Metallica Resources Announces Agreement To Acquire Glamis' Interest In The Cerro San Pedro, Mexico Project

Business Wire, Feb 5, 2003

Business Editors

TORONTO--(BUSINESS WIRE)--Feb. 5, 2003

Metallica Resources Inc. (OTC Bulletin Board:METLF)(TSX:MR.TO) announces that it has entered into a purchase agreement to acquire Glamis Gold Ltd.'s 50 percent interest in the Cerro San Pedro gold and silver heap leach project located in central Mexico. Upon closing of the transaction, scheduled for February 12, 2003, Metallica will own 100 percent of the Cerro San Pedro Project. Metallica currently owns 50 percent of the project.

All dollar amounts are in US dollars.

The Cerro San Pedro project is located approximately 20 kilometers from the city of San Luis Potosi and enjoys superb infrastructure and services. It has been the subject of three feasibility studies over the past five years with the most recent, utilizing a run-of-mine scenario, completed by Glamis in 2000. The project has received all federal, state and municipal permits necessary to commence construction, subject to compliance with certain items contained within the permits.

Glamis' 2000 feasibility study estimated the mineral resource at Cerro San Pedro to be the following:

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0.3 g/t gold cutoff grade:
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          Tonnes     Gold   Silver   Gold        Silver      Eq' Gold
         (millions)  (g/t)  (g/t)     Ounces      Ounces      Ounces
                                     (millions)  (millions) (millions)
----------------------------------------------------------------------
Measured    114     0.59    20.18      2.2          74         3.3
----------------------------------------------------------------------
Indicated    34     0.49    12.55      0.5          14         0.7
----------------------------------------------------------------------
Total Meas
 & Ind      148     0.57    18.43      2.7          88         4.0
----------------------------------------------------------------------
Inferred     12     0.48     9.07      0.2           3         0.2
----------------------------------------------------------------------

----------------------------------------------------------------------
0.4 g/t gold cutoff grade:
----------------------------------------------------------------------
          Tonnes     Gold   Silver   Gold        Silver      Eq' Gold
         (millions)  (g/t)  (g/t)     Ounces      Ounces      Ounces
                                    (millions)  (millions)  (millions)
----------------------------------------------------------------------
Measured     79      0.69   23.13      1.8         59          2.6
----------------------------------------------------------------------
Indicated    19      0.61   14.84      0.4          9          0.5
----------------------------------------------------------------------
Total Meas
 & Ind       98      0.67   21.53      2.2         68          3.1
----------------------------------------------------------------------
Inferred      7      0.57   10.18      0.1          2          0.1
----------------------------------------------------------------------

    Note: The equivalent gold ounces were arrived at using a gold to
silver ratio of 70:1.

Based on the above mineral resource and gold and silver prices of $275 and $5.00 per ounce, respectively, Glamis' feasibility study estimated a mineable reserve of 49.2 million tonnes grading 0.57 grams of gold and 23.0 grams of silver per tonne at a waste-to-ore ratio of 1.45 to 1. This equates to approximately 900,000 ounces of gold and 36 million ounces of silver, or 1.4 million ounces of gold equivalent ounces at a gold to silver ratio of 70:1.

Using all of the same parameters contained in Glamis' feasibility study, except gold and silver prices of $325 and $4.62 per ounce and higher operating costs to reflect the anticipated use of a contract mining company, Metallica has estimated a mineable reserve of 61.1 million tonnes grading 0.59 grams per tonne of gold and 24.0 grams per tonne of silver at a waste-to-ore ratio of 1.21 to 1. This equates to approximately 1.2 million ounces of gold and 47 million ounces of silver, or approximately 1.8 million ounces of gold equivalent when using metal prices of $325 per ounce gold and $4.62 per ounce silver.

At gold and silver prices of $350 and $5.00 per ounce, a floating cone mineable reserve increases to 1.3 million ounces of gold and 54 million ounces of silver or 2.1 million ounces of equivalent gold ounces at a gold to silver ratio of 70 to 1.

William L. Rose, P.E. of WLR Consulting, Inc estimated Metallica's mineable reserve. Mr. Rose is a qualified person as defined by National Instrument 43-101.

The basic terms of the purchase agreement are as follows:

-- $2 million in cash on closing

-- $5 million in cash within six months of closing

-- $6 million in cash or Metallica common shares, at Metallica's election and subject to certain conditions, within 12 months of closing

-- $2.5 million in cash at the commencement of commercial production

-- $2.5 million in cash within 12 months of commencement of commercial production