Metallica Resources Inc.: Exhibit 4.21 - Prepared by TNT Filings Inc.



 



Exhibit 4.21 

LIMITED NOTICE TO PROCEED 


This Limited Notice to Proceed (this
"LNTP") is entered into, effective as of the 15th day of November, 2005 (the
"Effective Date"), by and between Minera San Xavier, S.A. de C.V. ("MSX") and
Washington Group Latin America, Inc. ("WGLA"). MSX and WGLA are each referred to
herein as a "Party" and collectively as the "Parties." 


RECITALS


WHEREAS,
MSX and WGLA entered into a Mining Contract dated as of December 30, 2003 (the
"Mining Contract"), in which MSX engaged WGLA to perform drilling, blasting,
excavating, mining, hauling and construction-related services at the Cerro San
Pedro Mine (the "Mine") owned by MSX and located in Cerro de San Pedro, Mexico;



WHEREAS, for a variety of reasons,
including but not limited to MSX's inability to obtain the blasting permit, the
Parties entered into a standby letter dated May 12, 2004, as extended on August
31, 2004; October 29, 2004; and November 29, 2004 (the "Standby Letter"), in
which WGLA ceased to perform any further Work (as defined by the Mining
Contract) until such time when MSX notifies WGLA that MSX has secured the
blasting permit and authorizes WGLA to recommence the Work; 


WHEREAS, 
on March 29, 2005, the Parties
entered into a revised standby letter (the "Revised Standby Letter") in which
the Parties revised the terms of the Standby Letter and agreed upon an Extended
Standby Term (as defined in the Revised Standby Letter); and 


WHEREAS,
MSX desires that WGLA perform certain limited services during the Extended
Standby Term, and WGLA is willing to proceed with such services on the basis of
this LNTP. 


NOW THEREFORE, in consideration of the
foregoing and the promises and mutual covenants hereinafter set forth, and other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, and intending to be legally bound hereby, the Parties agree as
follows: 


AGREEMENT 


1.        
WGLA shall proceed with the services at the Mine described in Attachment A
to this LNTP (the "Services") and other work items as may be mutually agreed
upon by the Parties. 




2.
       
This LNTP shall not affect the standby status of, nor any obligations arising
from, the Mining Contract and Revised Standby Letter, except only as may arise
under section 4 of this LNTP regarding the Mining Contract scope of Work and
Target Budget. 

3.
MSX shall pay WGLA for the Services on a unit rate or time and materials basis
in accordance with the payment terms set forth in Attachment B
to this LNTP. Invoicing and payment shall be on a monthly basis. WGLA shall
invoice MSX within the first ten (10) days of each month for the previous
month's Services. MSX shall reimburse WGLA no later than the last day of the
month in which the invoice is delivered. 

4.        
The terms and conditions set forth in Attachment C
to this LNTP are incorporated herein by this reference. Upon recommencement of
the Work under the Mining Contract, any Services performed by WGLA under this
LNTP, which are part of the Mining Contract scope of Work, shall be deleted from
the Mining Contract and the Mining Contract Target Budget revised according to
the Mining Contract terms. 

5.        

If the Parties fail to recommence the Work under the Mining
Contract, and this LNTP is terminated, MSX shall reimburse WGLA for any costs
not previously reimbursed, including any mobilization and demobilization
expenses and costs. 

6.
       
This LNTP shall terminate on the earlier of: (a) completion of the Services as
mutually agreed by the Parties, (b) full recommencement of the Work under the
Mining Contract, (c) reasonable written notice of termination for convenience by
either Party, in which case the terminating Party shall pay demobilization
expenses and other reasonable termination costs, (d) a material breach of this
LNTP by either Party upon the breaching Party's receipt of written notice from
the non-breaching Party, provided however, that such notice shall provide ten
(10) business days for the breaching Party to cure its breach (the "Cure
Period"), or if such breach is incapable of being cured in the Cure Period then
the breaching Party shall have undertaken, within the Cure Period, good faith
measures to cure the breach within a reasonable time, or (e) termination of the
Mining Contract, or (f) termination of the Revised Standby Letter. 

7.

        Neither Party may
assign their respective rights, interests or obligations under this LNTP without
the express written consent of the other Party. This LNTP shall be binding upon
the Parties and their successors, permitted assigns, and legal representatives.


8.
       
The failure of either Party to enforce, at any time, any provision of this LNTP
shall not constitute waiver of such provision in any way or the right of such
Party at any time to avail itself of such remedies as it may have for any breach
of such provision. 

9.
       
This LNTP shall be governed by and construed in accordance with the laws of the
State of Colorado excluding any principles or provisions thereof that would
require the application of the laws of a different jurisdiction. The Parties
shall resolve any performance claim, controversy or dispute between the Parties
arising out of, or in connection with, this LNTP, or any
breach hereof, in accordance with Article 15 of the Mining Contract. 





10.        
This LNTP is the complete agreement between the Parties regarding the
performance of the Services set forth in Attachment A and supersedes all
oral and written proposals and all communication between the Parties relating to
this LNTP, except that the Mining Contract and Revised Standby Letter shall
remain intact, operable and enforceable according to section 2 of this LNTP and
subject to section C of Attachment C.
No modification of this LNTP shall be effective unless in writing and executed
by both Parties. 

11.
       
This LNTP may be executed in any number of counterparts and delivered by
facsimile transmission, all of which taken together shall constitute a single
and complete agreement. 


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IN WITNESS WHEREOF,
the Parties have caused this instrument to be executed
by their duly authorized representatives on this 21st day of November, 2005 to
be effective as of the Effective Date. 

	 	 
	Minera San
    Xavier, S.A.	Washington Group
    Latin America, Inc.
	 	 
	By: /s/ Donald E.
    Hulse	By: /s/ Robert W.
    Zaist
	 	 
	Name: Donald E.
    Hulse	Name: Robert W.
    Zaist
	 	 
	Title: General
    Manager	Title: President
    - Mining