( BW)(CO-APEX-SILVER-MINES)(SIL) Apex Silver Reports 2007 Year-End
Results
Business Editors
DENVER--(BUSINESS WIRE)--Feb. 29, 2008--Apex Silver Mines Limited
(AMEX:SIL) today reported net income of $11.6 million or $0.20 per
share for the year ended December 31, 2007, compared to a net loss of$513.5 million or $9.09 per share for the same 2006 period. The
company also reported a loss from operations of $37.9 million for the
year ended December 31, 2007, compared to a loss of $744.6 million for
the same 2006 period.
For the year ended December 31, 2007, the company recorded a gainrelated to its metals derivative positions in the amount of $19.3
million, compared to a loss of $715.1 million on its derivative
positions for 2006. The gains and losses are primarily the result of
marking-to-market its open derivative positions as spot and forward
prices for silver, zinc and lead fluctuate and maturity dates draw
closer. Also during 2007, the company began to settle the derivative
positions required by the San Cristobal project finance facility by
making cash payments of $48.3 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 December 31,
2007, the net liability associated with the derivative positions was
$741 million.
During the fourth quarter 2007 the company liquidated auction rate
securities (ARS) investments with a cost basis of $19.5 million for
$15.7 million for a loss of $3.8 million, and for the year the company
recorded a $30.7 million impairment charge to earnings on the
remaining ARS investments it held with an original cost of $52.2
million resulting in a carrying value of $21.5 million at December 31,2007. The company does not anticipate liquidating the remaining ARS
investments during the next twelve months and has classified them as
long-term investments at December 31, 2007.
At December 31, 2007 the company's aggregate cash, restricted
cash, short and long-term investments and restricted investments
totaled $220.7 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. At December 31, 2007, the company's
aggregate unrestricted cash and investments (excluding ARS
investments) totaled $95.9 million. The decrease in our aggregate
balance of cash, restricted cash, short and long-term investments andrestricted investments at December 31, 2007, compared to the prior
year, is primarily the result of $148.9 million invested in property,plant and equipment related to the development of the San Cristobal
mine; $166.0 million used to fund operations, property holding costs
and administrative costs, net of interest and other income; and $57.9million to settle maturing derivative positions and to purchase
additional derivative positions. In addition, the value of the
company's investments was reduced by a $34.5 million impairment to the
carrying value of its ARS investments. The decrease in cash and
investment balances was partially offset by $80.4 million advanced by
Sumitomo as its share of San Cristobal funding and $45.0 million of
borrowings against the San Cristobal project finance facility.
Earnings Calls Commencing with First Quarter Earnings
The company will be scheduling a conference call following the
first quarter earning release. An announcement and call in
instructions will be provided in advance of the call.
Apex Silver is a mining, exploration and development company. 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 net liability associated with the company's metals derivatives
positions and the anticipation that its remaining auction rate
security investments will not be liquidated during the next twelve
months. 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 fluctuations in silver, zinc and
lead prices and resulting changes in net liabilities associated with
and settlements of metals derivative positions and changes in its plan
regarding the liquidation of auction rate security investments. 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, 2007.
APEX SILVER MINES LIMITED
Summary Financial Information
The years ended December 31,
--------------------------------------
2007 2006 2005
------------ ------------ ------------
(in thousands except per share data)
Revenues:
Sales of concentrates, net $ 45,932 $ - $ -
Costs and expenses:
Costs applicable to sales (42,941) - -
Production startup
income/(expense), net (13,483) - - Exploration (15,357) (8,316) (5,235)
Administrative (21,857) (21,247) (17,860)
Gain (loss) - commodity
derivatives 19,290 (715,120) (151,515)
Gain (loss) - foreign
exchange and currency
derivatives 7,724 885 (678)
Asset retirement accretion
expense (600) (406) -
Other expense (2,435) - -
Amortization and depreciation (14,179) (403) (210)
------------ ------------ ------------
Total operating expenses (83,838) (744,607) (175,498)
------------ ------------ ------------
Loss from operations (37,906) (744,607) (175,498)
Other income and expenses:
Interest and other income 21,990 19,678 14,295
Royalty income 1,319 1,619 - Gain on sale of interest in
subsidiaries - 199,600 -
Gain on extinguishment of
debt - 2,875 6,765 Loss on auction rate
securities (34,537) - -
Interest expense and other
borrowing costs (net of
$30.6, $26.1 and $6.9
million capitalized during
2007, 2006 and 2005,
respectively) (23,845) (774) (7,335)
------------ ------------ ------------
Total other income and
expenses (35,073) 222,998 13,725
------------ ------------ ------------
Loss before minority interest
and income taxes (72,979) (521,609) (161,773)
Income tax expense (2,864) (749) (379)
Minority interest in loss of
consolidated subsidiary 87,399 8,813 16 ------------ ------------ ------------
Net income (loss) $ 11,556 $ (513,545) $ (162,136)
Other comprehensive income
(loss):
Unrealized loss on securities (86) (24) (311)
Reclassification for loss on
securities included in net
income - 243 -
------------ ------------ ------------
Comprehensive income (loss) $ 11,470 $ (513,326) $ (162,447)
============ ============ ============
Net income (loss) per Ordinary
Share - basic $ 0.20 $ (9.09) $ (3.34)
============ ============ ============
Net income (loss) per Ordinary
Share - diluted $ 0.20 $ (9.09) $ (3.34)
============ ============ ============
Weighted average Ordinary
Shares outstanding - basic 58,714,935 56,498,416 48,615,586
============ ============ ============
Weighted average Ordinary
Shares outstanding - diluted 59,070,546 56,498,416 48,615,586
============ ============ ============
SUMMARY BALANCE SHEET DATA
December 31, December 31, 2007 2006
------------ ------------
(in thousands except
share data)
Assets
Current assets
Cash and cash equivalents $ 40,736 $ 49,840
Restricted cash 12,313 31,942 Investments 52,243 325,536 Restricted investments - 65,343
Inventories 44,211 6,332 Prepaid expenses and other assets 19,305 9,984 ------------ ------------
Current assets 168,808 488,977Property, plant and equipment (net) 841,981 641,758
Ore stockpile inventories 76,914 21,341Deferred financing costs 15,990 19,485Value added tax recoverable 95,327 54,158Restricted Cash 91,000 -
Investments 24,407 42,255Derivatives at fair value 8,475 -
Other 2,009 2,122 ------------ ------------
Total assets $1,324,911 $1,270,096
============ ============
Liabilities and Shareholders' Equity
(Deficit)
Current liabilities
Accounts payable and accrued liabilities $ 55,957 $ 47,979
Accrued interest payable 4,982 3,405 Derivatives at fair value 266,820 39,080 Current portion of long term debt 41,155 4,408 ------------ ------------
Current liabilities 368,914 94,872Long term debt 546,981 492,195Derivatives at fair value 482,683 779,118Deferred gain on sale of asset 945 1,400
Other long term liabilities 2,508 -
Asset retirement obligation 6,981 5,761 ------------ ------------
Total liabilities 1,409,012 1,373,346
Minority interest in subsidiaries - 40
Commitments and contingencies
Shareholders' equity (deficit)
Ordinary Shares, $.01 par value,
175,000,000 shares authorized;
58,909,625 and 58,577,700 shares issued
and outstanding, respectively 589 586
Additional paid in capital 677,203 669,487 Accumulated deficit during development
stage (761,783) (773,339)
Accumulated other comprehensive loss (110) (24)
------------ ------------
Total shareholders' equity (deficit) (84,101) (103,290)
------------ ------------
Total liabilities and shareholders'
equity (deficit) $1,324,911 $1,270,096
============ ============
--30--
CONTACT: Apex Silver Mines Corporation
Jerry W. Danni, 303-228-0336
Sr. Vice President Corporate Affairs
