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Apex Silver Provides Operations Update 2008-01-21 - Centre Daily Times
DENVER — Apex Silver Mines Limited (AMEX: SIL) today provided an update regarding operations at its San Cristobal silver, zinc and lead mine in Bolivia.
DENVER —
Apex Silver Mines Limited (AMEX: SIL) today provided an update regarding operations at its San Cristobal silver, zinc and lead mine in Bolivia.
As of December 31, 2007, the company had shipped approximately 52,000 tonnes of zinc and lead concentrates, containing total payable metal of approximately 2.2 million ounces of silver, 19,000 tonnes of zinc and 8,000 tonnes of lead.
The company is continuing to ramp up to full production at San Cristobal. San Cristobal achieved milling rates of approximately 40,000 tonnes per day of ore through the plant on several days in the fourth quarter 2007. Mining continues at the planned rate. As the ramp-up proceeds, the company continues to focus primarily on improving the reliability of process water and on improving plant availability and metals recovery rates. Water produced by the well field is highly saline and has resulted in well failures that have reduced available process water below the amount required for full production rates on a sustained basis. The company expects to complete the redrilling of the failed wells in late January, which should provide adequate water for production at designed rates until the planned delivery and installation mid-year 2008 of larger stainless steel casings and pumps which should provide a long-term solution. The company is engaged in metallurgical pilot plant optimization of ore blends and recovery rates. Plant workforce training in an operating plant environment continues and adjustments are being made to designed process control systems to accommodate the real-time operating environment. The company also continues to address improvement of the reliability of operating supply delivery to site and the resolution of various typical start-up mechanical production issues. The company expects to resolve most of these issues during the second quarter 2008.
The company expects that its year-end 2007 financial results will reflect a non-cash fourth quarter gain related to its derivatives of approximately $214 million, which is expected to reduce its recorded net derivatives liability to approximately $741 million at December 31, 2007, primarily due to metals price decreases in the fourth quarter 2007.
Jeff Clevenger, the company's President and Chief Executive Officer, said, "We are progressing with the ramp-up to full production at San Cristobal and look forward to our first full year of operations. We have demonstrated the plant's ability to process ore at design capacity and the mine is performing well. We are working our way through the types of ramp-up issues characteristic of large operations with complex plants and are focused on improving operating consistency and metals recoveries. Now that San Cristobal is in production, we plan to schedule a conference call following our quarterly earnings releases to discuss the company's earnings and operations. This will commence with the release of our earnings for the first quarter of 2008, and an announcement and call in instructions will be provided in advance of the call."
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 our efforts to resolve process water reliability issues including the expected timing of redrilling and the delivery and installation of larger stainless steel casings and pumps and the increase in available process water expected to result from these actions; performance of metallurgical pilot plant work regarding optimization of ore blends and recovery rates; expectations regarding the resolution of most of these start-up issues during the second quarter of 2008; and expected 2007 non-cash fourth quarter gain related to derivatives and our net derivatives liability at December 31, 2007. 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 operations, variations in ore grade, plant availability and processing rates, reliability of process water and delivery of operating supplies to the site, the results of metallurgical pilot plant optimization of ore blends and recovery rates, the effectiveness of continued training of the plant workforce, final determination of the company's derivative liabilities in connection with completion of the 2007 audited financial statements, 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 with the SEC for the year ended December 31, 2006.
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