The President                 June 4, 1993
Amax Gold Inc.
350 Indiana Street
Golden
Colorado
USA

Dear Sir

We refer to the transactions involving Amax Gold, Inc. ("Amax") Waihi Financing
Limited ("Waihi"), Amax Holdings New Zealand Limited ("AHNZ") and its
subsidiaries and ACM (New Zealand) Limited contemplated in the documents
entitled Share Sale Agreement and Share Subscription Agreement executed on or
about the date of this letter.

In this letter expressions which have an upper case initial letter have the same
meanings respectively as in the abovementioned documents.

Poseidon Gold Limited ("PGL") assures Amax that:

(a)  within 6 months of the date of this letter it will ensure, subject to the
     co-operation of Amax in its capacity as holder of ordinary shares in the
     capital of Waihi, that the names of AHNZ and of its subsidiaries are
     changed to names which do not include the word "Amax" or a visually or
     phonetically similar word;

(b)  if and for so long as Amax continues to hold any shares in the capital of
     Waihi and PGL remains able, through its subsidiaries and persons appointed
     to office as directors by it or any of its subsidiaries, to control the day
     to day affairs of AHNZ or its subsidiaries, PGL will procure that (without
     the consent of Amax) AHNZ and its subsidiaries do not become involved in
     any business activity which they are not involved in on the date of this
     letter other than,

        (i)  passive investment of surplus cash; and

        (ii) normal developments of an existing business activity such as
             proceeding from exploration activities to feasibility activities
             and mining and processing activities;

(c)  when to do so will not be likely to put at risk the validity and
     enforceability of the Share Sale Agreement or the Share Subscription
     Agreement it will assist Amax to obtain



 
        (i)   a release of the Guarantee and Indemnity Agreements given by Amax
              in favour of Chase Manhattan Bank Australia Limited securing
              obligations of AGMNZ; and

        (ii)  a release of Amax from the Principals Deed by all other parties to
              it;

(d)  within a reasonable time after request by Amax it will procure that ACM
     Gold Limited releases Amax from liability to ACM Gold Limited under the
     Principals Deed.

(e)  it will not take any steps to seek the winding up, dissolution or
     liquidation of Waihi until after the last of the Subscription Dates

Yours faithfully

POSEIDON GOLD LIMITED

/s/Andrew Corletto
Andrew Corletto
Group Company Secretary - Corporate Counsel