Apex Silver Reports Second Quarter 2008 Results

DENVER, CO–(Marketwire – August 12, 2008) – Apex Silver Mines Limited (AMEX: SIL) today announced results for the second quarter 2008.

HIGHLIGHTSRamp-up Throughput. San Cristobal concentrator throughput for the second quarter averaged 34,000 tonnes per day, approximately 85% of the 40,000 tonnes per day design capacity. The key focus is now on the final ramp up to consistent 40,000 tonnes per day throughput and improvements to metals recovery.Production. Production from San Cristobal for the second quarter 2008 totaled approximately 84,000 tonnes of zinc concentrate and 23,000 tonnes of lead concentrate, containing approximately 4.2 million ounces of payable silver, 42,000 tonnes of payable zinc and 15,000 tonnes of payable lead.Sales. Revenues totaled $60 million for the second quarter. Concentrates sold contained approximately 1.6 million ounces of payable silver, 26,500 tonnes of payable zinc and 5,400 tonnes of payable lead. The company received an additional $53 million in the second quarter for concentrates shipped in the second quarter, which was recorded as deferred revenue. This amount, net of market adjustments, will be recorded as sales in the third quarter when risk of loss passes at the port of destination.Operating Costs. The company has adopted a new presentation for cash costs. Average cash operating costs for the quarter, which includes the mining royalty (complementary mining tax), were $1.42 per ounce for silver or $0.24 per pound for zinc produced. For the six months ending June 30, 2008 average cash operating costs were $0.43 per ounce silver or $0.26 per pound zinc. Average cash operating costs include byproduct credits. Operating costs were adversely affected by increased costs for diesel fuel, reagents and other consumables. Gain on Metal Derivatives. The company recorded for the second quarter a $223 million mark to market gain related to its metal derivative positions, which is primarily the result of declining lead and zinc prices during the period. Income from Operations. Income from operations totaled $204 million, including the $223 million gain on metal derivative positions.Net Income. Net income for the quarter was $178 million, or $2.57 per diluted share, including the gain on metal derivative positions and a gain of $63 million related to the sale of the deferred payment right to Sumitomo for $70 million.Apex Liquidity. At June 30, 2008, the company had cash, cash equivalents and investments totaling $214 million, of which $92 million was unrestricted cash and investments, including the proceeds of the sale of the deferred payment right. The company faces significant financial obligations in the second half of 2008 and during 2009 that are expected to exceed currently available funding sources. The company continues to explore alternatives to manage costs, as well as other actions to preserve and improve liquidity, while remaining focused on execution of the San Cristobal operating plan. Minera San Cristobal Line of Credit. The company has approved a $50 million subordinated unsecured line of credit to be entered into by Minera San Cristobal as borrower, with a subsidiary of Sumitomo as lender, and an initial loan of $15 million. The line of credit is expected to be effective during the week of August 11, 2008, and will permit borrowings by Minera San Cristobal until October 21, 2008. Note: All information is presented on a 100% basis unless otherwise noted. Apex owns 65% and Sumitomo 35% of the San Cristobal mine.

Summary Financial and Operating Data

__________________________________ Three Months Ended____Six Months Ended ________________________________________June 30______________June 30 __________________________________——————–__———— ——

________________________________2008________2007______2008______2007 __________________________________——–____——–__——–__– —— ____________________________________ (in thousands,______ (in thousands, __________________________________ except share data)__ except share data) Sales of concentrates______________59,678__a________-__ 196,531________ – Costs applicable to sales __(exclusive of __amounts shown separately below)__(62,605) b________- __(131,760)________- Gain (loss) on commodity __derivatives______________________223,463__c (165,647)__195,638__ (57,341) Income (loss) from operations____ 204,300____(173,714)__226,484__ (73,698) Gain on sale of interest in __subsidiary________________________63,071__d________- ____63,071________ – Income taxes______________________(11,242) e______(47)__(21,802)______(94) Minority interest in loss __(income) of __consolidated subsidiaries________(62,824) f__ 23,402__ (35,130)__ 28,332 Net income (loss) per Ordinary Share – basic________________________3.01______ (2.45)____ 3.45____ (0.54) Net income (loss) per Ordinary Share – diluted______________________2.57______ (2.45)____ 2.94____ (0.54) Cash and cash equivalents – end of period________________________________________________82,188__ 151,156

____________________________========____========__========__======== __a.__During the second quarter 2008, the company recorded sales of ______concentrates of $59.7 million, net of $11.4 million negative ______settlement and mark-to market adjustments related to sales made in ______prior periods. __b.__These costs relate to mining, milling, marketing, mining royalties ______and transportation of concentrate sold to customers. __c.__For the second quarter 2008 the company recorded a gain related to ______its metal derivative positions in the amount of $223 million. Gains ______and losses are the result of marking-to market open metal derivative ______positions and to the settlement of metal derivative positions during ______the period, as compared to the previous quarter, based upon changes ______in spot and forward prices for silver, zinc and lead. The gain for ______the second quarter 2008 is primarily the result of declining lead and ______zinc prices during the period. __d.__Amount reflects the gain related to the sale of deferred payment to ______Sumitomo. __e.__During the second quarter 2008 the company recorded income tax ______expense of $11.2 million as compared to $0.1 million for the second ______quarter 2007, due primarily to taxable income generated at the San ______Cristobal mine. __f.__During the second quarter 2008, the company allocated gains to the ______minority interest holder of $62.8 million as compared to allocated ______losses of $23.4 million for the second quarter 2007. The 2008 $62.8 ______million minority interest expense is primarily related to Sumitomo’s ______interest in certain gains primarily related to the open metal ______derivative positions required by the San Cristobal project finance ______facility (“the Facility”). Also during the second quarter 2008, ______Sumitomo advanced an additional $5.3 million to fund its share of ______operating costs related to the San Cristobal mine, and the company ______recorded $2.3 million of interest due Sumitomo on its share of ______advances to fund the San Cristobal mine.

Operations Update

San Cristobal concentrator throughput, metal recovery, concentrate production and payable metals production continued to improve during the second quarter 2008. Concentrator throughput for the second quarter averaged 34,000 tonnes per day, approximately 85% of the 40,000 tonnes per day designed capacity.

Average throughput in June was approximately 36,000 tonnes per day, which together with zinc concentrate production of approximately 34,000 dry tonnes and lead concentrate production of approximately 10,000 dry tonnes, exceeded first quarter monthly average throughput by 35%, zinc concentrate production by 72% and lead concentrate production by 102%.

In May, Minera San Cristobal concluded a successful 14-day throughput test under the engineering, procurement, and construction management contract. During the test period, mill throughput averaged 43,000 tonnes per day. The plant ran near 50,000 tonnes per day on several days during the test. The plant’s ability to maintain grind size at higher tonnage rates confirms that the liberation of the minerals is possible at higher throughputs.

____________________________Jan-08__Feb-08__Mar-08__Apr-08__May- 08__Jun-08

______________________======__======__======__======__======__====== Mining (000′s) __Total tonnes mined________ 2,802__ 3,182__ 3,682__ 3,890__ 3,677__ 4,033 ____________________________——__——__——__——__—— __—— Milling (000′s) __Total tonnes milled__________814____ 751____ 842____ 946__ 1,048__ 1,080

______________________======__======__======__======__======__====== __Recovery rate – silver________62%____ 65%____ 67%____ 68%____ 70%____ 65% __Recovery rate – zinc__________76%____ 82%____ 76%____ 73%____ 78%____ 78% __Recovery rate – lead__________65%____ 73%____ 65%____ 64%____ 70%____ 74% ____________________________——__——__——__——__—— __—— Concentrate produced (000′s) __Zinc (dry tonnes)____________ 17______20______23______24______26______34 __Lead (dry tonnes)______________5______ 5______ 5______ 6______ 7______10

______________________======__======__======__======__======__====== ____________________________________________________________ 1Q08____2Q08 ____________________________________________________________======= ======= Total mining cost / tonne of total material________________ $__1.80 $__1.49 ____________________________________________________________——- – —— Total milling cost(1) / tonne of ore________________________$ 10.91 $ 10.88 ——- ——- Total site support costs / tonne of con. produced(2)________$__ 196 $__ 202 ____________________________________________________________——- – —— Mining royalty / tonne of con. produced____________________ $__ 118 $__ 106 ____________________________________________________________——- – —— Sea freight cost / tonne of con. produced__________________ $__ 112 $__ 121 ____________________________________________________________======= ======= (1) Includes plant, maintenance and engineering costs (2) Includes all other site support costs and land freight costs

Payable production during the second quarter totaled approximately 4.2 million ounces of silver, 42,000 tonnes of zinc and 15,000 tonnes of lead, reflecting increases of 42%, 43% and 45% respectively over first quarter payable production.

__________________________________________________________________ % 2Q08 Payable Production (000′s)________________2007____ 1Q08____ 2Q08__ vs 1Q08 ________________________________________======== ======== ======== ======= Silver (oz)________________________________2,200____2,948____4,191______42% Zinc (tonnes)________________________________ 19______ 29______ 42______43% Lead (tonnes)__________________________________8______ 10______ 15______45% ________________________________________======== ======== ======== ======= ____________________________________________1Q08______________ 2Q08 __________________ ================== =================__================= Strip ratio__________________________________1.0________________1.0 __________________ —————— —————–__———– —— Average Mill Feed__Silver (g/t)______________ 63________________ 68 Grades____________Zinc____________________ 1.88%______________2.04% __________________ Lead____________________ 0.62%______________0.70% __________________ —————— —————–__———– —— Average__________ Silver in Zn (g/t)________585________________505 __Concentrate______Silver in Pb (g/t)______4,668______________4,537 __Grades__________ Zinc______________________ 58%________________58% __________________ Lead______________________ 68%________________58% __________________ ================== =================__================= Notes: Strip ratio =__waste mined / (sulfide ore + oxide ore mined ), where the ore mined includes stockpiled sulfides and oxides as well as sulfide ore fed to mill

The company continues to improve process water availability, which has increased from approximately 27,000 cubic meters per day in February to more than 40,000 cubic meters per day in June. This should now allow for sufficient process water to sustain 40,000 tonnes per day throughput.

The company also has experienced higher than expected silica levels in certain concentrate shipments and is implementing process improvements intended to reduce these levels. This is not expected to materially affect operating income.

Due primarily to lower production during the first six months of 2008, the company now projects full year 2008 production of approximately 15 million ounces of payable silver, 190,000 tonnes of payable zinc and 60,000 tonnes of payable lead.

The primary focus in the plant during the remainder of 2008 will be continued optimization of the flotation plant to improve metal recoveries, including reagent controls and training programs.

Jeffrey Clevenger, President and Chief Executive Officer, said, “We are pleased with San Cristobal’s progress in the second quarter, and especially the improvement in performance metrics in June. Our focus on plant optimization is evident in our results and we expect continued operating improvements. The hard work and dedication of our team is unsurpassed and is the critical contributing factor to our progress at San Cristobal.”

Sales of Concentrates

At June 30, 2008 the company had received payments totaling $53 million for concentrates shipped to certain European smelters during the second quarter that have been recorded as deferred revenue. Under the company’s accounting policies, revenue is not recorded until both title and risk of loss have passed to the customer. Consistent with commercial practice, risk of loss for shipments to smelters in Europe typically passes at the port of destination. The company expects to recognize $53 million of deferred revenue, net of market adjustments, as revenue during the third quarter 2008.

During the second quarter 2008 silver prices remained relatively unchanged while lead and zinc prices declined by approximately 40% and 20%, respectively. During the second quarter 2008, the company recorded a net reduction to sales of $11.4 million as a result of marking to market previous period provisional sales. This net reduction in sales included $6.1 million of provisional payments returned or to be returned to the smelters and a $5.4 million reduction in amounts receivable from the smelters at June 30, 2008.

______Payable Metal Sold (000′s)__________2007__ 1Q08__ 2Q08 __________________________________________=====__=====__===== ______Silver (oz)__________________________ 999__3,473__1,645 __________________________________________—–__—–__—– ______Zinc (tonnes)__________________________29____ 25____ 27 __________________________________________—–__—–__—– ______Lead (tonnes)__________________________ 7____ 12______5 __________________________________________=====__=====__=====

Liquidity and Capital Resources

At June 30, 2008, the company’s aggregate cash, restricted cash, short- and long-term investments were $213.9 million, including $70.0 million received from the sale of the deferred payment obligation to Sumitomo, compared to an aggregate of $220.7 million in cash, restricted cash, short- and long-term investments and restricted investments at December 31, 2007. Cash and investments at June 30, 2008 included $82.2 million of unrestricted cash and cash equivalents, $7.1 million of unrestricted short-term investments, $2.2 million of long-term investments, $20.0 million of currently illiquid auction rate securities (“ARS”) classified as long-term, $91.0 million of cash, of which $30.3 million is recorded as current, that is restricted to collateralize the open metal derivative positions required by the Facility, and $11.4 million of cash that is restricted to support operating requirements at the San Cristobal mine and Facility debt service. At June 30, 2008, the company’s aggregate unrestricted cash and investments totaled $91.5 million.

The San Cristobal mining operations are experiencing increased operating costs resulting from continued increases in oil and other commodity prices that have driven up the cost of diesel fuel, reagents and other materials consumed in the operation, as well as costs for mining, transportation and power. And as previously disclosed, treatment costs for lead and zinc concentrates have increased, with smelting charges for lead concentrates doubling from a year ago and charges for zinc concentrates rising approximately 30% due to greater demand for smelter capacity resulting from increased world concentrate supplies. Increased operating costs and a decline in metals prices of approximately 40% percent for lead and 20% for zinc from the first quarter of 2008 have reduced operating margins and have had a negative impact on cash flow available to fund San Cristobal’s operations. The reduced operating margins will make it unlikely that San Cristobal will generate the cash flow necessary to continue to settle metal derivative positions without additional contributions from the company and Sumitomo. The company and Sumitomo contributed $97 million to the San Cristobal operation in the first six months of 2008, and have contributed an additional $55 million to date in the third quarter. The company’s share of 2008 contributions has totaled $94 million.

The company faces significant financial obligations in the second half of 2008 and during 2009 that are expected to exceed available funding sources The company projects that an additional $125 million in funding will be required from August 2008 through June 2009. In addition the company does not expect San Cristobal to achieve “completion” by year-end 2008 as required by the Facility. Failure to achieve completion would constitute an event of default under the Facility, entitling the lenders to accelerate repayment of all indebtedness and derivative liabilities, and could also result in a default under the company’s convertible notes. The company and Sumitomo may seek a one year extension of the completion test through year-end 2009, but the company cannot predict whether or when the lenders would consider an extension or the terms on which they would be willing to do so.

The company has completed negotiation of and approved a $50 million subordinated unsecured line of credit to be entered into by MSC as borrower, with a subsidiary of Sumitomo as lender, and an initial loan of $15 million. The line of credit permits borrowings by MSC until October 31, 2008. The company expects that the line of credit will become effective during the week of August 11, 2008, upon satisfaction of customary closing conditions, and that the initial loan will be extended promptly thereafter.

Notwithstanding this new line of credit, the company believes that it is likely to require a significant restructuring of its operations or indebtedness based on the foregoing factors and its projections with respect to the San Cristobal mine. The company has engaged Jefferies & Company, Inc. as its financial advisor to assist it in reviewing strategic and financial alternatives, which could include new debt or equity financing, a sale of additional interests in San Cristobal or in one or more of the company’s exploration properties or a restructuring, refinancing or amendment of the Facility or the related metal derivative positions.

Cash Costs

The company has revised its presentation of cash operating costs for silver and zinc production. The previous presentation required an allocation of site operating costs between silver and zinc based on the relative sales values of the two metals. Because prices for these metals constantly vary, cost allocations may not appropriately reflect underlying operating fundamentals. The revised presentation reports cash operating costs on two separate, alternative bases. Cash operating costs for silver are calculated by assuming that San Cristobal produces silver with zinc and lead by-products. Total operating costs are allocated to silver, and estimated revenue from zinc and lead production is credited against those costs. Likewise, cash operating costs for zinc are calculated by assuming that San Cristobal produces zinc with silver and lead by-products. Total operating costs are allocated to zinc, and estimated revenue generated from silver and lead production is credited against those costs. The presentation reflects operating cash costs for silver or zinc production during the period and is not necessarily indicative of operating profit or cash flow determined under GAAP. The company believes that the revised presentation provides a more reliable indication of the cash generating capabilities of the mining operation and a more useful metric for purposes of managing and evaluating operating performance. See “Non-GAAP Financial Measures” at the end of this press release.

Cash Operating Cost — New Presentation

Production Basis. YTD Results__________________________ $M______Unit Basis

______________________________________________==========__========== Ag ($/oz.) ____ Site costs____________________________________ $____159.4__$____22.32 ____ Silver refining________________________________$______2.2__$____ 0.30 ____ Lead by-product credit________________________ $____(47.0) $____(6.58) ____ Zinc by-product credit________________________ $__ (111.5) $__ (15.62) ____________________________________________________———-__—- —— ________ Ag Net cash cost__________________________ $______3.0__$____ 0.43

______________________________________________==========__========== Zn ($/lb.) ____ Site costs____________________________________ $____159.4__$____ 1.02 ____ Zinc treatment________________________________ $____ 48.7__$____ 0.31 ____ Lead by-product credit________________________ $____(47.0) $____(0.30) ____ Silver by-product credit______________________ $__ (121.1) $____(0.77) ____________________________________________________———-__—- —— ________ Zn Net cash cost__________________________ $____ 40.0__$____ 0.26

______________________________________________==========__========== Note: site costs include $20.2 million of mining royalty

Average Cash Operating Costs — Comparison of Previous Method with New Method

____________________________________________________________1Q08____ 2Q08

____________________________________________________=======__======= Old Presentation, Production Basis ________Ag ($/oz)________________________________________ $ (0.79) $ (0.31) ________Zn ($/lb)________________________________________ $__1.02__$__0.89

____________________________________________________=======__======= New Presentation, Silver Production Basis ________Ag ($/oz)________________________________________ $ (1.37) $__1.42 New Presentation, Zinc Production Basis ________Zn ($/lb)________________________________________ $__0.26__$__0.24

____________________________________________________=======__=======

The company now expects average cash operating costs per payable ounce of silver to range from approximately $0.50 to $0.75 (assuming credits for zinc of $0.85 per payable pound of zinc produced and credits for lead of $0.85 per payable pound of lead produced) or a range of approximately $0.15 to $0.20 per payable pound of zinc (assuming credits for silver of $17.00 per payable ounce of silver produced and credits for lead of $0.85 per payable pound of lead produced).

Settlement of Metal Derivative Positions

During 2005, the company entered into certain forward sales, and put and call options for silver, zinc and lead in order to comply with requirements under the Facility. Because of significant increases in spot and forward prices for each of these metals, the company has recognized significant non-cash, mark-to market losses on these metal derivative positions. Since these metal derivative positions began to mature in July 2007, the company has been required to make cash payments to settle the maturing positions. During the first six months of 2008 the company made cash payments of $112 million to settle maturing metal derivative positions. The amount of cash required to settle the remaining metal derivative positions will not be known until the positions are closed on their settlement dates. At June 30, 2008 prices, the company estimates cash settlement costs associated with the remaining metal derivative positions maturing in 2008 to be approximately $115 million, with approximately equal amounts of derivatives maturing monthly.

Exploration Update

The company continues to advance exploration from a portfolio of exploration projects in several countries, including Argentina, Mexico, Peru and Bolivia.

Argentina.El Quevar. The second phase of drilling at the El Quevar project in northern Argentina was completed during the second quarter, with 78 holes drilled to date totaling about 15,500 meters of drilling, with 10,650 meters drilled during 2008. The 2007 drilling established the presence of high-grade silver mineralization in parallel structures aggregating more than a mile in length and as much as 80 to 100 feet wide. This second drilling phase is designed to provide close-spaced drill intercepts that can be used to support a preliminary economic assessment study. Drilling has extended the zone of known mineralization to at least 300 meters depth in several areas. During the second quarter, the company has also discovered another mineralized vein system at Copan, located about 500 meters south of the main zone. Assay results from the first drill hole in this new zone returned 236 g/t silver over a 9 meter intercept (7.6 ounces over 29 feet). The true width is estimated to be about 80% of the drilled intercept. Preliminary metallurgical studies indicate that excellent silver recoveries can be expected. El Quevar is a joint venture with Minera Hochschild under which Apex Silver has now earned an 80% interest.

Chinchilla. The company has identified a potentially significant silver-zinc prospect at the Chinchilla property in northern Argentina. Several cross-cutting intrusive breccia bodies contain disseminated mineralization over an area almost one mile in length and 1500 to 2000 feet in width. Test pits and trench sampling have returned values ranging up to 7% zinc and 400 grams per tonne of silver. A geophysical survey of the area has been completed and indicates several areas of high priority for exploration. During the second quarter, the company completed an initial seven hole diamond drilling program totaling 2200 meters of drilling. Field reports indicate that all holes encountered mineralization. The company has received preliminary results from the upper 75 meters of the first 320 meter hole which averages 1.56% zinc, 0.75% lead and 49 g/t silver. The company controls 100% of the project.

MexicoMuleros. First-phase drilling was completed during the second quarter at the company’s 100%-owned Muleros Project north of Zacatecas, Mexico. Thirty-one shallow drill holes have been completed, and mineralized veins have been intercepted in every hole. The company has initiated a program of deeper drilling in selected areas to further test the silver-gold-base metal mineralization identified to date.

PeruAnita. Detailed mapping and sampling was completed during the second quarter on the 100%-owned Anita project, located north of Barrick’s Pierina gold mine in the Department of Ancash in northern Peru. Field work has outlined a potentially significant zone of veining and stockwork mineralization associated with shallow-level volcanic intrusion and associated volcanic rocks. Sampling has returned encouraging values of gold, silver and base metals in several areas. A geophysical survey has been completed, and the results indicate several areas of interest that the company is evaluating for drill testing.

BoliviaSan Cristobal. Drill programs advanced during the second quarter at the San Cristobal mine in Bolivia. These programs are designed to further define areas of potentially higher-grade zinc- silver-lead mineralization in areas within and adjacent to the existing mine. Twenty four core holes have been completed at the Animas prospect, located about one kilometer southwest of the current open pit boundary. This drilling has been successful in defining a zone of zinc-silver-lead mineralization in volcaniclastic and intrusive rocks approximately 450 meters long and 175 meters wide to a depth of about 250 meters that contains mineralization with average values equal to or greater than the average values in the main San Cristobal ore body.

In addition, a program of 20 diamond core holes is being conducted on the Colon target, located on the southern edge of the ultimate pit boundary at San Cristobal. A total of 14 drill holes were completed during the second quarter. This drilling is designed to define additional higher-grade zinc-silver lead mineralization indicated by earlier wide-spaced drilling. Fourteen holes have been completed to date, with no results yet received.

Complete drill and sample results will be published on the company’s website (www.apexsilver.com) and updated periodically.

Earnings Call

An earnings conference call and live web cast have been scheduled for Tuesday, August 12, 2008 at 10:00 a.m. Eastern time. The call will be hosted by Jeffrey Clevenger, President and Chief Executive Officer, joined by other members of the Apex management team.

Conference call and web cast information: Dial-In Numbers ________Toll free dial-in number (US and Canada): (877) 726-1735 ________Toll dial-in number (International):______(706) 679-4764 ________Conference ID:____________________________ 57735717 Webcast ________A live webcast can be accessed at: www.ApexSilver.com Call Replay (available for one week after the call) ________Toll free dial-in number (US and Canada): (800) 642-1687 ________Toll dial-in number (International):______(706) 645-9291 ________Replay ID:________________________________ 57735717

Non-GAAP Financial Measures

The company uses the terms “estimated cash operating cost” and “average cash operating costs,” which differ from measures of performance determined in accordance with generally accepted accounting principles (“GAAP”). The company has included this information to provide investors with data about the average costs associated with its mining activities so that investors may have information regarding the cash generating capabilities of the San Cristobal mine. This information should not be considered in isolation or as a substitute for measures of performance that will be prepared in accordance with GAAP. These measures are not necessarily indicative of operating profit or cash flow from operations to be determined under GAAP and may not be comparable to similarly titled measures of other companies.

The term “estimated cash operating cost” includes actual mining, milling and mine related overhead costs, mine royalty taxes, inland freight costs, and marketing costs incurred on concentrate production during the period. Estimated cash operating costs also includes estimated ocean freight and insurance costs for concentrates produced during the period. Estimated cash operating costs for silver also includes projected off-site costs related to silver refining charges. Estimated cash operating costs for zinc also includes projected off-site costs related to treatment and smelting charges for zinc-silver concentrates. Estimated cash operating costs exclude income taxes, depreciation, amortization and provisions for reclamation. This measure differs from costs applicable to sales determined in accordance with GAAP. Costs applicable to sales in accordance with GAAP reflect costs incurred for concentrates sold during the period, as opposed to produced, and includes actual costs for ocean freight and insurance. In addition, costs applicable to sales do not include refining, treatment and smelting charges, which in accordance with GAAP are netted against revenue.

The average cash operating cost per ounce of silver is equal to the total of estimated cash operating costs for the period reduced by the estimated value of lead and zinc by-product credits for the period and divided by the number of “payable ounces” of silver. The “payable ounces” are the estimated number of ounces of silver produced during the period reduced by the ounces required to cover estimated refining charges. The lead by-product credits are equal to the estimated revenue from “payable pounds” of lead produced during the period, less estimated treatment and smelting charges for lead- silver concentrates. The “payable pounds” are the number of pounds of lead produced during the period, reduced by the estimated number of pounds required to cover refining and treatment charges. The zinc by-product credits are equal to the estimated revenue from “payable pounds” of zinc produced during the period, less estimated treatment and smelting charges for zinc-silver concentrates. The “payable pounds” are the number of pounds of zinc produced during the period, reduced by the estimated number of pounds required to cover refining and treatment charges.

The average cash operating cost per pound of zinc is equal to the total of estimated cash operating costs for the period, reduced by the estimated value of silver and lead by-product credits for the period, divided by the number of “payable pounds” of zinc. The lead by-product credits are equal to the estimated revenue from “payable pounds” of lead produced during the period, less estimated treatment and smelting charges for lead-silver concentrates. The silver by- product credits are equal to the estimated revenue from “payable ounces” of silver produced during the period, less estimated silver refining charges.

Forward-Looking Statements

Apex Silver is a mining, exploration and development company. Its 65%-owned San Cristobal mine 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 the company’s expected inability to comply with certain covenants of the Facility; anticipated additional funding requirements for San Cristobal, including the expectation that the company’s current sources of funds will be insufficient to contribute its share of such additional funding; San Cristobal anticipated production, including the adequacy of process water for production; San Cristobal anticipated average cash operating costs; the lack of material impact on anticipated operating income of increased silica levels in concentrates; expected timing of recognition of deferred revenue; the anticipated settlement costs of metal derivative positions; the timing of effectiveness of and first borrowing under the MSC line of credit; and the timing and extent of activities in connection with the evaluation and expansion of the company’s exploration portfolio.

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 the company’s ability to manage its liquidity to meet cash requirements, including, as necessary, a restructuring of its operations or indebtedness; the company’s ability to achieve certain amendments to the Facility to avoid any potential default from its failure to achieve “completion” as defined in the Facility or other covenants under the Facility, and its ability to comply with the amended covenants; the company’s ability to manage operational issues to avoid further impairments of its liquidity position; decreases in metals prices; problems or delays in achieving full mill throughput rates consistently and anticipated metals production and recovery rates at San Cristobal; including shortages and other problems with reliability of process water; material handling problems in the stockpile reclaim system, difficulties in blending ore types and variations in ore grade; inability to improve recoveries without affecting throughput; plant availability and delivery of operating supplies to the site, operating or maintenance problems or delays; continued training needs of the plant workforce labor disputes or strikes; higher than anticipated mine, concentrator and other operating costs; inability to complete planned exploration activities on exploration properties or at San Cristobal; financial market conditions, including particularly credit markets if the company determines that it must restructure its indebtedness through additional debt financing; 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 for the year ended December 31, 2007 and the company’s Form 10- Q for the quarter ended June 30, 2008, each of which have been filed with the SEC.

________________________ APEX SILVER MINES LIMITED ________________________CONSOLIDATED BALANCE SHEETS __________________ (Expressed in United States dollars) ________________________________(Unaudited) ________________________________________________June 30,____ December 31, __________________________________________________2008__________ 2007 ______________________________________________————-__——- —— ______________________________________________(in thousands, except share __________________________________________________________data) ____________________Assets Current assets __ Cash and cash equivalents__________________$______82,188__$______40,736 __ Restricted cash__________________________________ 41,747________ 12,313 __ Investments________________________________________7,086________ 52,243 __ Trade receivables__________________________________1,126__________3,110 __ Inventories______________________________________ 96,062________ 44,211 __ Derivatives at fair value__________________________6,817____________ — __ Deferred tax asset________________________________ 9,843____________ — __ Prepaid expenses and other assets________________ 18,653________ 16,195 ______________________________________________————-__——- —— ____ Total current assets__________________________ 263,522________168,808 __ Property, plant and equipment, net______________ 834,568________841,981 Ore stockpile inventories________________________ 93,697________ 76,914 __ Deferred financing costs__________________________13,742________ 15,990 __ Value added tax recoverable______________________127,753________ 95,327 __ Restricted cash__________________________________ 60,677________ 91,000 __ Investments______________________________________ 22,229________ 24,407 __ Derivatives at fair value__________________________5,481__________8,475 __

er______________________________________________1,053__________2,009 ______________________________________________————-__——- —— ____ Total assets____________________________ $__ 1,422,722__$__ 1,324,911 ______________________________________________————-__——- —— Liabilities and Shareholders’ Equity (Deficit) Current liabilities __ Accounts payable and other accrued ____liabilities______________________________ $______91,122__$______55,957 __ Deferred revenue__________________________________52,667____________ — __ Accrued interest payable__________________________ 5,237__________4,982 __ Derivatives at fair value________________________219,491________266,820 __ Current portion of long term debt________________ 85,009________ 41,155 ______________________________________________————-__——- —— ____ Total current liabilities______________________453,526________368,914 Long term debt______________________________________500,742________546,981 Derivatives at fair value__________________________ 226,224________482,683 Deferred gain on sale of asset__________________________945____________945 Asset retirement obligation__________________________ 8,306__________6,981 Deferred tax liability________________________________8,082____________ — Other long term liabilities__________________________ 4,499__________2,508 ______________________________________________————-__——- —— ____ Total liabilities____________________________1,202,324______1,409,012 ______________________________________________————-__——- —— Minority interest in consolidated

bsidiaries________________________________________97,358____________ — Commitments and contingencies Shareholders’ equity (deficit) __ Ordinary Shares, $.01 par value, ____175,000,000 shares authorized; 58,951,475 ____and 58,909,625 shares issued and ____outstanding at respective dates____________________ 590____________589 __ Additional paid in capital______________________ 679,418________677,203 __ Accumulated deficit____________________________ (558,522)______(761,783) __ Accumulated other comprehensive income

___(loss)____________________________________________1,554__________ (110) ______________________________________________————-__——- —— ____ Total shareholders’ equity (deficit)__________ 123,040________(84,101) ______________________________________________————-__——- —— ____ Total liabilities and shareholders’ ______equity (deficit)________________________$__ 1,422,722__$__ 1,324,911

________________________________________=============__============= ________________________ APEX SILVER MINES LIMITED __CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) __________________ (Expressed in United States dollars) ________________________________(Unaudited) ______________________________Three Months Ended______ Six Months Ended __________________________________ June 30,________________ June 30, ____________________________———————-__—————- —— ______________________________ 2008________2007________2008________2007 ____________________________———-__———-__———-__—- —— ____________________________(in thousands, except__ (in thousands, except ________________________________ share data)____________ share data) Revenues: __ Sales of concentrates____$__ 59,678__$______ — __$__196,531__$______ — Costs and expenses: __ Costs applicable to ____sales (exclusive of ____amounts shown ____separately below)__________(62,605)________ — ____(131,760)________ — __ Exploration__________________(8,939)____ (3,635)____(15,131)____ (6,366) __ Administrative______________ (5,738)____ (5,446)____(10,526)____(11,736) __ Gain (loss) on commodity ____derivatives________________223,463____(165,647)____195,638____ (57,341) __ Gain on foreign currency ____derivatives and ____transactions________________ 5,970______ 1,236______10,833______ 2,220 __ Asset retirement ____accretion expense____________ (197)______ (146)______ (366)______ (285) __ Depreciation, depletion ____and amortization____________(7,332)________(76)____(18,735)______ (190) ____________________________———-__———-__———-__—- —— ____ Total operating ______expenses, net____________144,622____(173,714)____ 29,953____ (73,698) ____________________________———-__———-__———-__—- —— __ Income (loss) from ____operations________________ 204,300____(173,714)____226,484____ (73,698) Other income and expenses: __ Interest and other ____income______________________ 1,887______ 6,514______ 3,934______13,594 __ Loss on auction rate ____securities__________________(3,100)________ — ______(3,100)________ — __ Gain on sale of interest ____in subsidiary______________ 63,071__________– ______63,071__________– __ Interest expense and ____other borrowing costs______(14,551)________ –____ (30,196)________ — ____________________________———-__———-__———-__—- —— ____ Total other income and ______expenses__________________47,307______ 6,514______33,709______13,594 ____________________________———-__———-__———-__—- —— __ Income (loss) before ____minority interest and ____income taxes______________ 251,601____(167,200)____260,193____ (60,104) __ Income taxes________________(11,242)________(47)____(21,802)________(94) __ Minority interest in ____loss (income) of ____consolidated ____subsidiaries______________ (62,824)____ 23,402____ (35,130)____ 28,332 ____________________________———-__———-__———-__—- —— __ Net income (loss)________$__177,541__$ (143,845) $__203,261__$__(31,866) ____________________________———-__———-__———-__—- —— __ Other comprehensive ____income (loss): __ Unrealized gain (loss) ____on securities__________ $____2,232__$______ 71__$____1,664__$____ (161) ____________________________———-__———-__———-__—- —— __ Comprehensive income ____(loss)__________________$__179,773__$ (143,774) $__204,925__$__(32,027)

______________________==========__==========__==========__========== Net income (loss) per Ordinary Share – basic____ $____ 3.01__$____(2.45) $____ 3.45__$____(0.54) ____________________________———-__———-__———-__—- —— Net income (loss) per Ordinary Share – diluted__ $____ 2.57__$____(2.45) $____ 2.94__$____(0.54)

______________________==========__==========__==========__========== Weighted average Ordinary Shares outstanding – basic 58,935,475__58,651,952__58,924,741__58,631,256 ____________________________———-__———-__———-__—- —— Weighted average Ordinary Shares outstanding –

ed____________________69,153,272__58,651,952__69,233,607__58,631,256

______________________==========__==========__==========__==========

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