1011509--4/3/2007--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}

{control, financial, internal}

{regulation, change, law}

{investment, property, distribution}

We have no history of production. We have a history of losses and may not be able to achieve profitability in the future. The calculation of our reserves and other mineralization is subject to significant estimates. The San Cristobal project is subject to risks including delays in completion and we may be unable to achieve anticipated production volume or manage cost increases. We depend on a single mining project which is not 100% owned by us. Our success will depend on our ability to manage our growth. Our profitability will be affected by changes in the prices of metals. We may not be successful in hedging against metals price, currency and interest rate fluctuations; we expect to incur mark-to-market losses on our metals price hedges and could lose money through our hedging programs. 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 project 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 San Cristobal project may be adversely affected by changes in the Bolivian Government s policies toward the mining industry. 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 may not be able to raise the funds necessary to explore and develop our mineral properties. We may be unable to comply with the terms and covenants of the project finance facility for our San Cristobal project. 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--4/3/2007--APEX_SILVER_MINES_LTD