per day within three (3) years from the date of this agreement

 EXHIBIT 10.42
                                                  Desert Minerals, Inc.
                                                  c/o LS Capital Corporation
                                                  15915 Katy Freeway, Suite 250
                                                  Houston, TX 77094

                                                  Thursday March 27, 1997

Mr. Douglas Schmitt
c/o Zeotech Industries, Inc.
P.O. Box 387
Tecopa, CA 92389-0387

Dear Doug,
         Desert Minerals, Inc. (DMI) appreciates your fine efforts on its behalf
since January 14, 1997 while working at our Tecopa facility as a consultant for 
DMI employed by Zeotech Industries, Inc. of Vancouver.

         To formalize  our ongoing  arrangement  for your services and our joint
rights  (50/50) to use the technology you brought to Tecopa and are tailoring to
suit DMI's deposits at our expense we propose the following:

                  1.   Salary - Your  weekly  consulting  fee payable by Zeotech
                       will be increased from US $750 weekly to US $1,500 weekly
                       effective March 1, 1997 ;

                  2.   Bonus - Upon execution of this letter  agreement you will
                       be paid a bonus of US $10,000 against a total bonus of US
                       $100,000 as follows:

                                    2.1 The  balance of US $90,000  will be paid
                                    upon delivery, as defined in sec. 2.3 below,
                                    of the technology, for recovering micro fine
                                    gold and other  precious  metals from desert

                                    2.2 Prior to payment of the US $90,000  such
                                    technology   will  be  demonstrated  to  and
                                    audited by an independent third party mining
                                    engineering  firm  of  international  repute
                                    which   is    willing,    after   you   have
                                    demonstrated  the process to them,  to allow
                                    its name to be used  publicly to verify that
                                    DMI has  successfully  "cracked the code" to
                                    consistently extract gold and other PMs from
                                    desert  sands on a large - scale  commercial
                                    basis. Alternately,  however, the production
                                    of   commercially   salable   quantities  of
                                    precious   metals  from  DMI's  Tecopa  area
                                    deposit in a form  acceptable to a reputable
                                    refiner,  with production  costs not greater
                                    than 75% of sale proceeds, will also satisfy
                                    the requirements of this sec 2.2;

                                    2.3 Prior to payment  of the US $90,000  you
                                    will  deliver to DMI a process  manual which
                                    will include all formulae,  process  designs
                                    and   systems   engineering   necessary   to
                                    implement and repeat the recovery process on
                                    a consistent, large scale, basis;

                                    2.4  Upon  payment  of  the US  $90,000  the
                                    recovery   process    technology   and   any
                                    enhancements  subsequently developed will be
                                    the joint property of you (50%), LS Capital,
                                    and  DMI  (50%)  and  such  subsidiaries  or
                                    affiliates  as they may,  from time to time,
                                    assign or license  the  technology  to, with
                                    the  proviso,   however,   that  should  you
                                    present  to  LS/DMI a  project  which  would
                                    utilize  the   technology  to  extract  gold
                                    and/or precious metals,  and LS/DMI declines
                                    in writing to pursue that project,  then you
                                    shall   have  the  right  to   utilize   the
                                    technology  to  extract  minerals  from that
                                    project, as long as appropriate measures are
                                    taken to maintain the integrity and security
                                    of the technology.

                  3. Royalty - As full and total compensation for the use of the
                  technology by LS/DMI and their  affiliates,  they shall pay to
                  you a royalty of 5% (five  percent),  of gross  sale  proceeds
                  from  the  refiner  minus  direct  production  costs,  but not
                  including any general overhead or administrative costs, on all
                  precious  minerals  extracted and produced in marketable  form
                  utilizing the process,  payable in cash or in kind, as long as
                  you are in compliance  with the  provisions of sec. 2.4 above.
                  It is  understood  by you that LS/DMI  expressly  reserves the
                  right to  discontinue  the use of the technology you developed
                  for us at any time in favor of either  the a)  utilization  of
                  technology provided by another source which LS/DMI believes is
                  more  attractive or cost  effective,  or b) abandonment of the
                  desert  sands  project.  In either  case all  royalty  payment
                  obligations  to you will  cease as long as none of our 50 - 50
                  jointly owned technology is being utilized thereafter;

                  4. Equity - LS Capital/DMI  and Griffin Gold hereby give their
                  consent to the transfer to you of 90% of the shares of Griffin
                  Gold Group, Inc. and Desert Minerals, Inc. which were reserved
                  for  Dr.  W.D.  Groves.   The  obligation  to  transfer  these
                  interests  is the sole  responsibility  of Ed Hemsted,  and is
                  subject to the satisfactory completion of secs.
                  2.2 and 2.3 above;

                  5.  Security - LS, DMI and you will take such  measures as are
                  necessary to secure and protect the secrecy of the technology,
                  including  effecting such  intellectual  property filings with
                  the  appropriate  international  bodies as may be  advised  by

                  6. Performance - Failure of LS/DMI to commission  construction
                  of an operating  plant of at least one  thousand  (1,000) tons
                  per day within three (3) years from the date of this agreement
                  constitutes  automatic recission of LS/DMI 50% interest in the
                  technology and process back to you.  Provided however that, if
                  negotiations  and/or  design work to  commission  an operating
                  plant of that size are underway the preceding  deadline May be
                  extended  by up to twelve (12) months by payment of US $25,000
                  to you;

                  7.  Confidentiality - The parties to this agreement agree that
                  it is confidential  and highly  sensitive and no disclosure of
                  its terms can be made  without  the  consent of both  parties,
                  except as may be required by  government  agencies such as tax
                  or securities authorities.

         This  letter  agreement  is entered  into as of the date first  written

         LS Capital Corporation

         s/s  Paul J.Montle
by ____________________________
         Paul J. Montle, President

Page 4

         Griffin Gold Group, Inc.

         s/s Paul J. Montle
by ____________________________
         Paul J. Montle, Vice President

         Desert Minerals, Inc.

         s/s Paul J. Montle
         Paul J. Montle, Vice President

         s/s Douglas Schmitt
by ____________________________
         Douglas Schmitt

         Zeotech Industries, Inc.

         s/s Ed Hemsted
         Ed Hemsted

         s/s Ed Hemsted
by ____________________________

         Ed Hemsted, individually 

Basic Info X:

Name: per day within three (3) years from the date of this agreement
Type: the date of this Agreement
Date: Oct. 14, 1997
State: Delaware

Other info:


  • Thursday March 27 , 1997
  • January 14 , 1997
  • March 1 , 1997


  • Zeotech Industries , Inc.
  • Griffin Gold Group , Inc.
  • Desert Minerals , Inc.


  • Houston
  • TX
  • Vancouver
  • Tecopa


  • $ 90,000


  • Katy Freeway
  • Dear Doug
  • Griffin
  • Ed Hemsted
  • Paul J.Montle
  • Paul J. Montle
  • Douglas Schmitt


  • 75 %
  • 5 % five percent
  • 90 %
  • 50 %