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|         | **Exhibit 4.23** |
|--------------|------------------|
| May 12, 2004 |             |

|                                |                          |
|-------------------------------------|-------------------------------|
| BY: Facsimile    and Overnight Mail |                          |
|                                |                          |
| Don Hulse                           | Fred H. Lightner              |
| Mine Manager                        | Sr. Vice    President and     |
| Minera San    Xavier, S.A. de C.V.  | Chief Operating    Officer    |
| Camino Cerro San    Pedro           | Metallica    Resources, Inc.  |
| Km. 3+870, no 200    C.P. 78440     | 12200 E.    Briarwood Avenue  |
| Cerro de San    Pedro, SLP          | Suite 165                     |
| Mexico                              | Centennial,    Colorado 80112 |
|                                | U.S.A.                        |

Re:     Mining Contract between MineraSan 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: 

As of the date of this letter, WGLA has performed all of thework under the Mining Contract that it is capable of performing given MSX'sinability to obtain the blasting permit, the Agrarian Court's recent decisionnullifying MSX's Lease Agreement for the Project site, the San PedroMunicipality's decision to revoke certain environmental authorizations and thecurrent uncertainty regarding the future of the Project. Therefore, until suchtime when MSX notifies WGLA in writing that MSX has secured the blasting permitand authorizes WGLA to commence the work contemplated by the Mining ContractWGLA will cease to perform any further work under the Mining Contract. 

WGLA remains committed to assisting MSX make the Projectsuccessful. In that regard, WGLA is providing the enclosed information as thebasis for a mutually agreed upon course of action for the parties to followuntil the earlier of (a) the date on which MSX notifies WGLA that MSX hasreceived the blasting permit and authorizes WGLA to commence work under theMining Contract and (b) 90 days from the date of this letter (the "StandbyTerm"). In addition, as consideration for WGLA remaining at the Project site,WGLA is requesting that MSX execute the enclosed Indemnification Agreement.

Based on a total equipment value of $4,576,223.00, the returnon capital employed ("ROCE") on the equipment currently located at the Projectsite is $76,270.00 per month. During the Standby Term, WGLA will maintain theequipment currently at the Project for a monthly payment of $76,270.00. WGLAwill also not bring any additional equipment into Mexico unless authorized to doso by MSX. 

| *A Subsidiary of:*Washington    Group International                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
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| Calle Benito    Juarez #23 Int. 2. **-** Portales Oriente **-** Del Benito - Juarez **-** Mexico

WGLA's monthly current G&A costs are $34,640.Please note that the G&A costs do not include the direct labor costs being paidby WGLA to Servicio de Plata y Oro S.A. ("SPO"), which will be treatedseparately under the WGLA/SPO contract. 

Based on a monthly equipment cost of$76,270.00 and G &A cost of $34,640, WGLA will maintain equipment and personnelat the Project during the Standby Term for $110,910 a month plus any SPO laborcosts. If accepted by MSX, WGLA agrees to continue under this cost structureuntil the end of the Standby Term. If MSX notifies WGLA to commence work within120 days of the date of this letter, MSX agrees to renegotiate the MiningSchedule and Target Pricing provisions of the Mining Contract in order toovercome the effects of the delay and any increased costs of performanceresulting from WGLA's inability to continue work during the Standby Term. 

If after 120 days MSX has still not securedthe blasting permit and MSX has not instructed WGLA to commence work, WGLAproposes that the parties meet again to mutually agree on a course of action.Possible courses of action include the ability of either party to immediatelyterminate the Mining Contract, continue under the current or a similar paymentschedule, or demobilization of the equipment. Estimated demobilization cost plusthe IVA loss would be $1,093,285. 

This letter is intended to amend andsupplement the Mining Contract. Except as described in this letter, all otherterms and conditions of the Mining Contract shall continue on full force andeffect. Please be advised that by presenting this proposal, WGLA is not waivingany of its other rights or remedies under the Mining Contract at law or inequity. 

We hope that the proposal outlined in thisletter will enable you to minimize costs and retain equipment and personnel atthe Project site while continuing to pursue the blasting permit. Please signwhere indicated below to confirm your acceptance of this letter. In addition,please sign the enclosed Indemnification Agreement and return an original to mealong with an originally executed copy of this letter. 

Sincerely, 

/s/ LeRoy E. Wilkes       LeRoy E. Wilkes       Executive Vice President President,       Mining Business Unit 

Washington Group International, Inc. Attorney-in-Fact, Washington Group Latin America, Inc. 
**ACCEPTED AND AGREED this 16 day of June, 2004. 
*A Subsidiary of:*Washington    Group International
Calle Benito Juarez #23 Int. 2. **-**    Portales Oriente **-** Del Benito - Juarez    **-** Mexico

By:     /s/ Fred H. Lightner Name:      Fred H. Lightner Title         Sr. V.P. & COO 

Enclosures: 

-  List of WGLA's equipment located at the Project site, which includes the fair  market value of each piece of equipment 

-  Table of WGLA's G&A costs 

-  Indemnification Agreement 

cc:     Curt Cooley           Christy Crase 

 

 

 

 

 
*A Subsidiary of:*Washington    Group International
Calle Benito Juarez #23 Int. 2. **-**    Portales Oriente **-** Del Benito - Juarez    **-** Mexico** |