Recitals

Third Amendment to Credit Agreement

by Homestake Mining
August 27th, 1997


                                                                 EXHIBIT 10.3



                            HOMESTAKE MINING COMPANY

                       THIRD AMENDMENT TO CREDIT AGREEMENT


                 This THIRD AMENDMENT TO CREDIT AGREEMENT (this  "Amendment") is
dated as of July  29,  1997  and  entered  into by and  among  HOMESTAKE  MINING
COMPANY,  a  Delaware  corporation  ("Company"),  HOMESTAKE  MINING  COMPANY,  a
California  corporation  ("U.S.  Borrower"),  HOMESTAKE  CANADA INC., an Ontario
corporation ("Canadian Borrower"),  HOMESTAKE GOLD OF AUSTRALIA LIMITED, a South
Australian  corporation  ("Australian  Borrower"),  the  financial  institutions
listed on the  signature  pages hereof  ("Lenders"),  CANADIAN  IMPERIAL BANK OF
COMMERCE  ("Documentation Agent"), THE CHASE MANHATTAN BANK OF CANADA ("Canadian
Administrative   Agent"),   CHASE  SECURITIES   AUSTRALIA  LIMITED  ("Australian
Administrative  Agent"),  CHASE  SECURITIES  INC.  ("Arranger"),  and THE  CHASE
MANHATTAN  BANK  ("Administrative  Agent"),  and is made with  reference to that
certain Credit  Agreement dated as of September 20, 1996, as amended to the date
hereof (as so amended,  the "Credit  Agreement"),  by and among Guarantor,  U.S.
Borrower, Canadian Borrower, Australian Borrower, Lenders,  Documentation Agent,
Canadian  Administrative  Agent,  Australian  Administrative Agent, Arranger and
Administrative  Agent.  Capitalized  terms used herein without  definition shall
have the same meanings herein as set forth in the Credit Agreement.


                                    RECITALS

                 WHEREAS,  Company  and  Lenders  desire  to  amend  the  Credit
Agreement to (a) modify the restriction on Liens contained in subsection 6.2A of
the  Credit  Agreement  and (b) modify the  assignment  provisions  set forth in
subsection 10.1 of the Credit Agreement, each as set forth below;

                 NOW,  THEREFORE,  in  consideration  of the  premises  and  the
agreements,  provisions and covenants herein contained, the parties hereto agree
as follows:

                 Section 1.       AMENDMENT TO THE CREDIT AGREEMENT.

                 A. Amendment to Subsection  6.2:  Provisions  Relating to Liens
and Related  Matters.  Subsection 6.2A of the Credit Agreement is hereby amended
by (i)  deleting the word "and"  appearing  at the end of clause (iii)  thereof,
(ii)  deleting  the  "."  appearing  at  the  end of  clause  (iv)  thereof  and
substituting  therefor "; and",  and (iii) adding at the end of subsection  6.2A
the following:


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                 "(v) Liens granted pursuant to that certain Pledge and Security
                 Agreement  entered  into by U.S.  Borrower  in favor of Bankers
                 Trust  Company,  as trustee for The Chase  Manhattan  Bank,  in
                 connection   with  the  Solid  Waste  Disposal   Revenue  Bonds
                 (Homestake Mining Company of California  Project) Series 1997A,
                 as such  agreement  is in  effect  on July 29,  1997,  and that
                 certain  Pledge and  Security  Agreement  entered  into by U.S.
                 Borrower in favor of Bankers Trust Company,  as trustee for The
                 Chase  Manhattan  Bank,  in  connection  with the  Solid  Waste
                 Disposal Revenue Bonds (Homestake  Mining Company of California
                 Project)  Series 1997B,  as such agreement is in effect on July
                 29, 1997."

                 B.       Amendment to Subsection 10.1B. Assignments. Subsection
10.1B(i) of the Credit Agreement is hereby amended by adding  immediately  after
the first sentence of subsection 10.1B(i) the following:

                 "Notwithstanding  the  proviso  in  the  immediately  preceding
                 sentence,  J.P. Morgan Australia Limited may assign all [or any
                 portion] of its outstanding Loans, participations in Letters of
                 Credit, and Commitments to Morgan Guaranty Trust Company of New
                 York, Sydney Branch, without the simultaneous assignment by the
                 Canadian Lender and the U.S.  Lender of J.P.  Morgan  Australia
                 Limited's  Lending  Unit of any  portion  of  their  respective
                 outstanding  Loans,  participations  in Letters of Credit,  and
                 Commitments."

                 Section 2.       CONDITIONS TO EFFECTIVENESS

                 Section 1 of this  Amendment  shall become  effective only upon
the  satisfaction  of all of the  following  conditions  precedent  (the date of
satisfaction  of such  conditions  being  referred  to herein as the  "Effective
Date"):

                 A. On or before the  Effective  Date,  Company shall deliver to
Administrative  Agent  (with  sufficient  originally  executed  copies  for each
Lender) copies of this Amendment, executed by Company and each Borrower.

                 B. On or before the  Effective  Date,  all  corporate and other
proceedings   taken  or  to  be  taken  in  connection  with  the   transactions
contemplated  hereby and all documents  incidental  thereto not previously found
acceptable by Administrative Agent, acting on behalf of Lenders, and its counsel
shall be  satisfactory  in form and substance to  Administrative  Agent and such
counsel,  and Administrative Agent and such counsel shall have received all such
counterpart  originals or certified  copies of such documents as  Administrative
Agent may reasonably request.



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Section 3.       REPRESENTATIONS AND WARRANTIES

                 In order to induce  Lenders to enter into this Amendment and to
amend the Credit  Agreement  in the manner  provided  herein,  Company  and each
Borrower  represents  and warrants to each Lender that the following  statements
are true, correct and complete:

                 A. Corporate Power and Authority. Company and each Borrower has
all requisite  corporate power and authority to enter into this Amendment and to
carry out the transactions  contemplated by, and perform its obligations  under,
the Credit Agreement as amended by this Amendment (the "Amended Agreement").

                 B.  Authorization of Agreements.  The execution and delivery of
this  Amendment  and the  performance  of the Amended  Agreement  have been duly
authorized  by all  necessary  corporate  action on the part of Company and each
Borrower.

                 C. No Conflict.  The execution and delivery by Company and each
Borrower of this  Amendment and the  performance by Company and each Borrower of
the Amended  Agreement do not and will not (i) violate any  provision of any law
or any  governmental  rule or  regulation  applicable  to  Company or any of its
Subsidiaries,  the Certificate or Articles of  Incorporation  or Bylaws or other
charter  documents of Company or any of its Subsidiaries or any order,  judgment
or decree of any court or other agency of  government  binding on Company or any
of its  Subsidiaries,  (ii)  conflict  with,  result in a material  breach of or
constitute  (with due notice or lapse of time or both) a material  default under
any Contractual  Obligation of Company or any of its Subsidiaries,  (iii) result
in or require the creation or imposition of any Lien upon any of the  properties
or assets of Company or any of its Subsidiaries  (other than Liens created under
any of the Loan  Documents  in  favor  of  Administrative  Agent  on  behalf  of
Lenders),  or (iv)  require any  approval  of  stockholders  or any  approval or
consent of any Person under any Contractual  Obligation of Company or any of its
Subsidiaries.

                 D. Binding Obligation. This Amendment and the Amended Agreement
have been duly  executed and  delivered by Company and are the legally valid and
binding  obligations of Company,  enforceable against Company in accordance with
their  respective  terms,  except as may be limited by  bankruptcy,  insolvency,
reorganization,  moratorium or similar laws  relating to or limiting  creditors'
rights generally or by equitable principles relating to enforceability.

                 E. Incorporation of Representations  and Warranties From Credit
Agreement.  The  representations  and  warranties  contained in Section 4 of the
Credit  Agreement  are and will be true,  correct and  complete in all  material
respects  on and as of the  Effective  Date to the same extent as though made on
and as of that date, 


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except to the extent such representations and warranties  specifically relate to
an earlier  date,  in which case they were true,  correct  and  complete  in all
material respects on and as of such earlier date.

                 F. Absence of Default.  No event has occurred and is continuing
or will result from the  consummation of the  transactions  contemplated by this
Amendment  that would  constitute  an Event of Default or a  Potential  Event of
Default.

                 Section 4.       MISCELLANEOUS

                 A.       Reference to and Effect on the Credit Agreement and
the Other Loan Documents.

                 (i) On and after the  Effective  Date,  each  reference  in the
         Credit Agreement to "this Agreement",  "hereunder",  "hereof", "herein"
         or words of like import  referring  to the Credit  Agreement,  and each
         reference  in the  other  Loan  Documents  to the  "Credit  Agreement",
         "thereunder", "thereof" or words of like import referring to the Credit
         Agreement,  shall mean and be a reference  to the Credit  Agreement  as
         amended by this Amendment.

                 (ii)  Except as  specifically  amended by this  Amendment,  the
         Credit  Agreement  and the other Loan  Documents  shall  remain in full
         force and effect and are hereby ratified and confirmed.

                 (iii) The execution, delivery and performance of this Amendment
         shall not, except as expressly provided herein,  constitute a waiver of
         any provision of, or operate as a waiver of any right,  power or remedy
         of  Administrative  Agent or any Lender under,  the Credit Agreement or
         any of the other Loan Documents.

                 B. Fees and Expenses. Company acknowledges that all costs, fees
and expenses as described  in Section 10.2 of the Credit  Agreement  incurred by
Administrative  Agent and its counsel  with  respect to this  Amendment  and the
documents  and  transactions  contemplated  hereby  shall be for the  account of
Company.

                 C.       Headings.  Section and subsection headings in this
Amendment are included  herein for  convenience  of reference only and shall not
constitute  a part of this  Amendment  for any  other  purpose  or be given  any
substantive effect.

                 D.   Applicable   Law.  THIS   AMENDMENT  AND  THE  RIGHTS  AND
OBLIGATIONS  OF THE  PARTIES  HEREUNDER  SHALL  BE  GOVERNED  BY,  AND  SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW
YORK.


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                 E. Counterparts;  Effectiveness. This Amendment may be executed
in any  number of  counterparts  and by  different  parties  hereto in  separate
counterparts,  each of which when so executed and  delivered  shall be deemed an
original,  but all such  counterparts  together shall constitute but one and the
same  instrument;  signature  pages  may  be  detached  from  multiple  separate
counterparts  and attached to a single  counterpart so that all signature  pages
are  physically  attached to the same  document.  This  Amendment  shall  become
effective upon the execution of a counterpart  hereof by Company,  each Borrower
and Requisite Lenders, receipt by Company and Administrative Agent of written or
telephonic  notification of such execution and authorization of delivery thereof
and compliance with the provisions of Section 2 to this Amendment.


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                 IN  WITNESS  WHEREOF,  the  parties  hereto  have  caused  this
Amendment  to be duly  executed  and  delivered  by  their  respective  officers
thereunto duly authorized as of the date first written above.

                                  Company:

                                  HOMESTAKE MINING COMPANY



                                  By:____________________
                                  Title:_________________


                                  U.S. Borrower:

                                  HOMESTAKE MINING COMPANY OF CALIFORNIA



                                  By:____________________
                                  Title:_________________


                                  Canadian Borrower:

                                  HOMESTAKE CANADA INC.



                                  By:_____________________
                                  Title:__________________


                                  Australian Borrower:

                                  HOMESTAKE GOLD OF AUSTRALIA LIMITED



                                  By:_____________________
                                  Title:__________________



                                      S-1



                                  LENDERS:

                                  THE CHASE MANHATTAN BANK, individually, as a
                                  U.S. Lender, as an Issuing Lender, and as 
                                  Administrative Agent


                                  By:______________________
                                  Title:___________________


                                  THE   CHASE    MANHATTAN   BANK   OF   CANADA,
                                  individually,  as a  Canadian  Lender,  as  an
                                  Issuing Lender, and as Canadian Administrative
                                  Agent


                                  By:______________________
                                  Title:___________________


                                  THE CHASE MANHATTAN BANK, as an Australian 
                                  Lender



                                  By:______________________
                                  Title:___________________




                                  CANADIAN IMPERIAL BANK OF COMMERCE, 
                                  individually, as a U.S. Lender, and as
                                  Documentation Agent



                                  By:______________________
                                  Title:___________________


                                      S-2





                                  CANADIAN IMPERIAL BANK OF COMMERCE, as a 
                                  Canadian Lender



                                  By:______________________
                                  Title:___________________



                                  CIBC AUSTRALIA LIMITED, as an Australian 
                                  Lender



                                  By:______________________
                                  Title:___________________



                                  BANK OF MONTREAL, as a U.S. Lender



                                  By:_______________________
                                  Title:____________________



                                  BANK OF MONTREAL, as a Canadian Lender


                                  By:_______________________
                                  Title:____________________



                                  THE CHASE MANHATTAN BANK, as an Australian 
                                  Lender (as fronting bank for Bank of Montreal)


                                  By:_______________________
                                  Title:____________________




                                      S-3


                                  THE BANK OF NOVA SCOTIA, as a U.S. Lender



                                  By:________________________
                                  Title:_____________________



                                  THE BANK OF NOVA SCOTIA, as a Canadian Lender



                                  By:________________________
                                  Title:_____________________



                                  THE  BANK OF  NOVA  SCOTIA,  as an  Australian
                                  Lender  with  respect to Letters of Credit and
                                  Gold Loans



                                  By:_________________________
                                  Title:______________________




                                  THE CHASE  MANHATTAN  BANK,  as an  Australian
                                  Lender (as fronting  bank for The Bank of Nova
                                  Scotia)  with  respect  to Bank Bill Swap Rate
                                  Loans and Eurodollar Rate Loans


                                  By:__________________________
                                  Title:_______________________



                                  CITICORP USA, INC., as a U.S. Lender


                                  By:__________________________
                                  Title:_______________________



                                      S-4



                                  CITIBANK CANADA, as a Canadian Lender



                                  By:__________________________
                                  Title:_______________________



                                  CITIBANK LIMITED, as an Australian Lender


                                  By:__________________________
                                  Title:_______________________



                                  CREDIT LYONNAIS, LOS ANGELES BRANCH, as a U.S.
                                  Lender



                                  By:__________________________
                                  Title:_______________________



                                  CREDIT LYONNAIS CANADA, as a Canadian Lender



                                  By:__________________________
                                  Title:_______________________



                                  CREDIT LYONNAIS AUSTRALIA LIMITED, as an 
                                  Australian Lender



                                  By:__________________________
                                  Title:_______________________




                                      S-5



                                  MELLON BANK, N.A. as a U.S. Lender



                                  By:__________________________
                                  Title:_______________________



                                  MELLON BANK CANADA, as a Canadian Lender



                                  By:__________________________
                                  Title:_______________________



                                  THE CHASE  MANHATTAN  BANK,  as an  Australian
                                  Lender  (as  fronting  bank for  Mellon  Bank,
                                  N.A.)



                                  By:__________________________
                                  Title:_______________________



                                  MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as
                                  a U.S. Lender



                                  By:__________________________
                                  Title:_______________________




                                  J.P. MORGAN CANADA, as a Canadian Lender



                                  By:___________________________
                                  Title:________________________



                                      S-6



                                  J.P. MORGAN AUSTRALIA LIMITED, as an
                                  Australian Lender



                                  By:____________________________
                                  Title:_________________________



                                  N M ROTHSCHILD & SONS LIMITED, as a U.S.
                                  Lender



                                  By:____________________________
                                  Title:_________________________



                                  N M ROTHSCHILD & SONS  LIMITED,  as a Canadian
                                  Lender



                                  By:____________________________
                                  Title:_________________________




                                      S-7



                                  N  M   ROTHSCHILD  &  SONS   LIMITED,   as  an
                                  Australian Lender



                                  By:____________________________
                                  Title:_________________________




                                  TORONTO DOMINION (TEXAS), INC., as a U.S. 
                                  Lender



                                  By:____________________________
                                  Title:_________________________



                                  THE TORONTO-DOMINION BANK, as a Canadian 
                                  Lender



                                  By:____________________________
                                  Title:_________________________




                                  TORONTO DOMINION AUSTRALIA LIMITED
                                  ACN 004 858 020, as an Australian Lender



                                  By:_____________________________
                                  Title:__________________________



                                      S-8



                                  AUSTRALIAN ADMINISTRATIVE AGENT:

                                  CHASE SECURITIES AUSTRALIA LIMITED,
                                  as Australian Administrative Agent



                                  By:_____________________________
                                  Title:__________________________




                                  ARRANGER:

                                  CHASE SECURITIES INC., as Arranger



                                  By:______________________________
                                  Title:___________________________



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