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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. As noted in that filing, Apex Silver does not have, and does not expect to have, sufficient cash to fully settle its share of the obligations if they were to become immediately due and payable and has reclassified such obligations as short-term in its consolidated balance sheets.

Amendment to Sumitomo Loan Agreement

Under the terms of the Amendment to the Loan Agreement dated August 11, 2008 with SC Minerals Aktiebolag, a subsidiary of Sumitomo ("SC Minerals"), SC Minerals has agreed to increase by $25.0 million the amount available for borrowing by MSC. SC Minerals is the 35% shareholder of MSC. The additional $25 million is to be used solely to fund MSC's operating expenses. The $25.0 million is in addition to the $125.0 previously borrowed pursuant to the original Loan Agreement and subsequent Amendments to the Loan Agreement. The additional loan amount may be borrowed by MSC at any time on or before December 31, 2008. Apex Silver expects that MSC will borrow the full Additional Loan Amount on December 22, 2008.

If the full amount available under the amended Loan Agreement is fully drawn (including the Additional Loan Amount), no payments are made by MSC prior to maturity, and SC Minerals were to convert all amounts payable into MSC shares as of the maturity date, Apex Silver's indirect ownership interest in MSC would be reduced to approximately 40.5% (approximately 48.2% on conversion of principal only).

Forward Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act, including statements regarding the intention of Apex Silver to enter into a definitive agreement relating to the sale of Apex Silver's interest in the San Cristobal mine and the restructuring of Apex Silver's capital structure, the expected continuation of Apex Silver as a management services and exploration company, and MSC's anticipated borrowing from SC Minerals. These statements are subject to risks and uncertainties, including those relating to the ability of Apex Silver and Sumitomo to reach a definitive agreement on all terms of the sale, including terms relating to Apex Silver's management of the mine, the risk that creditors of Apex Silver or the mine will not agree to a restructuring on terms satisfactory to Sumitomo, and the risk that SC Minerals does not advance funds to MSC. The ability of Apex Silver to achieve the contemplated sale could also be affected by other factors, including those relating to its operations such as further decreases in metals prices, whether and to what extent the financial markets continue to experience significant volatility; and political unrest and uncertainty in Bolivia. Apex Silver assumes any obligation to update this information.

CONTACT: Apex Silver Mines Corporation Jerry W. Danni (303) 839-5060 Sr. Vice President Corporate Affairs