liens") of the
------- ----------------------
Disclosure Schedule;

(d) Liens for taxes, assessments or other governmental
charges or levies not at the time delinquent or thereafter
payable without penalty or being contested in good faith by
appropriate proceedings and for which adequate reserves in
accordance with GAAP shall have been set aside on its books;

(e) Liens of carriers, warehousemen, mechanics,
materialmen, suppliers and landlords incurred in the
ordinary course of business for sums not overdue or being
contested in good faith by appropriate proceedings and for
which adequate reserves in accordance with GAAP shall have
been set aside on its books;

(f) Liens incurred in the ordinary course of business
in connection with workmen's compensation, unemployment
insurance or other forms of governmental insurance or
benefits, or to secure performance of tenders, statutory
obligations, leases and contracts (other than for borrowed
money) entered into in the ordinary course of business or to
secure obligations on surety or appeal bonds;

(g) Liens incurred in the ordinary course of business
in connection with the ownership of such property or assets
which do not secure Indebtedness and which do not materially
detract from the value of such property or assets or
materially impair the value or use thereof;

(h) solely in the case of any property acquired by the
Borrower or any Subsidiary after the Effective Date, Liens
existing prior to the date of acquisition of any such
property attaching only to such property but not incurred in
connection with such acquisition and any replacement or
extension of such Liens; provided, however, that any such
-------- -------
replacement or extension of any such Lien shall not secure
obligations in an amount greater than those originally
secured;

(i) Liens permitted to be incurred pursuant to any
Collateral Agreement;

(j) judgment Liens in existence less than 10 days
after the entry thereof or with respect to which execution

-18-<PAGE>
has been stayed or the payment of which is covered in full
(subject to a customary deductible) by insurance maintained
with responsible insurance companies;

(k) Liens securing Indebtedness permitted to be
incurred pursuant to clause (e)(ii) of Section 7.2.2;
-------------- -------------
provided, however, that any such Lien shall attach only to
-------- -------
the equipment in respect of which such Indebtedness is
incurred;

(l) Liens securing the Fort Knox Industrial Revenue
Bonds; provided, however, that any such Lien may attach only
-------- -------
to assets (including real estate) constituting the tailings
dam at the Fort Knox Mine and that the documents relating to
the Fort Knox Industrial Revenue Bonds shall contain
provisions as to the priority of liens, subordination of
Indebtedness and other intercreditor arrangements
satisfactory to the Required Lenders;

(m) at any time on or after the Fort Knox Economic
Completion Date, second-priority Liens in favor of Cyprus
Amax encumbering the assets and collateral subject of the
Security Documents as security for the Fort Knox Bridge
Indebtedness; provided, however, that the provisions
-------- -------
relating to the priority of such Liens in favor of Cyprus
Amax and the Liens in favor of the Lender Parties (as
security for the obligations) shall be satisfactory to the
Required Lenders; and

(n) without duplication of clause (b), Liens disclosed
----------
in Item 4 ("Assets; Properties") of the Disclosure Schedule.
------ ------------------

SECTION 2.12. AMENDMENT TO SECTION 7.2.4 OF THE ORIGINAL
LOAN AGREEMENT. Section 7.2.4 of the Original Loan Agreement
shall be amended in its entirety to read as set forth below:

SECTION 7.2.4 FINANCIAL CONDITION OF BORROWER. The
Borrower will not permit:

(a) the Cash Flow Ratio (calculated on the date of
preparation of each Compliance Certificate with respect to
each consecutive three-month period commencing on the Fort
Knox Economic Completion Date and (without duplication) all
Calculation Dates (if any) scheduled to occur on or after
such date of preparation (and, in the case of the Fort Knox
Economic Completion Date, calculated with respect to the
three month period ending on the next succeeding scheduled
Calculation Date (if any)), to be less than or equal to one-
hundred and twenty-five percent (125%);

-19-<PAGE>
(b) the Loan Life Ratio (calculated on the date of
preparation of each Compliance Certificate with respect to
the Fort Knox Economic Completion Date and (without
duplication) all Calculation Dates (if any) scheduled to
occur on or after such date of preparation), to be less than
or equal to one hundred and sixty percent (160%);

(c) the Consolidated Fixed Charge Coverage Ratio, for
any Measurement Period ending on the last day of each Fiscal
Quarter (commencing with the first Fiscal Quarter to end
after the Fort Knox Economic Completion Date) during either
period set forth below, to be less than or equal to the
percentage set forth below opposite such period:

Measurement Period Minimum Consolidated
Ending Fixed Charge Coverage
------------------ Ratio
---------------------
From the last day 200%
of the first
Fiscal Quarter
ending after the
Fort Knox Economic
Completion Date to
(and including)
December 31, 2000

From March 31, 180%
2001 to (and
including)
December 31, 2001;

(d) the Consolidated Indebtedness/Capitalization
Ratio, (i) at any date on or after the Fort Knox Economic
Completion Date and prior to December 31, 1997, to be equal
to or greater than fifty five percent (55%) and (ii) at any
time thereafter, to be equal to or greater than fifty
percent (50%);

(e) Consolidated Tangible Net Worth, at any date on or
after the Fort Knox Economic Completion Date, to be less
than the sum of (i) $285,000,000, (ii) all Capital
Contributions (including any Capital Contribution of the
nature referred to in clause (d) of Section 5.1.12) made by
---------- --------------
Cyprus Amax to the Borrower (excluding, for the avoidance of
doubt, any undrawn amount under either DOCLOC Facility and
any amount drawn thereunder which has not been converted
into equity share capital on or prior to such date) during
the period commencing on June 30, 1995 and ending on such
date, plus (iii) fifty percent (50%) of Consolidated Net
----
Income for the period commencing on June 30, 1995 and ending
on such date; or

-20-<PAGE>
(f) the Proven and Probable Reserves to be, at any
date on or after the Fort Knox Economic Completion Date,
less than four hundred percent (400%) of the Gold equivalent
of the Principal Amount of all Loans on such date.

SECTION 2.13. AMENDMENT TO SECTION 7.2.10 OF THE ORIGINAL
--------------
LOAN AGREEMENT. Section 7.2.10 of the Original Loan Agreement
--------------
shall be amended in its entirety to read as set forth below:

SECTION 7.2.10. ASSET DISPOSITIONS. The Borrower will
not, and will not permit any of its Subsidiaries or (except
to the extent that CMM shall be under any obligation to the
contrary pursuant to the terms and conditions applicable to
any financing obtained in relation to the Refugio Mine
(excluding any Indebtedness provided by any Affiliate of
CMM)) CMM to sell, transfer, lease or otherwise dispose of
any of, or grant options, warrants or other rights with
respect to, any of its assets (including accounts
receivable) to any Person, unless:

(a) such disposition is made in the ordinary course of
business and consists of finished goods inventories (which
may consist, without limitation, of gold-bearing
concentrates, gold-bearing ore, refined gold or other
products forms customarily sold as end products in the
mining industry);

(b) such disposition is of obsolete or replaced
assets, which are no longer used or useful to the Borrower
or such Subsidiary;

(c) the net book value of all assets disposed of by
the Borrower and its Subsidiaries (excluding, however,
assets disposed of pursuant to clauses (a) and (b)) in the
----------- ---
same Fiscal Year (or shorter period, commencing with the
Effective Date and ending on December 31, 1995) does not
exceed $5,000,000 (or the equivalent thereof in any other
currency calculated at the time of the relevant disposition)
and fair value in cash is received therefor; or

(d) such disposition is of a Material Asset for cash
proceeds as to which the Required Lenders shall have
consented and the Net Disposition Proceeds resulting
therefrom shall be used to make a mandatory prepayment of
the Loans pursuant to clause (h) of Section 3.1.1;
---------- -------------

provided, however, that nothing herein shall prohibit (i) any
- -------- ------- ---
disposition of Gold to the Administrative Agent or the Lenders in
direct repayment of any Gold Obligation, (ii) the incurrence of
----
any Lien permitted to be incurred pursuant to Section 7.2.3, or
-------------

-21-<PAGE>
(iii) at any time when no Default shall have occurred and be
continuing, any disposition by Nevada Gold of any assets
constituting the Sleeper Mine (other than Gold obtained from
residual leaching of the leach pads thereat).

SECTION 2.14. AMENDMENT TO SECTION 7.2.15 OF THE ORIGINAL
--------------
LOAN AGREEMENT. Section 7.2.15 of the Original Loan Agreement
--------------
shall be amended in its entirety to read as set forth below:

SECTION 7.2.15 SALE-LEASEBACK TRANSACTIONS. None of
the Borrower, Fairbanks Gold, Melba Creek or Lassen Gold
shall enter into any arrangement (other than the Permitted
Fort Knox Sale-Leaseback) with any Person providing for the
leasing by such Obligor of any property which property has
been or is to be sold or transferred by such Obligor to such
other Person. The Borrower or Fairbanks Gold shall promptly
inform the Administrative Agent of any default by it in the
performance by or of any obligations in connection with the
Permitted Fort Knox Sale-Leaseback.

SECTION 2.15. AMENDMENT TO SECTION 8.1.15 OF THE ORIGINAL
--------------
LOAN AGREEMENT. Section 8.1.15 of the Original Loan Agreement
--------------
shall be amended in its entirety to read as set forth below:

SECTION 8.1.15. CYPRUS AMAX DEFAULTS.

(a) A default shall be made in the payment of any
amount under the Cyprus Amax Guaranty in respect of the
Principal Amount of any Loan when and as the same shall
become due and payable.

(b) Default shall be made in the payment of any other
amount due from Cyprus Amax under the Cyprus Amax
Guaranty (other than an amount referred to in clause
------
(a)), when and as the same shall become due and
---
payable, and such default shall continue for a period
of five (5) Business Days after receipt by Cyprus Amax
of written or facsimile notice from the Administrative
Agent of such default.

(c) Any representation or warranty made or deemed made
by Cyprus Amax in the Cyprus Amax Guaranty or in any
other Instrument furnished by Cyprus Amax pursuant
thereto shall prove to have been false or misleading in
any material respect when made or delivered or when
deemed made in accordance with the terms thereof.

(d) At any time on or prior to the Fort Knox Economic
Completion Date, default shall be made in the due

-22-<PAGE>
observance or performance of the covenant and agreement
to be observed or performed on the part of Cyprus Amax
contained in Section 7.05 of the Competitive Advance
------------
Facility Agreement (as in effect on the Second
Amendment Effective Date but as modified and
incorporated by reference into Article 5 of the Cyprus
---------
Amax Guaranty).

(e) At any time on or prior to the Fort Knox Economic
Completion Date, default shall be made in the due
observance or performance of the covenant, condition
and agreement to be observed or performed on the part
of Cyprus Amax contained in Section 7.01 of the
------------
Competitive Advance Facility Agreement (as in effect on
the Second Amendment Effective Date but as modified and
incorporated by reference into Article 5 of the Cyprus
---------
Amax Guaranty) and such default shall continue
unremedied for a period of twenty (20) days after the
earlier of (i) the date when Cyprus Amax receives
notice thereof from the Administrative Agent or (ii)
after actual knowledge thereof by any Financial Officer
(as defined in the Competitive Advance Facility
Agreement as in effect on the Second Amendment
Effective Date) of Cyprus Amax.

(f) At any time on or prior to the Fort Knox Economic
Completion Date, and without prejudice to the foregoing
provisions of this Section, any Default or Event of
Default under (and as defined in) the Competitive
Advance Facility Agreement shall have occurred and be
continuing; provided, however, that in any such case
-------- -------
the acceleration of all or any of the Obligations
pursuant to Section 8.2 or 8.3 shall be conditional
----------- ---
upon the acceleration, in whole or in part, of any
loans outstanding under the Competitive Advance
Facility Agreement.

SECTION 2.16. AMENDMENT TO SECTION 9.5 OF THE ORIGINAL LOAN
-----------
AGREEMENT. Section 9.5 of the Original Loan Agreement shall be
-----------
amended in its entirety to read as set forth below:

SECTION 9.5. LOANS BY MERRILL, LYNCH, ABN AMRO,
LASALLE, ROTHSCHILD AND TORONTO-DOMINION. Each of Merrill
Lynch, ABN AMRO, Rothschild and Toronto-Dominion shall have
the same rights and powers with respect to (i) the Loans
made by it or any of its Affiliates and (ii) the Notes held
by it or any of its Affiliates as any Lender and may
exercise the same as if it were not an Agent or Arranger, as
the case may be, hereunder. Each of Merrill Lynch, ABN
AMRO, LaSalle, Rothschild, Toronto-Dominion and the
Affiliates of any of the foregoing may accept deposits from,

-23-<PAGE>
lend money to, act as Hedging Counterparties and
Interest Rate Protection Counterparties, and generally
engage in any kind of business with any Obligor, Cyprus
Amax or any Affiliate of any thereof, as if it were not
an Agent or Arranger.

SECTION 2.17. AMENDMENT TO SECTION 9.6 OF THE ORIGINAL LOAN
-----------
AGREEMENT. Section 9.6 of the Original Loan Agreement shall be
-----------
amended in its entirety to read as set forth below:

SECTION 9.6. ROTHSCHILD AS THE ADMINISTRATIVE AGENT.
In acting as Administrative Agent for the Lenders, the
Treasury Division of Rothschild shall be treated as a
separate entity from any other division of Rothschild (or
similar units of Rothschild in any subsequent
reorganization) or Affiliates and, without detracting from
the generality of the foregoing, in the event that any of
Rothschild's divisions (or similar units) or Affiliates
should act for the Borrower, any other Obligor, Cyprus Amax
or any Affiliate of any of the foregoing (the "Group") in an
-----
advisory capacity in relation to any other matter, any
information given by any member of the Group to such
divisions (or similar units) or Affiliates for the purpose
of obtaining advice shall be treated as confidential and
shall not be available to the other Lender Parties without
the consent of such member of the Group; and notwithstanding
anything to the contrary expressed or implied herein and
without prejudice to the generality of the foregoing,
Rothschild shall not as between itself and the other Lender
Parties be bound to disclose to any Lender Party or other
Person any information supplied by any member of the Group
to Rothschild in its capacity as the Administrative Agent
hereunder which is identified by such member at the time of
supply as being unpublished price sensitive information
relating to a proposed transaction by a member of the Group
and supplied solely for the purpose of evaluating in
consultation with Rothschild in such capacity whether such
transaction might require a waiver or amendment to any of
the provisions contained herein or in any other Loan
Document.

SECTION 2.18. AMENDMENT TO SECTION 10.1 OF THE ORIGINAL
------------
LOAN AGREEMENT. Section 10.1 of the Original Loan Agreement
------------
shall be amended by deleting clause (f) thereof and substituting
----------
the following language therefor:

(f) result in the release of the obligations of any
Principal Subsidiary under the Principal Subsidiary
Guaranty to which it is a party, the release of the
obligations of Cyprus Amax under the Cyprus Amax
Guaranty (other than specifically pursuant to its

-24-<PAGE>
terms), or the release of any Lien in respect of any
material collateral granted pursuant to any Security
Document shall be made without the consent of each
Lender; or

SECTION 2.19. AMENDMENT TO SECTION 10.13 OF THE ORIGINAL
-------------
LOAN AGREEMENT. Section 10.13 of the Original Loan Agreement
-------------
shall be amended in its entirety to read as follows:

SECTION 10.13 OTHER TRANSACTIONS. Without prejudice
to the provisions of Section 9.5 or 9.6, nothing contained
----------- ---
herein shall preclude any Lender Party from engaging in any
transaction, in addition to those contemplated by this
Agreement or any other Loan Document, with any Obligor or
Cyprus Amax or any of their Affiliates in which such
Obligor, Cyprus Amax or such Affiliate is not restricted
hereby from engaging with any other Person.

SECTION 2.20. AMENDMENT AND RESTATEMENT OF BORROWING
REQUEST. The Borrowing Request attached as Exhibit I to the
---------
Original Loan Agreement is amended and restated as set forth in
Exhibit E hereto.
- ---------

SECTION 2.21. AMENDMENT AND RESTATEMENT OF
CONTINUATION/CONVERSION NOTICE. The Continuation/Conversion
Notice attached as Exhibit J to the Original Loan Agreement is
---------
amended and restated as set forth in Exhibit F hereto.
---------

ARTICLE 3. REVISION OF BASE CASES; WAIVERS
-------------------------------------------

SECTION 3.1. REVISION OF BASE CASES. The Borrower shall
use its best efforts to revise, in consultation with the
Independent Consultant and the Documentation and Technical Agent,
the Base Cases so that amended versions thereof, which shall
reflect the effect of actual and projected overruns in Capital
Expenditures at the Fort Knox Mine together with the effects of
the Permitted Fort Knox Sale-Leaseback, the Fort Knox Bridge
Indebtedness and the Fort Knox Industrial Revenue Bonds and any
other sources of funding received by or specifically made
available to the Obligors in connection with the Principal Mines
on the projected performance of the Principal Mines and the
financial position of the Borrower and its Subsidiaries, are
approved by all the Lenders (such approval not to be unreasonably
withheld) as soon as practicable thereafter. The Base Cases, if
and to the extent so approved by all the Lenders, shall then be
the "Base Cases" for all purposes of the Loan Agreement and each
----------
other Loan Document. During the period commencing on the
Amendment Effective Date and ending on the date on which revised
Base Cases are agreed pursuant to the foregoing provisions of
this Section compliance with the provisions of clause (b) of
----------

-25-<PAGE>
Section 1.8 of the Amended Loan Agreement is hereby waived.
- -----------
Prior to the amendment described in the first sentence of this
Section, for purposes of clause (a) of Section 1.8 of the Amended
---------- -----------
Loan Agreement, all determinations and calculations of the nature
referred to therein shall be determined to the reasonable
satisfaction of the Documentation and Technical Agent (acting in
consultation with the Required Lenders). All amendments to the
Base Cases subsequent to the amendment described in the first
sentence of this Section shall be made in accordance with clause
------
(b) of Section 1.8 of the Amended Loan Agreement.
- --- -----------

SECTION 3.2. WAIVERS. As of the Amendment Effective Date
and during the period commencing on such date and ending on the
Fort Knox Economic Completion Date, the Lender Parties waive all
Defaults that have occurred or may occur under Section 8.1.2,
-------------
8.1.3 or 8.1.4 of the Original Loan Agreement or the Amended Loan
- ----- -----
Agreement as a result of any breach by the Borrower or any
Principal Subsidiary of any of its undertakings or
representations contained in clause (b) of Section 1.8 or
---------- -----------
Article 6 (excluding, however, Section 6.19) or Article 7
- --------- ------------ ---------
(excluding, however, Section 7.1.1 or 7.1.13) of the Original
------------- ------
Loan Agreement or the Amended Loan Agreement and any Default that
has occurred or may occur under any of Section 8.1.1 (solely to
-------------
the extent any relevant payment subject of such Section shall
have been made by Cyprus Amax as and when required pursuant to
the Cyprus Amax Guaranty) or any of Sections 8.1.5 to 8.1.19 of
-------------- ------
the Original Loan Agreement or any of Sections 8.1.5 to 8.1.14
-------------- ------
and 8.1.16 to 8.1.19 of the Amended Loan Agreement; provided,
------ ------ --------
however, that during the period commencing on the Amendment
- -------
Effective Date and ending on the Fort Knox Economic Completion
Date, the waiver by the Lender Parties of any Default arising as
a result of any breach by the Borrower or any Principal
Subsidiary or Fairbanks Canada of any of its undertakings or
representations contained in any Loan Document with respect to
the priority of any Lien granted to the Lender Parties pursuant
to the Security Documents (excluding any Lien in respect of
equipment subject to the Permitted Fort Knox Sale-Leaseback or
assets subject of the Fort Knox Industrial Revenue Bonds) shall
be limited to the fact that (and the agreements of the Lender
Parties contained in Article 2 shall be conditional upon), as
---------
contemplated by the Priority Agreement, such Liens shall not be
first priority Liens; and provided, further, however, that, if in
-------- ------- -------
connection with any such waiver or any suspension of the
operation of Article 6 or 7 of the Amended Loan Agreement, Cyprus
--------- -
Amax shall, as contemplated by the Priority Agreement, be granted
Liens by the Borrower or any Subsidiary in respect of any assets
not currently secured in favor of the Administrative Agent or the
Collateral Agent (for the rateable benefit of the Lender Parties)
pursuant to any Security Document then the Lender Parties shall,
simultaneously with the granting of such Liens and at all times
prior to the earlier of (i) the release of such Liens by Cyprus
Amax or (ii) the Fort

-26-<PAGE>
Knox Economic Completion Date, be granted a second-priority
perfected Lien in respect of all such assets; and provided,
--------
further, however, that, during the period commencing on
- ------- -------
the Amendment Effective Date and ending on the Fort Knox Economic
Completion Date, no Default shall be deemed to arise pursuant to
Section 6.19 or Section 7.1.13 of the Amended Loan Agreement
- ------------ --------------
unless, in the opinion of the Administrative Agent, such Default
would be expected to result in any liability to any Lender Party
pursuant to Section 10.4 of the Amended Loan Agreement or any
------------
similar provision of any other Loan Document. For the avoidance
of doubt, as of the Amendment Effective Date and during the
period commencing on such date and ending on the Termination Date
under (and as defined in) the Priority Agreement, the Lender
Parties' rights under Section 8.2 and 8.3 of the Amended Loan
----------- ---
Agreement shall be subject to all applicable provisions of the
Priority Agreement.

ARTICLE 4. REPRESENTATIONS AND WARRANTIES
------------------------------------------

In order to induce the Lender Parties to enter into this
Agreement and, in the case of the Lenders, to make, maintain,
continue and/or convert Loans under the Amended Loan Agreement,
the Borrower, individually for itself and with respect to matters
hereinafter relating to it and each other Obligor, and each other
Obligor, individually for itself and with respect to matters
hereinafter relating to it, represents and warrants unto each
Lender Party as set forth in this Article.

SECTION 4.1. AUTHORITY. Each Obligor has full power and
authority to enter into this Agreement and perform its
obligations under the Amended Loan Agreement.

SECTION 4.2. DUE AUTHORIZATION; NON-CONTRAVENTION. The
execution and delivery by each Obligor of this Agreement and the
performance by such Obligor of its obligations under the Amended
Loan Agreement have been authorized by all necessary corporate
action on its part, do not and will not require any Approval, do
not and will not conflict with, result in any violation of, or
constitute any default under, any provision of any Requirement of
Law (other than any default that has occurred or may occur under
the Original Loan Agreement specifically waived pursuant to
Section 3.2) or Approval binding on it, and will not result in or
- -----------
require the creation or imposition of any Lien on any of its
properties pursuant to the provisions of any Contractual
Obligations except as permitted to be incurred pursuant to the
Priority Agreement and Section 7.2.3 of the Amended Loan
-------------
Agreement.

SECTION 4.3. VALIDITY. This Agreement constitutes the
legal, valid and binding obligation of each Obligor enforceable
against such Obligor in accordance with its terms, subject as to

-27-<PAGE>
enforceability only, to Applicable Laws relating to bankruptcy
and the enforceability of creditors' rights generally and by the
fact that the availability of equitable remedies is
discretionary.

ARTICLE 5. CONDITIONS TO EFFECTIVENESS
---------------------------------------

This Agreement shall become effective upon receipt by the
Administrative Agent of the documents, certificates and other
Instruments described in this Article. The date on which the
Administrative Agent shall have received all such documents,
certificates and other Instruments is referred to as the
"Amendment Effective Date". In the event that the Amendment
------------------------
Effective Date shall not occur on or prior to April 15, 1996, the
agreements of the parties contained in this Agreement shall be of
no further force and effect.

SECTION 5.1. COUNTERPARTS OF AGREEMENT. The Administrative
Agent shall have received counterparts of this Agreement, duly
executed by the Borrower, the Principal Subsidiaries, the
Arrangers, the Syndication Agent, the Documentation and Technical
Agent, the Collateral Agent and all the Lenders, and duly
acknowledged by an Authorized Representative of Cyprus Amax.

SECTION 5.2. RESOLUTIONS, ETC. The Administrative Agent
shall have received from Cyprus Amax a certificate of its
Secretary or similar officer as to:

(a) resolutions of its Board of Directors or similar
body then in full force and effect authorizing the execution
and performance of the Cyprus Amax Guaranty and each other
document executed or to be executed by it in connection with
the transactions contemplated hereby and thereby,

(b) the incumbency and signatures of those of its
officers authorized to act with respect to the Cyprus Amax
Guaranty and each other document executed or to be executed
by it, and

upon which certificate each Lender Party may conclusively rely
until it shall have received a further certificate of the
Secretary or similar officer of Cyprus Amax cancelling or
amending such prior certificate; provided, however, that any such
-------- -------
further certificate may not retroactively cancel or amend any
matters contained in any certificate previously delivered
hereunder.

-28-<PAGE>
SECTION 5.3. CYPRUS AMAX GUARANTY. The Administrative
Agent shall have received counterparts of the Cyprus Amax
Guaranty, duly executed by an Authorized Representative of Cyprus
Amax.

SECTION 5.4. PRIORITY AGREEMENT. The Administrative Agent
shall have received counterparts of the Priority Agreement, duly
executed by the Borrower, Fairbanks Gold, Lassen Gold, Melba
Creek, Fairbanks Canada, the Collateral Agent and Cyprus Amax.

SECTION 5.5. COMPETITIVE ADVANCE FACILITY AGREEMENT. The
Administrative Agent shall have received a copy of the
Competitive Advance Facility Agreement, as in effect on March 19,
1996, certified by an Authorized Representative of Cyprus Amax.

SECTION 5.6. OPINIONS OF COUNSEL. The Administrative Agent
shall have received opinions addressed to the Lender Parties
from:

(a) Sullivan & Cromwell, special counsel to Cyprus
Amax, substantially in the form of Exhibit C attached
---------
hereto; and

(b) Dale E. Huffman, General Attorney and Assistant
Secretary of Cyprus Amax, substantially in the form of
Exhibit D attached hereto.
---------

SECTION 5.7. COMPLIANCE WITH WARRANTIES, NO DEFAULTS. The
Administrative Agent shall have received:

(a) a certificate, dated a date as close as
practicable to the intended Amendment Effective Date, of an
Authorized Representative of each Obligor to the effect
that, both immediately before and immediately after giving
effect to the transactions contemplated by this Agreement:
the representations and warranties of each Obligor set forth
in Article 4 and in each Security Document (only to the
---------
extent that any such representation or warranty shall be
required to be made on the Amendment Effective Date) to
which each is a party shall be true and correct with the
same effect as if then made (unless stated to relate solely
to an earlier date, in which case such representations and
warranties shall be true and correct as of such earlier
date); and

(b) a certificate, dated a date as close as
practicable to the intended Amendment Effective Date, of an
Authorized Representative of Cyprus Amax to the effect that,
both immediately before and immediately after giving effect

-29-<PAGE>
to the transactions contemplated by this Agreement, the
Cyprus Amax Guaranty and the Priority Agreement: (i) the
representations and warranties of Cyprus Amax set forth in
Article 4 of the Cyprus Amax Guaranty shall be true and
---------
correct with the same effect as if then made and (ii) Cyprus
Amax shall not then be in default (however denominated) of
any of its obligations under the Cyprus Amax Guaranty, the
Priority Agreement or the Competitive Advance Facility
Agreement.

SECTION 5.8. PROCESS AGENT. The Administrative Agent shall
have received evidence that the appointment by Cyprus Amax of the
Process Agent pursuant to Section 5.1.9 of the Amended Loan
-------------
Agreement shall extend to the Cyprus Amax Guaranty and the
Priority Agreement.

ARTICLE 6. MISCELLANEOUS
-------------------------

SECTION 6.1. COUNTERPARTS. This Agreement may be executed
by the parties hereto in several counterparts, each of which
shall be deemed to be an original and all of which shall
constitute together but one and the same agreement.

SECTION 6.2. EFFECT OF AMENDMENT. Effective as of the
Amendment Effective Date, references in the Original Loan
Agreement and in each other Loan Document to "the Agreement",
"this Agreement", the "Loan Agreement" and words of similar
import shall be to the Original Loan Agreement, as amended
hereby. Effective as of the Amendment Effective Date, references
in any Loan Document to the Borrowing Request and the
Continuation/Conversion Notice shall mean the Borrowing Request
and the Continuation/Conversion Notice, as amended and restated
pursuant to Sections 2.20 and 2.21, respectively. Except as
------------- ----
amended or otherwise modified hereby, the Original Loan Agreement
shall continue in full force and effect.

SECTION 6.3. GOVERNING LAW; ENTIRE AGREEMENT. THIS
AGREEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK. Upon the
Amendment Effective Date, except with respect to the Borrower's
obligations to indemnify and pay the costs and expenses of the
Underwriters as set forth in the Commitment Letter, the Original
Loan Agreement, as amended hereby, the Notes and the other Loan
Documents constitute the entire understanding among the parties
hereto with respect to the subject matter hereof and supersede
any prior agreements, written or oral, with respect thereto
(including the Commitment Letter (except as aforesaid), the
Indicative Summary Terms for $250,000,000 Senior Term Facility,
dated August 15, 1995, and the Information Memorandum).

SECTION 6.4. PROVISIONS INCORPORATED BY REFERENCE. The
parties hereto agree that the provisions of Sections 10.14 (Forum
--------------
Selection and Consent to Jurisdiction; Waiver of Immunity) and

-30-<PAGE>
10.15 (Waiver of Jury Trial) of the Original Loan Agreement shall
- -----
be incorporated by reference into this Agreement as if set forth
in full herein.

-31-<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto
duly authorized as of the day and year first above written.

The Obligors

AMAX GOLD INC.,
as the Borrower

By: /s/ Mark A. Lettes
-------------------------------------
Name Printed: Mark A. Lettes
--------------------------
Title: Vice President and Chief
----------------------------------
Financial Officer

FAIRBANKS GOLD MINING, INC.,
as a Principal Subsidiary