Apex Silver

Former Zinc, Silver, and Lead producer which has filed for bankruptcy

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Former operator of the large San Cristobal silver-zinc-lead mine in southwestern Bolivia which began production in Q4 2007 and is currently being sold to Sumitomo as the company reorganizes itself in Ch. 11 bankruptcy. The company still maintains an extensive portfolio of exploration properties located primarily in Argentina, Bolivia, Mexico, and Peru. [David Zurbuchen] [Jan 23 2009]

The only thing rivaling the size of Apex's deposit and anticipated yearly production schedule of 16.5 million ounces silver, 247,000 tonnes zinc, and 84,000 tonnes lead was the size of its hedge book. Roughly speaking, Apex Silver has sold forward nearly 800 million lbs. zinc. at $0.48/lb. and over 300 million lbs. lead at $0.28/lb. over a 5 year period. The huge derivatives loss, combined with the politically volatile location of the project (Bolivia), recently forced the company into bankruptcy. At $0.71, it could be argued that Apex Silver is not receiving enough value for its extensive portfolio of exploration properties spread throughout South and Central America, however, uncertainties surrounding the approval of the reorganization plan make this an extremely speculative investment. [David Zurbuchen] [Jan 23 2008]