Apex Silver's quarterly loss explodes with hedging charge

Apex Silver's 4Q Loss
Widens on Hedging Charge

By The Associated Press
via Yahoo News
Tuesday, April 3, 2007

http://biz.yahoo.com/ap/070403/earns_apex_silver_mines.html?.v=1

DENVER -- Precious metals miner Apex Silver Mines Ltd. said Tuesday its fourth-quarter loss widened, as a hefty charge for hedging affected results.
The company posted a loss of $326.4 million, or $5.58 per share, in the period ended Dec. 31 -- versus a restated loss of $72.5 million, or $1.44 per share during the same quarter in 2005.

Apex attributed the quarterly loss to its share of a $340.5 million charge related to the commodity hedge position required by its lenders in connection with financing for its share of the San Cristobal project in Bolivia.

Since San Cristobal is not yet operational, Apex does not expect to report revenue until the third quarter. The company received $8.6 million in interest income and royalty income during the period.

In the fiscal year, Apex Silver Mines reported a loss of $513.5 million, or $9.09 per share, compared with a loss of $162.4 million, or $3.34 per share in 2005.

The company cited its share of a $672.5 million charge related to San Cristobal.

Apex plans to file restated earnings for the quarter ended Sept. 30, 2005, the year ended Dec. 31, 2005 and the first three quarters of 2006 to correct understated derivative liability of about $300.5 million as of Sept. 30, 2006.

Correcting derivatives valuation also affected the gain and minority interest the company had on the sale of a 35 percent stake a subsidiary owned in San Cristobal. The gain rose to $199.6 million from $119.8 million. Minority interest shrank to $18.9 million from $88.4 million at Sept. 30, 2006.

Shares of Apex Silver Mines rose 29 cents, or 2.2 percent, to $13.50 in morning trading on the American Stock Exchange.

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