Metallica Resources Inc.: Exhibit 4.17 - Prepared by TNT Filings Inc.



 



Exhibit 4.17 


March 29, 2005 

BY: Facsimile and Overnight Delivery 


	Minera San
    Xavier, S.A. de C.V.	Metallica
    Resources, Inc.
	Attn: Mine
    Manager	Attn.: Fred H.
    Lightner
	Camino Cerro San
    Pedro	Sr. Vice
    President and Chief
	Km. 3+870, no.
    200 C.P. 78440	Operating Officer
	Cerro de San
    Pedro, SLP	12200 E.
    Briarwood Ave., Ste. 165
	Mexico	Centennial, CO
    80112



Re: Mining Contract Effective as of
December 30, 2003 (the "Mining Contract") between Minera San Xavier, S.A. de
C.V. ("MSX") and Washington Group Latin America, Inc. ("WGLA") for the Cerro San
Pedro Project (the "Project") 

Dear Don and Fred: 

The Standby Agreement detailed in our letter
dated May 12, 2004, as most recently amended on November 29, 2004 (the "Standby
Letter") expired on February 28, 2005. In anticipation of the Standby Letter
expiring, Washington Group International, Inc. sent Metallica Resources, Inc. a
letter on February 4, 2005 outlining three alternatives for how the parties
should proceed. Based on recent conversations with you, WGLA understands that
MSX would like to extend the Standby Term (as defined in the Standby Letter)
from March 1, 2005 until August 31, 2005 (the "Extended Standby Term") and
provide for a future extension (which will also constitute the Extended Standby
Term if implemented) under the provisions of the Standby Letter, as herein
amended until March 31, 2006. WGLA hereby agrees to such an extension subject to
the terms and conditions specified in this letter (the "Revised Standby
Letter"). 

Upon execution of this Revised Standby Letter,
MSX shall pay WGLA the actual costs incurred by WGLA during previous Standby
Terms for Value Added Taxes and demobilization for the following: one DM45
drill, one superlube truck, one boom truck, one 773 water truck and one 375
backhoe. WGLA estimates these costs to be approximately $251,000 total ($167,000
Value Added Taxes and $84,000 demobilization). 

During the Extended Standby Term, WGLA will
maintain the equipment and personnel at the Project for a minimum monthly
payment of $138,000 plus any Servicio de Plata y Oro S.A. ("SPO") labor costs.
In addition, MSX shall reimburse WGLA $526,000 for amounts WGLA has identified
as actual depreciation costs incurred by WGLA during 2004 and $309,000 for
amounts WGLA has identified as unrecouped costs as per Washington Group
International's February 4th letter. MSX may amortize the $526,000
and the $309,000 over the six-month Extended Standby Term beginning March 1,
2005 and concluding August 31, 2005; provided that in the event this Revised
Standby Letter or the Mining Contract is terminated at any time for any reason
during the Extended Standby Term, MSX shall pay the balance of the unamortized
$526,000 and $309,000 in one lump sum payment. (Please refer to Schedule 1).





WGLA shall not bring any additional equipment
to the Project during the Extended Standby Term unless authorized to do so by
MSX. In the event MSX has not instructed WGLA to commence work under the Mining
Contract prior to the end of the Extended Standby Term and the parties have not
agreed otherwise, WGLA shall demobilize all its equipment at the end of the
Extended Standby Term and shall charge MSX a demobilization charge of $259,000
plus the balance of any Value Added Tax receivables. In addition, either WGLA or
MSX may terminate the Mining Contract due to an event of Force Majeure pursuant
to the terms of Amendment No. 1 to the Mining Contract attached hereto as 
Exhibit A.


If MSX notifies WGLA of a full recommencement
of work prior to the end of the Extended Standby Term, WGLA shall then commence
to remobilize its equipment and personnel to the Project as soon as possible,
such remobilization to be substantially complete within ninety (90) days after
such notice unless the parties otherwise agree. Equipment specified in the
Mining Contract that has been removed by WGLA shall be re-mobilized, if
required, for the work by WGLA. WGLA shall bear the remobilization cost. In
addition, MSX and WGLA will renegotiate any provisions of the Mining Contract,
including but not limited to the Mining Schedule and the Target Pricing
provisions. 

This letter is intended to amend and
supplement the Mining Contract. Except as described in this Revised Standby
Letter, all other terms and conditions of the Mining Contract shall continue in
full force and effect. Please be advised that by presenting this Revised Standby
Letter, WGLA is not waiving any of its other rights or remedies under the Mining
Contract at law or in equity. 

Please sign where indicated below to confirm your acceptance
of this letter and return an original to me. 

Sincerely, 

/s/ LeRoy E. Wilkes 

LeRoy E. Wilkes 

President, Mining Business Unit 

Washington Group International, Inc. 

Attorney-in-Fact, Washington Group 

Latin America, Inc. 


 



	 
	 
	ACCEPTED AND AGREED
	This 30 day of March, 2005.
	 
	By:            
    /s/ Richard J. Hall
	Name:             
    Richard J. Hall
	Title:               
    President and CEO
	 
	cc:              
    Ken Kluksdahl
	                   
    Richard Hall
	                   
    Curt Cooley
	                   
    Christy Crase, Esq.


 

 



	 	 	 	 	 	 
	
    Schedule 1

	
    Payment Schedule (US $) Assuming 6 Month Duration

	 	 	Amortized	Amortized	VAT	 
	Month	Base	Fee	Depreciation	Tax	Demob.
	March	$138,000	$51,500	$87,666	$167,000	$84,000
	April	$138,000	$51,500	$87,666	 	 
	May	$138,000	$51,500	$87,666	 	 
	June	$138,000	$51,500	$87,667	 	 
	July	$138,000	$51,500	$87,667	 	 
	August	$138,000	$51,500	$87,668	+Remaining 	VAT & Demob.
	 	 	 	 	 	 
	 	 	 	 	 	 
	
    Payment Schedule (US $) Assuming 3 Month Duration

	 	 	Amortized	Amortized	VAT	 
	Month	Base	Fee	Depreciation	Tax	Demob.
	March	$138,000	$51,500	$87,666	$167,000	$84,000
	April	$138,000	$51,500	$87,667	 	 
	May	$138,000	$51,500	$87,667	 	 
	June	$0            
    	$154,500	$263,000	+Remaining 	VAT & Demob.


 



Exhibit A 

to 

March 21, 2005 Revised Standby Letter 

Amendment No. 1 to Mining Contract 



(See Attached)