DENVER, CO -- (Marketwire) -- 12/18/08 -- Apex Silver Mines Limited (AMEX: SIL) today provided an update regarding the company's restructuring and financing arrangements.

Letter of Intent for Sale of San Cristobal to Sumitomo

As announced on November 14, 2008, Apex Silver Mines Limited ("Apex Silver") entered into a non-binding letter of intent with Sumitomo Corporation ("Sumitomo") providing for the sale of Apex's interest in the San Cristobal mine to Sumitomo for a cash purchase price of $22.5 million, payable at the closing of the sale. Apex Silver would continue to manage the mine following the sale. Apex Silver and Sumitomo are continuing to negotiate definitive documentation related to this transaction. Upon completion of the sale, the holders of the Apex Silver $290.0 million in convertible notes would be entitled, under the existing terms of the notes, to redeem the notes for cash. The non-binding letter of intent is subject to significant conditions, including the restructuring of the Apex Silver convertible notes in a voluntary reorganization under chapter 11 of the U.S. Bankruptcy Code.

Termination of Derivative Positions

Apex Silver, Sumitomo and Minera San Cristobal, S.A. ("MSC") have entered into agreements with BNP Paribas and Barlcays PLC for the termination of the derivative positions established as a requirement of the San Cristobal project financing arrangements. Apex Silver paid approximately $59.0 million, or 65% of the final net settlement amounts with respect to the derivative positions, and repaid Sumitomo $7.5 million in respect of 65% of funding previously provided by Sumitomo to MSC to settle certain derivative positions. Apex Silver made these payments from the $91.0 million previously deposited by Apex Silver as cash collateral for the benefit of the counterparties to the derivative positions. Apex Silver received the remaining cash collateral, totaling $24.5 million.

Project Finance Loans Acquired by Sumitomo

Sumitomo has acquired 90% of the San Cristobal project finance loans from the lenders at par plus accrued interest, together with the right to exercise remedies of the lenders against MSC, Apex Silver and other Apex Silver subsidiaries. As previously disclosed, Apex Silver anticipates that Sumitomo, as the current holder of the San Cristobal project finance loans and the rights to exercise remedies against MSC, will have the right to accelerate the indebtedness outstanding upon a default by MSC or Apex Silver and its affiliates including the circumstances described in Apex Silver's quarterly report on Form 10-Q, for the quarter ending September 30, 2008.