APEX SILVER MINES LTD
DEF 14A, 1998-04-09
SILVER ORES
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<PAGE>
 
                           SCHEDULE 14A INFORMATION
 
               PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
                        SECURITIES EXCHANGE ACT OF 1934
 
Filed by the Registrant [X]
 
Check the appropriate box:
 
[_] Preliminary Proxy Statement           [_] Confidential, for Use of the
                                              Commission Only (as Permitted by
                                              Rule 14a-6(e)(2))
 
[X] Definitive Proxy Statement
 
[_] Definitive Additional Materials
 
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-
    12
 
 
                           APEX SILVER MINES LIMITED
               (NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
 
 
                                      N/A
   (NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
 
Payment of Filing Fee (Check the appropriate box):
 
[X] No fee required.
 
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
 
  (1)  Title of each class of securities to which transaction applies:
 
  (2)  Aggregate number of securities to which transaction applies:
 
  (3)  Per unit price or other underlying value of transaction computed
       pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
       filing fee is calculated and state how it was determined):
 
  (4)  Proposed maximum aggregate value of transaction:
 
  (5)  Total fee paid:
 
[_] Fee paid previously with preliminary materials.
 
[_] Check box if any part of the fee is offset as provided by Exchange Act
    Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
    paid previously. Identify the previous filing by registration statement
    number, or the Form or Schedule and the date of its filing.
 
  (1)  Amount Previously Paid:
 
  (2)  Form, Schedule or Registration Statement No.:
 
  (3)  Filing Party:
 
  (4)  Date Filed:
 
<PAGE>
 
                           APEX SILVER MINES LIMITED
                 CALEDONIAN HOUSE, GROUND FLOOR, MARY STREET,
                          GEORGE TOWN, GRAND CAYMAN,
                      CAYMAN ISLANDS, BRITISH WEST INDIES
 
                   NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
                            TO BE HELD MAY 14, 1998
 
To Our Shareholders:
 
  Notice is hereby given that the Annual Meeting of Shareholders of Apex
Silver Mines Limited (the "Company") will be held at the St. Regis Hotel,
Iridium Room, 2 East 55th Street at Fifth Avenue, New York, New York 10022, on
Thursday, May 14, 1998 at 4:00 p.m., New York City Time, for the following
purposes:
 
    1. To elect three (3) directors to hold office until the 2001 Annual
  Meeting of Shareholders or until their successors are elected.
 
    2. To transact such other business as may properly come before the
  meeting or any postponements or adjournments thereof.
 
  The Board of Directors has fixed the close of business on March 27, 1998 as
the record date for the determination of shareholders entitled to notice of
and to vote at the meeting.
 
  The Company's principal accountant is Price Waterhouse LLP. Representatives
of Price Waterhouse LLP will be present at the meeting and available in person
to respond to questions.
 
                                          By Order of the Board of Directors
 
April 15, 1998
 
 
   TO ASSURE YOUR REPRESENTATION AT THE ANNUAL MEETING OF SHAREHOLDERS,
 PLEASE SIGN, DATE AND RETURN YOUR PROXY IN THE ENCLOSED ENVELOPE, WHETHER OR
 NOT YOU EXPECT TO ATTEND IN PERSON. SHAREHOLDERS WHO ATTEND THE MEETING MAY
 REVOKE THEIR PROXIES AND VOTE IN PERSON IF THEY SO DESIRE.
 
<PAGE>
 
                           APEX SILVER MINES LIMITED
                 CALEDONIAN HOUSE, GROUND FLOOR, MARY STREET,
                          GEORGE TOWN, GRAND CAYMAN,
                      CAYMAN ISLANDS, BRITISH WEST INDIES
 
                               ----------------
 
                                PROXY STATEMENT
                        ANNUAL MEETING OF SHAREHOLDERS
                                 MAY 14, 1998
 
                               ----------------
 
To Our Shareholders:
 
  This Proxy Statement is furnished to the shareholders of Apex Silver Mines
Limited (the "Company") in connection with the solicitation of proxies by the
board of directors of the Company to be voted at the Annual Meeting of
Shareholders of the Company (the "Meeting") to be held on May 14, 1998, or any
postponements or adjournments thereof. The Meeting is being held for the
purposes set forth in the accompanying Notice of Annual Meeting of
Shareholders. The Company's principal offices are located at Caledonian House,
Ground Floor, Mary Street, George Town, Grand Cayman, Cayman Islands, British
West Indies, and its telephone number is (303) 839-5060. This Proxy Statement,
the accompanying proxy card and the Notice of Annual Meeting are first being
sent to shareholders of the Company on or about April 15, 1998.
 
                              GENERAL INFORMATION
 
VOTING RIGHTS
 
  Holders of the Company's ordinary shares, par value $.01 per share, (the
"Ordinary Shares"), at the close of business on March 27, 1998 (the "Record
Date") are entitled to notice of and to vote at the Meeting. On the Record
Date, 19,348,076 Ordinary Shares were issued, outstanding and entitled to
vote. The holders of a majority of the Ordinary Shares of the Company issued
and outstanding and entitled to vote at the meeting, present in person or by
proxy, constitutes a quorum.
 
  Each Ordinary Share outstanding on the Record Date is entitled to one vote.
Only shareholders of record at the close of business on March 27, 1998 will be
entitled to vote at the meeting.
 
VOTING PROXIES
 
  If a shareholder abstains from voting on any matter, the Company intends to
count the abstention as present for purposes of determining whether a quorum
is present at the Meeting for the transaction of business. Unless contrary
instructions are indicated on a proxy, the Ordinary Shares represented by such
proxy will be voted FOR the election as directors of the nominees named in
this proxy statement. Additionally, the Company intends to count broker "non-
votes" as present for purposes of determining the presence or absence of a
quorum for the transaction of business. A non-vote occurs when a nominee
holding shares for a beneficial owner votes on one proposal, but does not vote
on another proposal because the nominee does not have discretionary voting
power and has not received instructions from the beneficial owner. Abstention
from voting with respect to proposals are treated as votes against the
particular proposal. Non-votes will be disregarded and will have no effect on
the outcome of the vote.
 
  Management and the board of directors of the Company know of no other
matters to be brought before the Meeting. If other matters are presented
properly to the shareholders for action at the Meeting and any postponements
and adjournments thereof, it is the intention of the proxy holders named in
the proxy to vote in their discretion on all matters on which the Ordinary
Shares represented by such proxy are entitled to vote.
<PAGE>
 
REVOCABILITY OF PROXY
 
  Any proxy may be revoked at any time before it is voted by written notice to
the Chairman, by receipt of a proxy properly signed and dated subsequent to an
earlier proxy, or by revocation of a written proxy by request in person at the
Meeting; but if not revoked, the Ordinary Shares represented by such proxy
will be voted.
 
SECURITY OWNERSHIP OF PRINCIPAL SHAREHOLDERS AND MANAGEMENT
 
  The following table includes information as of March 1, 1998, except as
otherwise indicated, concerning the beneficial ownership of the Ordinary
Shares by (i) each person known by the Company to hold beneficially five
percent or more of the outstanding Ordinary Shares, (ii) each director of the
Company, (iii) each executive officer of Apex Silver Mines Corporation ("Apex
Corporation") named in the table set forth under "Executive Compensation and
Other Information", and (iv) all such executive officers of Apex Corporation
and directors of the Company as a group. All Ordinary Share numbers set forth
in the table have been rounded up to the nearest whole number. Except as
otherwise noted, the Company believes that all of the persons and groups shown
below, based on information furnished by such owners, have sole voting and
investment power with respect to the Ordinary Shares indicated.
 
<TABLE>
<CAPTION>
                                      BENEFICIAL OWNERSHIP    AS ADJUSTED(1)
                                      -------------------- ---------------------
                                       NUMBER   PERCENTAGE   NUMBER   PERCENTAGE
                                      --------- ---------- ---------- ----------
<S>                                   <C>       <C>        <C>        <C>
DIRECTORS AND 5% SHAREHOLDERS OF THE
 COMPANY AND EXECUTIVE OFFICERS OF
 APEX CORPORATION
  Silver Holdings(2)................          1      *      6,297,321   24.03%
  Moore Global Investments
   Ltd./Remington Investment
   Strategies L.P.(3)...............  1,767,500    9.15%    1,767,500    6.75%
  Michael Comninos(4)...............      6,250      *          6,250      *
  Harry S. Conger(5)................     15,625      *         15,625      *
  Marcel F. DeGuire(6)..............     31,250      *         31,250      *
  Eduardo S. Elsztain(7)............     31,250      *      6,328,571   24.15%
  David Sean Hanna(8)...............      6,250      *          6,250      *
  Ove Hoegh(9)......................      6,250      *          6,250      *
  Keith R. Hulley(10)...............     62,500      *         62,500      *
  Thomas S. Kaplan(11)..............  6,674,979   34.55%    6,674,979   25.48%
  Richard Katz(12)..................      6,250      *          6,250      *
  Gregory G. Marlier(13)............     15,626      *         15,626      *
  Douglas M. Smith(14)..............     15,625      *         15,625      *
  Paul Soros(15)....................     31,891      *      6,329,212   24.16%
  Directors of the Company and
   Executive Officers of Apex
   Corporation, as a group..........  6,903,746   35.73%   13,201,067   50.38%
</TABLE>
- --------
  * The percentage of Ordinary Shares beneficially owned is less than 1%.
 
 (1) Adjusted as if Ordinary Shares were issued in exchange for all shares of
     Apex Silver Mines LDC ("Apex LDC"), an exempted limited duration Company
     organized under the laws of the Cayman Islands, owned by Litani Capital
     Management LDC ("Litani LDC"), a limited duration company organized under
     the laws of the Bahamas, and Silver Holdings LDC ("Silver Holdings" and
     collectively with Litani LDC, the "Minority Shareholders"), an exempted
     limited liability company organized under the laws of the Cayman Islands,
     at March 1, 1998, on a one-for-one basis, pursuant to the terms of the
     Buy-Sell Agreement ("the Buy-Sell Agreement"), dated as of August 6,
     1996, by and among the Company, Apex LDC, Litani LDC and Silver Holdings.
 
 (2) The address of Silver Holdings is Kaya Flamboyan 9, Willemstad, Curacao,
     Netherlands Antilles. Quantum Industrial Partners LDC ("Quantum
     Industrial"), an exempted limited duration company formed under the laws
     of the Cayman Islands, is a 50 percent shareholder in Silver Holdings the
     registered owner of 6,297,320 shares of Apex LDC and of one Ordinary
     Share. Pursuant to the Buy-Sell Agreement, upon a
 
                                       2
<PAGE>
 
     request of Silver Holdings, the Company is required to purchase, at its
     sole option, for (i) cash, (ii) Ordinary Shares on a one-for-one basis, or
     (iii) any combination of (i) and (ii), the 6,297,320 shares of Apex LDC
     owned by Silver Holdings. QIH Management Investor, L.P. ("QIHMI"), an
     investment advisory firm organized as a Delaware limited partnership, is a
     minority shareholder of, and is vested with investment discretion with
     respect to portfolio assets held for the account of Quantum Industrial. The
     sole general partner of QIHMI is QIH Management, Inc. ("QIH Management"), a
     corporation formed under the laws of the State of Delaware. Mr. George
     Soros, the sole shareholder of QIH Management, has entered into an
     agreement with Soros Fund Management LLC ("SFM LLC"), a limited liability
     company formed under the laws of the State of Delaware, pursuant to which
     Mr. George Soros has, among other things, agreed to use his best efforts to
     cause QIH Management to act at the direction of SFM LLC (the "QIP
     Contract"). Mr. George Soros is Chairman of SFM LLC, and as a result of
     such position and the QIP Contract, may be deemed the beneficial owner of
     shares held for the account of Quantum Industrial. Mr. Stanley F.
     Druckenmiller, the Lead Portfolio Manager and a member of the Management
     Committee of SFM LLC, by virtue of such position as Lead Portfolio Manager
     and the QIP Contract, also may be deemed the beneficial owner of shares
     held for the account of Quantum Industrial. Mr. Eduardo Elsztain is the
     Chairman and majority shareholder of Consultores Asset Management, S.A.
     ("Consultores") which is a one percent shareholder of Silver Holdings and
     the sole owner of Consultores Management Company (Isle of Man) Limited
     ("Consultores Management"). Consultores Management is the manager of
     Emerging Dolphin Limited, a private open-end investment fund formed under
     the laws of the Isle of Man, which owns 26.5 percent of Silver Holdings.
     Geosor Corporation ("Geosor"), a corporation formed under the laws of the
     State of New York, which is wholly-owned by Mr. George Soros, is a 15
     percent shareholder of Silver Holdings. VDM, Inc. ("VDM"), which is wholly-
     owned by Mr. Paul Soros, a director of the Company, holds a five percent
     interest in Silver Holdings. Quantum Industrial, VDM and Geosor purchased
     256,410, 25,641 and 76,923 Ordinary Shares, respectively, in the Company's
     initial public offering (the "Offering").
 
 (3) The address of Moore Global Investments Ltd./Remington Investment
     Strategies L.P. is 1251 Avenue of the Americas, 53rd Floor, New York, New
     York 10020. Moore Capital Management, Inc., a Connecticut corporation, is
     vested with investment discretion with respect to portfolio assets held
     for the account of Moore Global Investments, Ltd. ("MGI"). Moore Capital
     Advisors, L.L.C., a New York limited liability company ("Moore Capital
     Advisors"), is the sole general partner of Remington Investment
     Strategies, L.P. ("Remington"). Mr. Louis M. Bacon is the majority
     shareholder of Moore Capital Management, Inc. and is the majority equity
     holder of Moore Capital Advisors. As a result, Mr. Bacon may be deemed to
     be the indirect beneficial owner of the aggregate 1,767,500 shares held
     by MGI and Remington.
 
 (4) Mr. Comninos is a director of the Company and a nominee for election as a
     director at the Meeting and has received, pursuant to a grant as of April
     10, 1997, vested options to purchase 6,250 Ordinary Shares as
     compensation for becoming a director of the Company.
 
 (5) Mr. Conger is a director of the Company and a nominee for election as a
     director at the Meeting and has received, pursuant to a grant as of
     October 8, 1996 and a grant as of April 10, 1997, vested options to
     purchase 15,625 Ordinary Shares as compensation for his consulting
     services performed for the Company and for his participation in the
     Company's Compensation Committee.
 
 (6) Mr. DeGuire has been granted vested options to purchase 31,250 Ordinary
     Shares pursuant to the Company's Employees' Share Option Plan (the
     "Employees' Share Option Plan").
 
 
 (7) Mr. Elsztain is a director of the Company and is the registered owner of
     25,000 Ordinary Shares. Pursuant to a grant as of April 10, 1997, Mr.
     Elsztain has vested options to purchase 6,250 Ordinary Shares of the
     Company. Mr. Elsztain also serves as a director of Silver Holdings, the
     registered owner of 6,297,320 shares of Apex LDC and of one Ordinary
     Share, which shares are included in the table. The inclusion of such
     Ordinary Shares shall not be deemed an admission that such individual is
     the beneficial owner of such Ordinary Shares. He is the Chairman and
     majority shareholder of Consultores which is a one percent shareholder of
     Silver Holdings and the sole owner of Consultores Management. Consultores
     Management is the manager of Emerging Dolphin Limited, a private open-end
     investment fund formed under the laws of the Isle of Man which owns 26.5
     percent of Silver Holdings.
 
 
                                       3
<PAGE>
 
 (8) Mr. Hanna is a director of the Company and has received, pursuant to a
     grant as of April 10, 1997, vested options to purchase 6,250 Ordinary
     Shares as compensation for becoming a director of the Company.
 
 (9) Mr. Hoegh is a director of the Company and has received, pursuant to a
     grant as of April 10, 1997, options to purchase 6,250 Ordinary Shares as
     compensation for becoming a director of the Company.
 
(10) Mr. Hulley is a director of the Company and an executive officer of Apex
     Corporation and has been granted vested options to purchase 62,500
     Ordinary Shares pursuant to the Employees' Share Option Plan.
 
(11) Pursuant to Voting Trust Agreements, Mr. Kaplan has voting and
     dispositive control with respect to 2,739,154 shares of the Company owned
     by Argentum LLC and 3,935,825 shares of the Company owned by Consolidated
     Commodities, Ltd. ("Consolidated").
 
(12) Mr. Katz is a director of the Company and a nominee for election as a
     director at the Meeting and has received, pursuant to a grant as of April
     10, 1997, vested options to purchase 6,250 shares of the Company.
 
(13) Mr. Marlier is an executive officer of Apex Corporation and has received
     vested options to acquire 15,626 Ordinary Shares pursuant to the
     Employees' Share Option Plan.
 
(14) Mr. Smith is an executive officer of Apex Corporation and has received
     vested options to acquire 15,625 Ordinary Shares pursuant to the
     Employees' Share Option Plan.
 
(15) Mr. Paul Soros is a director of the Company and has received, pursuant to
     a grant as of April 10, 1997, options to purchase 6,250 shares as
     compensation for becoming a director of the Company. Mr. Paul Soros is
     also a director and indirect five percent shareholder of Silver Holdings
     (through his 100 percent ownership of VDM, a five percent shareholder of
     Silver Holdings), which is the registered owner of 6,297,320 shares of
     Apex LDC and one Ordinary Share which shares are included in the table.
     The inclusion of any such Ordinary Shares shall not be deemed an
     admission that such individual is the beneficial owner of such Ordinary
     Shares. VDM purchased 25,641 Ordinary Shares in the Offering. Mr. Paul
     Soros also serves on the Investment Advisory Committee of Quantum
     Industrial, a five percent shareholder of Silver Holdings.
 
 
                                       4
<PAGE>
 
                                 PROPOSAL ONE
 
ELECTION OF DIRECTORS
 
  The Board of Directors has nominated for election at the Meeting the three
persons named below, to serve until the 2001 Annual Meeting of Shareholders or
until their successors are elected, and each of the three persons named below
has consented to being named as a nominee. All of the nominees are currently
directors of the Company.
 
  It is anticipated that proxies will be voted for the nominees listed below,
and the Board of Directors has no reason to believe any nominee will not
continue to be a candidate or will not be able to serve as a director of the
Company if elected. In the event that any nominee named below is unable to
serve as a director, the proxy holders named in the proxies have advised that
they will vote for the election of such substitute or additional nominees as
the Board of Directors may propose.
 
  The name and age of each nominee, his principal occupation for at least the
past five years and other information is set forth below, based upon
information furnished to the Company by such nominee.
 
NOMINEES FOR ELECTION
 
Michael Comninos, age 66, director since April, 1997.
 
  An international financier, Mr. Comninos joined N.M. Rothschild & Sons in
1954, becoming a Partner in its corporate finance group in 1965, and, later,
upon the firm's incorporation as N. M. Rothschild & Sons Limited in 1970, a
director. Prior to his retirement in 1991, Mr. Comninos served as the head of
the firm's investment management division, its credit division and for ten
years served as the chairman of N.M. Rothschild & Sons (C.I.) Ltd., the firm's
merchant banking affiliate in Guernsey. Mr. Comninos has served as a director
of numerous listed real estate and investment funds and is currently a member
of the investment committee of the East European Food Fund, a Luxembourg
investment fund managed by Jupiter Asset Management Bermuda Limited. Mr.
Comninos is a member of the Institute of Investment Management and Research,
The Chartered Institute of Bankers, The Institute of Chartered Secretaries and
Administrators and the Association of Corporate Treasurers.
 
Harry M. Conger, age 67, director since April, 1997.
 
  A leading figure in the international mining community, Mr. Conger has 42
years of industry experience, rising from a position as shift boss to chairman
and Chief Executive Officer of Homestake Mining Company ("Homestake"), a New
York Stock Exchange listed-company. He served as Chairman of Homestake from
1982 and retired from the Chief Executive Officer position in May 1986,
remaining as Chairman. Over the course of his career, Mr. Conger has been
involved in gold, silver, lead, zinc, uranium, sulfur, coal, iron ore and
copper mining. He has been extensively involved in numerous major project
developments, with both on-site and broader supervisory responsibility,
including the expansion, at a cost of $170 million, of an iron ore mine to
25 million tons of material mined per year, greenfield development of a large
surface coal mine moving 20 million tons per year at a cost of $165 million,
and development of a new gold mine with new technology at a cost of $165
million. Mr. Conger is a former Chairman of the American Mining Congress, the
World Gold Council and is a member of the National Academy of Engineering. He
currently serves on the board of directors of ASA Limited, a closed-end
portfolio of gold stocks listed on the New York Stock Exchange, and Pacific
Gas and Electric Company (PG&E), a San Francisco based utility company. Mr.
Conger recently retired from Baker Hughes Inc., an oil and mining services
company based in Houston, Texas, under their ten year tenure rule; and Cal Mat
Company of Los Angeles, an integrated producer of cement, construction
aggregates, pre-mixed concrete and asphalt mixes, and real estate developer.
 
Richard Katz, age 56, director since April, 1997.
 
  An investment banker specializing in international finance, Mr. Katz was a
director of N.M. Rothschild & Sons Limited, London, England from 1977 until
March 1993, having joined them in 1969; he was also a
 
                                       5
<PAGE>
 
managing director of Rothschild Italia S.p.A., Milan, Italy from its inception
in 1989 until December 1993. Mr. Katz has been a supervisory director of
Quantum Fund N.V., a Netherlands Antilles investment fund, or one of its
subsidiaries, since 1986. He is also a member of the board of supervisory
directors of a number of other investment funds affiliated with Mr. George
Soros, including Quasar International Fund N.V. and Quantum Emerging Growth
Fund N.V., and is the Chairman of the board of supervisory directors of Quota
Fund N.V., and the Chairman of the boards of advisors of Quantum Realty Fund
Limited, Asian Infrastructure Development Fund Ltd., and Quantum Industrial
Holdings Ltd., an indirect shareholder of the Company.
 
OTHER DIRECTORS
 
Eduardo S. Elsztain, age 38, director since March of 1996.
 
  Mr. Elsztain is a director of, and an indirect shareholder in, Silver
Holdings. Until the Offering, Mr. Elsztain was a director of Apex LDC. Mr.
Elsztain is the founder of Consultores, a leading securities portfolio
management firm in Buenos Aires, Argentina formerly known as Consultores de
Inversiones Bursatiles y Financiera S.A. He has served as the President of
Consultores since 1989. Mr. Elsztain is currently the Chairman of the board of
directors of IRSA Inversiones y Representaciones S.A., an Argentine real
estate company listed on the Buenos Aires Stock Exchange, the New York Stock
Exchange and the Mexico Stock Exchange. He is also the Chairman of the board
of directors of Cresud S.A.C.I.F. y A. and of SAMAP Sociedad Anonima Mercado
de Abasto Proveedor, both of which are listed on the Buenos Aires Stock
Exchange. Mr. Elsztain studied Economics at the University of Buenos Aires.
 
David Sean Hanna, age 37, director since March of 1996.
 
  For the past five years, Mr. Hanna has practiced corporate law with the
Bahamas law firm of Arthur D. Hanna & Co, of which he is a Partner. Until the
Offering, Mr. Hanna was a director of Apex LDC. Mr. Hanna is a director of two
shareholders of the Company, Litani LDC and Consolidated Commodities, Ltd.
("Consolidated"). Mr. Hanna was called to the Bar of England and Wales in
1983. He holds an LLB (Honours) from the University of Buckingham, England.
 
Ove Hoegh, age 61, director since April of 1997.
 
  A member of the board of directors until July of 1997 of Leif Hoegh & Co.
ASA, a family owned shipping business with more than $1 billion in assets, Mr.
Hoegh has more than 30 years of experience in the international shipping
industry. Mr. Hoegh began his career in commercial fishing, and joined the
board of directors of Leif Hoegh & Co. ASA in 1966. From 1970 to 1982, he
served as Chief Operating Officer and Chief Executive Officer of Leif Hoegh &
Co ASA. Since 1982, he has served as the senior partner of Hoegh Invest A/S, a
family investment company with a diversified portfolio of technology, oil and
gas and real estate holdings. In addition, Mr. Hoegh served for eight years as
a member of the board of directors and executive committee of Brown Boveri
(Norway), and also has served on the shareholders' councils of Esso Norway,
Den Norske Creditbank, and Det Norske Veritas. Mr. Hoegh is a member of the
board of the Energy Policy Foundation of Norway, a former member of the
steering committee of the International Maritime Industry Forum, and a former
Vice Chairman of the executive committee of the Independent Tanker Owners'
Association. He served for five years as a member of the Harvard Business
School Visiting Committee. Mr. Hoegh is a graduate of the Royal Norwegian
Naval Academy and holds an M.B.A. from Harvard University.
 
Keith R. Hulley, age 58, director since April of 1997.
 
  A mining engineer with more than 30 years experience, Mr. Hulley is
currently President of, and has served as the Chief Operating Officer of, Apex
Corporation since its formation in October of 1996. Since the Offering, Mr.
Hulley has been a director of Apex LDC. From early 1991 until he joined the
Company, he served as
 
                                       6
<PAGE>
 
a member of the board of directors and the Director of Operations at Western
Mining Holdings Limited Corporation ("Western Mining"), a publicly-traded
international nickel, gold and copper producer. At Western Mining, Mr.
Hulley's responsibilities included supervising on a global basis strategic
planning, mine production, concentrating, smelting, refining and sales. During
this period, Western Mining produced on an annual basis approximately 90,000
tonnes of nickel, 700,000 ounces of gold, 80,000 tonnes of refined copper and
1,500 tonnes of uranium oxide. Mr. Hulley also supervised the development and
operation of Western Mining's Mount Keith open-pit nickel mine, a $450 million
mining project. Prior to joining Western Mining, Mr. Hulley was the President,
Chief Executive Officer and Chairman of the board of directors of USMX Inc., a
publicly-traded precious metals exploration company. Mr. Hulley has also
served as the President of the Minerals Division and Senior Vice President for
Operations of Atlas Corporation, where he was in charge of mining exploration,
development and production. Previously he was Vice President of Mining and
Development of the U.S. division of BP Minerals, Inc. Over the course of his
career, Mr. Hulley has worked as a miner and shift supervisor in the gold
mines of South Africa, Mine Operation Superintendent of Kennecott
Corporation's Bingham Canyon mine which processed 100,000 tonnes of ore per
day, and project manager of the early phase of the Ok Tedi exploration and
development projects in Papua New Guinea. A member of the American Institute
of Mining and Metallurgical Engineers and a Fellow of the Australian Institute
of Mining and Metallurgy, Mr. Hulley holds a B.S. in Mining Engineering from
the University of Witwatersrand and an M.S. in Mineral Economics from Stanford
University.
 
Thomas S. Kaplan, age 35, director since March of 1996.
 
  Mr. Kaplan has been the Chairman of the board of directors of the Company
since its inception in March of 1996 and is a director and was the founder of
Apex LDC and its predecessor, Apex Bermuda, which contributed substantially
all of its assets to Apex LDC in December of 1994. Mr. Kaplan is a director of
Litani LDC and a principal shareholder in Consolidated. Consolidated is a
shareholder of the Company, and Litani LDC is a shareholder of both the
Company and Apex LDC. For the past ten years, Mr. Kaplan has served as an
advisor to private clients, trusts and fund managers in the field of strategic
forecasting, an analytical method which seeks to identify and assess global
trends in politics and economics and the way in which such trends relate to
international financial markets, particularly in the developing markets of
Asia, Latin America, the Middle East and Africa. Mr. Kaplan has managed
numerous venture capital investments and portfolio investment accounts, and is
a principal of several entities specializing in direct and portfolio
investments, including Feder Information Services Corporation, Tigris
Financial Group Ltd. ("Tigris"), FMS Partners L.P. and Bridge Capital Group
L.P. Mr. Kaplan also serves as a director of African Plantations Corporation
LDC, a Cayman Islands limited duration company, which owns and operates coffee
and tea plantations in eastern and southern Africa. Mr. Kaplan was educated in
Switzerland and England and holds B.A., M.A., and D. Phil. degrees in History
from the University of Oxford.
 
Paul Soros, age 71, director since March of 1996.
 
  Principally involved in private investment activities during the past five
years, Mr. Soros is a director of, and an indirect shareholder in Silver
Holdings through his 100 percent ownership of VDM a shareholder of Silver
Holdings. Until the Offering, Mr. Soros was a director of Apex LDC. Mr. Soros
is a member of the Investment Advisory Committee of Quantum Industrial.
Quantum Industrial is the largest shareholder in Silver Holdings. Mr. Soros is
involved in the monitoring of the Quantum Group of Fund's shareholding in
Companhia Vale do Rio Doce S.A. ("CVRD") of Brazil, its participation in
Global Power Investments, L.P., a joint venture with the International Finance
Corporation and GE Capital Corporation to develop power projects in emerging
economies, serves on the Board of Directors of TVX Gold Inc., and is an active
advisor to the Company. Mr. Soros is the founder and former president of Soros
Associates, an international engineering firm specializing in port
development, offshore terminal and material handling projects for the mining
industry and other basic industries. Soros Associates was involved in projects
in more than 80 countries, acting on behalf of consortia including USX
Corporation, The Broken Hill Proprietary Company Limited, Alcan Aluminum
Limited and Aluminum Company of America, and was involved in projects in a
majority of the largest mineral ports in the
 
                                       7
<PAGE>
 
world. Mr. Soros has served on the Review Panel of the President's Office of
Science and technology and the U.S.-Japan Natural Resources Commission. He
received the Outstanding Engineering Achievement Award of the National Society
of Professional Engineers in 1989. Mr. Soros holds a Masters of Mechanical
Engineering degree from the Polytechnic Institute of Brooklyn and is a
licensed professional engineer in New York and numerous other states. In
addition, he holds several patents in material handling and offshore
technology, and is the author of over 100 technical articles.
 
COMMITTEES OF THE BOARD OF DIRECTORS
 
  The Company has established an Audit Committee of its Board of Directors.
The Audit Committee will review the accounting and auditing principles and
procedures of the Company with a view to providing for the safeguard of the
Company's assets and the reliability of its financial records, recommending to
the board of directors the engagement of the Company's independent
accountants, reviewing with the independent accountants the plans and results
of the auditing engagement, and considering the independence of the Company's
accountants. Messrs. Comninos, Katz and Hoegh currently serve on the Audit
Committee.
 
  A Compensation Committee has also been established to review the Company's
compensation policies and supervise the Company's Share Option Plans. See
"Executive Compensation-Share Option Plans". Messrs. Conger and Soros
currently serve on the Compensation Committee.
 
  The Board of Directors is divided into three classes designated Class I,
Class II and Class III. Each class of directors consists of one-third of the
total number of directors constituting the entire board and approximately one-
third of the members of the board are elected at each annual meeting of
shareholders. The Class I directors are Messrs. Conger, Katz and Comninos; the
Class II directors are Messrs. Hulley, Soros and Hoegh; and the Class III
directors are Messrs. Kaplan, Elsztain and Hanna. The term of the Class I
directors will end on the date of the Meeting. The term of the Class II
directors will end on the date of the 2000 Annual Meeting of Shareholders. The
term of the Class III directors will end on the date of the 2001 Annual
Meeting of Shareholders. If the number of directors is changed, any increase
or decrease in the number of directors will be apportioned among the classes
so as to maintain the number of directors in each class as nearly equal as
possible, and any additional directors of any class elected to fill a vacancy
resulting from an increase in such class will hold office for a term that
coincides with the remaining term of that class. Each director will hold
office until the annual meeting for the year in which his term expires and
until his successor shall be elected, subject, however, to his prior death,
resignation, retirement or removal from office. Any vacancy occurring on the
Board of Directors for any reason will be filled by a vote of the majority of
the directors then in office, even if less than a quorum, or by a sole
remaining director. Any director elected to fill a vacancy will hold office
for a term that coincides with the term of the class to which such director
was elected.
 
MEETINGS OF THE BOARD
 
  The Board of Directors met twice during fiscal 1997. Each director attended
75 percent or more of the total number of such meetings and committee meetings
on which he or she served that were held during 1997.
 
DIRECTOR COMPENSATION
 
  Directors do not receive any cash compensation from the Company for serving
on the Board of Directors, although each non-employee director (other than Mr.
Conger) received, in April of 1997, options to purchase 6,250 Ordinary Shares
at a price of $8.00 per share and each Non-Employee Directors' Share Option
Plan. See "Share Option Plans--Non-Employee Directors' Share Option Plan." The
Company has agreed to reimburse the directors for all reasonable out-of-pocket
costs incurred by them in connection with their services to the Company. In
1996, Mr. Conger received options to purchase 25,000 Ordinary Shares for
certain consulting services performed for the Company and in 1997 received
options to purchase 3,125 Ordinary Shares for being a
 
                                       8
<PAGE>
 
member of the Company's Development Committee, all of which options are
exerciseable at a price of $8.00 per share. The options for the 25,000
Ordinary Shares vest ratably over four years. The first tranche vested in
October 1996. Pursuant to the terms of the Non-Employee Directors' Share
Option Plan each non-employee director of the Company shall receive the number
of options equal to $50,000 divided by the closing price of the Ordinary
Shares on the American Stock Exchange on the date of each annual meeting of
the shareholders of the Company.
 
BOARD COMMITTEES
 
  The Board of Directors has established the following standing committees:
 
  Audit Committee. The Audit Committee held two meetings during 1997, and is
currently comprised of Messrs. Comninos, Katz and Hoegh. The Audit Committee
reviews the accounting and auditing principles and procedures of the Company
with a view to providing for the safeguard of the Company's assets and the
reliability of its financial records, recommending to the Board of Directors
the engagement of the Company's independent accountants, reviewing with the
independent accountants the plans and results of the auditing engagement, and
considering the independence of the Company's accountants.
 
  Compensation Committee. The Compensation Committee was formed in August of
1997 and is currently comprised of Mr. Conger and Mr. Paul Soros. The
principal responsibilities of the Compensation Committee are to establish
policies and periodically determine matters involving executive compensation,
make changes in employee benefit programs, grant stock options and stock
awards under the Company's Employees' Share Option Plan and Non-Employee
Directors' Share Option Plan (collectively, the "Share Option Plans") and
provide counsel regarding key personnel selection. Thomas S. Kaplan and Keith
R. Hulley are authorized to execute all grant letters related to the Share
Option Plans upon approval of such grants by of the Compensation Committee.
 
EXECUTIVE COMPENSATION AND OTHER INFORMATION
 
  The following table sets forth certain information with respect to the
annual compensation paid by the Company during the fiscal years ended December
31, 1996 and December 31, 1997 to the Chief Executive Officer and the four
most highly compensated executives officers of Apex Corporation. The Company
has no executive officers.
 
                          SUMMARY COMPENSATION TABLE
 
<TABLE>
<CAPTION>
                                         ANNUAL            LONG-TERM
                                      COMPENSATION       COMPENSATION
                                      ------------- -----------------------
                                                    SECURITIES
                                                    UNDERLYING  ALL OTHER
  NAME AND PRINCIPAL POSITION    YEAR SALARY  BONUS  OPTIONS   COMPENSATION
  ---------------------------    ---- ------- ----- ---------- ------------ 
<S>                              <C>  <C>     <C>   <C>        <C>          
Thomas S. Kaplan...............  1997 213,000  --        --          --
 Chairman, Apex Silver Mines     1996 120,625  --        --          --
 Limited, and Chief Executive
 Officer, Apex Corporation(1)
Keith R. Hulley................  1997 225,000  --        --          --
 President and Chief Operating   1996  56,250  --    125,000      93,167
 Officer,
 Apex Corporation(2)
Marcel F. DeGuire..............  1997 180,000  --        --          --
 Vice President of Development,  1996  67,500  --     62,500         --
 Apex Corporation(3)
Gregory G. Marlier.............  1997 125,000  --        --          --
 Vice President of Finance and   1996  20,833  --     31,250         --
 Chief Financial Officer, Apex
 Corporation(4)
Douglas M. Smith ..............  1997  96,666  --     31,250         --
 Vice President of Exploration,  1996     --   --        --          --
 Apex Corporation(5)
</TABLE>
 
                                       9
<PAGE>
 
- --------
(1) Mr. Kaplan's annual base salary is $240,000.
 
(2) Mr. Hulley joined the Apex group of companies on October 1, 1996. His
    annual base salary is $225,000. The $93,167 in 1996 of other compensation
    was for taxable moving expenses and tax reimbursement.
 
(3) Mr. DeGuire joined the Apex group of companies on August 19, 1996. His
    annual base salary is $180,000.
 
(4) Mr. Marlier joined Apex Corporation on November 1, 1996. His annual base
    salary is $125,000.
 
(5) Mr. Smith joined Apex Corporation on March 7, 1997. His annual base salary
    is $120,000.
 
SHARE OPTION GRANTS
 
  The following table contains further information concerning the share
options grants made to the Chief Executive Officer and the four most highly
compensated officers of Apex Corporation during the fiscal year ended December
31, 1997.
 
                       OPTION GRANTS IN LAST FISCAL YEAR
 
<TABLE>
<CAPTION>
                                                                          POTENTIAL
                                                                      REALIZABLE VALUE
                                                                      AT ASSUMED ANNUAL
                                                                       RATES OF SHARE
                                                                            PRICE
                                                                      APPRECIATION FOR
                                      INDIVIDUAL GRANTS                OPTION TERM(4)
                         -------------------------------------------- -----------------
                                    % OF TOTAL
                         NUMBER OF   OPTIONS
                         SECURITIES GRANTED TO
                         UNDERLYING EMPLOYEES  EXERCISE OR
                          OPTIONS   IN FISCAL  BASE PRICE  EXPIRATION
          NAME           GRANTED(1)  YEAR(2)    ($/SH)(3)     DATE       5%      10%
          ----           ---------- ---------- ----------- ---------- -------- --------
<S>                      <C>        <C>        <C>         <C>        <C>      <C>
Thomas S. Kaplan........        0         0        --          --        --       --
Keith R. Hulley.........        0         0        --          --        --       --
Marcel F. DeGuire.......        0         0        --          --        --       --
Gregory G. Marlier......        0         0        --          --        --       --
Douglas M. Smith........   31,250     23.36       $8.00    01/23/2007 $157,224 $398,436
</TABLE>
- --------
(1) All options granted in 1997, vest ratably over four years, with the first
    tranche vesting on the date of grant.
 
(2) Based on 133,750 options granted to employees in fiscal 1997 pursuant to
    the Employees' Share Option Plan.
 
(3) All share options were granted with exercise prices of $8.00 per share.
 
(4) These amounts are based on compounded annual rates of share price
    appreciation of five and ten percent over the 10-year term of the options,
    as mandated by rules of the Securities and Exchange Commission, and are
    not indicative of expected share price performance. Actual gains, if any,
    on share option exercises are dependent on future performance of the
    overall market conditions, as well as the option holders' continued
    employment through the vesting period. The amounts reflected in this table
    may not necessarily be achieved or may be exceeded. The indicated amounts
    are net of the option exercise price but before taxes that may be payable
    upon exercise.
 
                                      10
<PAGE>
 
OPTION EXERCISES AND HOLDINGS
 
  The following table sets forth information with respect to the Chief
Executive Officer and the four most highly compensated officers of Apex
Corporation concerning unexercised options held as of December 31, 1997.
 
                AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
                       AND FISCAL YEAR-END OPTION VALUES
 
<TABLE>
<CAPTION>
                                                                      VALUE OF
                                                                    UNEXERCISED
                           SHARES                   NUMBER OF       IN-THE-MONEY
                         ACQUIRED ON  VALUE   SECURITIES UNDERLYING  OPTIONS AT
                          EXERCISE   REALIZED  UNEXERCISED OPTIONS     FISCAL
NAME                         (#)       ($)     AT FISCAL YEAR-END    YEAR-END*
- ----                     ----------- -------- --------------------- ------------
<S>                      <C>         <C>      <C>                   <C>
Thomas S. Kaplan........      0         --             --                --
Keith R. Hulley.........      0         --           62,500           $296,875
Marcel F. DeGuire.......      0         --           31,250           $148,438
Gregory G. Marlier......      0         --           15,626           $ 74,224
Douglas M. Smith........      0         --           7,812.5          $ 37,109
</TABLE>
- --------
*  Computed based upon a price of $12.75 per share, which was the closing
   price of the Ordinary Shares on December 31, 1997 as quoted by the American
   Stock Exchange.
 
        REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
 
  The Compensation Committee of the Board of Directors (the "Compensation
Committee") is responsible for establishing and administrating the
compensation philosophy, policies, and plans for the directors of the Company
and the executive officers of the Company and its subsidiaries. The
Compensation Committee's executive compensation philosophy is that
compensation should largely be tied to the performance and the sustained
creation of shareholder value. As a result, the Company's compensation program
reflects a strong performance and long-term orientation. The compensation
programs also are designed to encourage employee share ownership. In its
administration of the various compensation plans, the Compensation Committee
focuses on the goals of tying compensation to performance and encouraging
executive share ownership.
 
  The Company's executive compensation program consists of two principal
components: base salary and share options. These components are described
below:
 
  Base Salary. Executive base salaries were initially established at levels
consistent with the median of mining companies of similar size and growth
prospects.
 
  In establishing executive salaries in the future, the Compensation Committee
intends to consider quantitative measures related to the Company's financial
performance, as well as a number of qualitative measures related to the
executive's duties and responsibilities. The Compensation Committee will
continue to compare the salary of its executive officers with salaries of
executive officers in comparable positions in other mining companies of
similar size and growth prospects.
 
  Share Options. The Company has established two share option plans: one for
officers, employees, consultants and agents of the Company and its
subsidiaries, and one for non-employee directors of the Company.
 
  Employees' Share Option Plan. The Company has established a share option
plan for officers, employees, consultants and agents of the Company and its
subsidiaries (the "Employees' Share Option Plan"). The Employees' Share Option
Plan provides for the grant of Ordinary Share options (including incentive
Ordinary share options as defined in Section 422 of the U.S. Internal Revenue
Code of 1986, as amended, (the "Code")),
 
                                      11
<PAGE>
 
Ordinary Share appreciation rights and other Ordinary Share awards (including
restricted Ordinary Share awards, contingent Ordinary Share awards and
dividend or equivalent Ordinary Share awards) (collectively "Awards"). The
total number of options outstanding at any time cannot exceed ten percent of
the number of Ordinary Shares outstanding from time to time. Options granted
under the Employees' Share Option Plan are non-assignable and exist for a
term, not to exceed ten years, fixed by the Compensation Committee. The
exercise price of options granted on or before the date of the Offering is
$8.00 per share. The exercise price of options granted after the date of the
Offerings is determined by the Compensation Committee at the time of grant;
provided that the exercise price shall not be less than 100 percent of the
Fair Market Value (as defined in the Employees' Share Option Plan) of the
Ordinary Shares on the date of grant. In the case of an incentive Ordinary
Share option granted to an employee owning (actually or constructively under
Section 422(b) of the Code) more than ten percent of the total combined voting
power of all classes of Ordinary Shares of the Company, the price of any such
option shall not be less than 110 percent of the Fair Market Value of the
Ordinary Shares on the date of grant. The aggregate Fair Market Value
(determined at the time the incentive share options are granted) of the
Ordinary Shares with respect to which incentive share options are exerciseable
for the first time by any optionee during any calendar year under all plans of
the Company shall not exceed $100,000. Awards may be granted by the
Compensation Committee on such terms, including vesting schedules, price,
restriction option period, dividend rights, post-retirement and termination
rights, and payment forms as they deem appropriate. Unless terminated by the
Board of Directors, the Employees' Share Option Plan continues until August 1,
2006.
 
  Options grants made under the Employees' Share Option Plan provide that in
the event of a Change of Control (as defined in the Employees' Share Option
Plan), the options whether or not currently vested and exercisable, shall
become immediately vested and exerciseable as of the effective date of the
Change of Control.
 
  In 1997, Share Option grants to executive officers were consistent with the
Company's compensation philosophy of emphasizing performance-oriented pay and
were determined by comparison with the compensation practices of other
similarly situated companies.
 
  Non-Employee Directors' Share Option Plan. The Company has established a
share option plan for non-employee directors of the Company (the "Non-employee
Directors' Share Option Plan"). The total number of options outstanding at any
time cannot exceed five percent of the number of Ordinary Shares outstanding
from time to time. Once granted under the Non-employee Directors' Share Option
Plan are non-assignable (except for assignments to immediate family members)
and expire at the earlier of (i) ten years after the grant of the option or
(ii) one year after the director ceases to be a director of the Company.
Options shall have an exercise price of 100 percent of the Fair Market Value
(as defined in the Non-employee Directors' Share Option Plan) of the Ordinary
Shares on the date of the grant. The Non-employee Directors' Share Option Plan
provides for the automatic grant of (i) an option to purchase a number of
Ordinary Shares equal to $50,000 divided by the Fair Market Value of the
Ordinary Shares on the date of the grant to each non-employee director at the
effective date of their initial election to the Board of Directors and (ii) an
option to purchase the number of Ordinary Shares equal to $50,000 divided by
the Fair Market Value of the Ordinary Shares on the date of the grant at the
close of business on the date of each annual meeting of the shareholders of
the Company.
 
  No options have been granted under the Non-employee Directors' Share Option
Plan. However, certain non-employee directors have received options pursuant
to individual grants. See "Security Ownership of Principal Shareholders and
Management."
 
  In 1997, Apex Corporation instituted a 401(k) Plan for its U.S. employees.
Apex Corporation makes monthly contributions to this 401(k) Plan, and
currently matches 50 percent of each employee's contribution up to an employee
contribution of 6 percent of base salary. Employees vest in the Apex
Corporation's contribution at 50 percent after one year of service and 100
percent after two years of service.
 
  Although the Company does not currently have a formal bonus or incentive
plan for any employees, it anticipates instituting an incentive bonus plan in
the future.
 
 
                                      12
<PAGE>
 
  Chairman's 1997 Compensation. Mr. Kaplan's base salary of $240,000 was
established upon his employment with the Company in April of 1997, and has not
been adjusted. Given Mr. Kaplan's existing share ownership in the Company, he
declined the issuance of options in 1997.
 
  Section 162(m) of the Internal Revenue Code, enacted in 1993, generally
limits to $1 million the tax deductibility of compensation paid by a public
company to its chief executive and four other most highly compensated
executive officers. The Company is relying upon certain transition rules set
forth in recently promulgated regulations. Therefore, the Compensation
Committee believes that it need not take any specific action or adopt a formal
policy at the present time with respect to the deductibility of compensation
under Section 162(m).
 
  Submitted by the Members of the Compensation Committee:
 
                                Harry M. Conger
                                  Paul Soros
 
  The preceding report shall not be deemed incorporated by reference by any
general statement incorporating by reference this Proxy Statement into any
filing under the Securities Act of 1933, as amended (the "Securities Act") or
the Securities Exchange Act of 1934 (the "Exchange Act"), except to the extent
the Company specifically incorporates this information by reference, and shall
not otherwise be deemed filed under the Securities Act or the Exchange Act.
 
                                      13
<PAGE>
 
                               PERFORMANCE GRAPH
 
  The Securities and Exchange Commission (the "SEC") requires that the Company
include in this Proxy Statement a line graph presentation comparing cumulative
shareholder returns on an indexed basis with a broad market index and either a
published industry or line-of-business index or a group of peer companies
selected by the Company. The Company has selected the Dow Jones Precious
Metals Index to reflect the market for precious metals stocks. The graph below
compares the cumulative total return as of December 31, 1997 on $100 invested
in Ordinary Shares on November 25, 1997 (the first day of trading in the
Ordinary Shares, and in the stocks comprising the Dow Jones Precious Metals
Index and Standard & Poor's 500 ("S&P 500"), assuming the reinvestment of all
dividends.

                [GRAPHICAL REPRESENTATION OF DATA TABLE BELOW]
 
        TABLE REFLECTING PLOT POINTS FOR CUMULATIVE TOTAL RETURN GRAPH
 
<TABLE>
<CAPTION>
                                                               11/25/97 12/31/97
                                                               -------- --------
   <S>                                                         <C>      <C>
   Apex Silver Mines Limited..................................   100     115.25
   Dow Jones Precious Metals Index............................   100      98.55
   S&P 500....................................................   100     101.72
</TABLE>
 
  The information under the heading "Performance Graph" shall not be deemed
incorporated by reference by any general statement incorporating by reference
this Proxy Statement into any filing under the Securities Act or the Exchange
Act, except to the extent the Company specifically incorporates this
information by reference, and shall not otherwise be deemed filed under the
Securities Act or the Exchange Act.
 
                                      14
<PAGE>
 
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
 
  The current members of the Compensation Committee of the Company are Messrs.
Harry Conger and Paul Soros. Both Mr. Conger and Mr. Soros are directors of
the Company. In addition, Mr. Soros is a director of, and an indirect five
percent shareholder of, Silver Holdings through his 100 percent ownership of
VDM (a five percent shareholder in Silver Holdings). Mr. Soros is also a
member of the Investment Advisory Committee of Quantum Industrial, which is
the largest shareholder of Silver Holdings.
 
CERTAIN TRANSACTIONS
 
  In connection with Silver Holdings' investment in Apex LDC in December of
1994, Apex LDC agreed to pay Tigris, a corporation formed under the laws of
the State of Delaware, an annual advisory fee of $75,000, plus expenses, in
consideration for Mr. Kaplan's services to Apex LDC and its subsidiaries. Mr.
Kaplan is the sole shareholder of Tigris. This consulting arrangement was
terminated at the end of the first quarter of 1997, following the formation of
Apex Corporation. In addition, Apex LDC agreed to pay Litani Capital
Management Ltd. ("Litani Ltd.") an annual advisory fee of $45,000, plus
expenses, in consideration for Litani Ltd.'s services to Apex LDC and its
subsidiaries. The right to this fee was subsequently assigned to LCM Holdings
LDC, a limited duration company formed under the laws of the Bahamas ("LCM
Holdings LDC"). This consulting arrangement was terminated at the end of the
first quarter of 1997.
 
  Certain officers of subsidiaries of the Company are shareholders and
directors of Begeyge Minera Ltd. ("Begeyge"), from which the Company acquired
options to purchase three mineral properties in Honduras for a total of
$20,000. The Company declined to exercise its options to purchase two of the
three properties. From the time of entering into the option contracts until
December 31, 1996, the Company spent a total of $182,324 in connection with
the returned properties. During the period January 1, 1997 through December
31, 1997 the Company paid Begeyge $5,000 in lease payments for one of the
returned properties. The Company spent a further $9,619 in connection with
this property during the period. The Company currently has an option to
purchase the remaining property for $3,000,000. Begeyge also serves as an
associate of the Company and during the period ended December 31, 1996, total
expenditures charged to the Company by Begeyge amounted to $106,691. During
the period ended December 31, 1997, Begeyge did not receive any payments from
the Company other than the $5,000 in lease payments.
 
  In 1996, Mr. Harry Conger, a director of the Company, received options to
purchase 25,000 Ordinary Shares at $8.00 per share, which vest ratably over
four years with the first tranche vesting on the date of the grant. In
addition, Mr. Conger received, pursuant to a grant as of April 10, 1997,
options to purchase 3,175 Ordinary Shares at $8.00 per share, which options
were granted in consideration of Mr. Conger's consulting services to the
Company.
 
  At December 31, 1997, the Company owned 73 percent of the outstanding share
capital of Apex LDC. Pursuant to the Buy-Sell Agreement, the Minority
Shareholders are entitled to sell their shares of Apex LDC to the Company for,
at the Company's sole option, Ordinary Shares on a one-for-one basis, cash or
a combination of cash and Ordinary Shares. At December 31, 1997, the Company
had reserved approximately 7,077,007 Ordinary Shares for issuance to the
Minority Shareholders in exchange for approximately 7,077,007 shares of Apex
LDC. If all such reserved Ordinary Shares were issued to the Minority
Shareholders as of the Record Date, the Company would have 26,201,923 Ordinary
Shares outstanding on the Record Date.
 
  In August of 1997, the Company (i) issued 25,000 Ordinary Shares to a
company affiliated with an officer of a subsidiary of the Company in
consideration for its services to the Company; (ii) exchanged 268,496 Ordinary
Shares for a 2.5 percent interest in ASC Bolivia LDC owned by Minera Tecnica
Consultores Asociados, S.A. ("Mintec"), an entity in which certain officers
and employees of a subsidiary of the Company have an interest, and (iii)
issued an officer of such subsidiary 113,595 Ordinary Shares in consideration
for his services to the Company.
 
 
                                      15
<PAGE>
 
  In 1997, Apex LDC hired Mintec to perform services on its behalf in Bolivia.
These services include administrative functions, obtaining interests in
properties on Apex LDC's behalf, and consulting services. Certain persons
affiliated with Mintec serve as directors or officers of Apex LDC's
subsidiaries. In January 1998, ASC Bolivia acquired 100 percent of Mintec's
assets, including buildings, equipment, mining concessions and its commercial
name, for approximately $1.3 million.
 
  Silver Holdings, the Company, Mr. Kaplan, Argentum LLC, Aurum LLC and
Consolidated have entered into a Board Designation Agreement pursuant to which
they have agreed to nominate and support for nomination two individuals
designated by Silver Holdings, for so long as Silver Holdings owns at least
one percent of the outstanding Ordinary Shares, inclusive of all Ordinary
Shares Silver Holdings may receive under the Buy-Sell Agreement.
 
  Silver Holdings, Argentum LLC, Consolidated, Litani LDC, Mr. Kaplan, Aurum
LLC and the Company have entered into a Registration Rights Agreement,
pursuant to which each of Silver Holdings and Argentum LLC is entitled to
demand the registration of their Ordinary Shares. Silver Holdings and Argentum
LLC may make such demand up to three times each on Form S-1 of the Securities
Act and up to an additional three times each on Forms S-2 and S-3 of the
Securities Act, when such forms are available for use by the Company. The
Company is not required to effect any demand registration within 20 days after
the effective date of a previous demand registration, and may postpone, on one
occasion in any 365-day period, the filing or effectiveness of a registration
statement for a demand registration for up to 120 days under certain
circumstances, including pending material transactions. Silver Holdings,
Argentum LLC, Aurum LLC, Mr. Kaplan, Consolidated and Litani LDC are also
entitled to unlimited piggyback registrations. All such registrations are at
the Company's expense, exclusive of underwriting discounts and commissions.
The Company and such shareholders have entered into customary indemnity and
contribution provisions.
 
EMPLOYMENT AGREEMENTS
 
  Keith Hulley, a director of the Company and President and Chief Operating
Officer of Apex Corporation, and Apex Corporation entered into an employment
agreement on September 2, 1996. Pursuant to such employment agreement, the
Company, through Apex Corporation, will pay Mr. Hulley an annual salary of
$225,000. In addition, the employment agreement provides that Mr. Hulley is
eligible to participate in the Company's and Apex Corporation's employee
benefit plans, including the Employees' Share Option Plan pursuant to which
Mr. Hulley has been granted options to purchase 125,000 Ordinary Shares.
Twenty-five percent of such options vested upon Mr. Hulley's appointment; the
remaining 75 percent vest over the three-year period ending September 2, 1999
at a rate of 25 percent per annum. The employment agreement, which may be
terminated for cause by Apex Corporation at any time, contains a severance
arrangement that entitles Mr. Hulley to receive his existing salary and all
benefits for one year from the date of termination if he is terminated, other
than for cause, during the three-year period ending September 2, 1999. The
employment agreement contains a non-compete covenant which restricts Mr.
Hulley for two years from the date of his termination.
 
  Marcel DeGuire, Vice President of Project Development of Apex Corporation,
and Apex Corporation entered into an employment agreement on August 1, 1996.
Pursuant to such employment agreement the Company, through Apex Corporation,
will pay Mr. DeGuire an annual salary of $180,000. In addition, the employment
agreement provides that Mr. DeGuire is eligible to participate in the
Company's employee benefit plans, including the Employees' Share Option Plan
pursuant to which Mr. DeGuire has been granted options to purchase 62,500
Ordinary Shares. Twenty-five percent of such options vested upon Mr. DeGuire's
appointment; the remaining 75 percent vest over the three-year period ending
August 1, 1999 at a rate of 25 percent per annum. The employment agreement,
which may be terminated for cause by Apex Corporation at any time, contains a
severance arrangement that entitles Mr. DeGuire to receive his existing salary
and all benefits for one year from the date of termination if he is
terminated, other than for cause, during the three-year period ending August
1, 1999. The employment agreement contains a non-compete covenant which
restricts Mr. DeGuire for two years from the date of his termination.
 
                                      16
<PAGE>
 
  Gregory Marlier, Vice President of Finance and Chief Financial Officer of
Apex Corporation, and Apex Corporation entered into an employment agreement on
October 2, 1996. Pursuant to such employment agreement the Company, through
Apex Corporation, will pay Mr. Marlier an annual salary of $125,000. In
addition, the employment agreement provides that Mr. Marlier is eligible to
participate in the Company's employee benefit plans, including the Employees'
Share Option Plan pursuant to which Mr. Marlier has been granted options to
purchase 31,250 Ordinary Shares. Twenty-five percent of such options vested
upon Mr. Marlier's appointment; the remaining 75 percent vest over the three-
year period ending October 2, 1999 at a rate of 25 percent per annum. The
employment agreement, which may be terminated for cause by Apex Corporation at
any time, contains a severance arrangement which entitles Mr. Marlier to
receive his existing salary and all benefits for one year from the date of
termination if he is terminated, other than for cause, during the three-year
period ending October 2, 1999. The employment agreement contains a non-compete
covenant which restricts Mr. Marlier for two years from the date of his
termination.
 
  Douglas Smith, Vice President of Exploration of Apex Corporation, and Apex
Corporation entered into an employment agreement on January 23, 1997. Pursuant
to such employment agreement the Company, through Apex Corporation, will pay
Mr. Smith an annual salary of $120,000. In addition, the employment agreement
provides that Mr. Smith is eligible to participate in the Company's employee
benefits plans, including the Employees' Share Option Plan pursuant to which
Mr. Smith has been granted options to purchase 31,250 Ordinary Shares. Twenty-
five percent of such options vested upon Mr. Smith's appointment; the
remaining 75 percent vest over the three-year period ending January 23, 2000
at a rate of 25 percent per annum. The employment agreement contains a
confidentiality covenant with a term of two years after the termination of Mr.
Smith's employment.
 
    COMPLIANCE WITH SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
 
  Section 16(a) of the Exchange Act requires the Company's directors and
persons who own more than 10 percent of a registered class of the Company's
equity securities, to file with the SEC initial reports of ownership and
reports of changes in ownership of Ordinary Shares and other equity securities
of the Company. These insiders are required by SEC regulations to furnish the
Company with copies of all Section 16(a) forms they file, including Forms 3, 4
and 5.
 
  The Company is not aware of any delinquent filing, based solely on its
review of the copies of such reports furnished to the Company and written
representations that no other reports were required.
 
                                 SOLICITATION
 
  The enclosed proxy is being solicited by the board of directors of the
Company. The cost of this solicitation will be borne by the Company. In
addition to solicitation by mail, directors and employees of the Company may
solicit proxies by telephone, telegraph or in person. Although no compensation
will be paid for such solicitation of proxies, the Company may also request
banks and brokers to solicit their customers who have a beneficial interest in
the Company's Ordinary Shares registered in the names of nominees and will
reimburse such banks and brokers for their reasonable out-of-pocket expenses.
In addition, the Company has engaged the American Stock Transfer and Trust
Company to assist in such solicitation as part of their agency services.
 
                             SHAREHOLDER PROPOSALS
 
  The rules of the SEC permit shareholders of the Company to present proposals
for shareholder action in the Company's proxy statement where such proposals
are consistent with applicable law, pertain to matters appropriate for
shareholder action and are not properly omitted by Company action in
accordance with the proxy rules. The Company's Annual Meeting of Shareholders
following the end of fiscal 1998 is expected to be held
 
                                      17
<PAGE>
 
on or about May 14, 1999, and proxy materials in connection with that meeting
are expected to be mailed on or about April 15, 1999. Shareholder proposals
prepared in accordance with the proxy rules must be received by the Company on
or before March 15, 1999. The Company's Memorandum and Articles of Association
also contain procedures to be followed for shareholder proposals for
shareholder action, including the nomination of directors.
 
                                    GENERAL
 
  The board of directors of the Company knows of no matters other than the
foregoing to be brought before the meeting. The enclosed proxy, however, gives
discretionary authority in the event that any additional matters should be
presented.
 
  The Company's Annual Report to Shareholders for the fiscal year ended
December 31, 1997 is being mailed to shareholders with this Proxy Statement.
 
                                          By Order of the Board of Directors,
 
                                          /s/ THOMAS S. KAPLAN
                                          -----------------------------------
                                          Thomas S. Kaplan, Chairman
 
                                      18
<PAGE>
 
                           APEX SILVER MINES LIMITED

              PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
         FOR ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 14, 1998

     The undersigned hereby appoints Thomas S. Kaplan and Keith R. Hulley, or
either of them, as proxies with full power of substitution to vote all shares of
Ordinary Shares, par value $0.01 per share, of Apex Silver Mines Limited of
record in the name of the undersigned at the close of business on March 27, 1998
at the Annual Meeting of Shareholders to be held in New York, New York on May
14, 1998, or at any postponements or adjournments, hereby revoking all former
proxies.

<TABLE>
<CAPTION>
<S>                            <C>                                           <C>  
1.  ELECTION OF DIRECTORS:     [__]  WITH AUTHORITY                          [__]  WITHHOLD AUTHORITY 
                                     to vote for all nominees listed below         to vote for all
                                     (except as marked to the contrary)            nominees
</TABLE>                                                              

(INSTRUCTIONS:  TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE
A LINE THROUGH THE WITHHELD NOMINEE'S NAME IN THE LIST BELOW.)

                Harry M. Conger, Michael Comninos, Richard Katz

2.   IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON ANY OTHER
     MATTERS COMING BEFORE THE MEETING.

                                      
<PAGE>
 
       THE ORDINARY SHARES REPRESENTED BY THE PROXY WILL BE VOTED ON PROPOSALS
     (1) AND (2) IN ACCORDANCE WITH THE SPECIFICATION MADE AND "FOR" SUCH
     PROPOSALS IF THERE IS NO SPECIFICATION.

                                    Dated:
                                          ----------------------------------


                                    -----------------------------------------
                                                       (Signature)

                                    ----------------------------------------- 
                                                       (Signature)

                                    Please sign name(s) exactly as shown at
                                    left.  When signing as executor,
                                    administrator, trustee or guardian, give
                                    full title as such; when shares have been
                                    issued in the names of two or more persons,
                                    all should sign.

                                      



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