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Exhibit 4.26 

EMPLOYMENT AGREEMENT 

This EmploymentAgreement (the "Agreement"), is effective as of April 13, 2007, among METALLICAMANAGEMENT INC., a Colorado corporation ("Corporation"), METALLICA RESOURCESINC., a company federally incorporated in Canada ("Metallica") and MARK A.PETERSEN ("Executive"). 

WHEREAS the Executive commenced employment withthe Corporation effective January 1, 2003; **WHEREAS the Executive and the Corporation have agreed that the ongoingemployment of the Executive shall be subject to the terms and conditions setforth herein; and 
**WHEREAS the Corporation is awholly-owned subsidiary of Metallica, and pursuant to a management agreementbetween the Corporation and Metallica, the Corporation provides certainmanagerial and administrative services to Metallica and its other subsidiaries.
**NOW THEREFORE in consideration of the mutual covenants and promisescontained herein, and other good and valuable consideration, the parties heretoagree as follows: 

1. 

Employment Duties. The Corporation agrees to continue to employ theExecutive as the Vice President – Exploration, and the Executive hereby agreesto continue such employment. Moreover, the Executive shall also act as the VicePresident – Exploration of Metallica, and shall hold such offices of Metallica'ssubsidiaries (hereafter the "Associated Companies") as shall be assigned to himby the Boards of Directors of the Corporation or Metallica. In such capacities,the Executive shall have responsibility for the supervision and direction of allexploration activities for all mineral assets of the Corporation, Metallica andthe Associated Companies, and such other activities as may be requested fromtime to time. The Executive shall report to, and accept direction from, theChief Executive Officer of Metallica. Executive shall devote substantially allof his time, abilities and attention to the business of the Corporation,Metallica and the Associated Companies and shall use his best efforts to performfaithfully and efficiently the duties and responsibilities assigned toExecutive. 

2. 

Employment Period. Subject to sections 9, 10, 11 and 12 hereof, the termof this Agreement shall commence on the date hereof and shall terminate April13, 2009. Provided, however, that this Agreement shall continue to govern theemployment of the Executive by the Corporation after April 13, 2009 unlesseither the Corporation or the Executive terminates this Agreement either (i)effective April 13, 2009, by written notice to the other party given not laterthan October 13, 2009, or (ii) after April 13, 2009, upon not less than sixmonths’ written notice to the other party. 

3. 

Compensation. As compensation for his services hereunder, the Corporationshall pay to the Executive a salary of US$115,000 per annum by equal monthlyinstallments in arrears. The salary shall be reviewed periodically by the Boardof Directors of the Corporation. The Executive may also be eligible for periodicbonuses to be determined by the Board of Directors based upon performance.

4*.*

Expenses. The Corporation shall reimburse the Executive for suchtraveling, hotel, entertainment and other out-of-pocket expenses as he may fromtime to time properly incur while conducting the businesses of the Corporation,Metallica, or the Associated Companies and as may be approved by the ChiefExecutive Officer of the Corporation. 

5. 

Benefits. The Executive shall be entitled to such other benefits and tosuch holidays to be agreed upon by the Executive and the Corporation. Thesebenefits and holidays shall include, but not be limited to: eligibility in theCorporation's 401-k plan; health, dental and disability insurance; and lifeinsurance at two times annual salary. The Executive shall be entitled to fourweeks of paid annual vacation. The maximum number of accrued and unused vacationhours that can be carried over from one calendar year to the following calendaryear is 160 hours. 

6. 

Stock Options. The Executive shall be entitled to participate in theCorporation's stock option plan to the extent and upon such terms as may bedetermined from time to time by the Board of Directors of the Corporation.

7. 

Nonsolicitation. The Executive shall not at any time either during hisemployment by the Corporation and/or for a period of two years thereafterattempt to induce any person to leave the employment of the Corporation,Metallica or the Associated Companies. 

8. 

Confidentiality / Trade Secrets. The Executive acknowledges that in thecourse of carrying out, performing and fulfilling his duties with theCorporation, Metallica or the Associated Companies, he has had and will haveaccess to and be entrusted with the Corporation, Metallica and the AssociatedCompanies' trade secrets and with detailed confidential information concerningthe present and contemplated exploration projects, prospects and opportunitiesof the Corporation, Metallica and the Associated Companies. The Executiveacknowledges that the disclosure of any such trade secrets or confidentialinformation to the competitors of the Corporation, Metallica or the AssociatedCompanies or to the general public would be highly detrimental to the bestinterests of the Corporation, Metallica and the Associated Companies. TheExecutive further acknowledges and agrees that the right to maintain such tradesecrets and detailed confidential information constitutes a proprietary rightwhich the Corporation, Metallica and the Associated Companies are entitled toprotect. Accordingly, the Executive covenants and agrees with the Corporationand Metallica that he will not (either during the continuance of his employmentby the Corporation, Metallica or the Associated Companies or at any timethereafter) disclose any such trade secrets or confidential information to anyperson nor shall he use the same for any purpose other than those of theCorporation, Metallica or the Associated Companies unless such information isotherwise known to the public. 

9. 

Termination by the Corporation. Notwithstanding section 2 hereof, butsubject to sections 10, 11 and 12 hereof, the Corporation may terminate theemployment of the Executive: 

(a) 

For Good Cause (as defined below) and in such event the Executive shall not beentitled to any payment on account of such termination, other than compensationdue him in respect of the period ending on the date of termination. 

(b) 

If the Executive dies or becomes disabled (any such disability to be assessedunder applicable laws) and in such event the Executive shall not be entitled toany payment on account of such termination, other than compensation due him inrespect of the period ending on the date of termination. 

(c) 

Upon six months' notice and in such event the Executive shall not be entitled toany payment on account of such termination, other than compensation due him inrespect of the period ending on the date of termination. 

10. 

Change ofControl. In the event that following a Change of Control (as hereinafterdefined), either: 

(a) 

the Corporationterminates the employment of the Executive other than for Good Cause (ashereinafter defined); or 

(b) 

the Executive resigns from his employment hereunder for Good Reason (ashereinafter defined) within six months following the Change of Control, 

the Corporation shall pay to the Executive alump sum in cash on the date of termination or resignation an amount equal tothree times the Executive's annual salary in effect for the financial year ofthe Corporation during which the Change of Control occurs. 

11. 

Definitions.For the purposes of this Agreement: 

"Change of Control" means: 

(a) 

the acquisition by any "offeror" (as defined in Part XX**of the SecuritiesAct (Ontario)) of beneficial ownership of more than 50% of the outstandingvoting securities of Metallica, by means of a takeover bid or otherwise; 

(b) 

any consolidation or merger of Metallica in which Metallica is not thecontinuing or surviving corporation or pursuant to which shares of Metallicawould be converted into cash, securities or other property, other than a mergerof Metallica in which shareholders immediately prior to the merger have the sameproportionate ownership of stock of the surviving corporation immediately afterthe merger; 

(c) 

any sale, lease,exchange or other transfer (in one transaction or a series or relatedtransaction) of all or substantially all of the assets of Metallica; or 

(d) 

the approval bythe shareholders of Metallica of any plan of liquidation or dissolution ofMetallica. 

"Good Reason" meansany circumstance in which the Executive is induced by actions of theCorporation, Metallica or the Associated Companies to terminate his employmentother than on a purely voluntary basis, and without limiting the generality ofthe foregoing shall include: 

(a) 

a reduction ordiminution in the level of responsibility, title or office of the Executive;

(b) 

a reduction inthe compensation level of the Executive, taken as a whole; 

(c) 

forced relocationto another geographic location; or 

(d) 

the failure of the Corporation or any successor corporation to maintainsubstantially similar employment terms with the Executive after the Change ofControl as were in existence prior to the Change of Control. 

"Good Cause" means: 

(a) 

the conviction,or plea of *nolo contendere,* of the Executive on a felony charge; 

(b) 

awillful failure of the Executive to perform the duties necessary to carry outthe Executive's responsibilities which failure has not been cured within ten(10) business days after a written notice setting forth such failure has beengiven to the Executive; 

(c) 

dishonest conducttaken by or committed at the request of Executive which is intentional andmaterially injurious to the Corporation; or 

(d) 

the repeatedwillful violations by the Executive of the Executive's obligations under thisAgreement. 

12. 

Termination by the Executive. The Executive may terminate his employmentwith the Corporation upon six months’ notice and in such event the Executiveshall not be entitled to any payment on account of such termination, other thancompensation due him in respect of the period ending on the date of termination.

13. 

Severability. All of the provisions of this Agreement including withoutlimitation section 7, are intended by the parties hereto as separate thedivisible provisions and, if, for any reason, any one of them (or part thereof)is held to be invalid or unenforceable, neither the validity nor theenforceability of any other provision (or part thereof) shall be affectedthereby. Executive agrees that the restrictions imposed by section 7 isreasonable in scope and duration and acknowledges that he has or shall receivesufficient consideration from Corporation to make enforceable the restrictionsand limitations contained in section 7 of this Agreement. 

14. 

Notice. Any notice in writing required to be given to the Executivehereunder shall be sufficiently given if delivered to the Executive personallyor mailed by registered mail, postage prepaid, addressed to the Executive at hislast residential address known to the Secretary of the Corporation. Any suchnotice mailed as aforesaid shall be deemed to have been received by theExecutive on the third business day following the date of mailing. Any notice inwriting required or permitted to be given to the Corporation hereunder shall begiven by registered mail, postage prepaid, addressed to its head office. Anysuch notice mailed as aforesaid shall be deemed to have been received by theCorporation on the third business day following the date of mailing. Any suchaddress for the giving of notices hereunder may be changed by notice in writinggiven hereunder. 

15. 

Previous Agreements Terminated and Cancelled. Any and all previousagreements written or oral, between the parties hereto or on their behalfrelating to the employment of the Executive by the Corporation, are herebyterminated and cancelled, and each of the parties hereto hereby releases andforever discharges the other of and from all manner of actions, causes ofaction, claims and demands whatsoever under or in respect of any suchagreements. 

16. 

Governing Law. The provisions of this Agreement shall be governed by andinterpreted in accordance with the laws of the State of Colorado, withoutreference to the principals of conflicts of laws thereunder, and each of theparties hereto by their execution of this Agreement irrevocably agrees to thejurisdiction of the courts of Denver, Colorado. 

17. 

Assignment.This Agreement is personal to the Executive and shall not be assignable by theExecutive. This Agreement shall be assignable by the Corporation. 
**IN WITNESS WHEREOF the parties hereto have settheir hands and seals as of the date first above written. 

By:/s/ Mark A. Petersen Mark A. Petersen  **METALLICA MANAGEMENT INC.**  By:/s/ Richard J. Hall Richard J. Hall, President and CEO  **METALLICA RESOURCES INC.**  By:/s/ Craig J. Nelsen Craig J. Nelsen, Chairman
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