1011509--2/29/2008--APEX_SILVER_MINES

related topics

{cost, contract, operation}

{loss, insurance, financial}

{gas, price, oil}

{operation, international, foreign}

{personnel, key, retain}

{cost, regulation, environmental}

{competitive, industry, competition}

{investment, property, distribution}

{regulation, change, law}

{cost, operation, labor}

The ramp up to full production at our San Cristobal mine and our 2008 production estimate remain subject to a number of uncertainties; a delay in planned ramp up would result in increased Apex funding requirements. We expect to be required to make payments to settle our metals derivative positions. We may be unable to comply with the terms and covenants of the project finance facility for our San Cristobal mine. Our San Cristobal mine may be adversely affected by changes in the Bolivian government's policies toward or laws governing the mining industry. Shortages of critical parts, equipment, materials and skilled labor may adversely affect our operations and development projects. We currently have only one source of operational cash flow, which is subject to restrictions under our project financing facility and will likely be insufficient to fund potential future development activities on other properties. The calculation of our reserves and other mineralization is subject to significant estimates. We depend on a single mining project which is not 100% owned by us. Our profitability will be affected by changes in the prices of metals. Our success will depend on our ability to manage our growth. The exploration of mineral properties is highly speculative in nature, involves substantial expenditures and is frequently non-productive. Our profitability depends, in part, on actual economic returns and actual costs of developing mines, which may differ significantly from our estimates and involve unexpected problems and delays. Title to our mineral properties may be challenged. We may lose rights to properties if we fail to meet payment requirements or development or production schedules. We cannot insure against all of the risks associated with mining. We may be subject to fines or other penalties in connection with an alleged violation of the Foreign Corrupt Practices Act. Our San Cristobal mine and our exploration activities are in countries with developing economies and are subject to the risks of political and economic instability associated with these countries. Our activities are subject to foreign environmental laws and regulations that may materially adversely affect our future operations. We compete against larger and more experienced companies. Our ability to obtain dividends or other distributions from our subsidiaries may be subject to restrictions imposed by law, foreign currency exchange regulations and our financing arrangements. We depend on the services of key executives. Apex Silver and certain lower tier subsidiaries will likely be treated as passive foreign investment companies for U.S. federal income tax purposes.

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1011509--2/29/2008--APEX_SILVER_MINES_LTD