APEX SILVER MINES LTD
10-Q, 1998-08-12
SILVER ORES
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<PAGE>
 
                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, DC 20549
                                        
                                   FORM 10-Q
(MARK ONE)

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30,1998.

                                       OR

[_]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM________TO________.

                        COMMISSION FILE NUMBER 1-13627

                           APEX SILVER MINES LIMITED
                           -------------------------
            (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

CAYMAN ISLANDS, BRITISH WEST INDIES                               NOT APPLICABLE
- --------------------------------------------------------------------------------
(STATE OR OTHER JURISDICTION OF                              (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION)                               IDENTIFICATION NO.)

        CALEDONIAN HOUSE
    GROUND FLOOR, MARY STREET
    GEORGETOWN, GRAND CAYMAN
CAYMAN ISLANDS, BRITISH WEST INDIES                              NOT APPLICABLE
- --------------------------------------------------------------------------------
(ADDRESS PRINCIPAL EXECUTIVE OFFICES)                              (ZIP CODE)

                                (345) 949-0050
- --------------------------------------------------------------------------------
             (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)

INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS REQUIRED
TO BE FILED BY SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 DURING
THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE REGISTRANT WAS
REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH FILING
REQUIREMENTS FOR THE PAST 90 DAYS:  YES   X    NO   
                                        ------    -----


AT AUGUST 3, 1998, 26,213,297 ORDINARY SHARES, $0.01 PAR VALUE PER SHARE, WERE
ISSUED AND OUTSTANDING.
<PAGE>
 
                           APEX SILVER MINES LIMITED
                                   FORM 10-Q
                          QUARTER ENDED JUNE 30, 1998


                                     INDEX


                                                                  PAGE
                                                                  ----     
PART I - FINANCIAL INFORMATION

  ITEM 1.  FINANCIAL STATEMENTS.................................    3
 
  ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
           CONDITION AND RESULTS OF OPERATIONS..................    7
 
  ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
           MARKET RISK..........................................    9
 
 
PART II - OTHER INFORMATION
 
  ITEM 1.  LEGAL PROCEEDINGS....................................   10
 
  ITEM 2.  CHANGES IN SECURITIES................................   10
 
  ITEM 3.  DEFAULTS UPON SENIOR SECURITIES......................   10
  
  ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS..   10
 
  ITEM 5.  OTHER INFORMATION....................................   10
 
  ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.....................   10
 

SIGNATURES  ....................................................   11

                                       2
<PAGE>
 
                         PART I. FINANCIAL INFORMATION
                                        
ITEM 1.  FINANCIAL STATEMENTS

                           APEX SILVER MINES LIMITED
                     (SUCCESSOR TO APEX SILVER MINES LDC)
                                        
                          CONSOLIDATED BALANCE SHEET
                     (EXPRESSED IN UNITED STATES DOLLARS)
                                        
<TABLE>
<CAPTION>
                                                                                        June 30,      December 31,
                                                                                          1998            1997
                                                                                    ---------------- ---------------
                                                                                      (Unaudited)
                                      Assets
Current assets
<S>                                                                                 <C>               <C>
  Cash and cash equivalents........................................................    $ 37,786,981     $ 57,033,193
  Amounts due from affiliate  .....................................................              --          722,717
  Prepaid expenses and other assets  ..............................................       1,713,537        1,070,462
                                                                                       ------------     ------------
    Total current assets  .........................................................      39,500,518       58,826,372


Mining properties and development costs  ..........................................      24,540,321       11,888,258
Plant, buildings and equipment (net)  .............................................       2,197,547        1,149,842
Value Added Tax recoverable  ......................................................       2,677,463        1,351,004
Other non-current assets...........................................................         366,193          113,183
                                                                                       ------------     ------------
    Total assets  .................................................................    $ 69,282,042     $ 73,328,659
                                                                                       ============     ============

                     LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities
  Accrued salaries, wages and benefits.............................................    $    102,751     $     40,736
  Accounts payable and other accrued liabilities  .................................       1,672,418          553,130
  Current portion of long-term debt................................................         172,000          412,408
                                                                                       ------------     ------------
    Total current liabilities  ....................................................       1,947,169        1,006,274
Long-term debt  ...................................................................       2,182,400        3,093,788
Shareholders' equity
  Ordinary shares, $.01 par value, 75,000,000 shares authorized; 19,906,602
   and 19,124,916 shares issued and outstanding, respectively   ...................         199,066          191,249
  Contributed surplus  ............................................................      97,812,152       97,819,969
  Accumulated deficit  ............................................................     (32,858,745)     (28,782,621)
                                                                                       ------------     ------------
    Total shareholders' equity  ...................................................      65,152,473       69,228,597
                                                                                       ------------     ------------
    Total liabilities and shareholders' equity  ...................................    $ 69,282,042     $ 73,328,659
                                                                                       ============     ============
</TABLE>
                                        
    The accompanying notes form an integral part of these consolidated financial
                                  statements.

                                       3
<PAGE>
 
                           APEX SILVER MINES LIMITED
                     (Successor to Apex Silver Mines LDC)
                                        
                     CONSOLIDATED STATEMENT OF OPERATIONS
                     (Expressed in United States dollars)
                                  (UNAUDITED)
<TABLE>
<CAPTION>
                                               THREE MONTHS ENDED JUNE 30,      SIX MONTHS ENDED JUNE 30,
                                             -------------------------------  -----------------------------
                                                 1998               1997          1998             1997
                                             --------------  ---------------  -------------  --------------
<S>                                          <C>             <C>              <C>            <C>                                 
Income
    Interest income  .....................      $   661,614      $   282,103    $ 1,393,996   $     475,298
                                             --------------  ---------------  -------------  --------------
       Total income  .....................          661,614          282,103      1,393,996         475,298
Expenses
    Exploration  .........................        1,699,675        3,492,854      2,336,386       7,961,583
    Administrative  ......................        1,467,669        1,511,712      1,765,412       2,414,831
    Consulting  ..........................          492,653          888,924        825,632       1,059,669
    Professional fees  ...................          309,761          739,736        458,649         775,863
    Amortization and depreciation  .......           57,816           27,050         84,041          41,198
                                             --------------  ---------------  -------------  --------------
       Total expenses  ...................        4,027,574        6,660,276      5,470,120      12,253,144
                                             --------------  ---------------  -------------  --------------
       Net loss  .........................      $(3,365,960)     $(6,378,173)   $(4,076,124)   $(11,777,846)
                                             ==============  ===============  =============  ==============
Net loss per ordinary share  Basic and
diluted/(1)/..............................           $(0.13)          $(0.31)        $(0.16)         $(0.58)
                                             ==============  ===============  =============  ==============
Weighted average ordinary shares
outstanding...............................       26,203,922       20,271,460     26,203,922      20,271,460
                                             ==============  ===============  =============  ==============
</TABLE>

(1)  Diluted earnings per share were antidilutive for all periods presented.



  The accompanying notes form an integral part of these consolidated financial
                                  statements.

                                       4
<PAGE>
 
                           APEX SILVER MINES LIMITED
                     (SUCCESSOR TO APEX SILVER MINES LDC)

                     CONSOLIDATED STATEMENT OF CASH FLOWS
                     (EXPRESSED IN UNITED STATES DOLLARS)
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                                 Six Months Ended June 30,
                                                          ---------------------------------------
                                                                 1998                1997
                                                          ------------------  -------------------
<S>                                                          <C>                 <C>
Cash flows from operating activities:
    Net cash used in operating
    activities............................................     $  (4,057,598)        $(12,981,766)
Cash flows from investing activities:
    Purchase of short-term investments....................                --           (9,000,000)
    Mining properties and development costs...............       (13,252,063)                  --
    Purchases of plant, buildings and equipment...........        (1,103,450)             (51,322)
    Other.................................................          (281,305)                  --
                                                                ------------         ------------
        Net cash used in investing activities.............       (14,636,818)          (9,051,322)
                                                                ------------         ------------
Cash flows from financing activities:
Net cash provided by (used in) financing activities.......          (551,796)             171,659
                                                                ------------         ------------
Net decrease in cash and cash equivalents.................       (19,246,212)         (21,861,429)
Cash and cash equivalents beginning of period.............        57,033,193           25,949,771
                                                                ------------         ------------
Cash and cash equivalents end of period...................      $ 37,786,981         $  4,088,342
                                                                ============         ============



SUPPLEMENTAL NON-CASH TRANSACTION:

       Capitalization of depreciation expense
         related to San Cristobal assets..................      $    109,853         $         __
</TABLE>


  The accompanying notes form an integral part of these consolidated financial
                                  statements.

                                       5
<PAGE>
 
                           APEX SILVER MINES LIMITED
                     (Successor to Apex Silver Mines LDC)

                NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                     (Expressed in United States dollars)

1.  BASIS OF PREPARATION OF FINANCIAL STATEMENTS

  These unaudited interim consolidated financial statements of Apex Silver Mines
Limited (the "Company") and its subsidiaries have been prepared in accordance
with the rules and regulations of the Securities and Exchange Commission.  Such
rules and regulations allow the omission of certain information and footnote
disclosures normally included in financial statements prepared in accordance
with GAAP so long as such omissions do not render the financial statements
misleading.

  In the opinion of management, these financial statements reflect all
adjustments which are necessary for a fair statement of the results for the
periods presented.  All adjustments were of a normal recurring nature.  These
interim financial statements should be read in conjunction with the annual
financial statements of the Company included in its 1997 Annual Report on Form
10-K.
 
2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
  In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 133, Accounting for Derivative
Instruments and Hedging Activities (the "Standard").  This Statement establishes
accounting and reporting standards for derivative instruments and for hedging
activities. It requires that an entity recognize all derivatives as either
assets or liabilities in the statement of financial position and measure those
instruments at fair value. The accounting for changes in fair value of a
derivative will depend upon the intended use of the derivative and the resulting
designation.

  Currently, the Company has no derivative instruments to which SFAS No. 133
would apply; however, any instruments acquired by the Company to which the
Standard would apply will be accounted for in accordance with the Standard from
its effective date of January 1, 2000.

3.  VALUE ADDED TAX RECOVERABLE

  The Company has recorded all value added tax (''VAT'') paid by ASC Bolivia LDC
("ASC Bolivia"), ASC Peru LDC ("ASC Peru") and Minera de Cordilleras, S. de R.L.
de C.V. ("Cordilleras Mexico") as recoverable assets. The VAT paid by ASC
Bolivia and ASC Peru is expected to be recovered through the sale of mine
production and the VAT paid by Cordilleras Mexico is recoverable upon
application to local authorities. As of June 30, 1998, the VAT recorded by ASC
Bolivia, ASC Peru and Cordilleras Mexico was $2,376,397, $167,669 and $133,397,
respectively.

4.  PLANT, BUILDINGS AND EQUIPMENT

  The components of plant, buildings and equipment were as follows:

                                             JUNE 30,           DECEMBER 31,
                                               1998                 1997
                                        -------------------  -------------------
                                            (Unaudited)
  Buildings...........................          $  807,000           $  410,639
  Mining equipment....................             754,799              728,313
  Other furniture and equipment.......             894,986              104,529
                                                ----------           ----------
                                                 2,456,785            1,243,481
  Less: Accumulated depreciation......            (259,238)             (93,639)
                                                ----------           ----------
                                                $2,197,547           $1,149,842
                                                ==========           ==========

                                                                                

                                       6
<PAGE>
 
ITEM 2:     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
            AND RESULTS OF OPERATIONS

GENERAL

  The following discussion and analysis summarizes the results of operations of
Apex Silver Mines Limited for the three months ended June 30, 1998 and 1997 and
for the six months ended June 30, 1998 and 1997 and changes in its financial
condition from December 31, 1997.  This discussion should be read in conjunction
with the Management's Discussion and Analysis included in the Company's 1997
Annual Report on Form 10-K.

  The Company is a mining exploration and development company that holds a
portfolio of silver exploration and development properties in South America,
Central America and Central Asia. None of these properties are in production
and, consequently, the Company has no current operating income or cash flow. The
sole source of income for the Company since inception is interest income. The
Company's policy is to invest all excess cash in liquid, high credit quality,
short-term financial instruments.

  Mineral exploration expenditures are expensed as incurred prior to the
determination of the feasibility of mining operations. Once it has been
determined that a mineral property has proven and probable ore reserves,
subsequent development and exploration expenses are capitalized. Through June
30, 1998, all acquisition and exploration costs have been expensed as incurred,
except those pertaining to the San Cristobal Project. Since September 1, 1997,
the Company has capitalized exploration and development costs associated with
the San Cristobal Project and will continue to do so in the future.

  Apex Silver Mines Corporation ("Apex Corporation"), the Company's U.S.
management services company, is subject to U.S. income taxes. Otherwise the
Company pays no income tax in the U.S. since the Company is incorporated in the
Cayman Islands and conducts no business that currently generates U.S. taxable
income. There is currently no corporate taxation imposed by the Cayman Islands.
If any form of taxation were to be enacted in the Cayman Islands, the Company
has been granted exemption until January 16, 2015.

RESULTS OF OPERATIONS  THREE MONTHS ENDED JUNE 30, 1998

  Interest Income. Interest income for the second quarter of 1998 was $661,614
compared to $282,103 for the second quarter of 1997. The increase in interest
income for the comparative periods was due to the additional cash raised in the
November 1997 initial public offering.

  Exploration.  Exploration expenses were $1,699,675 for the second quarter of
1998 compared to $3,492,854 for the second quarter of 1997. The decreased
exploration expenses in 1998 compared to 1997 were due to the capitalization of
exploration and development activity at the San Cristobal Project in 1998.

  Consulting.   Consulting fees were $492,653 for the second quarter of 1998
compared to $888,924 for the second quarter of 1997. The decrease in 1998 versus
1997 is primarily due to a decrease in expenses associated with retaining third
party consultants to prepare technical studies on exploration stage properties.

  Professional Fees.   Professional fees were $309,761 for the second quarter of
1998 compared to $739,736 for the second quarter of 1997. The decrease in 1998
over 1997 was primarily due to higher legal and accounting fees in preparation
of the November 1997 initial public offering.

RESULTS OF OPERATIONS  SIX MONTHS ENDED JUNE 30, 1998

  Interest Income. Interest income for the six months ended June 30, 1998 was
$1,393,996 compared to $475,298 for the six months ended June 30, 1997. The
increase in interest income for the comparative periods was due to the
additional cash raised in the November 1997 initial public offering.

                                       7
<PAGE>
 
  Exploration.  Exploration expenses were $2,336,386 for the six months ended
June 30, 1998 compared to $7,961,583 for the six months ended June 30, 1997. The
decreased exploration expenses in 1998 compared to 1997 were due to the
capitalization of exploration and development activity at the San Cristobal 
Project in 1998.

  Administrative.   Administrative expenses were $1,765,412 for the six months
ended June 30, 1998, compared to $2,414,831 for the six months ended June 30,
1997.  The decrease in 1998 versus 1997 is primarily related to the
capitalization of administrative activity related to the San Cristobal Project
beginning September 1, 1997.

  Consulting.   Consulting fees were $825,632 for the six months ended June 30,
1998 compared to $1,059,669 for the six months ended June 30, 1997. The decrease
in 1998 versus 1997 is primarily due to a decrease in expenses associated with
retaining third party consultants to prepare technical studies on exploration
stage properties and the capitalization of consulting activity related to the
San Cristobal Project in 1998.

  Professional Fees.   Professional fees were $458,649 for the six months ended
June 30, 1998 compared to $775,863 for the six months ended June 30, 1997. The
decrease in 1998 over 1997 was primarily due to higher legal and accounting fees
in preparation of the November 1997 initial public offering.

LIQUIDITY AND CAPITAL RESOURCES

  As of June 30, 1998, the Company had cash and cash equivalents of $37,786,981
compared to $57,033,193 at December 31, 1997. The decrease was due primarily to
costs incurred on the San Cristobal Project.

  The Company is currently assessing available sources of capital that would
allow for the development and construction of the San Cristobal Project. While
the Company believes that it will be able to secure the required financing, no
assurance can be given that it will be able to do so.

  The Company is subject to a series of obligations with respect to its mineral
properties; the failure to meet any of these commitments could result in the
loss or forfeiture of one or more of the Company's properties. These obligations
consist of government mineral patent fees and commissions, work commitments,
lease payments and advance royalties. In addition, a number of the Company's
property interests derive from contractual purchase options. In order to acquire
such properties, the Company will be obliged to make certain payments to the
registered concession holders and others who have interests in the properties.

RECENT DEVELOPMENTS

   The Company is currently conducting a bankable feasibility study on its San
Cristobal Project, which it expects to complete in early 1999.  Based on drill
results through the end of March 1998, the Company announced a 70 percent
increase in proven and probable reserves on May 7, 1998.  A second reserve
update is planned for the third quarter once results from the completed drill
program have been analyzed.

   Proven and probable reserves now total 208.7 million tonnes of ore grading
1.64 ounces per tonne of silver, 1.34 percent zinc and 0.45 percent lead.
Assumptions used to develop these reserves are the same as in the 1997 first
phase feasibility study, including market prices of $5.00 per ounce silver,
$0.55 per pound of zinc and $0.30 per pound of lead.  Updated reserves now
contain 341 million ounces of silver, 2.8 million tonnes of zinc and 0.9 million
tonnes of lead.

  Apex's 1997 first phase feasibility study incorporated two separate pits,
Tesorera and Jayula.  1998 drilling confirms sufficient ore continuity between
Tesorera and Jayula to create one large open pit.  The result is a significantly
lower strip ratio of 1.26:1 (tonnes of waste per tonne of ore) versus a first
phase feasibility strip ratio of 1.66:1.  1998 drilling has extended the mine
life from 11.5 years to 19.3 years using 

                                       8
<PAGE>
 
the production rate of 30,000 tonnes per day. Higher mining rates are also being
considered as part of the bankable feasibility study.

OTHER MATTERS

   In April 1998, the Company retired $900,000 of long-term debt, originally
acquired in exchange for certain mineral property related to the San Cristobal
Project, for a cash payment of $300,000.  This debt was to be retired through a
5% net smelter return royalty in the first year of production.  The $600,000
difference between the $900,000 principal amount and the $300,000 effectively
represents a purchase price adjustment and has therefore been reflected as a
reduction of mining properties.

   In August 1998, the Company purchased Silver Holdings LDC's ("Silver
Holdings") 24 percent minority interest in Apex Silver Mines LDC ("Apex LDC"),
the Company's primary operating subsidiary.  The Company purchased the minority
interest with 6,297,321 of its ordinary shares in accordance with the terms of a
1996 buy-sell agreement amongst the Company and minority shareholders in Apex
LDC. With completion of the purchase, the Company now owns 100 percent of Apex 
LDC.  As Silver Holdings' ownership in Apex LDC converted on a one-for-one basis
to the Company's ordinary shares, this transaction does not effect the
beneficial or economic interest in Apex LDC attributable to the Company's
shareholders.

YEAR 2000 DATE CONVERSION

   The inability of computer programs to correctly interpret the century from a 
date that consists of two-year digits does not appear to be a significant
problem to the Company. As of June 30, 1998, the Company has no mainframe or
central database. In addition, personal computers and software direct the
Company's accounting system. Although minor adjustments may be required on the
software applications, these costs will be immaterial. To further mitigate the
risk of loss of data, the Company intends to perform regular tape backups of all
files, contact software manufacturers about updates to their products and keep
informed of the latest developments concerning year 2000 issues.

FORWARD-LOOKING STATEMENTS

   This filing contains forward-looking statements within the meaning of
Section 27A of the Securities Act and Section 21E of the Exchange Act.  All
statements, other than statements of historical facts, included in this filing
which address activities, events or developments that the Company expects,
believes, intends or anticipates will or may occur in the future, including such
matters as future investments in existing development projects and the
acquisition of new mineral properties (including the amount and nature thereof),
business strategies and the future need for additional funds from outside
sources, are forward-looking statements.  Forward-looking statements are
inherently subject to risks and uncertainties, many of which cannot be predicted
with accuracy, and some of which might not even be anticipated.  Future events
and actual results, financial and otherwise, could differ materially from those
set forth in or contemplated by the forward-looking statements therein.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

    Currently, the Company's major principal cash balances are held in U.S.
dollars.  Subsidiary cash balances in foreign currencies are held to minimum
balances and therefore have a minimum risk to currency fluctuations.  There are
currently no hedge positions against foreign currencies.  The Company currently
does not hedge commodity and base metals price risks.  However, the Company
anticipates that as its mineral properties are brought into production and it
begins to derive revenue from the production, sale and exchange of commodity and
base metals, the Company may utilize various price hedging techniques to lock in
forward delivery prices on a portion of its production, and thereby mitigate
some of the risks associated with fluctuations in the prices of the metals it
produces.  The Company may also engage in hedging activities to hedge the risk
of exposure to currency fluctuations as a result of its operations in several
foreign countries.  There can be no assurance that the use of hedging techniques
will always benefit the Company.

                                       9
<PAGE>
 
                          PART II: OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

        During the period covered by this report, there were no legal
        proceedings instituted that are reportable.

ITEM 2. CHANGES IN SECURITIES

        None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

        None.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

        The Annual Meeting of Shareholders was held on May 14, 1998. At the
        meeting the following directors were elected to serve until the 2001
        Annual Meeting of Shareholders:

        Director                  Number of Common Shares Voted
        --------                  -----------------------------

                          Affirmative    Withhold Authority    Broker Non-Votes
                          -----------    ------------------    ----------------

        Harry Conger        9,559,238           103,343                 0
        Michael Comninos    9,659,081             3,500                 0
        Richard Katz        9,659,081             3,500                 0

        The directors continuing in office until 1999 are Ove Hoegh, Keith
        Hulley and Paul Soros. The directors continuing in office until 2000 are
        Thomas S. Kaplan, Eduardo S. Elsztain and David Sean Hanna.

ITEM 5. OTHER INFORMATION

        None.

ITEM 6. (A) REPORTS ON FORM 8-K

        None.

        (B) EXHIBITS

        3.1   Amended and restated Memorandum of Association of the Registrant.*
        3.2   Amended and restated Articles of Association of the Registrant.*
        27    Financial Data Schedule.

        *Incorporated by reference to the Company's Annual Report on Form 10-K
         filed for the year ended December 31, 1997 (File No. 1-13627).

                                       10
<PAGE>
 
                                  SIGNATURES


        Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on behalf of the undersigned
thereunto duly authorized.



                                  APEX SILVER MINES LIMITED
                                  (Registrant)



Date:  August 12, 1998            By: /s/  Thomas S. Kaplan
                                      ---------------------
                                      Thomas S. Kaplan
                                      Chairman, Board of Directors


 

                                       11

<TABLE> <S> <C>

<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains summary information extracted from the financial
statements included in the Apex Silver Mines Limited Form 10-Q for the quarter
ended June 30, 1998 and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
       
<S>                                        <C>
<PERIOD-TYPE>                              6-MOS
<FISCAL-YEAR-END>                          DEC-31-1998
<PERIOD-START>                             JAN-01-1998
<PERIOD-END>                               JUN-30-1998
<CASH>                                      37,786,981
<SECURITIES>                                         0
<RECEIVABLES>                                        0
<ALLOWANCES>                                         0
<INVENTORY>                                          0
<CURRENT-ASSETS>                            39,500,518
<PP&E>                                      26,997,106
<DEPRECIATION>                                 259,238
<TOTAL-ASSETS>                              69,282,042
<CURRENT-LIABILITIES>                        1,947,169
<BONDS>                                              0
                                0
                                          0
<COMMON>                                       199,066
<OTHER-SE>                                  64,953,407
<TOTAL-LIABILITY-AND-EQUITY>                69,282,042
<SALES>                                              0
<TOTAL-REVENUES>                             1,393,996
<CGS>                                                0
<TOTAL-COSTS>                                        0
<OTHER-EXPENSES>                             5,470,120
<LOSS-PROVISION>                                     0
<INTEREST-EXPENSE>                                   0
<INCOME-PRETAX>                                      0
<INCOME-TAX>                                         0
<INCOME-CONTINUING>                                  0
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                               (4,076,124)
<EPS-PRIMARY>                                   (0.16)
<EPS-DILUTED>                                   (0.16)
        

</TABLE>



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