Apex Silver Reports on Second Quarter 2007 Results

    DENVER, August 9 /CNW/ - Apex Silver Mines Limited (AMEX:  SIL) today
reported a net loss of $143.8 million or $2.45 per share for the second
quarter 2007 compared to a net loss of $80.5 million or $1.40 per share for
the same 2006 period.

    In the second quarter 2007, we recorded a loss related to our metals
derivative positions in the amount of $165.6 million compared to a loss of
$78.1 million on our derivative positions for the second quarter of 2006. The
second quarter 2007 loss is 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
our 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. At June 30, 2007, the liability associated with the derivative
positions was $875.5 million.

    At June 30, 2007 the company's aggregate cash, restricted cash, short and
long-term investments and restricted investments totaled $402.8 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 our aggregate cash and investment balances as of June 30, 2007
compared to December 31, 2006 was primarily the result of $129.6 million
invested in property, plant and equipment related to the development of the
San Cristobal project, offset partially by $45.0 million drawn under the San
Cristobal project finance facility and $27.4 million advanced from Sumitomo.
In addition, $44.4 million was spent to fund operations, property holding
costs and administrative costs, net of interest and other income, and $7.5
million was spent for the payment of long term debt (primarily capital lease

    San Cristobal Achieves First Production

    Earlier this week we announced the first production of silver bearing
lead and zinc concentrates. As was announced, the plant reached mechanical
completion in late June 2007 and began start-up commissioning in early July.
The first rail shipment from the plant to the port has now commenced. We
expect to record our first sale of silver bearing lead and zinc concentrates
in the third quarter and intend to ramp up to full production rate during the
fourth quarter of 2007.

    Concurrently with construction and commissioning at the San Cristobal
Project we have continued to mine ore and at June 30, 2007 we had stockpiled
3.5 million tonnes of sulfide ore. The primary crusher and overland conveyor
are operating at design rates delivering ore to the coarse ore stockpile. The
plant is operating with the semi-autogenous (SAG) mill and one of the two ball
mills. The second ball mill motor has been repaired and is being commissioned.
We expect continuous production from this ball mill in early September. The
flotation circuit has been commissioned and we are producing both silver
bearing lead and zinc concentrates. The filtration and load out system has
also been commissioned.

    The entire project construction and operating team has achieved twelve
million man-hours without a lost time accident.

    Mining Taxation Legislation Proposed in Bolivian Congress

    The Bolivian government continues to consider various changes to
applicable mining taxes, including possible increases in income tax rates,
modification of credibility of the complementary mining tax against income
tax, and elimination of the refund to exporters of a percentage of import
duties and value added taxes. The company, together with Sumitomo, is engaged
in ongoing discussions with government representatives regarding the various
proposals and their potential effects on San Cristobal.

    Apex Exploration Activities Increase at El Quevar Property

    Drill testing of projects in Argentina, Peru and Mexico continues. At the
El Quevar property in Argentina, we have completed 34 drill holes during a
first phase program that has identified a potentially significant zone of
silver mineralization. Eleven drill holes, drilled on sections spaced about
100 meters apart, have all returned promising intercepts containing silver
with minor lead and zinc. Selected intercepts include holes QVD-030, drilled
on the western end of the zone, which returned 17 meters averaging 533 grams
per tonne (g/t) silver (55.8 feet at 17.1 ounces per ton (oz/ton)). Drill hole
QVD-023, located approximately 700 meters (2300 feet) to the west of QVD-030,
returned 10 meters averaging 126 g/t silver (32.8 feet at 4.05 oz/ton) in an
upper zone and 14 meters averaging 352 g/t silver (45.9 feet at 11.3 oz/ton)
in a lower zone. All of these drill intercepts are within 100 meters (328
feet) of the surface. Results for all of the El Quevar drill holes will be
posted on our web site. The zone is open for expansion to the east, west and
to depth. The next phase of drilling will provide further definition of the
zone and should expand the limits in preparation for an estimate of the size
and grade of the deposit. We plan to bring in additional drills to test other
areas at El Quevar including large silver, lead and zinc bearing breccia zones
and associated veins. Apex Silver has a 65% interest in the property and is
manager. Drills are also operating at four properties in Mexico with results

    Alan Edwards Resigns as Chief Operating Officer

    Alan Edwards, the company's Chief Operating Officer since June 2004, has
resigned effective August 20, 2007 to become the chief executive officer of
another company. Alan was instrumental in leading the successful development,
commissioning and startup of the San Cristobal Project.

    Deborah Friedman Joins as General Counsel

    Deborah Friedman joined Apex Silver on July 10, 2007 as Senior Vice
President, General Counsel and Corporate Secretary. Ms. Friedman has over 25
years of experience in the mining industry with 16 years at Cyprus Amax and
AMAX Gold and 8 years as a partner at Davis Graham & Stubbs LLP where her
practice focused on the representation of publicly traded international mining
companies. Ms. Friedman holds a Bachelor of Arts degree in history from the
University of Illinois and a Juris Doctor degree from the University of

    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 anticipated initial
shipment and sales in the third quarter 2007, timing of commissioning and
continuous production from the second ball mill, the anticipated schedule for
the ramp up to full production, potential changes in Bolivian mining taxes and
tax rates and the potential effect on San Cristobal, and planned drilling at
El Quevar and potential results. 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 commissioning
and achieving continuous production at the second ball mill, start-up and
production problems or delays, work stoppages, variations in ore grade and
processing rates, unfavorable results of exploration at El Quevar 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.

For further information:

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

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