Document:

Exhibit 4.2

                            METALLICA RESOURCES INC.

                                STOCK OPTION PLAN

1.   PURPOSE
     -------

     The purpose of this Stock Option Plan (the "Plan") is to authorize the
grant to directors, officers, employees and consultants of METALLICA RESOURCES
INC. (the "Company") or any present or future subsidiary thereof as hereinafter
defined of options to purchase common shares ("shares") of the Company's capital
and thus benefit the Company by enabling it to attract, retain and motivate
directors, officers, employees and consultants by providing them with the
opportunity, through share options, to acquire an increased proprietary interest
in the Company.

2.   ADMINISTRATION
     --------------

     The Plan shall be administered by the board of directors of the Company.
Subject to approval of the granting of options by the board of directors, the
Company shall grant options under the Plan.

3.   SHARES SUBJECT TO PLAN
     ----------------------

     Subject to adjustment under the provisions of paragraph 11 hereof, the
aggregate number of shares of the Company which may be issued and sold under the
Plan will not exceed 2,400,000 shares. In any particular year, shares eligible
for exercise pursuant to options granted under the Plan may not exceed more than
10% of the issued and outstanding shares. The total number of shares which may
be reserved for issuance to any one individual under the Plan shall not exceed
5% of the total number of issued and outstanding shares (on a non-diluted basis)
and shares reserved for issuance under employer stock option plans and options
for services. The Company shall not, upon the exercise of any option, be
required to issue or deliver any shares prior to (a) the admission of such
shares to listing on any stock exchange on which the Company's shares may then
be listed, and (b) the completion of such registration or other qualification of
such shares under any law, rules or regulation as the Company shall determine to
be necessary or advisable.

4.   LIMITS WITH RESPECT TO INSIDERS
     -------------------------------

     (a)  The maximum of shares which may be reserved for issuance to insiders
          ("Insiders") as defined under the Securities Act (Ontario) under the
          Plan, any other employer stock option plans, options for services or
          any other share compensation arrangement, shall be 10% of the shares
          issued and outstanding at the time of the grant (on a non-diluted
          basis).

     (b)  The maximum number of shares which may be issued to Insiders under the
          Plan within a one year period shall be 10% of the shares issued and
          outstanding at the time of the issuance (on a non-diluted basis),
          excluding shares issued under the Plan, any other employer stock
          option plans, options for services or any other share compensation
          agreement over the proceeding one year period. The maximum number of
          Common shares which may be issued to any one Insider and his
          associates under the Plan within a one year period shall be 5% of the
          shares outstanding at the time of the issuance (on a non-diluted
          basis), excluding shares issued to such Insider under the Plan.

<PAGE>

     (c)  Any entitlement to acquire shares granted pursuant to the Plan, any
          other employer stock option plans, options for services or any other
          share compensation agreement, prior to the grantee becoming an Insider
          shall be excluded for the purposes of the limits set out in (a), (b)
          and (c) above.

5.   ELIGIBILITY
     -----------

     Options shall be granted only to directors, officers and employees and
consultants of the Company or any subsidiary. The term "subsidiary" as used in
the Plan shall mean any corporation in which the Company owns, directly or
indirectly, stock possessing 50% or more of the total combined voting power of
all classes of stock.

     Subject to the foregoing, the board of directors shall have full and final
authority to determine the persons who are to be granted options under the Plan
and the number of shares subject to each option. Within 10 days of the issue of
any option, the board of directors shall file a letter with securities
regulators demonstrating compliance with any applicable blanket rulings
regarding trades in options to directors or senior officers and provide
substantially the same information as prescribed by Form 20 under the Ontario
Securities Act.

6.   PRICE
     -----

     The purchase price (the "Price") for the shares of the Company under each
option shall be determined by the board of directors on the basis of the market
price, where "market price" shall mean the prior trading day closing price of
the shares of the Company on the Toronto Stock Exchange or such other stock
exchange on which the shares are listed that had a greater volume on such day
and where there is no such closing price, "market price" shall mean the average
of the most recent bid and ask of the shares of the Company on The Toronto Stock
Exchange. If there is not a market price, the fair market value of the shares at
the date of the grant of the option shall be deemed to be the "market price".

7.   PERIOD OF OPTION AND RIGHTS TO EXERCISE
     ---------------------------------------

     Subject to the provisions of this paragraph 6 and paragraphs 8, 9 and 10
below, options will be exercisable in whole or in part, and from time to time,
during the currency thereof. Options shall not be granted for a term exceeding
ten years. The shares to be purchased upon each exercise of any option shall be
paid for in full, in cash, at the time of such exercise. Former consultants are
eligible to exercise options granted to them at any time prior to the expiry of
such option. Except as provided in paragraphs 8 and 9 below, no option which is
held by a director, officer or employee may be exercised unless the optionee is
then a director, officer or in the employ of the Company or any subsidiary and,
in the case of an employee, shall have been continuously employed by one or more
of the Company and its subsidiaries since the grant of his option. Absence on
leave approved by an officer of the Company or of any subsidiary authorized to
give such approval shall not be considered an interruption of the employment for
any purpose of the Plan.

                                       2
<PAGE>

8.   NON-TRANSFERABILITY OF OPTION
     -----------------------------

     No option granted under the Plan shall be transferable by an optionee
otherwise than by will or by the laws of descent and distribution, and such
option shall be exercisable, during his lifetime, only by him.

9.   TERMINATION OF EMPLOYMENT
     -------------------------

     If any optionee who is a director, officer or employee shall cease to be an
officer, director or employee of the Company or any subsidiary for any reason
(except as otherwise provided in paragraph 9), he may, but only within the
period of ninety days next succeeding such cessation and in no event after the
expiry date of his option, exercise his option. Before expiry of an option under
this paragraph 8, the board of directors shall notify the optionee in writing of
such expiry. The entitlement of a consultant to options, including the
entitlement to options upon termination, shall be determined by the terms of the
consultant's consulting agreement and the requirements of the Plan.

10.  DEATH OF OPTIONEE
     -----------------

     In the event of the death of an optionee during the currency of his option,
the option theretofore granted to him shall be exercisable within, but only
within, the period of one year next succeeding his death, and in no event after
the expiry date of his option. Before expiry of an option under this paragraph
9, the board of directors shall notify the optionee's representative in writing
of such expiry.

11.  EXTENSION OF OPTION
     -------------------

     Notwithstanding the provisions of paragraphs 8 and 9, the board of
directors may extend the period of time within which an option held by a
deceased optionee may be exercised or within which an option may be exercised by
an optionee who has ceased to be an officer, director or employee of the
Company, but such an extension shall not be granted beyond the original expiry
date of the option. Any extensions of options granted under this Plan are
subject to regulatory approval.

12.  ADJUSTMENTS IN SHARES SUBJECT TO PLAN
     -------------------------------------

     The aggregate number and kind of shares available under the Plan shall be
appropriately adjusted in the event of a reorganization, recapitalization, stock
split, stock dividend, combination of shares, merger, consolidation, rights
offering or any other change in the corporate structure or shares of the
Company. The options granted under the Plan shall contain such provisions as the
board of directors may determine with respect to adjustments to be made in the
number and kind of shares covered by such options and in the option price in the
event of any such change.

13.  AMENDMENT AND TERMINATION OF THE PLAN
     -------------------------------------

     The board of directors may at any time amend or terminate the Plan, but
where amended, such amendment is subject to regulatory approval.

14.  EFFECTIVE DATE OF THE PLAN
     --------------------------

     The Plan becomes effective on the date of its adoption by the board of
directors and options may be granted immediately thereafter.

                                       3
<PAGE>

15.  EVIDENCE OF OPTIONS
     -------------------

     Each option granted under the plan shall be embodied in a written option
agreement between the Company and the optionee which shall give effect to the
provisions of the Plan.

16.  EXERCISE OF OPTION
     ------------------

     Subject to the provisions of the Plan, an option may be exercised from time
to time by delivering to the Corporation at its registered office a written
notice of exercise specifying the number of shares with respect to which the
option is being exercised and accompanied by payment in case or certified cheque
in full of the purchase price of the shares then being purchased. The board of
directors may grant such financial assistance as it views appropriate to assist
the holder in the exercise of an option provided that such financial assistance
shall be extended on a full recourse basis only and a lien shall be granted on
the issuance of all underlying shares.

     Upon receipt of a certificate of an authorized officer directing the issue
of shares purchased under the Plan, the transfer agent is authorized and
directed to issue and countersign share certificates for the option shares in
the name of such optionee or his legal personal representative or as may be
directed in writing by his legal personal representative.

17.  NOTICE OF SALE OF ALL OR SUBSTANTIALLY ALL SHARES OR ASSETS
     -----------------------------------------------------------

     If at any time when an option granted under this Plan remains unexercised
with respect to any optioned shares, (a) a general offer to purchase all of the
issued shares of the Company is made by a third party or (b) the Company
proposes to sell all or substantially all of its assets and undertaking or to
merge, amalgamate or be absorbed by or into any other company (save and except
for a subsidiary or subsidiaries of the Company) under any circumstances which
involve or may involve or require the liquidation of the Company, a distribution
of its assets among its shareholders, or the termination of the corporate
existence, the Company shall use its best efforts to bring such offer or
proposal to the attention of the option holder as soon as practicable and (i)
the option granted under this Plan may be exercised, as to all or any of the
optioned shares in respect of which such option has not previously been
exercised, by the option holder at any time up to and including, (but not after)
a date thirty (30) days following the date of the completion of such sale or
prior to the close of business on the expiry date, whichever is the earlier;
(ii) the Company may require the acceleration of the time for the exercise of
the said option and of the time for the fulfillment of any conditions or
restrictions on such exercise.

18.  RIGHTS PRIOR TO EXERCISE
     ------------------------

     The option holder shall have no rights whatsoever as a shareholder in
respect of any of the optioned shares (including any right to receive dividends
or other distribution therefrom or thereon) other than in respect of optioned
shares in respect of which the option holder shall have exercised his option to
purchase hereunder and which the option holder shall have actually taken up and
paid for.

                                       4
<PAGE>

19.  GOVERNING LAW
     -------------

     This Agreement shall be construed in accordance with and be governed by the
laws of the Province of Ontario and shall be deemed to have been made in said
Province, and shall be in accordance with all applicable securities laws.

20.  EXPIRY OF OPTION
     ----------------

     On the expiry date of any option granted under the Plan, and pursuant to
any extension of such expiry date permitted in accordance with the Plan, such
option hereby granted shall forthwith expire and terminate and be of no further
force or effect whatsoever as to such of the optioned shares in respect of which
the option has not been exercised.

21.  APPROVAL
     --------

     The Plan has been approved by the directors of the Company on August 18,
1994, by shareholders of the Company on September 29, 1994 and amended by the
directors on July 21, 1995 and supersedes and replaces all prior stock option
plans.

     Dated at Toronto, Ontario, 21st day of July, 1995.

                                     ----------------------------------------
                                     CRAIG J. NELSEN, CHIEF EXECUTIVE OFFICER
                                     METALLICA RESOURCES INC.

                                       5Exhibit 4.3

                                      FORM
                                       OF
                             STOCK OPTION AGREEMENT

     THIS AGREEMENT made as of the ____ day of __________.

B E T W E E N:

             METALLICA RESOURCES INC., a corporation
             incorporated under the laws of the Province of Ontario

                 (hereinafter referred to as the "Corporation"),

                                                              OF THE FIRST PART,

                                      A N D

        _______________________, a service provider for the Corporation,

                  (hereinafter referred to as the "Optionee"),

                                                             OF THE SECOND PART.

     THIS AGREEMENT WITNESSETH that for and in consideration of the mutual
covenants and agreements herein contained and other lawful and valuable
consideration, the receipt of which is hereby acknowledged, it is agreed by and
between the parties hereto as follows:

     1. Pursuant to the 1996 Stock Option Plan established by the Board of
Directors of the Corporation on September 25, 1996, and approved by the
shareholders of the Corporation on June 24, 1997, the Corporation hereby
conditionally grants to the Optionee, subject to the terms and conditions
hereinafter set out, an irrevocable option (the "Option") to purchase __________
common shares (the said shares being hereinafter called the "Optioned Shares"),
at the price of Cdn$______ per Optioned Share.

     2. The Optionee shall, subject to the terms and conditions hereinafter set
out, have the right to exercise the Option with respect to all or any part of
the Optioned Shares in respect of which the Option shall have vested at any time
or from time to time after the date on which Shareholder Approval is obtained
and prior to the close of business on November 8, 2004 (the "Expiry Time"). The
Option shall vest as follows:

(a)  the Option shall vest as to _____% of the total number of Optioned Shares
     on the date hereof;

(b)  the Option shall vest as to an additional _____% of the total number of
     Optioned Shares (for a cumulative total of _____% of the total number of
     Optioned Shares) on November _________; and

(c)  the Option shall vest as to all of the Optioned Shares on
     __________________.

<PAGE>

At the Expiry Time the Option shall forthwith expire and terminate and be of no
further force or effect whatsoever as to such of the Optioned Shares in respect
of which the Option has not been exercised.

     3. Notwithstanding the provisions of paragraph 2 above, in the event of the
death of the Optionee prior to the Expiry Time while still a service provider to
the Corporation (as such term is defined in the 1996 Stock Option Plan), the
Option may be exercised, as to such of the Optioned Shares in respect of which
the Option shall have vested as of the date of death of the Optionee and which
have not previously been exercised, by the legal personal representatives of the
Optionee at any time up to and including but not after a date one year following
the date of death of the Optionee or prior to the Expiry Time, whichever is the
earlier.

     4. Notwithstanding the provisions of paragraph 3 above, in the event that
the Optionee ceases to be a service provider for the Corporation, the Option may
be exercised, as to such of the Optioned Shares in respect of which the Option
shall have vested as of the date on which the Optionee ceases to be a service
provider to the Corporation and which have has not previously been exercised, at
any time up to and including but not after a date ninety days following the date
of such cessation or prior to the Expiry Time, whichever is the earlier.

     5. Notwithstanding the vesting provisions set out in paragraph 2 above, the
directors of the Corporation shall have the right, in their sole and unfettered
discretion, to amend the provisions of this Agreement to permit the exercise of
the Option hereby granted at earlier times than otherwise permitted under
paragraph 3. In addition, upon the occurrence of an Acceleration Event (as
defined in the 1996 Stock Option Plan), the Option shall immediately vest in
respect of all of the Optioned Shares.

     6. The Option shall be exercisable by the Optionee giving a notice in
writing (the "Notice") addressed to the Corporation at its principal office and
delivered to the Secretary of the Corporation, which Notice shall specify
therein the number of Optioned Shares in respect of which this Option is being
exercised and shall be accompanied by payment in full of the purchase price for
the number of Optioned Shares specified therein. Upon any such exercise of this
Option as aforesaid, the Corporation shall deliver to the Optionee within ten
days following receipt by the Corporation of the Notice a certificate or
certificates in the name of the Optionee representing in the aggregate such
number of Optioned Shares as the Optionee shall have paid for and as are
specified in the Notice.

     7. Nothing herein contained or done pursuant hereto shall obligate the
Optionee to purchase and/or pay for any Optioned Shares except those Optioned
Shares in respect of which the Optionee shall have exercised his Option to
purchase hereunder in the manner hereinbefore provided.

     8. In the event of any subdivision, re-division, consolidation,
reclassification or change of the shares of the Corporation at any time prior to
the Expiry Time into a greater or lesser number of shares or into shares of a
different class, the Corporation shall thereafter deliver at the time of
exercise, in lieu of the number or class of shares in respect of which the
Option is then being exercised, such number and class of shares of the
Corporation as would result from said subdivision, re-division, consolidation,
reclassification or change without the Optionee making any additional payment or
giving any other consideration therefor.

     9. The Optionee shall have no rights whatsoever as a shareholder in respect
of any of the Optioned Shares (including any right to receive dividends or other
distributions therefrom or thereon) other than in respect of Optioned Shares in
respect of which the Optionee shall have exercised his Option to purchase
hereunder and which the Optionee shall have actually taken up and paid for.

                                       2
<PAGE>

     10. Time shall be of the essence of this Agreement.

     11. This Agreement shall not be assignable by the Optionee.

     12. This Agreement shall be governed by and construed in accordance with
the laws of the Province of Ontario and the federal laws of Canada applicable
therein.

     IN WITNESS WHEREOF this Agreement has been executed by the parties hereto.

SIGNED, SEALED AND DELIVERED            )
    in the Presence of                  )
                                        )
                                        )        -----------------------------
                                        )        [Optionee]
                                        )

                                                 METALLICA RESOURCES INC.

                                                 By:__________________________
                                                        Craig J. Nelsen
                                                        Chairman

                                       3

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