APEX SILVER MINES LTD, 424B3, 1999-11-09

APEX SILVER MINES LTD
424B3, 1999-11-09
GOLD AND SILVER ORES

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Filed Pursuant to Rule 424(b)(3)
Registration No. 333-76181

PROSPECTUS SUPPLEMENT
(To Prospectus Dated October 7, 1999)

APEX SILVER MINES LIMITED

898,200 Units Consisting of
898,200 Ordinary Shares and
Warrants to Purchase 449,100 Ordinary Shares
and Ordinary Shares Underlying the Warrants

Of the 898,200 units offered by this prospectus supplement, 875,666 units
are being sold by our company directly to purchasers and up to 22,534 units may
be issued as part of the commission payable by our company in connection with
this offering. See "Plan of Distribution." Each unit is comprised of one
ordinary share, par value $0.01 per share, of our company, and one-half of a
warrant. Each whole warrant entitles the holder to purchase one ordinary share
at the exercise price of $18.00 per share. Units are only being offered and
will be sold in quantities divisible by two. The ordinary shares and warrants
are separately transferable.

Our company's ordinary shares are listed on the American Stock Exchange
under the symbol "SIL." On November 8, 1999, the last reported sales price of
the ordinary shares on the AMEX composite index was $11-15/16.

Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus supplement is truthful or complete. Any representation to the
contrary is a criminal offense.

Investing in our securities involves significant risks. See the Risk
Factors section in the related prospectus beginning on page 4.

The units offered by this prospectus supplement will be purchased by the
purchasers directly from our company at a price of $12 per unit, resulting in
$10,507,992 aggregate net proceeds to our company, before deducting commissions
and estimated expenses of the offering. Our company will pay the expenses of
the offering estimated at approximately $50,000 and commissions payable in
connection with the offering. See "Plan of Distribution."

The date of this prospectus supplement is November 8, 1999.
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TABLE OF CONTENTS

Prospectus Supplement

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RISK FACTORS...........................................................S-1
RECENT DEVELOPMENTS....................................................S-1
USE OF PROCEEDS........................................................S-1
DESCRIPTION OF THE WARRANTS............................................S-1
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS..............................S-4
PLAN OF DISTRIBUTION..................................................S-11
</TABLE>

Prospectus
<TABLE>
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Page
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<S> <C>
SUMMARY..................................................................1
RISK FACTORS.............................................................4
RATIOS OF EARNINGS TO FIXED CHARGES AND EARNINGS TO COMBINED FIXED
CHARGES AND PREFERENCE SHARE DIVIDENDS..................................13
WHERE YOU CAN FIND MORE INFORMATION.....................................13
FORWARD-LOOKING STATEMENTS..............................................14
THE COMPANY.............................................................16
REPUBLIC OF BOLIVIA.....................................................19
USE OF PROCEEDS.........................................................23
DESCRIPTION OF THE DEBT SECURITIES......................................23
DESCRIPTION OF THE PREFERENCE SHARES....................................35
DESCRIPTION OF THE DEPOSITARY SHARES....................................37
DESCRIPTION OF THE ORDINARY SHARES......................................40
DESCRIPTION OF THE WARRANTS.............................................41
DESCRIPTION OF THE ORDINARY SHARE PURCHASE RIGHTS.......................42
PLAN OF DISTRIBUTION....................................................44
LEGAL MATTERS...........................................................45
EXPERTS.................................................................45
</TABLE>
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RISK FACTORS

Prospective purchasers of our securities should consider carefully, in
addition to the other information contained in, or incorporated by reference
into, this prospectus supplement or the related prospectus, the risk factors set
forth in the Risk Factors section on page 4 in the related prospectus.

RECENT DEVELOPMENTS

On November 5, 1999, our company completed a public offering of
7,214,466 units, resulting in approximately $82.9 million aggregate net proceeds
to our company, after deducting commissions and estimated expenses of the
offering.

USE OF PROCEEDS

Our company expects that the net proceeds from the sale of the units
offered by this prospectus supplement, after deducting commissions and estimated
expenses of the offering, will be approximately $10.0 million. Our company
plans to use a majority of the net proceeds to finance a portion of the
construction and development of the San Cristobal project. Our company plans to
finance the remaining portion of the construction and development of the San
Cristobal project through external financings, which may include bank borrowings
and additional debt and equity offerings.

The remaining portion of the net proceeds of the offering will be used for
the following purposes:
. exploring and developing properties in our portfolio;

. maintaining control or ownership of our properties, including making
ongoing lease and royalty payments and paying other maintenance and
registration fees;

. acquiring additional mining related properties or businesses; and

. financing other general corporate purposes.

Pending the application of the net proceeds, we expect to invest the
proceeds in short-term investment grade marketable securities or money market
obligations.

The proceeds from the exercise of the warrants offered by this prospectus
supplement are expected to be applied in the same manner. The exercise price of
a whole warrant for one ordinary share is initially $18.00 or 150% of the price
of the ordinary shares offered by this prospectus supplement. The exercise
price of the warrants may be adjusted in accordance with the terms of the
warrant. See "Description of the Warrants."

DESCRIPTION OF THE WARRANTS

General

The warrants are being issued pursuant to a warrant agreement between our
company and American Stock Transfer & Trust Company, as the warrant agent. The
following summary of the

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material provisions of the warrant agreement are not complete. You should refer
to the warrant agreement, a copy of which will be filed with the SEC prior to
the issuance of the units.

The warrants offered by this prospectus supplement are initially
exercisable for an aggregate of 449,100 ordinary shares. Each whole warrant is
exercisable for one ordinary share at an exercise price of $18.00 per share. If
an adjustment of the exercise price occurs, the number of ordinary shares
issuable upon exercise of the warrants would increase or decrease
proportionately. See "--Adjustment." The warrants will expire at 5:00 p.m., New
York City time, on November 4, 2002.

We have reserved and will continue to reserve out of our authorized share
capital, a number of ordinary shares sufficient to provide for the issuance of
ordinary shares upon the exercise of the warrants.

The certificates for the warrants will be numbered and registered in a
warrant register maintained by the warrant agent. The registered holder of a
warrant will be treated as the owner of that warrant for all purposes.

Our company will pay any documentary stamp taxes, if any, attributable to
the initial issuance of any warrant certificates or certificates for ordinary
shares issuable upon exercise of the warrants. However, the warrant holder
shall pay any taxes that may be payable in respect of any transfer involved in
the issue or delivery of any warrant certificates or certificates for ordinary
shares unless that holder has paid our company the amount of the tax or has
established to our satisfaction that the tax has been paid.

There is no public market for the warrants and we do not expect that a
market for the warrants will develop. There can be no assurance that the market
price of the ordinary shares will exceed the exercise price of the warrants.

Transfer of Warrants

The warrants are transferable only on the books of the warrant agent upon
delivery of a warrant certificate, duly endorsed by the registered holder or by
an authorized representative or accompanied by proper evidence of succession,
assignment or authority to transfer. Endorsements must be guaranteed by an
eligible guarantor institution which is a member of a signature guarantee
program satisfactory to the warrant agent. Warrants may be transferred only in
whole, so as to allow the holder of each warrant to purchase one whole ordinary
share. In addition, any transfer of a warrant must be in a minimum increment of
one hundred warrants. Without the prior written consent of our company, during
the first thirty days after the date of the warrant agreement, a warrant
certificate may not be transferred or exchanged other than for the full number
of unexercised warrants that the certificate represents.

Exercise of Warrants

Each warrant certificate initially entitles the holder of the warrant to
purchase for cash the number ordinary shares indicated on the certificate at the
exercise price of $18.00 per share, subject to any adjustments made pursuant to
the warrant agreement. Warrants may be exercised at any time from the opening
of business on November 5, 1999 to 5:00 p.m., New York City time, on November 4,
2002. After that time and date, unexercised warrants will become void.

Subject to the terms of the warrant agreement, a warrant may be exercised
upon:

. the surrender of the warrant certificate evidencing that warrant to
the warrant agent;

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. delivery of the subscription form duly executed, with the signature
guaranteed by an eligible institution; and

. delivery of payment of the exercise price by certified or official
bank check.

Upon receipt of the warrant certificate, the duly executed subscription
form and payment of the exercise price, the warrant agent shall cause to be
issued and delivered as soon as practicable the ordinary shares purchased upon
exercise. No fractions of ordinary shares, cash or other consideration will be
issued. If less than all of the warrants represented by the warrant certificate
are exercised, a new warrant certificate will be issued for the remaining
warrants.

Adjustment

An adjustment to the number of ordinary shares purchasable upon exercise of
each warrant will be made if our company takes any of the following actions at
any time while a warrant is outstanding:

. declare a dividend or make a distribution on the ordinary shares payable
in ordinary shares;

. subdivide or reclassify the outstanding ordinary shares into a greater
number of ordinary shares; or

. combine or reclassify the outstanding ordinary shares into a smaller
number of ordinary shares.

If any of these events occur, then the exercise price and the number of
ordinary shares to be issued upon exercise of a warrant in effect on the record
date of these actions will be proportionately adjusted so that the holder of a
warrant exercised after that time shall be entitled to receive the aggregate
number of ordinary shares which, if the warrant had been exercised immediately
before the action, the holder would have owned upon exercise and been entitled
to receive by virtue of the dividend, subdivision, combination or
reclassification.

Notwithstanding anything to the contrary, no adjustment in the exercise
price will be made unless the increase or decrease is at least 1 percent of the
exercise price. Any adjustments that are not made as a result of the
immediately preceding sentence will be carried forward and taken into account
into any subsequent adjustment. In addition, no adjustment to the exercise
price or other terms of the warrants will be made if the registered holder is to
participate in any transaction on a basis, and with notice, that the board of
directors of our company determines to be fair and appropriate in light of the
basis and notice on which holders of ordinary shares participate in the
transaction.

Mergers, Consolidations and Other Transactions

If (1) we consolidate into or merge or consummate an arrangement,
reconstruction or statutory share exchange with, any other person or company or
(2) any other person or company acquires all of our outstanding ordinary shares,
each registered holder will have the right upon exercise of a warrant and
payment of the exercise price, to purchase the kind and amount of shares of
stock and other securities and property, including cash, that the holder would
have owned or been entitled to receive after the happening of the consolidation,
merger, arrangement, reconstruction or share exchange, had the warrant been
exercised immediately prior to the event.

No Rights as Shareholders

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Holders of warrants are not entitled to vote, receive dividends, consent
or receive notice as shareholders with respect to any meeting of shareholders,
or to exercise any rights whatsoever as shareholders.

Modification of the Warrants

Our company and the warrant agent may supplement or amend the warrant
agreement without the approval of any holder in order to cure any ambiguity or
correct or supplement any provision that may be defective or inconsistent with
any other provision of the warrant agreement or as our company and the warrant
agreement deems necessary or advisable, but which do not materially and
adversely affect the interest of the holders.

Our company and the warrant agent may also supplement or amend the
warrant agreement in any other respect with the written consent of the holders
of a majority of the outstanding warrants. Notwithstanding the foregoing, each
holder must consent to the following events, to the extent the events are not
originally provided for in the warrant agreement or made in compliance with
applicable law:

. a change the number or nature of securities purchasable upon the
exercise of any warrant;

. increase the exercise price of any warrant or

. accelerate the expiration date of any warrant.

CERTAIN FEDERAL INCOME TAX CONSIDERATIONS

The following discussion is a summary of certain Cayman Islands and U.S.
federal income tax consequences of the ownership of ordinary shares and warrants
by an investor that holds the warrants and shares as capital assets. The
discussion is based on the Internal Revenue Code and the tax laws of the Cayman
Islands and the United States as in effect on the date of this prospectus
supplement, which are subject to change. The discussion does not address all
material tax consequences of the ownership of the ordinary shares and warrants,
and does not consider any specific facts or circumstances that may apply to a
particular investor, including tax-exempt entities, insurance companies, banks,
broker-dealers, investors liable for alternative minimum tax, investors who hold
ordinary shares and warrants as part of straddles or hedging or conversion
transactions or constructive sales, and investors whose functional currency is
not the U.S. dollar, which may be subject to special rules. In addition, the
discussion does not address special rules that could, in some circumstances,
apply to a U.S. Holder of ordinary shares and warrants that owns directly or by
attribution 10 percent or more of the ordinary shares.

Because the discussion is not exhaustive of all possible tax considerations
relevant to the ownership of ordinary shares and warrants and individual
circumstances may vary and because the discussion is not based upon an opinion
of counsel, prospective investors are urged to consult their tax advisors
regarding the U.S. federal, state, local and foreign tax consequences, including
the Cayman Islands tax consequences, of the acquisition, ownership and
disposition of ordinary shares and warrants in their particular circumstances.

Cayman Islands Taxation

There is, at present, no direct income taxation in the Cayman Islands.
Accordingly, income and gains received by our company, and distributions by our
company to our shareholders and gains realized

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upon the disposition of ordinary shares and warrants, will be received free of
all Cayman Islands income and withholding taxes. Our company is registered as an
exempted company under Cayman Islands law, and our company has received an
undertaking from the Governor-in-Council of the Cayman Islands to the effect
that, for a period of 20 years from the date of the undertaking, no law that is
enacted in the Cayman Islands imposing any tax to be levied on profits or income
or gains or appreciations will apply to our company nor shall any tax in the
nature of estate duty or inheritance tax be payable on the shares, debentures or
other obligations of our company.

United States Federal Income Taxation

For purposes of this discussion, a U.S. Holder is any beneficial owner that
owns ordinary shares and/or warrants as capital assets and is:

. a citizen or resident of the U.S.,

. a corporation or partnership that is created or organized in the U.S. or
under the law of the U.S. or any state,

. an estate that is subject to U.S. federal income tax on its income
regardless of source, or

. a trust, if a court within the U.S. is able to exercise primary
supervision over the administration of the trust and one or more U.S.
fiduciaries have authority to control all substantial decisions of the
trust.

U.S. Holders

Ownership and Disposition of Warrants

Sale of a Warrant. Generally, a U.S. Holder of a warrant will recognize
gain or loss upon the sale of a warrant in an amount equal to the difference
between the amount realized on the sale and the U.S. Holder's adjusted tax basis
for the warrant. A U.S. Holder's adjusted tax basis in a warrant will generally
equal its cost, increased by the amount of any constructive distributions to the
U.S. Holder in respect of the warrants as a result of an adjustment to the
conversion ratio. In order to determine the cost of a warrant, the total
purchase price paid for the ordinary share/warrant units offered by this
prospectus supplement must be allocated between the ordinary shares and the
warrants acquired, based upon their relative fair market value. Our company will
provide this information upon request to any holder. See "--Adjustments Under
the Warrants," below. Gain or loss attributable to the sale of an option to buy
or sell property is considered gain from the sale of property that has the same
character as the property to which the option relates. The warrants relate to
ordinary shares. Accordingly, subject to the discussion below regarding the
passive foreign investment company status of our company, gain or losses
attributable to the sale of warrants will generally constitute capital gains and
losses if the ordinary shares would be a capital asset in the hands of the
warrant holder and will be long term if the warrants have been held for more
than one year.

Exercise of a Warrant. In general, no gain or loss will be recognized by a
U.S. Holder upon the exercise of a warrant. Upon the exercise of a warrant, the
holder's tax basis in the shares so acquired will be the sum of (1) the holder's
adjusted tax basis in the warrant and (2) the cash paid upon exercise of the
warrant. A U.S. Holder's holding period in the ordinary shares so acquired will
begin on the day following the date the warrants are exercised for purposes of
determining whether gain on the sale of the ordinary shares will be treated as
long-term or short-term capital gain.

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Expiration of the Warrants. Upon expiration of an unexercised warrant, the
holder will recognize a loss equal to the adjusted tax basis of the warrant in
the hands of the holder. The character of the loss recognized upon the failure
to exercise an option is determined based on the character of the property to
which the option relates. Because the warrants relate to ordinary shares, a
loss recognized upon expiration of a warrant will generally be capital loss if
the ordinary shares would have been a capital asset in the hands of the warrant
holder and will be long term if the warrant was held for more than one year.

Adjustments Under the Warrants. Pursuant to the terms of the warrants, the
number of ordinary shares that may be purchase upon exercise of the warrants is
subject to adjustment from time to time upon the occurrence of the events
described under "Description of the Warrants--Adjustment." In some
circumstances, a change in the conversion ratio or any transaction having a
similar effect on the interest of a warrant holder may be treated as a
distribution with respect to any warrant holder whose proportionate interest in
the earnings and profits of the issuer is increased by that change or
transaction. As a result, under some circumstances which may or may not occur,
an adjustment pursuant to the terms of the warrants may be treated as a taxable
distribution to the warrant holders to the extent of our company's current or
accumulated earnings and profits, as determined for U.S. federal income tax
purposes, without regard to whether the warrant holders receive any cash or
other property. If the warrant holders receive a taxable distribution, their
tax bases in the warrants will be increased by an amount equal to the taxable
distribution.

Passive Foreign Investment Company Considerations. As discussed below, our
company may constitute a passive foreign investment company (PFIC) for any
taxable year. If our company were treated as a PFIC during a U.S. Holder's
holding period for the warrants, then such U.S. Holder will be subject to a
special tax regime in respect of gains realized on the sale or other disposition
of warrants. Although not entirely free from doubt, the PFIC rules should not
apply to gain realized in respect of any warrants disposed of during the same
taxable year in which the warrants are acquired.

In general, under the PFIC rules, a U.S. Holder will be required to
allocate any gain realized on the sale of the warrants to each day during the
Holder's holding period for the warrants, and will be taxable at the highest
rate of taxation applicable to ordinary income for the year to which the gain is
allocable, without regard to the U.S. Holder's other items of income and loss
for such taxable year. This deferred tax, other than the tax on amounts
allocable to the year of disposition, then will be increased by an interest
charge computed by reference to the rate generally applicable to underpayments
of tax, which interest charge generally will be non-deductible interest expense
for individual taxpayers. A U.S. Holder of warrants will not be entitled to
elect to have our company treated as a "qualified electing fund" ("QEF
election") or a mark to market election, as described below, to alleviate
adverse tax consequences arising from the special tax regime. Holders of
warrants also should note that they may be subject to adverse PFIC consequences
as the result of their possible indirect ownership of certain "lower-tier
PFICs," which are discussed below. The application of the PFIC rules to
ordinary shares received upon an exercise of the warrants also raise complicated
tax issues. The application of the PFIC rules to holders of warrants is
complex. Investors are urged to consult their U.S. tax advisors with respect to
the PFIC consequences of owning and exercising the warrants.

A U.S. Holder who owns warrants during any year that our company is a PFIC
must file an Internal Revenue Service Form 8621 in respect of such warrants and,
under proposed U.S. Treasury Regulations, in respect of interests in any lower-
tier PFICs.

Prospective investors are urged to consult their own tax advisors regarding
the possible classification of our company as a PFIC as well as the potential
tax consequences arising from the ownership and disposition, directly or
indirectly, of interests in a PFIC.

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Ownership and Disposition of Ordinary Shares

Taxation of Dividends

Subject to the discussion under "Passive Foreign Investment Company
Considerations" and "Foreign Personal Holding Company Considerations," under
U.S. federal income tax law, U.S. Holders must include in gross income as a
dividend the gross amount of any distribution paid by our company to the extent
of its current or accumulated earnings and profits, as determined for U.S.
federal income tax purposes, as ordinary income when the dividend is received by
the U.S. Holder. The dividend will not be eligible for the dividends-received
deduction generally allowed to U.S. corporations. In general, the dividend will
be income from sources outside the U.S., and generally will be treated together
with other items of "passive income" or, in the case of certain holders,
"financial services income" for U.S. foreign tax credit purposes.

Taxation of Capital Gains

Subject to the discussion under "Passive Foreign Investment Company
Considerations," upon a sale or other disposition of ordinary shares, a U.S.
Holder will recognize gain or loss for U.S. federal income tax purposes in an
amount equal to the difference between the U.S. dollar value of the amount
realized and the U.S. Holder's tax basis, determined in U.S. dollars, in the
ordinary shares. This gain or loss will be capital gain or loss and, if the
U.S. Holder's holding period for those ordinary shares exceeds one year, will be
long-term capital gain or loss.

Passive Foreign Investment Company Considerations

Classification as a PFIC. Our company will be a PFIC for any taxable year
if 75 percent or more of its gross income for the taxable year is "passive"
income or 50 percent or more of its assets produce or are held for the
production of "passive" income. For purposes of applying these income and asset
tests, our company is deemed to receive its pro rata share of the income, and to
own its pro rata share of the assets, of any corporation in which our company
directly or indirectly owns 25 percent or more of the stock, measured by value.
In addition, although not free from doubt, it is expected that our company will
be deemed to receive its pro rata share of the income, and to own its pro rata
share of the assets, of any partnership in which our company is a partner,
either directly or through one or more intervening partnerships. U.S. Holders
should be aware that the ordinary shares may be treated as stock of a PFIC for
U.S. federal income tax purposes because our company will earn significant
passive income from investments relative to any non-passive income of our
company prior to the commencement by our company of substantial mining
operations. Further, the Internal Revenue Code treats gains from transactions
in commodities, such as silver, as passive income for PFIC purposes unless
"substantially all" of a company's business is as an active producer of the
commodity. Applicable U.S. Treasury Regulations interpret "substantially all"
to mean that 85 percent or more of a producer's taxable income must be gross
receipts from sales in the active conduct of a commodities business or certain
related activities. Under these rules, there can be no assurance that our
company would not be treated as a PFIC even after it has begun to earn income
from mining operations. In this regard, prospective investors should note that
our company would likely constitute a PFIC even after it begins to generate
significant income from mining operations in the event our company conducts its
mining operations predominantly through the use of independent contractors
rather than directly through the use of its own employees.

Prospective investors should note that the PFIC classification rules are
complex and may apply in numerous unexpected circumstances. Under these rules,
our company could be classified as a PFIC in various circumstances in addition
to those described in the preceding paragraphs. For example, our company could
constitute a PFIC for any taxable year as a consequence of owning substantial
"passive

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assets" such as cash and marketable securities, including any cash derived from
the issuance of our company's securities or the sale of assets of our company,
even in a year in which our company generates significant income from direct
mining operations.

Consequences of PFIC Status. If our company were treated as a PFIC for any
taxable year of a U.S. Holder's holding period for its shares, unless a U.S.
Holder makes a QEF election or mark to market election in respect of our
company, that U.S. Holder will be subject to a special tax regime (1) in respect
of gains realized on the sale or other disposition of ordinary shares, and (2)
in respect of distributions on ordinary shares held for more than one taxable
year to the extent those distributions constitute "excess distributions."
Although not entirely free from doubt, the PFIC rules should not apply to gain
realized in respect of any ordinary shares disposed of during the same taxable
year in which the ordinary shares are acquired. An excess distribution generally
includes dividends or other distributions received from a PFIC in any taxable
year to the extent the amount of such distributions exceeds 125 percent of the
average distributions for the three preceding years or, if shorter, the
investor's holding period. In general, under the PFIC rules, a U.S. Holder will
be required to allocate such excess distributions and any gain realized on the
sale of the ordinary shares to each day during the Holder's holding period for
the ordinary shares, and will be taxable at the highest rate of taxation
applicable to ordinary income for the year to which the excess distribution or
gain is allocable, without regard to the U.S. Holder's other items of income and
loss for such taxable year. This deferred tax, other than the tax on amounts
allocable to the year of disposition or receipt of the distribution, will then
be increased by an interest charge computed by reference to the rate generally
applicable to underpayments of tax, which interest charge generally will be non-
deductible interest expense for individual taxpayers.

QEF Election. The special PFIC tax rules described above will not apply to
a U.S. Holder if the U.S. Holder makes a QEF election in the first taxable year
of the holder's ownership of the ordinary shares during which our company is a
PFIC and our company complies with specified reporting requirements. Our company
intends to comply with all reporting requirements necessary for U.S. Holders to
make a QEF election with respect to our company and will upon request provide to
U.S. Holders the information that may be required to make a QEF election
effective.

A U.S. Holder that makes a QEF election with respect to our company will be
currently taxable on its pro rata share of ordinary earnings and net capital
gain of our company for each taxable year of our company in which our company
qualifies as a PFIC, regardless of whether the holder receives any distribution
from our company. The U.S. Holder's basis in the ordinary shares of our company
will be increased to reflect taxed but undistributed income of our company.
Distributions of income that previously has been taxed will result in a
corresponding reduction of basis in the ordinary shares and will not be taxed
again as a distribution to the U.S. Holder.

During the period in which our company may be a PFIC, our company may be
entitled to deductions under U.S. federal income tax principles that may
substantially offset earnings of our company. As a result, the pro rata share of
the ordinary earnings and net capital gain of our company that would be
includable by a U.S. Holder making a QEF election may not be material. If this
were the case, U.S. Holders generally could obtain the benefits of making a QEF
election in respect of our company, including the elimination of deferred tax
and interest charges on excess distributions and realized gains, without having
to bear current inclusions of income substantially in excess of distributions
received. U.S. Holders should consult their own tax advisors concerning the
most appropriate manner in which to make a QEF election.

Lower-Tier PFICs. At the present time, none of our company's non-U.S.
subsidiaries is or will be classified as a corporation for U.S. federal income
tax purposes. Accordingly, U.S. Holders are not subject to the PFIC rules with
respect to their indirect ownership interests in these subsidiaries.

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If our company is a PFIC and, in the future, our company acquires a non-
U.S. subsidiary that is classified as a corporation for U.S. federal income tax
purposes, U.S. Holders generally would be deemed to own, and also would be
subject to the PFIC rules with respect to, their indirect ownership interests in
any corporate subsidiaries of our company which themselves constitute PFICs.
These indirect corporate subsidiaries are referred to as "lower-tier PFICs." If
our company were a PFIC and a U.S. Holder does not make a QEF election in
respect of any lower-tier PFIC, the U.S. Holder could incur liability for the
deferred tax and interest charge described above if either (1) our company
receives a distribution from, or disposes of all or part of its interest in, a
lower-tier PFIC or (2) the U.S. Holder disposes of all or part of its ordinary
shares. Our company intends to cause any lower-tier PFIC to comply with all
reporting requirements necessary for a U.S. Holder to make a QEF election with
respect to the lower-tier PFIC.

Mark to Market Election. For taxable years beginning after December 31,
1997, a U.S. Holder who owns marketable stock of a PFIC may elect to recognize
any gain or loss on the stock on a mark-to-market basis at the end of the U.S.
Holder's taxable year. If an election is made, any mark-to-market gains, and any
gains realized on disposition of the stock, will be treated as ordinary income.
Mark-to-market losses, and any losses recognized on disposition of the stock to
the extent of the holder's net mark-to-market gains, will be treated as ordinary
losses. U.S. Holders should consult their tax advisors regarding the effect of
making a mark-to-market election with respect to the ordinary shares, including
the effect of such an election on any lower-tier PFICs that the holder is deemed
to own.

A U.S. Holder who owns ordinary shares during any year that our company is
a PFIC must file an Internal Revenue Service Form 8621 in respect of such
ordinary shares and, under proposed U.S. Treasury Regulations, in respect of
interests in any lower-tier PFICs.

Foreign Personal Holding Company Considerations

Prospective investors should also be aware that special U.S. tax laws would
apply to U.S. Holders of ordinary shares if our company, or any corporate
subsidiary of our company, is characterized as a foreign personal holding
company (FPHC). In particular, if our company, or any corporate subsidiary, is
an FPHC in respect of any taxable year of our company, U.S. Holders may be
subject to current tax on their direct or indirect pro rata share of the income
of the FPHC, as determined for purposes of the FPHC rules, even if no cash
dividend is actually paid by the FPHC. In general, our company, or any corporate
subsidiary of our company, will constitute a FPHC during a taxable year if (1) a
specified percentage of its income is passive for purposes of the FPHC rules,
and (2) at any time during the taxable year five or fewer individuals who are
U.S. citizens or residents own directly, indirectly or constructively more than
50 percent of the voting power or value of such company's stock. Our company
does not anticipate that it or any of its subsidiaries will be an FPHC
immediately following this offering or in the future. Our company, however, can
provide no assurance as to this conclusion.

Non-U.S. Holders

An investor who is not a U.S. Holder will not be subject to U.S. federal
income tax on any dividends received on the ordinary shares unless (1) the
investor has an office or other fixed place of business in the U.S. to which the
dividends are attributable and either the dividends are derived in the active
conduct of a banking, finance or similar business in the United States or the
investor is a non-U.S. corporation the principal business of which consists of
trading in stocks or securities for its own account

S-9
<PAGE>

and other specified conditions are met or (2) the investor is a foreign
insurance company that conducts business in the U.S. and the dividends are
attributable to that business.

An investor who is not a U.S. Holder will not be subject to U.S. federal
income tax on any gain realized on the sale or other disposition of ordinary
shares or warrants unless (1) the investor is engaged in the conduct of a trade
or business in the Unties States and the gain is effectively connected with that
trade or business or (2) the investor is an individual who is present in the
United States for 183 days or more during the taxable year in which the gain is
realized and other specified conditions are met.

United States Information Reporting and Backup Withholding

Under current U.S. federal income tax law, payments of dividends to some
U.S. Holders are subject to information reporting, and a "back up" withholding
tax at a rate of 31 percent if these persons fail to supply correct taxpayer
identification numbers and other information in the required manner. Payments of
dividends to a U.S. Holder (1) made by mail or wire transfer to an address in
the United States, (2) made by a paying agent, broker or other intermediary in
the United States or (3) made by a U.S. broker or by a custodian, nominee or
agent that is (a) a U.S. person, (b) a controlled foreign corporation for U.S.
tax purposes, or (c) a foreign person 50% or more of whose gross income is from
a U.S. trade or business (the persons described in (a), (b) and (c) shall be
referred to as a "U.S. Controlled Person") to that holder outside the United
States may be subject to U.S. information reporting requirements. Payments of
dividends received by investors who are not U.S. Holders generally would be
exempt from these reporting requirements, but these persons may be required to
comply with certification and identification procedures in order to prove their
exemption from the reporting requirements. Treasury regulations currently in
effect do not require backup withholding with respect to dividends paid by a
foreign corporation such as our company.

The payment of proceeds of the disposition of ordinary shares or warrants
by a holder to or through the U.S. office of a broker generally will be subject
to information reporting and backup withholding at a rate of 31 percent, unless
the holder either certifies its status as a non-U.S. Holder under penalties of
perjury or otherwise establishes an exemption. The payment of proceeds of the
disposition by a holder of ordinary shares or warrants to or through a non-U.S.
office of a broker will generally not be subject to backup withholding and
information reporting. However, information reporting, but not backup
withholding, may apply to such a holder who sells a beneficial interest in
ordinary shares or warrants through a non U.S. branch of a U.S. broker, or
through a non-U.S. office of a U.S. Controlled Person, in either case, unless
the holder establishes an exemption or the broker has documentary evidence in
its files of the holder's status as a non-U.S. person.

Any amounts withheld under the backup withholding rules from payment to a
holder will be refunded, or credited against the holder's U.S. federal income
tax liability, if any, provided that the required information is furnished to
the U.S. Internal Revenue Service.

S-10
<PAGE>

PLAN OF DISTRIBUTION

Of the 898,200 units offered by this prospectus supplement, 875,666 units
are being sold by our company directly to purchasers at a price of $12 per unit.
In connection with this offering, our company has agreed to pay to HKC
Securities, Inc. and Sunrise Securities Corp. an aggregate commission equal to
$448,900. This commission may be paid in the form of cash and/or securities of
our company. Up to 22,534 units may be issued as part of the commission payable
by our company in connection with this offering. The ordinary shares offered by
this prospectus supplement and the ordinary shares underlying the warrants are
expected to be listed on the American Stock Exchange subject to official notice
of issuance.

S-11
<PAGE>

================================================================================

You should rely only on the information incorporated by reference or
provided in this prospectus supplement or the related prospectus. We have
authorized no one to provide you with different information. We are not making
an offer of these securities in any state where the offer is not permitted. You
should not assume that the information in this prospectus is accurate as of any
date other that the date on the front of this document.

Apex Silver Mines Limited

898,200 Units Consisting of
898,200 Ordinary Shares and
Warrants to Purchase 449,100 Ordinary Shares
and Ordinary Shares Underlying the Warrants

PROSPECTUS SUPPLEMENT

____________

November 8, 1999

================================================================================

<PAGE>

PROSPECTUS

APEX SILVER MINES LIMITED

DEBT SECURITIES
PREFERENCE SHARES
DEPOSITARY SHARES
ORDINARY SHARES
WARRANTS
ORDINARY SHARE PURCHASE RIGHTS

----------------

We will provide specific terms of these securities in supplements to this
prospectus.

You should read this prospectus and any supplement carefully before you
invest.

Our company's ordinary shares are listed on the American Stock Exchange
under the symbol "SIL."

Investing in these securities involves significant risks. See the Risk
Factors section beginning on page 4.

Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.

SALOMON SMITH BARNEY MERRILL LYNCH & CO.

The date of this prospectus is October 7, 1999.
<PAGE>

[General Location Map]
<PAGE>

TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>

SUMMARY............................................................... 1
RISK FACTORS.......................................................... 4
RATIOS OF EARNINGS TO FIXED CHARGES AND EARNINGS TO COMBINED FIXED
CHARGES AND PREFERENCE SHARE DIVIDENDS................................ 13
WHERE YOU CAN FIND MORE INFORMATION................................... 13
FORWARD-LOOKING STATEMENTS............................................ 14
THE COMPANY........................................................... 16
REPUBLIC OF BOLIVIA................................................... 19
USE OF PROCEEDS....................................................... 23
DESCRIPTION OF THE DEBT SECURITIES.................................... 23
DESCRIPTION OF THE PREFERENCE SHARES.................................. 35
DESCRIPTION OF THE DEPOSITARY SHARES.................................. 37
DESCRIPTION OF THE ORDINARY SHARES.................................... 40
DESCRIPTION OF THE WARRANTS........................................... 41
DESCRIPTION OF THE ORDINARY SHARE PURCHASE RIGHTS..................... 42
PLAN OF DISTRIBUTION.................................................. 44
LEGAL MATTERS......................................................... 45
EXPERTS............................................................... 45

</TABLE>
<PAGE>

SUMMARY

This summary highlights selected information from this document and may not
contain all of the information that is important to you. To understand the
terms of our securities, you should carefully read this document with the
attached prospectus supplement. Together these documents will give the specific
terms of the securities we are offering. You should also read the documents to
which we have referred you in "Where You Can Find More Information" below for
information on our company and our financial statements.

The Company

Apex Silver Mines Limited explores and develops silver properties in South
America and Central America. We have one of the largest, most diversified
portfolios of privately owned and controlled silver exploration properties in
the world. Our exploration efforts have produced our first development project,
the San Cristobal project located in southern Bolivia. None of our properties
are in production, and, consequently, we have no current operating income or
cash flow.

We maintain our principal executive offices at Caledonian House, Jennett
Street, George Town, Grand Cayman, Cayman Islands, British West Indies. Our
telephone number is (345) 949-0050.

The Securities We May Offer

This prospectus is part of a registration statement (File No. 333-76181)
that we filed with the Securities and Exchange Commission utilizing a "shelf"
registration process. Under this shelf registration process, we may offer from
time to time any of the following securities, either separately or in units:

. debt securities;
. preference shares;
. depositary shares;
. ordinary shares;
. warrants; and
. ordinary share purchase rights.

This prospectus provides you with a general description of the securities
which we may offer. Each time we offer securities, we will provide you with a
prospectus supplement that will describe the specific amounts, prices and terms
of the securities being offered. The prospectus supplement may also add, update
or change information contained in this prospectus.

The securities which we may offer may involve a high degree of risk. A
prospectus supplement relating to any security that we offer will describe the
risks relating to each offered security. In addition, a prospectus supplement
may also contain additional risk factors relating to our business.

Debt Securities

We may offer general obligations of our company, which may be senior or
subordinated. The senior debt securities will have the same ranking as all of
our other unsecured, unsubordinated debt. The subordinated debt securities will
be entitled to payment only after payment on our senior indebtedness. In

<PAGE>

addition, we are a holding company that conducts all of our operations through
subsidiaries. As a result, claims of the holders of the debt securities will
generally have a junior position to claims of creditors of our subsidiaries and
preferred shareholders of our subsidiaries, except to the extent that our
company is recognized as a creditor of those subsidiaries.

The senior debt securities will be issued under an indenture between our
company and Wilmington Trust Company, as trustee for the senior debt securities.
The subordinated debt securities will be issued under an indenture between our
company and Wilmington Trust FSB, as trustee for the subordinated debt
securities. We have summarized the material features of the debt securities that
will be included in the indentures. We encourage you to read the form of the
indentures and our recent periodic and current reports that we file with the
SEC. The indentures are included as exhibits to this registration statement.
Directions on how you can get copies of these reports are provided under "Where
You Can Find More Information" below.

General Indenture Provisions that Apply to Senior Debt Securities and
Subordinated Debt Securities

. Neither form of indenture limits the amount of debt securities that we
may issue under that indenture.

. If we comply with the requirements of the indentures, we may merge or
consolidate with another company, or sell all or substantially all of
our assets to another company. If these events occur, the other company
will be required to assume our responsibilities relating to the debt
securities, and we will be released from all liabilities and
obligations. There is no restriction on other companies merging into our
company.

. Generally, the indentures provide that holders of a majority of the
total principal amount of outstanding debt securities of all series
affected by a proposed change to specified obligations may vote to
change our obligations or your rights concerning the debt securities of
those series. For this purpose, the holders of debt securities of all
series will vote as a class. However, to change the amount or timing of
principal, interest or other payments under a series of debt securities,
every holder in that series must consent.

Events of Default

Each indenture provides that each of the following is an event of default:

. If we do not pay interest for 30 days after its due date.
. If we do not pay principal or premium when due.
. If we do not make any sinking fund payment for 30 days after its due
date.
. If we continue to breach a covenant for 90 days after notice.
. If a bankruptcy or insolvency event set forth in the indenture occurs.

If an event of default occurs with respect to any series of debt
securities, the trustee or holders of 25% of the outstanding principal amount of
that series may declare the principal amount of that series immediately payable
or, in the case of a bankruptcy or insolvency event, the principal amount of all
series under the indenture immediately payable. However, holders of a majority
of the principal amount may rescind this action.

2
<PAGE>

General Indenture Provisions that Apply Only to Senior Debt Securities

The prospectus supplement relating to a series of senior debt securities
will describe any material covenants or any special events of default in respect
of that series of senior debt securities.

General Indenture Provisions that Apply Only to Subordinated Debt Securities

The subordinated debt securities will be subordinated to all senior
indebtedness, which includes all indebtedness for money borrowed by our company,
except indebtedness that is stated to be not superior to, or to have the same
ranking as, the subordinated debt securities. In addition, claims of our
subsidiaries' creditors and preferred shareholders generally will have priority
with respect to the subsidiaries' assets and earnings over the claims of our
creditors, including holders of the subordinated debt securities, even though
those obligations may not constitute senior indebtedness. The subordinated debt
securities, therefore, will be effectively subordinated to creditors, including
trade creditors, and preferred shareholders of our subsidiaries with regard to
the assets of those subsidiaries.

The prospectus supplement relating to a series of subordinated debt
securities will describe any material covenants or special events of default in
respect of that series of subordinated debt securities.

Preference Shares and Depositary Shares

We may issue our preference shares, par value $0.01 per share, in one or
more classes or series. Our Board of Directors will determine for the
preference shares, the dividend, voting, redemption, sinking fund, conversion,
liquidation preference, relative priority and other rights of the class or
series being offered and the terms and conditions relating to its offering and
sale at the time of the offer and sale. We may also issue fractional shares of
preference shares that will be represented by depositary shares and depositary
receipts.

Ordinary Shares

We may issue our ordinary shares, par value $0.01 per share. Holders of
ordinary shares are entitled to receive dividends when declared by the Board of
Directors. The right to receive dividends is also subject to the rights of
holders of preference shares. Each holder of ordinary shares is entitled to one
vote per share. The holders of ordinary shares have no preemptive rights or
cumulative voting rights.

Warrants

We may issue warrants for the purchase of preference shares or ordinary
shares. We may issue warrants independently or together with other securities.
A prospectus supplement relating to the warrants will describe the terms of the
warrants, including the following:

. the title, number and offering price of the warrants;
. the terms on which they may be issued; and
. the number, designation and description of the ordinary shares or
preference shares that may be purchased upon exercise of the warrants
and the price at which the shares may be purchased.

3
<PAGE>

Ordinary Share Purchase Rights

We may issue rights to purchase ordinary shares. We may issue ordinary
share purchase rights independently or together with other securities. Our
Board of Directors will determine for the ordinary share purchase rights, the
number, the exercise price, the terms on which they may be issued, the extent of
transferability, the date of commencement and the date of expiration.

RISK FACTORS

Prospective purchasers of our securities should consider carefully, in
addition to the other information contained in, or incorporated by reference
into, this prospectus or any prospectus supplement, the following risk factors:

No Production History - we have not mined any silver or other metals.

Our company has no history of producing silver or other metals. The
development of our economically feasible properties will require the
construction or rehabilitation and operation of mines, processing plants and
related infrastructure. As a result, we are subject to all of the risks
associated with establishing new mining operations and business enterprises.
There can be no assurance that we will successfully establish mining operations
or profitably produce silver or other metals at any of our properties.

History of Losses - we expect losses to continue for at least the next three
years.

As an exploration and development company that has no production history,
we have incurred losses since our inception, and we expect to continue to incur
additional losses for at least the next three years. As of December 31, 1998,
we had an accumulated deficit of $39.8 million. There can be no assurance that
we will achieve or sustain profitability in the future.

Potential Inaccuracy of the Reserves and Other Mineralization Estimates

Unless otherwise indicated, reserves and other mineralization figures
presented in our filings with the Securities and Exchange Commission, press
releases and other public statements that may be made from time to time are
based on estimates of contained silver and other metals made by independent
geologists and/or our own personnel. These estimates are imprecise and depend
on geological interpretation and statistical inferences drawn from drilling and
sampling which may prove to be unreliable. There can be no assurance that:

. these estimates will be accurate;

. reserves and other mineralization figures will be accurate; or

. reserves or mineralization could be mined and processed profitably.

Since we have not commenced production on any of our properties, reserves
and other mineralization estimates for these properties may require adjustments
or downward revisions based on actual production experience. Extended declines
in market prices for silver, zinc and lead may render portions of our reserves
uneconomic and result in reduced reported reserves. Any material reductions in
estimates of our reserves and other mineralization, or of our ability to extract
these reserves or mineralization, could have a material adverse effect on our
results of operations and financial condition.

4
<PAGE>

We have not established the presence of any proven or probable reserves at
any of our mineral properties other than the San Cristobal project. There can
be no assurance that subsequent testing or future feasibility studies will
establish additional reserves at our properties. The failure to establish
additional reserves could restrict our ability to successfully implement our
strategies for long term growth beyond the San Cristobal project.

San Cristobal Project Risks - the completion of the San Cristobal project is
subject to delays in commencement and completion, our inability to achieve
anticipated production volume and cost increases.

We plan to complete the development of the San Cristobal project and
commence production operations by late 2001. However, there can be no assurance
that:

. the development of the San Cristobal project will be commenced or
completed on a timely basis, if at all;

. the resulting operations will achieve the anticipated production
volume; or

. the construction costs and ongoing operating costs associated with the
development of the San Cristobal project will not be higher than
anticipated.

If the actual cost to complete the development of the San Cristobal project
is significantly higher than expected, there can be no assurance that we will
have enough funds to cover these costs or that we would be able to obtain
alternative sources of financing to cover these costs. Failure to obtain
necessary project financing on acceptable terms, to commence or complete the
development of the San Cristobal project on a timely basis, to achieve
anticipated production capacity, and unexpected cost increases could have a
material adverse effect on our future results of operations and financial
condition.

The successful development of the San Cristobal project is subject to the
other risk factors described in this prospectus.

Dependence on a Single Mining Project - our principal asset is the San Cristobal
project.

We anticipate that the majority, if not all, of our revenues and profits
for the next few years and beyond will be derived from the sale of metals mined
at the San Cristobal project. Therefore, if we are unable to complete and
successfully mine the San Cristobal project in a timely manner, our ability to
generate revenue and profits would be materially adversely affected.

Management of Growth - our success will depend on our ability to manage our
growth.

We anticipate that as we bring our mineral properties into production and
as we acquire additional mineral rights, we will experience significant growth
in our operations. We expect this growth to create new positions and
responsibilities for management personnel and increase demands on our operating
and financial systems. There can be no assurance that we will successfully meet
these demands and manage our anticipated growth.

Volatility of Metals Prices - our profitability will be affected by changes in
the prices of metals.

Our profitability and long-term viability depend, in large part, on the
market price of silver, zinc, lead and other metals. The market prices for
these metals are volatile and are affected by numerous factors beyond our
control, including:

5
<PAGE>

. global or regional consumption patterns;
. supply of, and demand for, silver, zinc, lead and other metals;
. speculative activities;
. expectations for inflation; and
. political and economic conditions.

The aggregate effect of these factors on metals prices is impossible for
our company to predict. A decrease in metals prices could adversely affect our
ability to finance the development of the San Cristobal project and the
exploration and development of our other properties, which would have a material
adverse effect on our financial condition and results of operations.

The following table sets forth (1) the London Silver Market's high and low
spot price of silver in U.S. dollars per troy ounce and (2) the London Metals
Exchange's high and low spot prices of zinc and lead in U.S. dollars per pound,
for the periods indicated.

Silver Zinc Lead
------------------------------- ---------------------------- -----------------------------
Year High Low High Low High Low
- ---- ------------- ---------------- -------------- -------------- ------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
1994.................... 5.75 4.64 0.54 0.41 0.31 0.15
1995.................... 6.04 4.41 0.55 0.43 0.35 0.24
1996.................... 5.83 4.71 0.50 0.44 0.42 0.30
1997.................... 6.27 4.22 0.60 0.47 0.33 0.23
1998.................... 6.83 4.88 0.52 0.42 0.27 0.22
</TABLE>

Hedging and Currency Risks - we may not be successful in hedging against price,
currency and interest rate fluctuations and may lose money through our hedging
programs.

We have commenced a limited preliminary program to hedge against commodity
and base metals price risks. We anticipate that as we bring our mineral
properties into production and we begin to generate revenue, we may utilize
various price hedging techniques to mitigate some of the risks associated with
fluctuations in the prices of the metals we produce. We may also engage in
activities to hedge the risk of exposure to currency and interest rate
fluctuations related to the development of San Cristobal in Bolivia or in other
countries in which we incur substantial expenditures for exploration or
development. Further, terms of our financing arrangements may require us to
hedge against these risks.

There can be no assurance that we will be able to successfully hedge
against price, currency and interest rate fluctuations. In addition, our
ability to hedge against zinc and lead price risk in a timely manner may be
adversely affected by the smaller volume of transactions in both the zinc and
lead markets. Further, there can be no assurance that the use of hedging
techniques will always be to our benefit. Hedging instruments which protect
against market price volatility may prevent us from realizing the benefit from
subsequent increases in market prices with respect to covered production. This
limitation would limit our revenues and profits. Hedging contracts are also
subject to the risk that the other party may be unable or unwilling to perform
its obligations under these contracts. Any significant nonperformance could
have a material adverse effect on our financial condition and results of
operations.

6
<PAGE>

Uncertainty and Cost of Mineral Exploration and Acquisition - the exploration of
mineral properties is highly speculative in nature, involves substantial
expenditures, and is frequently non-productive.

Our future growth and profitability will depend, in part, on our ability to
identify and acquire additional mineral rights, and on the costs and results of
our continued exploration and development programs. Competition for attractive
mineral exploration properties is intense. See "--Competition." Our strategy
is to expand our reserves through a broad program of exploration. Mineral
exploration is highly speculative in nature and is frequently non-productive.
Substantial expenditures are required to:

. establish ore reserves through drilling and metallurgical and other
testing techniques;
. determine metal content and metallurgical recovery processes to extract
metal from the ore; and
. construct, renovate or expand mining and processing facilities.

If we discover mineralization, it usually takes several years from the
initial phases of exploration until production is possible. During this time,
the economic feasibility of production may change. As a result of these
uncertainties, there can be no assurance that we will successfully acquire
additional mineral rights, that our exploration programs will result in new
proven and probable reserves in sufficient quantities to justify commercial
operations in any of our company's properties, other than the San Cristobal
project.

We consider from time to time the acquisition of operating or formerly
operating mines. Our decisions to acquire these properties are based on a
variety of factors including historical operating results, estimates of and
assumptions about future reserves, cash and other operating costs, metals prices
and projected economic returns, and evaluations of existing or potential
liabilities associated with the property and its operation. Other than
historical operating results, all of these may differ significantly from our
estimates and assumptions. In addition, there is intense competition for
attractive properties. Accordingly, there is no assurance that our acquisition
efforts will result in profitable mining operations.

Development Risks - our profitability depends, in part, on actual economic
returns and actual costs of developing mines, which may differ significantly
from our estimates and involve unexpected problems and delays.

None of our mineral properties, including the San Cristobal project, has an
operating history upon which we can base estimates of future cash operating
costs. Our decision to develop the San Cristobal project is based on
feasibility studies. Decisions about the development of other projects in the
future may also be based on feasibility studies. Feasibility studies derive
estimates of reserves and operating costs and project economic returns.
Estimates of economic returns are based, in part, on assumptions about future
metals prices. See "--Volatility of Metals Prices." Feasibility studies
derive estimates of cash operating costs based upon, among other things:

. anticipated tonnage, grades and metallurgical characteristics of ore to
be mined and processed;

. anticipated recovery rates of silver and other metals from the ore;

. cash operating costs of comparable facilities and equipment; and

7
<PAGE>

. anticipated climatic conditions.

Actual cash operating costs, production and economic returns may differ
significantly from those anticipated by our studies and estimates.

There are a number of uncertainties inherent in the development and
construction of any new mine, including the San Cristobal project. See "--San
Cristobal Project Risks." These uncertainties include:

. the timing and cost, which can be considerable, of the construction of
mining and processing facilities;

. the availability and cost of skilled labor, power, water and
transportation facilities;

. the availability and cost of appropriate smelting and refining
arrangements;

. the need to obtain necessary environmental and other governmental
permits, and the timing of those permits; and

. the availability of funds to finance construction and development
activities.

The costs, timing and complexities of mine construction and development are
increased by the remote location of many mining properties, like the San
Cristobal project. It is common in new mining operations to experience
unexpected problems and delays during mine start-up. In addition, delays in the
commencement of mineral production often occur. Accordingly, there is no
assurance that our future development activities will result in profitable
mining operations.

Title to Our Mineral Properties May be Challenged

Our policy is to seek to confirm the validity of our rights to title to, or
contract rights with respect to, each mineral property in which we have a
material interest. However, we cannot guarantee that title to our properties
will not be challenged or impugned. Title insurance generally is not available,
and our ability to ensure that we have obtained secure claim to individual
mineral properties or mining concessions may be severely constrained. We have
not conducted surveys of all of the claims in which we hold direct or indirect
interests and, therefore, the precise area and location of these claims may be
in doubt. Accordingly, our mineral properties may be subject to prior
unregistered agreements, transfers or claims, and title may be affected by,
among other things, undetected defects. In addition, we may be unable to
operate our properties as permitted or to enforce our rights with respect to our
properties.

Property Rights - we may lose rights to properties if we fail to meet payment
requirements or development or production schedules.

We derive the rights to some of our mineral properties, including some of
our principal properties at the San Cristobal project, from leaseholds or
purchase option agreements which require the payment of rent or other
installment fees. If we fail to make these payments when they are due, our
rights to the property may lapse. There can be no assurance that we will always
make payments by the requisite payment dates. In addition, some contracts with
respect to our mineral properties require development or production schedules.
There can be no assurance that we will be able to meet any or all of the
development or production schedules. In addition, our ability to transfer or
sell our rights to some of our mineral properties requires governmental
approvals or third party consents, which may not be granted.

8
<PAGE>

Mining Risks and Limits of Insurance Coverage - we cannot insure against all of
the risks associated with mining.

The business of mining is subject to a number of risks and hazards,
including:

. adverse environmental effects;
. industrial accidents;
. labor disputes;
. technical difficulties due to unusual or unexpected geologic formations;
. cave-ins; and
. flooding and periodic interruptions due to inclement or hazardous
weather conditions.

These risks can result in, among other things:

. damage to, and destruction of, mineral properties or production
facilities;
. personal injury;
. environmental damage;
. delays in mining;
. monetary losses; and
. legal liability.

Although we maintain, and intend to continue to maintain, insurance with
respect to our operations and mineral properties within ranges of coverage
consistent with industry practice, there can be no assurance that insurance will
be available at economically feasible premiums. Insurance against environmental
risks is not generally available. These environmental risks include potential
liability for pollution or other disturbances resulting from mining exploration
and production. In addition, not all risks associated with developing and
producing silver, zinc, lead and other metals are included in coverage and some
covered risks may result in liabilities which exceed policy limits. Further, we
may elect to not seek coverage for all risks. The occurrence of an event that
is not fully covered, or covered at all, by insurance, could have a material
adverse effect on our financial condition and results of operations.

Foreign Operations - we conduct all of our exploration activities in countries
with developing economies and are subject to the risks of political and economic
instability associated with these countries.

We currently conduct exploration activities in countries with developing
economies including Bolivia, Chile, Honduras, Mexico and Peru in Latin America.
These countries and other emerging markets in which we may conduct operations
have from time to time experienced economic or political instability. We may be
materially adversely affected by risks associated with conducting operations in
countries with developing economies, including:

. political instability and violence;

. war and civil disturbance;

9
<PAGE>

. expropriation or nationalization;
. changing fiscal regimes;
. fluctuations in currency exchange rates;
. high rates of inflation;
. underdeveloped industrial and economic infrastructure; and
. unenforceability of contractual rights.

Changes in mining or investment policies or shifts in the prevailing
political climate in any of the countries in which we conduct exploration and
development activities could adversely affect our business. Our operations may
be affected in varying degrees by government regulations with respect to, among
other things:

. production restrictions;
. price controls;
. export controls;
. income and other taxes;
. maintenance of claims;
. environmental legislation;
. foreign ownership restrictions;
. foreign exchange and currency controls;
. labor;
. welfare benefit policies;
. land use;
. land claims of local residents;
. water use; and
. mine safety.

We cannot accurately predict the effect of these factors. In addition,
legislation in the United States regulating foreign trade, investment and
taxation could have a material adverse effect on our financial condition and
results of operations.

Government Regulation of Environmental Matters - our activities are subject to
foreign environmental laws and regulations which may materially adversely affect
our future operations.

We conduct mineral exploration and development activities primarily in
Central America and South America, and are most active in Bolivia, where the San
Cristobal Project is located, and Mexico. With the development of San
Cristobal, we also expect to conduct mining operations in Bolivia. These
countries have laws and regulations which control the exploration and mining of
mineral properties and their effects on the environment, including air and water
quality, mine reclamation, waste handling and disposal, the protection of
different species of flora and fauna and the preservation of lands. These laws
and regulations will require our company to acquire permits and other
authorizations for certain activities.

10
<PAGE>

In many countries, including Bolivia, there is relatively new comprehensive
environmental legislation, and the permitting and authorization processes may be
less established and less predictable than they are in the United States. There
can be no assurance that we will be able to acquire necessary permits or
authorizations on a timely basis, if at all. Delays in acquiring any permit or
authorization could increase the development cost of San Cristobal or other
projects and could delay the commencement of production. See "Republic of
Bolivia--Environmental Matters."

Environmental legislation in many countries is evolving in a manner which
will likely require stricter standards and enforcement, increased fines and
penalties for non-compliance, more stringent environmental assessments of
proposed projects and a heightened degree of responsibility for companies and
their officers, directors and employees. In Bolivia, where there is relatively
new environmental legislation, enforcement activities and strategies may be
under development, and thus may be less predictable than in the United States.
We cannot predict what environmental legislation or regulations will be enacted
or adopted in the future or how future laws and regulations will be administered
or interpreted. Compliance with more stringent laws and regulations, as well as
potentially more vigorous enforcement policies or regulatory agencies or
stricter interpretation of existing laws, may (1) necessitate significant
capital outlays, (2) cause us to delay, terminate or otherwise change our
intended activities with respect to one or more projects and (3) materially
adversely affect our future operations.

Many of our exploration and development properties are located in historic
mining districts where prior owners may have caused environmental damage which
may not be known to us or to the regulators. In most cases, we have not sought
complete environmental analyses of our mineral properties and have not conducted
comprehensive reviews of the environmental laws and regulations in every
jurisdiction in which we own or control mineral properties. To the extent we
are subject to environmental requirements or liabilities, the cost of compliance
with these requirements and satisfaction of these liabilities would reduce our
net cash flow and could have a material adverse effect on our financial
condition and results of operations. If we are unable to fund fully the cost of
remediation of any environmental condition, we may be required to suspend
operations or enter into interim compliance measures pending completion of the
required remediation.

Competition - we compete against larger and more experienced companies.

The mining industry is intensely competitive. Many of the largest mining
companies are primarily producers of base metals, and may become interested in
the types of silver deposits on which we are focused because these deposits
typically are polymetallic, containing significant quantities of base metals
including zinc, lead and copper. Many of these companies have greater financial
resources, operational experience and technical capabilities than we have. We
may encounter increasing competition from other mining companies in our efforts
to acquire mineral properties and hire experienced mining professionals.
Increased competition in our business could adversely affect our ability to
attract necessary capital funding or acquire suitable producing properties or
prospects for mineral exploration in the future.

Holding Company Structure Risks - our ability to obtain dividends or other
distributions from our subsidiaries may be subject to restrictions imposed by
law and foreign currency exchange regulations.

We conduct, and will continue to conduct, all of our operations through
subsidiaries. Our ability to obtain dividends or other distributions from our
subsidiaries may be subject to restrictions on dividends or repatriation of
earnings under applicable local law, monetary transfer restrictions and foreign
currency exchange regulations in the jurisdictions in which the subsidiaries
operate. Our subsidiaries' ability to pay dividends or make other distributions
to our company is also subject to their having sufficient funds to do so. If
our subsidiaries are unable to pay dividends or make other distributions, our
growth may be

11
<PAGE>

inhibited unless we are able to obtain additional debt or equity financing on
acceptable terms. In the event of a subsidiary's liquidation, we may lose all or
a portion of our investment in that subsidiary.

Requirement of External Financing - we may not be able to raise the funds
necessary to explore and develop our mineral properties.

We will need external financing to develop and construct the San Cristobal
project and to fund the exploration and development of our other mineral
properties. Sources of external financing may include bank borrowings and
future debt and equity offerings. There can be no assurance that financing will
be available on acceptable terms, or at all. The failure to obtain financing
could have a material adverse effect on our growth strategy and our results of
operations and financial condition. The mineral properties that we are likely
to develop are expected to require significant capital expenditures. There can
be no assurance that we will be able to secure the financing necessary to retain
our rights to, or to begin or sustain, production at our mineral properties.

Dependence on Key Personnel - we depend on the services of key executives.

We are dependent on the services of key executives including our chairman
and our chief operating officer and a small number of highly skilled and
experienced executives and personnel focused on the development of the San
Cristobal project. Due to the relatively small size of our company, the loss of
these persons or our inability to attract and retain additional highly skilled
employees required for the development of the San Cristobal project, may delay
or otherwise adversely affect the development of the San Cristobal project,
which could have a material adverse effect on our business or future operations.

Substantial Control By Directors and Officers, and Shareholders - the
substantial control of our company by the directors and officers, and
shareholders may have a significant effect in delaying, deferring or preventing
a change in control of our company or other events which could be of benefit to
our other shareholders.

As of March 1, 1999, Thomas S. Kaplan and the other directors of our
company and officers of Apex Silver Mines Corporation, together with members of
their families and entities that may be deemed to be affiliates of or related to
these persons or entities, beneficially owned approximately 34% of the
outstanding shares of our company. This percentage includes approximately 1.4%
owned by Paul Soros and his affiliates and approximately 6.7% owned by Eduardo
Elsztain and his affiliates. In addition, as of March 1, 1999, Quantum
Industrial Partners LDC and Geosor Corporation collectively owned approximately
17% of the outstanding shares of our company. George Soros, by virtue of his
ownership of Geosor Corporation and his position with Soros Fund Management LLC,
an investment advisor to Quantum Industrial Partners LDC, may have the power to
direct the way that these shares are voted. This level of ownership by these
persons may have a significant effect in delaying, deferring or preventing a
change in control of our company or other events which could be of benefit to
our other shareholders.

12
<PAGE>

RATIOS OF EARNINGS TO FIXED CHARGES AND EARNINGS TO
COMBINED FIXED CHARGES AND PREFERENCE SHARE DIVIDENDS

Our company is a mining exploration and development company that holds a
portfolio of silver exploration and development properties in South America and
Central America. None of these properties are in production, and, consequently,
our company has no current operating income or cash flow. Accordingly, no
ratios are shown for any of the years ended December 31, 1994, 1995, 1996, 1997
and 1998 and the six-month period ended June 30, 1999 as earnings were not
sufficient to cover fixed charges. As of the date of this prospectus, we have
not issued any preference shares. As a result of the net losses incurred for
the period ended December 31, 1994 and for each of the years ended December 31,
1995, 1996, 1997 and 1998 and the six-month period ended June 30, 1999, earnings
were inadequate to cover fixed charges by $0.2 million, $1.9 million, $11.7
million, $15.0 million, $11.0 million and $4.5 million, respectively.

WHERE YOU CAN FIND MORE INFORMATION

We file annual, quarterly and current reports, proxy statements and other
information with the SEC. You may read and copy any document we file at the
SEC's public reference rooms in Washington, D.C., New York, New York and
Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further information
on the public reference rooms. Our SEC filings are also available to the public
at the SEC's web site at http://www.sec.gov.

The SEC allows our company to "incorporate by reference" into this
prospectus the information we file with it, which means that we can disclose
important information to you by referring you to those documents. The
information incorporated by reference is considered to be part of this
prospectus, and later information that we file with the SEC will automatically
update and supersede this information. We incorporate by reference the
documents listed below and any future filings made with the SEC under Section
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until our
offering is completed:

. Annual Report on Form 10-K for the year ended December 31, 1998;

. Annual Reports on Form 10-K/A for the year ended December 31, 1998 filed on
April 1, 1999, October 5, 1999 and October 6, 1999;

. Quarterly Report on Form 10-Q for the quarter ended March 31, 1999;

. Quarterly Report on Form 10-Q/A for the quarter ended March 31, 1999 filed on
August 5, 1999;

. Quarterly Report on Form 10-Q for the quarter ended June 30, 1999;

. Current Report on Form 8-K filed on September 7, 1999; and

. The description of the ordinary shares and other classes or series of shares
contained under the caption "Description of Ordinary Shares" in our
registration statement on Form S-1, as amended (File No. 333-34685), and
incorporated by reference into the registration statement on Form 8-A under
the Securities Exchange Act of 1934 of our company filed with the SEC on
November 18, 1997.

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<PAGE>

You may request a copy of these filings at no cost, by writing to or
telephoning us at the following address:

Linda Wilson
Vice President Investor Relations
Apex Silver Mines Corporation
1700 Lincoln Street, Suite 3050
Denver, Colorado 80203
(303) 839-5060

You should rely only on the information incorporated by reference or
provided in this prospectus or any prospectus supplement. We have not
authorized anyone else to provide you with different information. We are not
making an offer of these securities in any state where the offer is not
permitted. You should not assume that the information in this prospectus or any
prospectus supplement is accurate as of any date other than the date on the
front of the document.

FORWARD-LOOKING STATEMENTS

Some information contained in this prospectus or any prospectus supplement,
or incorporated by reference into this prospectus or any prospectus supplement
may contain forward-looking statements. These statements include comments
regarding mine development and construction plans, costs, grade, production and
recovery rates, permitting, financing needs, the availability of financing on
acceptable terms, the timing of engineering studies and environmental
permitting, and the markets for silver, zinc and lead. The use of any of the
words "anticipate", "continue," "estimate," "expect," "may," "will," "project,"
"should," "believe" and similar expressions are intended to identify
uncertainties. We believe the expectations reflected in those forward-looking
statements are reasonable. However, we cannot assure you that these
expectations will prove to be correct. Our actual results could differ
materially from those anticipated in these forward-looking statements as a
result of the risk factors set forth below and other factors set forth in, or
incorporated by reference into, this prospectus or any prospectus supplement:

. worldwide economic and political events affecting the supply of and
demand for silver, zinc and lead;

. volatility in market prices for silver, zinc and lead;

. financial market conditions, and the availability of financing on terms
acceptable to our company;

. uncertainties associated with developing a new mine, including potential
cost overruns and the unreliability of estimates in early stages of mine
development;

. variations in ore grade and other characteristics affecting mining,
crushing, milling and smelting operations and mineral recoveries;

. geological, technical, permitting, mining and processing problems;

. the availability and timing of acceptable arrangements for power,
transportation, water and smelting;

. uncertainties regarding future changes in tax legislation or
implementation of existing tax legislation;

. variations in smelting operations and capacity;

14
<PAGE>

. the availability of experienced employees; and

. the factors discussed under "Risk Factors."

Many of those factors are beyond our ability to control or predict. You
should not unduly rely on these forward-looking statements. These statements
speak only as of the date of this prospectus or the date of any prospectus
supplement. Except as required by law, we are not obligated to publicly release
any revisions to these forward-looking statements to reflect future events or
developments. All subsequent written and oral forward-looking statements
attributable to our company and persons acting on our behalf are qualified in
their entirety by the cautionary statements contained in this section and
elsewhere in this prospectus and any prospectus supplement.

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<PAGE>

THE COMPANY

Apex Silver Mines Limited explores and develops silver properties in South
America and Central America. We have one of the largest, most diversified
portfolios of privately owned and controlled silver exploration properties in
the world. Since we were founded in 1993, we have added to our portfolio
approximately 95 non-producing silver and other mineral properties located
primarily in or near the traditional silver-producing regions of Bolivia, Peru,
Chile, Honduras and Mexico.

Since 1993, our exploration efforts have produced our first development
project, the San Cristobal project located in southern Bolivia. Continued
drilling and analysis of the properties relating to the San Cristobal project
established that proven and probable reserves total 240 million tonnes of ore
grading 2.0 ounces per tonne of silver, 1.67 percent zinc and 0.58 percent lead
containing 470 million ounces of silver, 8.8 billion pounds of zinc and 3.1
billion pounds of lead.

Proven and probable reserves were calculated using a $4.65 net smelter
return per tonne cutoff value and market price assumptions of $5.00 per ounce of
silver, $0.50 per pound of zinc and $0.28 per pound of lead. The following
tables show our company's proven and probable reserves of silver, zinc and lead
for sulfide ore and oxide ore at the San Cristobal project, which were
calculated by Mine Reserve Associates, Inc.

Proven and Probable Reserves for Sulfide Ore - San Cristobal Project
--------------------------------------------------------------------
Average Grade Contained Metals(1)
------------------------------------- -------------------------------------
Tonnes Silver Zinc Lead Silver Zinc Lead
of ore Grade Grade Grade Ounces Tonnes Tonnes
(000s) (oz./tonne) (%) (%) (mm) (000s) (000s)
----------- ----------- ------------ ---------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
230.7 1.90 1.73 0.58 430.3 3,990 1,338
</TABLE>
_______
(1) Amounts shown as contained metals do not reflect losses in the recovery
process. Proven and probable reserves for sulfide ore include an average
recovery of 68.75% for silver, 91.22% for zinc and 75.43% for lead.

Proven and Probable Reserves for Oxide Ore - San Cristobal Project
------------------------------------------------------------------
Average Grade Contained Metals(1)
------------------------------------- -------------------------------------
Tonnes Silver Zinc Lead Silver Zinc Lead
of ore Grade Grade Grade Ounces Tonnes Tonnes
(000s) (oz./tonne) (%) (%) (mm) (000s) (000s)
----------- ----------- ------------ ---------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
9.6 4.20 0.10 0.61 39.7 10 58
</TABLE>
_______
(1) Amounts shown as contained metals do not reflect losses in the recovery
process. Proven and probable reserves for oxide ore include an average recovery
of 60% for silver and 50% for zinc.

In addition to proven and probable reserves, Mine Reserve Associates, Inc.
has estimated 46 million tonnes of mineralized material at an average grade of
2.90 ounces of silver per tonne, 1.04 percent zinc and 0.58 percent lead.

We have completed a final, bankable feasibility study on the San Cristobal
project. Based on the results of this study we anticipate developing a large
scale, open pit mining operation with low stripping ratios, which we believe
will be capable of processing 40,000 tonnes of ore per day using conventional
mining and processing technologies.

In addition, exploration efforts at other properties in Bolivia, Mexico and
Peru indicate the presence of sufficient mineralization to warrant additional
exploration and evaluation to determine the potential for future development.

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<PAGE>

Business Strategy

We are one of a limited number of mining companies which focuses on silver
exploration, development and production. Our strategy is to capitalize on our
sizeable portfolio of silver exploration properties in order to achieve long-
term profits and growth and to enhance shareholder value.

Although our primary focus is on mining silver, we intend to produce other
metals associated with our silver deposits if economically practicable,
including zinc, lead, copper and gold. Our company is managed by a team of
seasoned mining professionals with significant experience in the identification
and exploration of mineral properties, as well as the construction, development
and operation of large scale, open pit and underground, precious and base metals
mining operations.

The principal elements of our business strategy are to:

. proceed to develop the San Cristobal project into a large scale open pit
mining operation;
. continue to explore and evaluate the Cobrizos silver property in
southern Bolivia and the Platosa silver and zinc property in northern
Mexico;
. continue to explore and develop other properties which we believe are
most likely to contain significant amounts of silver and divesting those
properties that are not of continuing interest; and
. identify and acquire additional mining and mineral properties that we
believe contain significant amounts of silver or have exploration
potential.

History, Principal Office

We conduct substantially all of our operations through Apex Silver Mines
and its subsidiaries. Apex Silver Mines was formerly Apex Silver Mines LDC and
is our wholly owned subsidiary. Our company's material assets consist
exclusively of the shares of Apex Silver Mines.

We have a contract with Apex Silver Mines Corporation, a wholly owned
subsidiary of Apex Silver Mines, under which Apex Silver Mines Corporation
provides our company with strategic, financial, planning and other management
services. Apex Silver Mines Corporation maintains its principal office at 1700
Lincoln Street, Suite 3050, Denver, Colorado 80203 and its telephone number is
(303) 839-5060.

Enforceability of Civil Liabilities Under United States Laws

Our company is a Cayman Islands exempted company and some of our directors
reside in jurisdictions outside of the United States. At any one time, all or a
substantial portion of our assets and directors are or may be located in
jurisdictions outside of the United States. Therefore, it could be difficult
for investors to effect within the United States service of process on our
company or any of the directors who reside outside the United States. Further,
it could be difficult to recover against our company or directors judgments of
courts in the United States, including judgments based upon civil liability
under U.S. federal securities laws and similar state laws. Notwithstanding the
foregoing, our company has irrevocably agreed that it may be served with process
with respect to actions based on offers of the securities offered by this
prospectus in the United States by serving Apex Silver Mines

17
<PAGE>

Corporation, 1700 Lincoln Street, Suite 3050, Denver, Colorado 80203, its U.S.
agent appointed for that purpose.

W.S. Walker & Company, our Cayman Islands counsel, has advised our company
that there may be circumstances where the courts of the Cayman Islands would not
enforce:

. judgments of U.S. courts obtained in actions against our company or
directors of our company that are not resident within the United States
that are based upon the civil liability provisions for the U.S. federal
securities laws and similar state laws; or
. original actions brought in the Cayman Islands against our company or
directors of our company that are not resident within the United States
based solely upon U.S. federal securities laws.

There is no treaty in effect between the United States and the Cayman
Islands providing for enforcement. There are grounds upon which Cayman Islands
courts may not enforce judgments of U.S. courts. In addition, some remedies
that are available under the laws of U.S. jurisdictions, including some remedies
under U.S. federal securities laws, may not be allowed in Cayman Islands courts
as being contrary to public policy.

18
<PAGE>

REPUBLIC OF BOLIVIA

We have compiled the following information from governmental and private
publications.

General Information

Bolivia is situated in central South America and is bordered by Peru,
Brazil, Paraguay, Argentina and Chile. It has an area of 1,098,581 square
kilometers and a population of approximately 8.1 million people. Bolivia's
official and most widely spoken language is Spanish, but over 70 percent of the
population is either native Aymara or Quechua Indian. Sucre is the capital city
of Bolivia. La Paz is the seat of government and, with a population of over one
million people, the largest city in Bolivia. La Paz is situated on the
Altiplano, the high plateau which separates the eastern and western ranges of
the Andes. The land in this part of the country is largely semi-desert plains
bordered by steep, rugged mountains. The eastern portion of the country consists
of sparsely populated low-lands bordering the Brazilian Amazon basin where
temperate and tropical forests dominate. Santa Cruz is the principal city of the
low country with a population of approximately 1,000,000.

The government of Bolivia consists of a directly elected president and a
bicameral congress. Since the military government stepped down in 1982, Bolivia
has maintained a stable democratic system with elections every four years. The
current president, Hugo Banzer, was elected by the congress on August 5, 1997,
after none of the presidential candidates succeeded in winning a majority of the
votes in the general election held in June 1997.

Economy

The Bolivian economy has experienced continuous growth and relatively low,
stable inflation in recent years. This economic performance is generally
ascribed to the deregulation of key sectors of the economy, including oil and
gas, communications, transportation and finance, and to foreign direct
investment which has occurred as part of the recent privatization of formerly
government-owned electricity, telecommunications, railways, aviation and oil and
gas companies. The country's privatization program has involved (1) the sale of
shares in government-owned entities in exchange for capital contributions to the
privatized entities, and (2) the contribution of government-owned shares in
privatized entities to trust funds established on behalf of all Bolivians over
the age of 21 at the end of 1995. In connection with this program, we have
entered into joint venture agreements with the government mining company,
Comibol, with respect to two properties. Summary information on the Bolivian
economy is set forth in the table below.

<TABLE>
<CAPTION>
1994 1995 1996 1997 1998
<S> <C> <C> <C> <C> <C>
GDP Growth............................................ 5.0% 3.7% 4.0% 4.2% 4.7%
GDP per Capita........................................ $ 756 $ 812 $ 860 $1,005 $1,076
Inflation............................................. 8.5% 12.6% 7.9% 6.73% 4.39%
Pubic Section Deficit (non-financial) as
% of GDP.............................................. 3.2% 2.3% 2.1% 3.6% 4%
Exports FOB (in millions)............................. $1,124 $1,181 $ 1326 $1,272 $1,206
Imports CIF (in millions)............................. $1,196 $1,433 $1,635 $1,906 $2,083
Current Account Balance (% GDP)....................... 3.6% 5.0% 5.2% -8% -10%
Total Investment (in millions)........................ $ 794 $ 898 $ 540 $1,578 $1,754
Share of GDP (%)...................................... 13.3% 13.7% 7.6% 19.8% 20.5%
Public Investment (in millions)....................... $ 481 $ 505 $ 524 $ 582 $ 539
Share of GDP (%)...................................... $ 481 $ 505 7.6% 7.3% 6.3%
Private Investment (in millions)...................... $ 288 $ 373 $ 632 $ 996 $1,215
Share of GDP (%)...................................... 4.8% 5.7% 8.9% 12.5% 14.2%
</TABLE>

Source: Latin Finance

19
<PAGE>

The official monetary unit of Bolivia is the boliviano, which was
introduced in January 1987 following the adoption in 1985 of a broad based
reform program known as the "New Economic Policy." In the mid-1980s, prior to
the New Economic Policy, Bolivia suffered from hyperinflation, declining foreign
investment, growing balance of payments deficits and a foreign exchange shortage
fueled in part by an increasing disparity between the official and unofficial
exchange rates. The New Economic Policy removed restrictions on exports and
imports, ended most price controls and subsidies, instituted a freeze on public
sector wages and subjected the public sector to rigorous cost cutting. By 1986,
inflation was under control and the International Monetary Fund resumed stand-by
assistance. During the period of the New Economic Policy, the gap between the
official exchange rate and the parallel unofficial rate was bridged. On
December 31, 1998, the exchange rate was 5.65 bolivianos to one U.S. dollar
compared to the exchange rate on December 31, 1997 of 5.37 bolivianos to one
U.S. dollar. Over the past year the boliviano has shown a tendency to
depreciate approximately US$0.01 every 13 days; however this pace has
accelerated recently in response to the devaluation of the Brazilian currency.

The boliviano is freely convertible in Bolivia at a single, public exchange
rate established by twice-weekly auctions held by the Bolivian Central Bank.

Foreign Investment and Tax

Since the New Economic Policy, most restrictions on trade have been removed
or are in the process of being phased out. The remaining material restrictions
applicable to mining in Bolivia are described below. Currently, import levies
stand at ten percent for all items except capital goods, which are subject to a
five percent levy. In March 1991, a new export code introduced further measures
to liberalize trade. In order to prevent transfer pricing and other tax
avoidance mechanisms, almost all foreign trade transactions require the filing
of an aviso de conformidad describing the terms of the underlying transactions.

The 1990 Investment Law provides for unrestricted repatriation of capital,
freedom to import goods and services, equality under the law between foreign and
domestic companies, and the creation of ''free trade zones''.

Mining companies in Bolivia are subject to a 25 percent income tax. Taxable
income is determined in accordance with Bolivian generally accepted accounting
principles.

Under the new Bolivian Mining Code, which came into effect on March 17,
1997, there is Complementary Mining Tax applicable to whomever carries out
mining activities. Mining activities are defined to include: prospecting and
exploration; mining or extracting minerals or metals; concentrating mine
products; smelting and refining; and marketing of minerals and metals. The
Complementary Mining Tax is calculated by applying an aliquot to the taxable
base. The aliquot of the Complementary Mining Tax is a variable percentage
indexed to the official U.S. dollar market price for the relevant metal or
mineral. The variable percentage fluctuates between three percent and seven
percent for precious stones and metals and between one percent and five percent
for other metallic minerals. The taxable base is construed as the amount that
results from multiplying the weight of the fine content of the mineral or metal
by its official U.S. dollar market price. This tax is creditable against
corporate income and is, in effect, a minimum tax on mining companies. If
complementary mining tax payments in any fiscal year exceed corporate income tax
payments, the excess is a credit against corporate income in the following year.
Manufacturing or processing involving minerals is not subject to the
Complementary Mining Tax.

20
<PAGE>

Bolivian source income, including dividends, interest, management fees and
expenses charged to a Bolivian company by foreign affiliates, is subject to a
withholding tax of 12.5 percent, as is any of these payments when made to third
parties.

Operating losses are adjusted for inflation and may be carried forward and
deducted from taxable income indefinitely. However, if accrued losses exceed 50
percent of capital, the capital must be increased.

Bolivia assesses a 12.5 percent tax on profits of a branch of a foreign
corporation operating in Bolivia. The branch tax is calculated on the book
profits of the branch regardless of remittances. Any portion of the profits
reinvested in Bolivia can be excluded from the taxable basis. Book profits are
deemed remitted 120 days after the end of the fiscal year.

There is a 13 percent value added tax on all sales, including mineral
commodities, a five percent import duty on machinery and equipment and a ten
percent duty on imported raw materials and components. The VAT paid on purchases
is recoverable against VAT collected on Bolivian sales. Exports are not subject
to VAT. The exporter can offset the VAT credit arising from purchases with
domestic sales or can apply for a refund of import duties and VAT paid on inputs
and raw materials included in the cost of exported goods. However, the refund of
credits arising from imports is limited to 13 percent of the total value of the
exports and therefore is not recoverable during the exploration phase.

Mining Industry

Bolivia produces a number of mineral commodities including tin, gold,
silver, lead, zinc, antimony, tungsten, copper and bismuth. The country has long
been a leading mineral and precious metals producer. Bolivia was colonized in
the early sixteenth century by Spaniards who arrived in search of silver and
gold. The extensive silver mining operations in Potosi which developed under
Spanish rule led to the region being described as the "treasury of the Spanish
empire." In the early twentieth century, tin became the country's leading
mineral export although in recent years the focus has returned to gold, silver,
lead and zinc. The country's principal mining regions are the eastern part of
Bolivia along the Brazilian border, and the traditional mining areas of the
Altiplano and Cordillera.

Recent regulatory reforms have resulted in increased exploration
activities, particularly with respect to precious metals. In the early 1990s,
the government reformed the land tenure system, reduced taxes on mining
operations, established equal treatment under the law between Comibol and
foreign companies in obtaining mineral concessions, and created a national
Mining Inventory Service which will maintain up-to-date information, including
maps, for exploration and mining exploration concessions.

Mining Concessions

The Bolivian constitution states that all mineral deposits are the property
of the State. Mining concessions, which may be awarded by the government, grant
the holder, subject to the payment of patents, the real and exclusive right to
carry out prospecting, exploration, exploitation, concentration, smelting,
refining and marketing activities with respect to all mineral substances located
within a given concession. Individual mineral claims consist of indivisible
squares shaped like an inverted pyramid, whose lower vertex is the center of the
earth and whose surface area covers a total area of 25 hectares. Mining
concessions are comprised of no fewer than one and no more than 2,500 adjacent
squares. Mining concessions are distinct from the surface rights which comprise
traditional land ownership; holders of mining concessions are entitled to
explore and exploit a property and to use the water found at the property.
Expropriation or the establishment of easements may not be legally carried out
if the water supplies for a population are interrupted or negatively affected.

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Holders of mining concessions are obliged to pay an annual mining patent.
Co-owners are jointly and severally responsible for the patent payment. The
patent is progressive and fees are based on the number of years of existence of
the concession. Concessions established before the enactment of the new Mining
Code, which comprise an area of up to 1,000 mining claims, pay the equivalent of
$1.00 per claim per year. Concessions established before the enactment of the
new Mining Code which comprise an area of more than 1,000 mining claims pay the
equivalent of $1.00 per claim per year for the first five years of the existence
of the concession; thereafter, the patent increases to the equivalent of $2.00
per claim per year. Concessions established under the new Mining Code pay the
following: for the first five years of the existence of a concession, the owner
is required to pay the equivalent of $25.00 per square per year; thereafter the
patent increases to the equivalent of $50.00 per square per year. All of our
Bolivian concessions were established prior to enactment of the new Mining Code.

Mining concessions are liable to forfeiture when the corresponding annual
patent fails to be paid. Forfeiture is governed by law and does not require any
administrative or judicial declaration. When a concession has been forfeited,
the mining concession reverts to the State.

Environmental Matters

In 1992, the Bolivian government passed environmental legislation that
established a comprehensive scheme for the initiation of a national
environmental policy to protect the environment, promote sustainable
development, promote the preservation of biological diversity and promote
environmental education. Few environmental regulations specifically applicable
to mineral exploration companies in Bolivia have been proclaimed to date. At
present, concession holders must maintain waterways running through their
concessions in their unspoiled state and concession holders must employ
exploration and development techniques that will minimize environmental damage.
Under Bolivia's environmental regulations, environmental impact assessments are
required. In practice, foreign mining companies operating in Bolivia generally
adhere to U.S. and European environmental standards for mining and exploration.

The new Mining Code requires concession holders to minimize damage to
surface rights, to neighboring concessions and to the environment. Concession
holders are liable for damage or injury caused by their operations. Concession
holders are not obliged to remediate environmental damage caused prior to the
effectiveness of the new Mining Code or the date on which the mining concession
was obtained, if the concession was granted at a later date. Upon becoming the
owner of a concession, the concession holder must conduct an environmental audit
to determine the extent of any environmental damage. If an environmental audit
is not performed, the concession holder assumes the responsibility to mitigate
all environmental damage. Environmental liabilities incurred under this new
regime survive the existence or ownership of the relevant concession.

Labor Market

Bolivia has a large pool of unskilled and, in the mining sector, semi-
skilled labor, but a relative shortage of skilled labor and managerial expertise
overall. One percent of the payroll tax is used for worker training. A large
portion of the labor force that is engaged in wage employment is also unionized,
although union participation is not mandatory. Strikes, the frequency of which
have decreased greatly since the early 1980s, are not forbidden. However,
before a strike may be called, all legally mandated alternatives, including
negotiation, mediation and conciliation, must have been exhausted. Collective
bargaining agreements are very rare, as negotiations are generally carried out
between an individual company's union and management.

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USE OF PROCEEDS

Unless otherwise specified in a prospectus supplement, the net proceeds we
receive from the sale of the securities offered by this prospectus and the
accompanying prospectus supplement will be used for one or more of the following
purposes:

. constructing and developing the San Cristobal project;

. exploring and developing properties in our portfolio;

. maintaining control or ownership of our properties, including making
ongoing lease and royalty payments and paying other maintenance and
registration fees;

. acquiring additional mining related properties or businesses; and

. financing other general corporate purposes.

DESCRIPTION OF THE DEBT SECURITIES

The following description of the terms of the debt securities sets forth
general terms that may apply to the debt securities. The particular terms of
any debt securities will be described in the prospectus supplement relating to
those debt securities.

The debt securities will be either our senior debt securities or our
subordinated debt securities. The senior debt securities will be issued under
an indenture be entered into between our company and Wilmington Trust Company,
as trustee for the senior debt securities. The subordinated debt securities
will be issued under an indenture to be entered into between our company and
Wilmington Trust FSB, as trustee for the subordinated debt securities.

The following summary of the material provisions of the indentures is not
complete. You should refer to the indentures, copies of which are exhibits to
the registration statement of which this prospectus is a part. Section
references below are to the section in the applicable indenture.

We are a holding company that conducts substantially all of our operations
through subsidiaries. As a result, claims of the holders of the debt securities
will generally have a junior position to claims of creditors of our
subsidiaries, except to the extent that our company may be recognized as a
creditor of those subsidiaries. Claims of creditors of our subsidiaries other
than our company may include substantial amounts of long-term debt, commercial
paper and other short-term borrowings.

General

Neither indenture limits the amount of debt securities that we may issue
under that indenture. Each indenture provides that debt securities may be
issued up to the principal amount authorized by our company from time to time.
The senior debt securities will have the same ranking as all of our other
unsecured and unsubordinated debt. The subordinated debt securities will be
unsecured and will be subordinated and junior to all senior indebtedness.

The debt securities may be issued in one or more separate series of senior
debt securities and/or subordinated debt securities. The prospectus supplement
relating to the particular series of debt securities being offered will specify
the particular amounts, prices and terms of those debt securities. These terms
may include:

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. the title of the debt securities;

. any limit upon the aggregate principal amount of the debt securities;

. the date or dates, or the method of determining the dates, on which the
debt securities will mature;

. the interest rate or rates of the debt securities, or the method of
determining those rates, the interest payment dates and, for registered
debt securities, the Regular Record Dates;

. if a debt security is issued with original issue discount, the yield to
maturity;

. the places where payments may be made on the debt securities;

. any mandatory or optional redemption provisions applicable to the debt
securities;

. any sinking fund or analogous provisions applicable to the debt
securities;

. any conversion or exchange provisions applicable to the debt securities;

. any terms for the attachment to the debt securities of warrants, options
or other rights to purchase or sell our securities;

. the portion of the principal amount of the debt security payable upon
the acceleration of maturity if other than the entire principal amount
of the debt securities;

. any deletions of, or changes or additions to, the events of default or
covenants applicable to the debt securities;

. if other than U.S. dollars, the currency or currencies, including
European Currency Units, the euro and other composite currencies, in
which payments of principal, premium and/or interest on the debt
securities will be payable and whether the holder may elect payment to
be made in a different currency;

. the method of determining the amount of any payments on the debt
securities which are linked to an index;

. whether the debt securities will be issued in fully registered form
without coupons or in bearer form, with or without coupons, or any
combination of these, and whether they will be issued in the form of one
or more global securities in temporary or definitive form;

. any terms relating to the delivery of the debt securities if they are to
be issued upon the exercise of warrants;

. whether and on what terms we will pay additional amounts to holders of
the debt securities that are not U.S. persons in respect of any tax,
assessment or governmental charge withheld or deducted and, if so,
whether and on what terms we will have the option to redeem the debt
securities rather than pay the additional amounts; and

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. any other specific terms of the debt securities.

(Sections 2.2 and 3.1).

Unless otherwise specified in the applicable prospectus supplement, (1) the
debt securities will be registered debt securities and (2) debt securities
denominated in U.S. dollars will be issued, in the case of registered debt
securities, in denominations of $1,000 or an integral multiple of $1,000 and, in
the case of bearer debt securities, in denominations of $5,000. Debt securities
may bear legends required by United States federal tax law and regulations
(Section 4.1).

If any of the debt securities are sold for any foreign currency or currency
unit or if any payments on the debt securities are payable in any foreign
currency or currency unit, the prospectus supplement will contain any
restrictions, elections, tax consequences, specific terms and other information
with respect to the debt securities and the foreign currency or currency unit.

Some of the debt securities may be issued as original issue discount debt
securities. Original issue discount securities bear no interest during all or a
part of the time that these debt securities are outstanding or bear interest at
below-market rates and will be sold at a discount below their stated principal
amount at maturity. The prospectus supplement will also contain special tax,
accounting or other information relating to original issue discount securities
or relating to other kinds of debt securities that may be offered, including
debt securities linked to an index or payable in currencies other than U.S.
dollars.

Exchange, Registration and Transfer

Debt securities may be transferred or exchanged at the corporate trust
office of the security registrar or at any other office or agency maintained by
our company for these purposes, without the payment of any service charge,
except for any tax or governmental charges (Section 4.4). The senior trustee
initially will be the designated security registrar in the United States for the
senior debt securities. The subordinated trustee initially will be the
designated security registrar in the United States for the subordinated debt
securities.

If debt securities are issuable as both registered debt securities and
bearer debt securities, the bearer debt securities will be exchangeable for
registered debt securities. Except as provided below, bearer debt securities
will have outstanding coupons. If a bearer debt security with related coupons
is surrendered in exchange for a registered debt security between a record date
and the date set for the payment of interest, the bearer debt security will be
surrendered without the coupon relating to that interest payment and that
payment will be made only to the holder of the coupon when due.

In the event of any redemption in part of any class or series of debt
securities, we will not be required to:

. issue, register the transfer of, or exchange, debt securities of any
series between the opening of business 15 days before any selection of
debt securities of that series to be redeemed and the close of business
on:

. if debt securities of the series are issuable only as registered debt
securities, the day of mailing of the relevant notice of redemption, and

. if debt securities of the series are issuable as bearer debt securities,
the day of the first publication of the relevant notice of redemption
or, if debt securities of the series are
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also issuable as registered debt securities and
there is no publication, the day of mailing of the relevant notice of
redemption;

. register the transfer of, or exchange, any registered debt security
selected for redemption, in whole or in part, except the unredeemed
portion of any registered debt security being redeemed in part; or

. exchange any bearer debt security selected for redemption, except to
exchange it for a registered debt security which is simultaneously
surrendered for redemption.

(Section 4.4).

Payment and Paying Agent

We will pay principal, interest and any premium on fully registered
securities in the designated currency or currency unit at the office of a
designated paying agent. Payment of interest on fully registered securities may
be made at our option by check mailed to the persons in whose names the debt
securities are registered on days specified in the indentures or any prospectus
supplement. (Sections 4.6 and 4.10).

We will pay principal, interest and any premium on bearer securities in the
designated currency or currency unit at the office of a designated paying agent
or agents outside of the United States. Payments will be made at the offices of
the paying agent in the United States only if the designated currency is U.S.
dollars and payment outside of the United States is illegal or effectively
precluded. (Sections 4.10 and 11.2). If any amount payable on any debt
security or coupon remains unclaimed at the end of two years after that amount
became due and payable, the paying agent will release any unclaimed amounts to
our company, and the holder of the debt security or coupon will look only to our
company for payment. (Section 11.3).

The designated paying agent in the United States for the senior debt
securities initially will be the senior trustee located at 1100 North Market
Street, Rodney Square North, Wilmington, Delaware. The designated paying agent
in the United States for the subordinated debt securities initially will be the
subordinated trustee located at 3773 Howard Hughes Parkway, Las Vegas, Nevada.

Global Securities

The debt securities of a series may be issued in whole or in part in the
form of one or more global certificates that will be deposited with a depositary
whom we will identify in a prospectus supplement. Global debt securities may be
issued in either registered or bearer form and in either temporary or definitive
form. All global debt securities in bearer form will be deposited with a
depositary outside of the United States. We will describe the specific terms of
the depositary arrangement with respect to a series of debt securities in the
applicable prospectus supplement.

Other than with respect to payments, we may treat a person having a
beneficial interest in a definitive global debt security as the holder of the
principal amount of outstanding debt securities represented by the definitive
global debt security as specified in a written statement delivered to the
trustee by the holder of the definitive global debt security, or, in the case of
a definitive global debt security in bearer form, by a depositary in London for
Morgan Guaranty Trust Company of New York, Brussels Office, as operator of the
Euroclear System, and Cedel Bank, societe anonyme. (Section 4.11). Neither
we, the trustee nor any of our respective agents will be responsible for any
aspect of the records relating to or payments made on account of beneficial
ownership interests in a global debt security or for

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maintaining, supervising or reviewing any records relating to these beneficial
ownership interests. (Section 4.11). We anticipate that the following provisions
will apply to all depositary arrangements with a depositary.

Temporary Global Securities

All or any portion of the debt securities of a series that are issuable as
bearer debt securities initially may be represented by one or more temporary
global debt securities, without interest coupons, to be deposited with
Euroclear, and Cedel Bank for credit to the accounts of the beneficial owners of
the debt securities or to other accounts as they may direct. On and after an
exchange date provided in the applicable prospectus supplement, each temporary
global debt security will be exchangeable for definitive debt securities in
bearer form, registered form, definitive global bearer form or any combination
of these forms, as specified in the prospectus supplement. No bearer debt
security delivered in exchange for a portion of a temporary global debt security
will be mailed or delivered to any location in the United States. (Sections 4.2
and 4.3).

Interest on a temporary global debt security will be paid to Euroclear
and/or Cedel Bank with respect to the portion held for its account only after
they deliver to the trustee a certificate which states that the portion:

. is not beneficially owned by a United States person;
. has not been acquired by or on behalf of a United States person or for
offer to resell or for resale to a United States person or any person
inside the United States; or
. if a beneficial interest has been
acquired by a United States person,
. that the person is a financial institution, as defined in the Internal
Revenue Code, purchasing for its own account or has acquired the debt
security through a financial institution and

. that the debt securities are held by a financial institution that has
agreed in writing to comply with the requirements of Section
165(j)(3)(A), (B) or (C) of the Internal Revenue Code and the
regulations to the Internal Revenue Code and that it did not purchase
for resale inside the United States.

The certificate must be based on statements provided by the beneficial owners of
interests in the temporary global debt security. Euroclear and Cedel Bank will
credit the interest received by it to the accounts of the beneficial owners of
the debt security or to other accounts as they may direct. (Section 4.3).

"United States person" means a citizen or resident of the United States, a
corporation, partnership or other entity created or organized in or under the
laws of the United States or an estate or trust with income subject to United
States federal income taxation regardless of its source.

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Definitive Global Securities

Bearer Securities. The applicable prospectus supplement will describe the
exchange provisions, if any, of debt securities issuable in definitive global
bearer form. We will not deliver any bearer debt securities delivered in
exchange for a portion of a definitive global debt security to any location in
the United States. (Section 4.4).

U.S. Book-Entry Securities. Debt securities of a series represented by a
definitive global registered debt security and deposited with or on behalf of a
depositary in the United States will be represented by a definitive global debt
security registered in the name of the depositary or its nominee. Upon the
issuance of a global debt security and the deposit of the global debt security
with the depositary, the depositary will credit, on its book-entry registration
and transfer system, the respective principal amounts represented by that global
debt security to the accounts of participating institutions that have accounts
with the depositary or its nominee. The accounts to be credited shall be
designated by the underwriters or agents for the sale of U.S. book-entry debt
securities or by our company, if these debt securities are offered and sold
directly by our company.

Ownership of U.S. book-entry debt securities will be limited to
participants or persons that may hold interests through participants. In
addition, ownership of U.S. book-entry debt securities will be evidenced only
by, and the transfer of that ownership will be effected only through, records
maintained by the depositary or its nominee for the definitive global debt
security or by participants or persons that hold through participants.

So long as the depositary or its nominee is the registered owner of a
global debt security, that depositary or nominee, as the case may be, will be
considered the sole owner or holder of the U.S. book-entry debt securities
represented by that global debt security for all purposes under the indenture.
Payment of principal of, and premium and interest, if any, on, U.S. book-entry
debt securities will be made to the depositary or its nominee as the registered
owner or the holder of the global debt security representing the U.S. book-entry
debt securities. Owners of U.S. book-entry debt securities:

. will not be entitled to have the debt securities registered in their
names;

. will not be entitled to receive physical delivery of the debt securities
in definitive form; and

. will not be considered the owners or holders of the debt securities
under the indenture.

The laws of some jurisdictions require that purchasers of securities take
physical delivery of securities in definitive form. These laws impair the
ability to purchase or transfer U.S. book-entry debt securities.

We expect that the depositary for U.S. book-entry debt securities of a
series, upon receipt of any payment of principal of, or premium or interest, if
any, on, the related definitive global debt security, will immediately credit
participants' accounts with payments in amounts proportionate to their
respective beneficial interests in the principal amount of the global debt
security as shown on the records of the depositary. We also expect that
payments by participants to owners of beneficial interests in a global debt
security held through those participants will be governed by standing
instructions and customary practices, as is now the case with securities held
for the accounts of customers in bearer form or registered in "street name," and
will be the responsibility of those participants.

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Covenants of the Company

Limitation on Merger, Consolidation and Sales of Assets. We may, without
the consent of the holders of the debt securities, merge into or consolidate
with any other person, or convey or transfer all or substantially all of our
company's properties and assets to another person provided that:

. the successor assumes on the same terms and conditions all the
obligations under the debt securities and the indentures; and
. immediately after giving effect to the transaction, there is no default
under the applicable indenture.

(Section 9.1).

The remaining or acquiring person will be substituted for our company in
the indentures with the same effect as if it had been an original party to the
indenture. (Section 9.2). A prospectus supplement will describe any other
limitations on the ability of our company to merge into, consolidate with, or
convey or transfer all or substantially all or our properties and assets to,
another person.

Satisfaction and Discharge; Defeasance

We may be discharged from our obligations on the debt securities of any
class or series that have matured or will mature or be redeemed within one year
if we deposit with the trustee enough cash and/or U.S. government obligations or
foreign government securities, as the case may be, to pay all the principal,
interest and any premium due to the stated maturity or redemption date of the
debt securities and comply with the other conditions set forth in the applicable
indenture. The principal conditions that we must satisfy to discharge our
obligations on any debt securities are (1) pay all other sums payable with
respect to the applicable series of debt securities and (2) deliver to the
trustee an officers' certificate and an opinion of counsel which state that the
required conditions have been satisfied. (Section 5.1).

Each indenture contains a provision that permits our company to elect to be
discharged from all of our obligations with respect to any class or series of
debt securities then outstanding. However, even if we effect a legal
defeasance, some of our obligations will continue, including obligations to:

. maintain and apply money in the defeasance trust,
. register the transfer or exchange of the debt securities,
. replace mutilated, destroyed, lost or stolen debt securities, and
. maintain a registrar and paying agent in respect of the debt securities.

Each indenture also permits our company to elect to be released from our
obligations under specified covenants and from the consequences of an event of
default resulting from a breach of those covenants. To make either of the above
elections, we must deposit in trust with the trustee cash and/or U.S. government
obligations, if the debt securities are denominated in U.S. dollars, and/or
foreign government securities if the debt securities are denominated in a
foreign currency, which through the payment of principal and interest under
their terms will provide sufficient amounts, without reinvestment, to repay in
full those debt securities. As a condition to legal defeasance or covenant
defeasance, we must deliver to the trustee an opinion of counsel that the
holders of the debt securities will not recognize income, gain or loss for U.S.
federal income tax purposes as a result of the deposit and defeasance and

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will be subject to U.S. federal income tax in the same amount and in the same
manner and times as would have been the case if the deposit and defeasance had
not occurred. In the case of a legal defeasance only, the opinion of counsel
must be based on a ruling of the U.S. Internal Revenue Service or other change
in applicable U.S. federal income tax law. (Section 5.3).

The indentures specify the types of U.S. government obligations and foreign
government securities that we may deposit.

Events of Default, Notice and Waiver

Each indenture defines an event of default with respect to any class or
series of debt securities as one or more of the following events:

. failure to pay interest on any debt security of the class or series for
30 days when due;
. failure to pay the principal or any premium on any debt securities of
the class or series when due;
. failure to make any sinking fund payment for 30 days when due;
. failure to perform any other covenant in the debt securities of the
series or in the applicable indenture with respect to debt securities of
the series for 90 days after being given notice; and
. occurrence of an event of bankruptcy, insolvency or reorganization set
forth in the indenture.

An event of default for a particular class or series of debt securities
does not necessarily constitute an event of default for any other class or
series of debt securities issued under an indenture. (Section 6.1).

In the case of an event of default arising from events of bankruptcy or
insolvency set forth in the indenture, all outstanding debt securities will
become due and payable immediately without further action or notice. If any
other event of default as to a series of debt securities occurs and is
continuing, the trustee or the holders of at least 25% in principal amount of
the then outstanding debt securities of that series may declare all the debt
securities to be due and payable immediately.

The holders of a majority in aggregate principal amount of the debt
securities then outstanding by notice to the trustee may on behalf of the
holders of all of the debt securities of that series waive any existing default
or event of default and its consequences under the applicable indenture except a
continuing default or event of default in the payment of interest on, or the
principal of, the debt securities of that series.

Each indenture requires the trustee to, within 90 days after the occurrence
of a default known to it with respect to any outstanding series of debt
securities, give the holders of that class or series notice of the default if
uncured or not waived. However, the trustee may withhold this notice if it
determines in good faith that the withholding of this notice is in the interest
of those holders, except that the trustee may not withhold this notice in the
case of a payment default. The term "default" for the purpose of this provision
means any event that is, or after notice or lapse of time or both would become,
an event of default with respect to debt securities of that series. (Section
7.2).

Other than the duty to act with the required standard of care during an
event of default, a trustee is not obligated to exercise any of its rights or
powers under the applicable indenture at the request or direction of any of the
holders of debt securities, unless the holders have offered to the trustee
reasonable security and indemnity. (Section 7.3). Each indenture provides that
the holders of a majority in principal amount of outstanding debt securities of
any series may direct the time, method and place of conducting

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any proceeding for any remedy available to the trustee, or exercising any trust
or other power conferred on the trustee if the direction would not conflict with
any rule of law or with the indenture. However, the trustee may take any other
action that it deems proper which is not inconsistent with any direction and may
decline to follow any direction if it in good faith determines that the directed
action would involve it in personal liability. (Section 6.12).

Each indenture includes a covenant that we will file annually with the
trustee a certificate of no default, or specifying any default that exists.
(Section 11.4).

Modification of the Indentures

We and the applicable trustee may modify an indenture without the consent
of the holders for limited purposes, including adding to our covenants or events
of default, establishing forms or terms of debt securities, curing ambiguities
and other purposes which do not adversely affect the holders in any material
respect. (Section 10.1).

We and the applicable trustee may make modifications and amendments to an
indenture with the consent of the holders of a majority in principal amount of
the outstanding debt securities of all affected series. However, without the
consent of each affected holder, no modification may:

. change the stated maturity of any debt security;
. reduce the principal, premium, if any, or rate of interest on any debt
security;
. change any place of payment or the currency in which any debt security
is payable;
. impair the right to enforce any payment after the stated maturity or
redemption date;
. adversely affect the terms of any conversion right;
. reduce the percentage of holders of outstanding debt securities of any
series required to consent to any modification, amendment or waiver
under the indenture;
. change any of our obligations, with respect to outstanding debt
securities of a series, to maintain an office or agency in the places
and for the purposes specified in the indenture for the series; or
. change the provisions in the indenture that relate to its modification
or amendment other than to increase the percentage of outstanding debt
securities of any series required to consent to any modification or
waiver under the indenture.

(Section 10.2).

Meetings

The indentures contain provisions for convening meetings of the holders of
debt securities of a series. (Section 14.1). A meeting may be called at any
time by the trustee and also, upon request, by our company or the holders of at
least 25% in principal amount of the outstanding debt securities of a series, in
any case upon notice given in accordance with "Notices" below. (Section 14.2).
Persons holding a majority in principal amount of the outstanding debt
securities of a series will constitute a quorum at a meeting. A meeting called
by our company or the trustee that does not have a quorum may be adjourned for
not less than 10 days. If there is not a quorum at the adjourned meeting, the
meeting may be further adjourned for not less than 10 days.

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Any resolution presented at a meeting at which a quorum is present may be
adopted by the affirmative vote of the holders of a majority in principal amount
of the outstanding debt securities of that series, except for any consent which
must be given by the holders of each debt security affected by the modifications
or amendments of an indenture described above under "Modification of the
Indentures." However, a resolution with respect to any request, demand,
authorization, direction, notice, consent, waiver, or other action which may be
made, given, or taken by the holders of a specified percentage, which is equal
to or less than a majority, in principal amount of outstanding debt securities
of a series may be adopted at a meeting at which a quorum is present by the
affirmative vote of the holders of the specified percentage in principal amount
of the outstanding debt securities of that series.

Any resolution passed or decision taken at any meeting of holders of debt
securities of any series duly held in accordance with an indenture will be
binding on all holders of debt securities of that series and the related
coupons. The indentures provide that specified consents, waivers and other
actions may be given by the holders of a specified percentage of outstanding
debt securities of all series affected by the modification or amendment, acting
as one class. For purposes of these consents, waivers and actions, only the
principal amount of outstanding debt securities of any series represented at a
meeting at which a quorum is present and voting in favor of the action will be
counted for purposes of calculating the aggregate principal amount of
outstanding debt securities of all series affected by the modification or
amendment favoring the action. (Section 14.4).

Notices

In most instances, notices to holders of bearer debt securities will be
given by publication at least once in a daily newspaper in New York, New York
and in London, England and in other cities as may be specified in the bearer
debt securities and will be mailed to those persons whose names and addresses
were previously filed with the applicable trustee, within the time prescribed
for the giving of the notice. Notice to holders of registered debt securities
will be given by mail to the addresses of those holders as they appear in the
security register. (Section 1.6).

Title

Title to any bearer debt securities and any related coupons will pass by
delivery. We, the trustee, and any agent of ours or the trustee may treat the
holder of any bearer debt security or related coupon and, prior to due
presentment for registration of transfer, the registered owner of any registered
debt security as the absolute owner of that debt security for the purpose of
making payment and for all other purposes, regardless of whether or not that
debt security or coupon shall be overdue and notwithstanding any notice to the
contrary (Section 4.7).

Replacement of Securities Coupons

Debt securities or coupons that have been mutilated will be replaced by our
company at the expense of the holder upon surrender of the mutilated debt
security or coupon to the security registrar. Debt securities or coupons that
become destroyed, stolen, or lost will be replaced by our company at the expense
of the holder upon delivery to the security registrar of evidence of its
destruction, loss, or theft satisfactory to our company and the security
registrar. In the case of a destroyed, lost, or stolen debt security or coupon,
the holder of the debt security or coupon may be required to provide reasonable
security or indemnity to the trustee and our company before a replacement debt
security will be issued. (Section 4.5).

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Governing Law

The indentures, the debt securities, and the coupons will be governed by,
and construed under, the laws of the State of New York without regard to the
principles of conflicts of laws.

Concerning the Trustees

We may from time to time maintain lines of credit, and have other customary
banking relationships, with any of the trustees.

Senior Debt Securities

The senior debt securities will rank equally with all of our company's
other unsecured and non-subordinated debt.

Covenants in the Senior Indenture

The prospectus supplement relating to a series of senior debt securities
will describe any material covenants in respect of that series of senior debt
securities.

Subordinated debt securities

The subordinated debt securities will be unsecured. The subordinated debt
securities will be subordinate in right of payment to all senior indebtedness.
(Section 15.1 of subordinated indenture). In addition, claims of creditors and
preferred shareholders of our subsidiaries generally will have priority with
respect to the assets and earnings of our subsidiaries over the claims of our
creditors, including holders of the subordinated debt securities, even though
those obligations may not constitute senior indebtedness. The subordinated debt
securities, therefore, will be effectively subordinated to creditors, including
trade creditors, and preferred shareholders of our subsidiaries with regard to
the assets of our subsidiaries. Creditors of our subsidiaries include trade
creditors, secured creditors and creditors holding guarantees issued by our
subsidiaries.

Unless otherwise specified in a prospectus supplement, senior indebtedness
shall mean the principal of, premium, if any, and interest on,

. all indebtedness for money borrowed by our company and

. any deferrals, renewals, or extensions of any senior indebtedness.

Indebtedness for money borrowed by our company includes all indebtedness of
another person for money borrowed that we guarantee, other than the subordinated
debt securities, whether outstanding on the date of execution of the
subordinated indenture or created, assumed or incurred after the date of the
subordinated indenture. However, senior indebtedness will not include any
indebtedness that expressly states to have the same rank as the subordinated
debt securities or to rank junior to the subordinated debt securities. Senior
indebtedness will also not include:

. any of our obligations to our subsidiaries; and

. any liability for federal, state, local or other taxes owed or owing by
our company.

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The senior debt securities constitute senior indebtedness under the
subordinated indenture. A prospectus supplement will describe the relative
ranking among different series of subordinated debt securities.

Unless otherwise specified in a prospectus supplement, we may not make any
payment on the subordinated debt securities and may not purchase, redeem, or
retire any subordinated debt securities if

. any senior indebtedness is not paid when due or

. the maturity of any senior indebtedness is accelerated as a result of a
default, unless the default has been cured or waived and the
acceleration has been rescinded or the senior indebtedness has been paid
in full.

We may, however, pay the subordinated debt securities without regard to these
limitations if the subordinated trustee and our company receive written notice
approving the payment from the representatives of the holders of senior
indebtedness with respect to which either of the events set forth above has
occurred and is continuing. Unless otherwise specified in a prospectus
supplement, during the continuance of any default with respect to any designated
senior indebtedness under which its maturity may be accelerated immediately
without further notice or the expiration of any applicable grace periods, we may
not pay the subordinated debt securities for 90 days after the receipt by the
subordinated trustee of written notice of a default from the representatives of
the holders of designated senior indebtedness. If the holders of designated
senior indebtedness or the representatives of those holders have not accelerated
the maturity of the designated senior indebtedness at the end of the 90 day
period, we may resume payments on the subordinated debt securities. Only one
notice may be given in any consecutive 360-day period, irrespective of the
number of defaults with respect to designated senior indebtedness during that
period. (Section 15.3 of subordinated indenture).

In the event that we pay or distribute our company's assets to creditors
upon a total or partial liquidation, dissolution or reorganization of our
company or our company's property, the holders of senior indebtedness will be
entitled to receive payment in full of the senior indebtedness before the
holders of subordinated debt securities are entitled to receive any payment.
Until the senior indebtedness is paid in full, any payment or distribution to
which holders of subordinated debt securities would be entitled but for the
subordination provisions of the subordinated indenture will be made to holders
of the senior indebtedness as their interests may appear. However, holders of
subordinated debt securities will be permitted to receive distributions of
shares and debt securities subordinated to the senior indebtedness. (Section
15.2 of subordinated indenture). If a distribution is made to holders of
subordinated debt securities that, due to the subordination provisions, should
not have been made to them, the holders of subordinated debt securities are
required to hold it in trust for the holders of senior indebtedness, and pay it
over to them as their interests may appear. (Section 15.5 of subordinated
indenture).

If payment of the subordinated debt securities is accelerated because of an
event of default, either we or the subordinated trustee will promptly notify the
holders of senior indebtedness or the representatives of the holders of the
acceleration. We may not pay the subordinated debt securities until five
business days after the holders or the representatives of the senior
indebtedness receive notice of the acceleration. Afterwards, we may pay the
subordinated debt securities only if the subordination provisions of the
subordinated indenture otherwise permit payment at that time. (Section 15.4 of
subordinated indenture).

As a result of the subordination provisions contained in the subordinated
indenture, in the event of insolvency, our creditors who are holders of senior
indebtedness may recover more, ratably, than the holders of subordinated debt
securities. In addition, our creditors who are not holders of senior

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indebtedness may recover less, ratably, than holders of senior indebtedness and
may recover more, ratably, than the holders of subordinated indebtedness.

The prospectus supplement relating to a series of subordinated debt
securities will describe any material covenants in respect of any series of
subordinated debt securities.

DESCRIPTION OF THE PREFERENCE SHARES

The following is a description of the material general terms and provisions
of the preference shares. The particular terms of any class or series of
preference shares will be described in the applicable prospectus supplement.

The following summary of terms of our preference shares is not complete.
You should refer to the provisions of our Memorandum of Association, the
Articles of Association and the resolutions of the Board of Directors relating
to the approval and terms of each class or series of the preference shares which
will be filed with the SEC at or prior to the time of issuance of a class or
series of the preference shares.

We are authorized to issue up to 75,000,000 shares of our company, par
value $.01 per share. The Board of Directors has the power to designate whether
an issue of shares shall be ordinary shares or preference shares. As of
December 31, 1998, 26,250,761 ordinary shares were outstanding and no preference
shares were outstanding. Subject to limitations prescribed by law, the Board of
Directors is authorized at any time to:

. issue one or more classes or series of preference shares;

. determine the designation for any class or series of preference shares;
and

. determine the number of shares in any class or series.

The Board of Directors in approving the issuance of a class or series of
preference shares shall determine, and the applicable prospectus supplement will
set forth with respect to the class or series, the following:

. whether dividends on that class or series of preference shares will be
cumulative or non-cumulative;
. the dividend rate and rights in respect of dividends on the preference
shares of that class or series;
. the liquidation preference per share of that class or series of
preference shares, if any;
. the voting powers, if any, of the preference shares of that class or
series;
. any redemption and sinking fund provisions applicable to that class or
series of preference shares;
. any conversion provisions applicable to that class or series of
preference shares;
. the terms of any other preferences or other rights and limitations, if
any, applicable to that class or series of preference shares.

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Dividends

Holders of preference shares will be entitled to receive, when, as and if
declared by the Board of Directors, cash dividends at the rates and on the dates
as set forth in the prospectus supplement. Except as set forth below, no
dividends will be declared or paid on any class or series of preference shares
unless full dividends for all classes or series of preference shares which have
the same rank as, or rank senior to, that class or series of preference shares,
including any unpaid cumulative dividends, have been or contemporaneously are
declared and paid. When those dividends are not paid in full, dividends will be
declared pro rata so that the amount of dividends declared per share on that
class or series of preference shares and on each other class or series of
preference shares having the same rank as, or ranking senior to, that class or
series of preference shares will in all cases bear to each other the same ratio
that accrued dividends per share on that class or series of preference shares
and the other preference shares bear to each other. In addition, generally,
unless all dividends on the preference shares have been paid, no dividends will
be declared or paid on the ordinary shares and generally we may not redeem or
purchase any ordinary shares.

Convertibility

No class or series of preference shares will be convertible into, or
exchangeable for, other securities or property except as set forth in the
prospectus supplement.

Redemption and Sinking Fund

No class or series of preference shares will be redeemable or receive the
benefit of a sinking fund except as set forth in the prospectus supplement.

Liquidation

In the event we voluntarily or involuntarily liquidate, dissolve, or wind
up our affairs, the holders of each class or series of preference shares will be
entitled to receive the liquidation preference per share specified in the
prospectus supplement plus an amount equal to accrued and unpaid dividends, if
any, before any distribution to the holders of ordinary shares. If the amounts
payable with respect to preference shares are not paid in full, the holders of
preference shares will share ratably in any distribution of assets based upon
the aggregate liquidation preference for all outstanding shares for each class
or series. After the holders of preference shares are paid in full, they will
have no right or claim to any of our remaining assets.

Voting

Except as indicated below or in the prospectus supplement, the holders of
preference shares will not be entitled to vote. If the equivalent of six
quarterly dividends payable on any class or series of preference shares is in
default, the number of directors constituting our Board of Directors will be
increased by two and the holders of that class or series of preference shares,
voting together as a class with all other classes or series of preference shares
entitled to vote on the election of directors, will be entitled to elect those
additional directors. In the event of a default, the Board of Directors will
call a special meeting for the holders of all affected classes or series within
10 business days of the default for the purpose of electing the additional
directors. Alternatively, the holders of record of a majority of the
outstanding shares of all affected classes or series who are entitled to
participate in the election of directors may elect the additional directors by
written consent. If all accumulated dividends on any class or series of
preference shares have been paid in full, the holders of shares of that class or
series will no

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longer have the right to vote on directors and the term of office of each
director so elected will terminate and the number of our directors will, without
further action, be reduced by two.

The majority vote of the holders of two-thirds of the outstanding shares of
each class or series of preference shares voting together as a class, is
required to authorize any amendment, alteration or repeal of the Articles of
Association, the Memorandum of Association or the adoption of a special
resolution by the shareholders of our company which would adversely affect the
powers, preferences or special rights of the preference shares, including
authorizing any class or series of shares with superior dividend and liquidation
preferences.

Miscellaneous

The holders of preference shares will have no preemptive rights. The
preference shares, when issued, will be fully paid and nonassessable.
Preference shares that we redeem or otherwise reacquire will resume the status
of authorized and unissued shares of share capital undesignated as to class or
series, and will be available for subsequent issuance. There are no
restrictions on repurchase or redemption of the preference shares while there is
any arrearage on sinking fund installments except as may be set forth in a
prospectus supplement. Neither the par value nor the liquidation preference is
indicative of the price at which the preference shares will actually trade on or
after the date of issuance. Payment of dividends on any class or series of
preference shares may be restricted by loan agreements, indentures and other
transactions we may enter into.

No Other Rights

The shares of a class or series of preference shares will not have any
preferences, voting powers or relative, participating, optional or other special
rights except as set forth above or in the prospectus supplement, the Memorandum
of Association, the Articles of Association, the Board of Directors' resolution
approving the issuance of preference shares or as otherwise required by law.

Transfer Agent and Registrar

The transfer agent for each class or series of preference shares will be
described in the prospectus supplement.

DESCRIPTION OF THE DEPOSITARY SHARES

We may, at our option, elect to offer fractional shares of preference
shares, rather than full shares of preference shares. If we do, we will issue
to the public receipts for depositary shares and each of these depositary shares
will represent a fraction of a share of a particular class or series of
preference shares. Each owner of a depositary share will be entitled, in
proportion to the applicable fractional interest in shares of preference shares
overlying that depositary share, to all rights and preferences of the preference
shares overlying that depositary share. Those rights include dividend, voting,
redemption and liquidation rights. The particular terms of any depositary shares
will be described in the applicable prospectus supplement.

The shares of preference shares overlying the depositary shares will be
deposited with a bank or trust company selected by our company under a deposit
agreement between our company, the depositary and the holders of the depositary
receipts. A depositary receipt will evidence the depositary shares issued under
the deposit agreement. The depositary will be the transfer agent, registrar,
and dividend disbursing agent for the depositary shares.

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Holders of depositary receipts will agree to be bound by the deposit
agreement. Any actions required to be taken by holders of depositary receipts,
including filing proof of residence and paying applicable charges, will be set
forth in the deposit agreement.

The following summary of the material provisions of the depositary shares
contained in this prospectus is not complete. You should refer to the forms of
the deposit agreement, and the Board of Directors' resolutions approving the
issuance of the depositary shares for the applicable class or series of
preference shares that are, or will be, filed with the SEC.

Dividends

The depositary will distribute all cash dividends or other cash
distributions received in respect of the class or series of preference shares
overlying the depositary shares to the record holders of depositary receipts in
proportion to the number of depositary shares owned by those holders on the
relevant record date, which will be the same date as the record date for the
preference shares.

In the event of a distribution other than in cash, the depositary will
distribute property received by it to the record holders of depositary receipts
that are entitled to receive the distribution, unless the depositary determines
that it is not feasible to make the distribution. If this occurs, the
depositary may, with our approval, adopt another method for the distribution,
including selling the property and distributing the net proceeds to the holders.

Liquidation Preference

In the event of our voluntary or involuntary liquidation, dissolution or
winding up, the holders of each depositary share will be entitled to receive the
fraction of the liquidation preference accorded each share of the applicable
class or series of preference shares, as set forth in the prospectus supplement.

Redemption

If a class or series of preference shares overlying the depositary shares
is subject to redemption, the depositary shares will be redeemed from the
proceeds received by the depositary resulting from the redemption, in whole or
in part, of preference shares held by the depositary. Whenever we redeem any
preference shares held by the depositary, the depositary will redeem, as of the
same redemption date, the number of depositary shares representing the
preference shares so redeemed. The depositary will mail the notice of
redemption to the record holders of the depositary receipts promptly upon
receiving the notice from our company and not less than 35 nor more than 60 days
prior to the date fixed for redemption of the preference shares and the
depositary shares.

Voting

Upon receipt of notice of any meeting at which the holders of preference
shares are entitled to vote, the depositary will mail the information contained
in the notice of meeting to the record holders of the depositary receipts
underlying the preference shares. Each record holder of those depositary
receipts on the record date will be entitled to instruct the depositary as to
the exercise of the voting rights pertaining to the amount of preference shares
overlying that holder's depositary shares. The record date for depositary
receipts will be the same date as the record date for the preference shares.
The depositary will try, as far as practicable, to vote the preference shares
overlying the depositary shares in accordance with the provided instructions,
and we will agree to take all action which may be deemed necessary by the

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depositary in order to enable the depositary to do so. The depositary will not
vote the preference shares to the extent that it does not receive specific
instructions from the holders of depositary receipts.

Withdrawal of Preference Shares

Owners of depositary shares are entitled, upon surrender of depositary
receipts at the principal office of the depositary and payment of any unpaid
amount due the depositary, to receive the number of whole shares of preference
shares overlying the depositary shares. Partial shares of preference shares
will not be issued. Holders of preference shares will not be entitled to
deposit the shares under the deposit agreement to receive depositary receipts
evidencing depositary shares for the preference shares.

Amendment and Termination of Deposit Agreement

The form of depositary receipt evidencing the depositary shares and any
provision of the deposit agreement may be amended at any time and from time to
time by agreement between our company and the depositary. However, any
amendment which materially and adversely alters the rights of the holders of
depositary shares, other than any change in fees, will not be effective unless
the amendment has been approved by at least a majority of the depositary shares
then outstanding. The deposit agreement may be terminated by our company or the
depositary only if (1) all outstanding depositary shares have been redeemed or
(2) there has been a final distribution in respect of the preference shares in
connection with our dissolution and the distribution has been made to all the
holders of depositary shares.

Charges of Depositary

We will pay all transfer and other taxes and governmental charges arising
solely from the existence of the depositary arrangements. We will also pay
charges of the depositary in connection with the initial deposit of the
preference shares and the initial issuance of the depositary shares, any
redemption of the preference shares and all withdrawals of preference shares by
owners of depositary shares. Holders of depositary receipts will pay transfer,
income and other taxes and governmental charges and other applicable charges as
provided in the deposit agreement to be for their accounts. The deposit
agreement may list circumstances under which the depositary may refuse to
transfer depositary shares, withhold dividends and distributions, and sell the
depositary shares evidenced by depositary receipt if the charges are not paid.

Miscellaneous

The depositary will forward to the holders of depositary receipts all
reports and communications we deliver to the depositary that we are required to
furnish to the holders of the preference shares. In addition, the depositary
will make available for inspection by holders of depositary receipts at the
principal office of the depositary, and at other places as it may from time to
time deem advisable, any reports and communications we deliver to the depositary
as the holder of preference shares.

Neither we nor the depositary will be liable if either of us are prevented
or delayed by law or any circumstance beyond our control in performing our
respective obligations under the Deposit Agreement. Our obligations and those of
the depositary will be limited to performance in good faith of our respective
duties under the Deposit Agreement. Neither we nor the depositary will be
obligated to prosecute or defend any legal proceeding in respect of any
depositary shares or preference shares unless satisfactory indemnity is
furnished. We and the depositary may rely on written advice of counsel or
accountants, on information provided by holders of depositary receipts or other
persons believed in good faith to be

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competent to give that information, and on documents believed to be genuine and
to have been signed or presented by the proper party or parties.

Resignation and Removal of Depositary

The depositary may resign at any time by delivering a notice to our company
of its election to do so. We may remove the depositary at any time. Any
resignation or removal will take effect upon the appointment of a successor
depositary and its acceptance of the appointment. The successor depositary must
be appointed within 60 days after delivery of the notice for resignation or
removal and must be a bank or trust company having its principal office in the
United States of America and having a combined capital and surplus of at least
$50,000,000.

Federal Income Tax Consequences

Owners of the depositary shares will be treated for federal income tax
purposes as if they were owners of the preference shares overlying the
depositary shares. Accordingly, those owners will be entitled to take into
account for federal income tax purposes income and deductions to which they
would be entitled if they were holders of the overlying preference shares. In
addition:

. no gain or loss will be recognized for federal income tax purposes upon
the withdrawal of preference shares in exchange for depositary shares,
. the tax basis of each share of preference shares to an exchanging owner
of depositary shares will, upon exchange, be the same as the aggregate
tax basis of the depositary shares exchanged, and
. the holding period for preference shares in the hands of an exchanging
owner of depositary shares will include the period during which that
person owned the depositary shares.

DESCRIPTION OF THE ORDINARY SHARES

As of the date of this prospectus, our authorized share capital consists of
75,000,000 shares, par value $.01 per share. We are authorized to issue up to
an aggregate of 75,000,000 ordinary shares and preference shares. As of June
30, 1999, 26,258,386 ordinary shares were outstanding and no preference shares
were outstanding.

The ordinary shares offered by this prospectus are validly issued, fully
paid and nonassessable. There are no provisions of Cayman Islands law, the
Memorandum of Association or the Articles of Association which impose any
limitation on the rights of shareholders to hold or vote ordinary shares by
reason of their not being resident in the Cayman Islands.

Dividends

Holders of ordinary shares are entitled to receive dividends ratably when
and as declared by the Board of Directors. The right to receive dividends is
also subject to the rights of holders of preference shares.

Voting

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Holders of ordinary shares are entitled to one vote per share on all
matters submitted to a vote of shareholders at a shareholders' meeting.

Rights Upon Liquidation

In the event of our voluntary or involuntary dissolution, liquidation or
winding-up, the holders of outstanding ordinary shares shall be entitled to
share ratably in our assets available for distribution after payment in full of
all debts and after the holders of preference shares have received their
liquidation preferences in full.

Miscellaneous

Ordinary shares are not redeemable and have no subscription, conversion or
preemptive rights.

DESCRIPTION OF THE WARRANTS

We may issue warrants for the purchase of preference shares or ordinary
shares. Warrants may be issued independently or together with preference shares
or ordinary shares and may be attached to or separate from any offered
securities. Each class or series of warrants will be issued under a separate
warrant agreement to be entered into between our company and a bank or trust
company, as warrant agent. The warrant agent will act solely as our agent in
connection with the warrants and will not have any obligation or relationship of
agency or trust for or with any holders or beneficial owners of warrants. This
summary of the material provisions of the warrants is not complete. You should
refer to the provisions of the warrant agreement that will be filed with the SEC
in connection with the offering of warrants for the complete terms of the
warrant agreement.

Share warrants

The prospectus supplement relating to a particular issue of warrants to
issue ordinary shares or preference shares will describe the terms of the
warrants, including the following:

. the title of the warrants;

. the offering price for the warrants, if any;

. the aggregate number of the warrants;

. the designation and terms of the ordinary shares or preference shares
that may be purchased upon exercise of the warrants;

. if applicable, the designation and terms of the securities that the
warrants are issued with and the number of warrants issued with each
security;

. if applicable, the date from and after which the warrants and any
securities issued with the warrants will be separately transferable;

. the number of ordinary shares or preference shares that may be purchased
upon exercise of a warrant and the price at which ordinary or preference
shares may be purchased upon exercise;

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. the dates on which the right to exercise the warrants shall commence and
expire;

. if applicable, the minimum or maximum amount of the warrants that may be
exercised at any one time;

. the currency or currency units in which the offering price, if any, and
the exercise price are payable;

. if applicable, a discussion of material U.S. federal income tax
considerations;

. the antidilution provisions of the warrants, if any;

. the redemption or call provisions, if any, applicable to the warrants;
and

. any additional terms of the warrants, including terms, procedures and
limitations relating to the exchange and exercise of the warrants.

DESCRIPTION OF THE ORDINARY SHARE PURCHASE RIGHTS

General

We may issue ordinary share purchase rights. The ordinary share purchase
rights may be issued independently or together with any other security and may
or may not be transferable by the purchaser receiving the ordinary share
purchase rights. In connection with an ordinary share purchase rights offering
to our shareholders, certificates evidencing the ordinary share purchase rights
and a prospectus supplement will be distributed to our shareholders on the
record date set by us for receiving ordinary share purchase rights.

The prospectus supplement relating to an ordinary share purchase rights
offering will describe the following terms of the ordinary share purchase rights
in respect of which this prospectus is being delivered:

. the exercise price for the ordinary share purchase rights;

. the number of ordinary share purchase rights issued to each shareholder;

. the extent to which the ordinary share purchase rights are transferable;
. if applicable, a discussion of the material U.S. federal income tax
considerations applicable to the issuance or exercise of the ordinary
share purchase rights;

. any other terms of the ordinary share purchase rights, including terms,
procedures and limitations relating to the exchange and exercise of the
ordinary share purchase rights;

. the date on which the right to exercise the ordinary share purchase
rights shall commence, and the date on which the right shall expire;
. the extent to which the ordinary share purchase rights includes an over-
subscription privilege with respect to unsubscribed securities; and

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. if applicable, the material terms of any standby underwriting
arrangement entered into by us in connection with the ordinary share
purchase rights offering.

Exercise of the Ordinary Share Purchase Rights

Holders of ordinary share purchase rights will be entitled to purchase for
cash a principal amount of ordinary shares at an exercise price set forth in, or
be determinable as set forth in, the prospectus supplement relating to the
ordinary share purchase rights offering. The ordinary share purchase rights may
be exercised at any time up to the close of business on the expiration date for
the ordinary share purchase rights set forth in the prospectus supplement.
After the close of business on the expiration date, all unexercised ordinary
share purchase rights will become void.

The ordinary share purchase rights may be exercised as set forth in the
prospectus supplement relating to the ordinary share purchase rights offering.
Upon receipt of payment and the ordinary share purchase rights certificate
properly completed and duly executed at the corporate trust office of the agent
for the ordinary share purchase rights or any other office indicated in the
prospectus supplement, we will, as soon as practicable, forward the ordinary
shares purchasable upon exercise. In the event that not all of the ordinary
share purchase rights issued in any ordinary share purchase rights offering are
exercised, we may decide to offer any unsubscribed ordinary shares directly to
persons other than shareholders, to or through agents, underwriters or dealers
or under standby underwriting arrangements or through a combination of these
methods, as set forth in the applicable prospectus supplement.

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PLAN OF DISTRIBUTION

We may sell the securities to or through underwriters or dealers, directly
to other purchasers or through agents. Unless otherwise set forth in a
prospectus supplement, (1) any underwriters may include Salomon Smith Barney and
Merrill Lynch & Co., acting alone or as representatives of a group of
underwriters, and (2) any agents may include Salomon Smith Barney and Merrill
Lynch & Co. A prospectus supplement will set forth the names of the
underwriters, dealers or agents, if any, and any applicable commissions or
discounts. In addition, we may from time to time distribute the ordinary share
purchase rights and issue ordinary shares directly to purchasers or through
agents in connection with the exercise of ordinary share purchase rights. In
addition, in connection with any ordinary share purchase rights offering to our
shareholders, we may enter into a standby underwriting arrangement with one or
more underwriters under which the underwriter will purchase any ordinary shares
remaining unsubscribed for after the ordinary share purchase rights offering.
The applicable prospectus supplement will set forth the terms of the offering of
the securities, including the following:

. the name or names of any underwriters;

. the purchase price and the proceeds which we will receive from the sale;

. any underwriting discounts and other items constituting underwriters'
compensation;

. any initial public offering price and any discounts or concessions
allowed or reallowed or paid to dealers; and

. any securities exchanges on which the securities of a class or series
may be listed.

If underwriters are used in the sale, the securities will be acquired by
the underwriters for their own account and may be resold from time to time in
one or more transactions, including negotiated transactions, at a fixed public
offering price or at varying prices determined at the time of sale. The
securities may be either offered to the public through underwriting syndicates
represented by managing underwriters or by underwriters without a syndicate.
The obligations of the underwriters to purchase securities will be subject to
the conditions precedent agreed to by the parties and the underwriters will be
obligated to purchase all the securities of a class or series if any are
purchased. Any initial public offering price and any discounts or concessions
allowed or reallowed or paid to dealers may be changed from time to time.

Securities may be sold directly by our company or through agents designated
by our company from time to time. Any agent involved in the offer or sale of
the securities in respect of which this prospectus is delivered will be named,
and any commissions payable by our company to any agent will be set forth, in
the prospectus supplement. Unless otherwise indicated in the prospectus
supplement, any agent will be acting on a best efforts basis for the period of
its appointment.

We may authorize agents or underwriters to solicit offers by eligible
institutions to purchase securities from our company at the public offering
price set forth in the prospectus supplement under delayed delivery contracts
providing for payment and delivery on a specified date in the future. The
conditions to these contracts and the commissions payable for solicitation of
these contracts will be set forth in the applicable prospectus supplement.

Agents and underwriters may be entitled to indemnification by our company
against some civil liabilities, including liabilities under the Securities Act
of 1933, or to contribution with respect to

44
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payments which the agents or underwriters may be required to make relating to
these liabilities. Agents and underwriters may be customers of, engage in
transactions with, or perform services for, our company in the ordinary course
of business.

Each class or series of securities will be a new issue of securities with
no established trading market. Any underwriter may make a market in these
securities, but will not be obligated to do so and may discontinue any market
making at any time without notice. No assurance can be given as to the
liquidity of the trading market for any securities.

LEGAL MATTERS

Some U.S. legal matters, including the validity of the securities offered
by this prospectus, will be passed upon for our company by Akin, Gump, Strauss,
Hauer & Feld, L.L.P., New York, New York, our special legal counsel, and some
Cayman Islands legal matters, including the validity of the securities offered
by this prospectus, will be passed upon for our company by W.S. Walker &
Company, Grand Cayman, Cayman Islands.

EXPERTS

The consolidated financial statements of Apex Silver Mines Limited
incorporated by reference in this Registration Statement by reference to the
Annual Report on Form 10-K for the year ended December 31, 1998, have been so
incorporated in reliance on the report of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.

Reserves for the San Cristobal project were calculated by Mine Reserves
Associates, Inc. All reserve figures are included in this prospectus in
reliance upon the authority of that firm as experts in these matters.

45
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[San Cristobal District Deposit and Exploration Location Map]
<PAGE>

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You should rely only on the information incorporated by reference or
provided in this prospectus or any supplement to this prospectus. We have
authorized no one to provide you with different information. We are not making
an offer of these securities in any state where the offer is not permitted. You
should not assume that the information in this prospectus is accurate as of any
date other that the date on the front of this document.

APEX SILVER MINES LIMITED

DEBT SECURITIES
PREFERENCE SHARES
DEPOSITARY SHARES
ORDINARY SHARES
WARRANTS
ORDINARY SHARE PURCHASE RIGHTS

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PROSPECTUS

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October 7, 1999

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