Apex Silver Reports on Third Quarter 2007 Results



    DENVER, November 9 /CNW/ - Apex Silver Mines Limited (AMEX:   SIL) today
reported a net loss of $151.9 million or $2.59 per share for the third quarter
2007 compared to net income of $67.8 million or $1.16 per share for the same
2006 period.

    In the third quarter 2007, the company recorded a loss related to its
metals derivative positions in the amount of $136.9 million, compared to a
loss of $119.9 million on its derivative positions for the third quarter of
2006. The third quarter 2007 loss is primarily the result of high metals
prices and maturity dates drawing closer. Statement of Financial Accounting
Standards No. 133, "Accounting for Derivative Instruments and Hedging
Activities", requires that derivative instruments be recorded on the balance
sheet at fair value, or "marked to market", and that changes in the fair value
be recorded in current earnings. Also in the third quarter 2007, the company
began to settle the derivative positions required by the San Cristobal project
finance facility by making cash payments of $19.1 million. The actual
financial impact of the remaining derivative positions will not be known until
the positions are closed on their future settlement dates. At September 30,
2007, the net liability associated with the derivative positions was $983.7
million.

    Also in the third quarter 2007, the company recorded a $21.1 million
impairment charge to the carrying value of $71.7 million of auction rate
securities (ARS) investments held at September 30, 2007. The ARS investments
are floating rate securities with long term nominal maturities that have
failed at auction. In early November, the company sold for approximately $15.6
million certain of its ARS with an original cost basis of approximately $19.6
million. Under current market conditions, the company does not presently
intend to sell its remaining ARS investments.

    At September 30, 2007 the company's aggregate cash, restricted cash,
short and long-term investments and restricted investments totaled $299.5
million compared to an aggregate of $514.9 million in cash, restricted cash,
short- and long-term investments and restricted investments at December 31,
2006. The decrease in aggregate cash and investment balances is primarily the
result of $148.3 million invested in property, plant and equipment related to
the development of the San Cristobal mine and $111.1 million spent to fund
operations, property holding costs and administrative costs, net of interest
and other income, partially offset by $45.0 million drawn under the San
Cristobal project finance facility and $59.4 million advanced by Sumitomo.

    San Cristobal Startup

    During the third quarter 2007 Apex Silver completed the major components
of the plant and infrastructure at the San Cristobal mine with total
expenditures from January 1, 2004 through September 30, 2007 of $685 million,
excluding working capital and amounts advanced to the companies that built the
port and power line facilities. In September 2007 the company completed the
commissioning of the second ball mill, the last major component of the project
to be commissioned. At September 30, 2007 the company estimated that it would
be required to make additional payments of approximately $45 million for final
payment of accrued construction costs and completion of construction of
certain additional facilities and plant components not required for initial
operations at San Cristobal.

    During the third quarter of 2007, San Cristobal shipped its first
concentrates from the port of Mejillones, Chile, consisting of 3,500 dry
metric tonnes of bulk concentrates containing lead, silver and zinc. The
company shipped 9,100 dry metric tonnes of zinc concentrate during October and
an additional 5,000 dry metric tonnes of zinc concentrates in early November.

    During the fourth quarter 2007, the company intends to ramp up production
at San Cristobal until the full production rate of approximately 40,000 tonnes
per day ore throughput is achieved. As the ramp-up proceeds, the company is
focused on improving the reliability of process water, the continued training
of the plant workforce, the reliability of operating supply delivery to site,
and improving plant availability.

    Apex Silver is a mining exploration and development company. Its
65%-owned San Cristobal project is the world's largest development in silver
and zinc. The ordinary shares of Apex Silver trade on the American Stock
Exchange under the symbol "SIL". This press release contains forward-looking
statements regarding the company, within the meaning of Section 27A of the
Securities Act and Section 21E of the Exchange Act, including statements
regarding estimates of additional payments required for accrued construction
costs and completion of additional facilities and plant components and the
anticipated ramp up to the full production rate during the fourth quarter
2007. Actual results relating to any and all of these subjects may differ
materially from those presented. Factors that could cause results to differ
materially include problems or delays in startup and operations, variations in
ore grade, plant availability and processing rates, reliability of process
water and delivery of operating supplies to the site, continued training need
s of the plant workforce, problems in emerging financial markets and political
unrest and uncertainty in Bolivia. The company assumes no obligation to update
this information. Additional information concerning factors that could cause
actual results to differ materially from those in the forward-looking
statements can be found in the company's Form 10-K filed with the SEC for the
year ended December 31, 2006.

    
                          APEX SILVER MINES LIMITED
                        Summary Financial Information
      (In thousands of United States dollars, except for shares and per
                                  share data)
                                 (Unaudited)

                             Three Months Ended       Nine Months Ended
                           September   September   September   September
                               30,         30,         30,         30,
                              2007        2006        2007        2006
    Income and expenses
      Production startup
       income/(expense),
       net (exclusive of
       amounts shown
       separately below)     $(12,423)         $-    $(12,423)         $-
      Interest and other
       income                   5,212       4,469      18,362      12,637
      Gain on sale of
       interest in
       subsidiary                   -     199,600           -     199,600
      Gain on
       extinguishment of
       debt                         -           -           -       2,875
      Trading losses -
       commodities           (136,895)   (119,934)   (194,236)   (370,895)
      Trading gains -
       foreign currency         2,572         203       4,792         439
      Loss on auction rate
       securities             (21,130)          -     (21,130)          -
      Exploration expense      (2,975)     (2,155)     (9,341)     (5,162)
      Other operating
       expense                    113        (134)        272        (276)
      Administrative
       expense                 (7,457)     (4,123)    (19,193)    (15,122)
      Interest expense &
       other borrowing
       costs                   (7,290)          -      (7,290)       (774)
      Amortization and
       depreciation            (4,675)       (100)     (4,865)       (296)
                           ----------- ----------- ----------- -----------
        Gain (loss) before
         minority interest   (184,948)     77,826    (245,052)   (176,974)
      Income tax expense         (394)        (54)       (488)       (161)
      Minority interest        33,501     (10,016)     61,833     (10,023)
                           ----------- ----------- ----------- -----------
        Net gain (loss)     $(151,841)    $67,756   $(183,707)  $(187,158)
      Other comprehensive
       income (loss)               96        (560)        (65)        403
                           ----------- ----------- ----------- -----------
        Comprehensive
         income (loss)      $(151,745)    $67,196   $(183,772)  $(186,755)
                           ----------- ----------- ----------- -----------


    Net income (loss) per
     Ordinary Share - basic    $(2.59)      $1.16      $(3.13)     $(3.35)
                           ----------- ----------- ----------- -----------
    Weighted average
     Ordinary Shares
     outstanding - basic   58,644,407  58,417,387  58,635,980  55,816,488
                           ----------- ----------- ----------- -----------

    Net income (loss) per
     Ordinary Share -
     diluted                   $(2.59)      $1.15      $(3.13)     $(3.35)
                           ----------- ----------- ----------- -----------
    Weighted average
     Ordinary Shares
     outstanding - diluted 58,644,407  58,989,561  58,635,980  55,816,488
                           ----------- ----------- ----------- -----------
    

    

                                                September 30, December 31,
    SUMMARY BALANCE SHEET DATA                      2007          2006
                                                ------------- ------------
    in thousands of U.S. dollars                  (Unaudited)
                                                -------------

    Cash and cash equivalents                         $82,123      $49,840
    Restricted cash                                    23,645       31,942
    Short-term investments                             56,294      325,536
    Restricted investments                                612       65,343
    Inventories                                        28,376        6,332
    Other current assets                               11,313        9,984
                                                ------------- ------------
    Total current assets                              202,363      488,977

    Property, plant and equipment, net                847,756      641,758
    Ore stockpile inventories                          63,829       21,341
    Deferred financing costs                           17,146       19,485
    Value added tax recoverable                        84,590       54,158
    Restricted cash                                    91,000            -
    Investments                                        45,814       42,255
    Derivatives at fair value                           6,458            -
    Deferred tax asset                                  1,720            -
    Other assets                                        5,310        2,122
                                                ------------- ------------
    Total assets                                   $1,365,986   $1,270,096
                                                ------------- ------------

    Accounts payable and accrued current
     liabilities                                      $54,534       47,979
    Accrued interest payable                            2,218        3,405
    Derivatives at fair value                         303,624       39,080
    Current portion of long-term debt                   8,914        4,408
                                                ------------- ------------
    Total current liabilities                         369,290       94,872

    Long-term debt                                    581,623      492,195
    Derivatives at fair value                         686,546      779,118
    Asset retirement obligation                         6,660        5,761
    Other long-term liabilities                         2,540        1,400
                                                ------------- ------------
    Total liabilities                               1,646,659    1,373,346

    Minority interest in subsidiaries                     588           40
    Shareholders' deficit                           (281,261)    (103,290)
                                                ------------- ------------
    Total liabilities and shareholders' deficit    $1,365,986   $1,270,096
                                                ------------- ------------
    




For further information:

For further information: Apex Silver Mines Corporation Jerry Danni,
303-228-0336 Senior Vice President Corporate Affairs

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APEX SILVER MINES CORPORATION

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