Printer Friendly

Apex Silver Forms Strategic Alliance with Sumitomo Corporation.

DENVER -- Apex Silver Mines Limited (AMEX: SIL) today announced the formation of a strategic alliance with Sumitomo Corporation, a diversified international company whose business operations include major interests in mining, metal products, transportation and construction systems, finance and logistics. Under the agreement, approved by the respective Boards of Directors, Sumitomo will acquire a 35% participating interest in Apex Silver's San Cristobal open-pit silver-zinc-lead project located in southwestern Bolivia and will be granted a two-year option to earn a 35% share of certain Apex Silver exploration projects located in Peru, Mexico, Argentina and Bolivia. In exchange, Apex Silver will receive consideration consisting of:

-- Cash amounting to $224 million

-- Deferred silver payments consisting of 22.86% of Sumitomo's share of future payable silver production from San Cristobal (currently projected to amount to over 20 million ounces of payable metal accrued to Apex Silver) plus payments related to additional reserves and mine extensions

-- Deferred zinc payments equal to the dollar value of 20% of Sumitomo's share of payable zinc production from San Cristobal (currently projected to amount to approximately 200,000 tonnes of payable metal subject to the payment) plus payments related to additional reserves and mine extensions, multiplied by the amount by which the London Metal Exchange price of zinc exceeds $1,800 per tonne. On September 22, 2006, zinc prices on the London Metal Exchange were quoted at $3,400 per tonne.

-- Assumption by Sumitomo of its 35% share of: San Cristobal's project financing, ultimately to total $225 million, and San Cristobal-related derivative liabilities, which at June 30, 2006 were stated at $130 million.

Closing of the transaction requires completion of certain procedural steps expected before the end of September 2006. Sumitomo will participate in any capital under- and over-run related to San Cristobal. Apex Silver will remain the operator of San Cristobal which is on track to begin production in the third quarter 2007.

"We welcome Sumitomo as our strategic partner," said Jeffrey G. Clevenger, Apex Silver's President and Chief Executive Officer. "Sumitomo's proven track record of partnerships in major mining operations around the world will solidify the successful development of San Cristobal." Sumitomo's other mining partners include Newmont, Teck Cominco, Phelps Dodge, Rio Tinto and Penoles with whom the company has joint ventures in gold, silver and copper mining operations located in the U.S., Chile, Peru, Mexico, Indonesia and Australia.

"Upon completion of the Sumitomo transaction, Apex Silver will be a stronger company. With the San Cristobal project fully financed and over $400 million in unrestricted cash and liquid investments, the company will be well positioned to make further strides in building lasting shareholder value," added Mr. Clevenger.

"We are looking forward to a mutually beneficial strategic relationship with Apex Silver," said Mitsuhiko Yamada, Executive Officer of Sumitomo. "Our partner has a first-rate team which has advanced the development of San Cristobal in a highly professional and socially conscious manner. We are confident that Sumitomo's involvement will further strengthen the time-tested bonds that exist between the peoples of Bolivia and Japan."

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 anticipated closing of the sale to Sumitomo Corporation of 35% of the San Cristobal project before the end of September 2006, current projections of the amounts of silver and zinc with respect to which the deferred payments would be made and expected commencement of production at San Cristobal in the third quarter 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 the failure to complete the sale to Sumitomo Corporation of 35% of the San Cristobal project or the related procedural steps before the end of September 2006 or at all, fluctuations in silver, zinc and lead prices, problems or delays in construction, startup and mining, variations in ore grade and processing rates, future changes in reserves and mine plans, problems in emerging financial markets, 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, 2005.
COPYRIGHT 2006 Business Wire
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2006, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

Article Details
Printer friendly Cite/link Email Feedback
Publication:Business Wire
Date:Sep 25, 2006
Previous Article:AskMeNow Launches National TV Advertising Campaign to Promote 'ASKME' (27563).
Next Article:AskMeNow Launches Intelligent Mobile Answer Service 'ASKME' (27563).

Related Articles
Statement by Susan M. Phillips, Member, Board of Governors of the Federal Reserve System, before the Committee on Banking and Financial Services,...
Reaching the Apex.
DuPont, Teknor Team Up in Cap Liners.
Goodyear Tire & Rubber, Akron, OH, as part of its ongoing plan to enhance its financial flexibility, has reduced its ownership stake in Japan's...
Hines, Sumitomo Life Realty partner on Park Avenue purchase.
Osaka Gas, Sumitomo Corp. Partner in Oil and Gas Development.
Progress in Tie-Up Measures by Nippon Steel, Sumitomo Metals and Kobe Steel, and Agreement on Further Enhancement of Cooperation.

Terms of use | Privacy policy | Copyright © 2019 Farlex, Inc. | Feedback | For webmasters