Apex teams up with Western Copper in Mexico

Vancouver – Focusing on developing the large San Cristobal silver-zinc project in Bolivia, Denver-based Apex Silver Mines (SIL-X) has joined forces with Western Copper Holdings (WTC-T) to jointly explore their promising properties in the Zacatecas state region of Mexico.

The agreement consolidates 1,462-ha of ground held by Western and 4,800-ha controlled by Apex in an area that has not been systematically evaluated for massive sulfide deposits. The jointly funded exploration program comes in at US$200,000 for the first year and will include data evaluation, geophysics and drilling. Western will be the project operator.

The most perspective target, dubbed El Pirul, lies 10 km southeast of the Francisco I Madero sediment hosted massive sulfide deposit. Dump material around the historic El Pirul shaft returned up to 5.7 grams gold, 2,392 grams silver per tonne, plus 9.53% lead and 17.20% zinc. The area has never been drill tested.

The second priority area is called Veta Grande. Located 10 km north of the city of Zacatecas, the property hosts fragments of massive sulfide breccia on historical mine dumps.

In order to fund its share of the first year exploration program, Apex has issued 11,126 shares to Western. Western aims to sell these shares from time to time to meet funding requirements and will match the preceding sale with its own cash.

Apex reported a loss of US$1 million, or US$0.03 per share in the first quarter of 2002. This compares to a loss of US$1.9 million, or US$0.05 per share tallied in the same period of 2001.

The company spent US$1.5 million on engineering and development costs at San Cristobal during the quarter bring total expenditures on the project to US$91.2 million. The wholly owned, open-pit silver-zinc project in the Potosi district of southwestern Bolivia, hosts an impressive 240 million tonnes grading 62.2 grams silver, 1.67% zinc and 0.58% lead. The main orebody remains open in several directions, as well as at depth, and the property has several other targets yet to be drilled.

Apex envisions a large-scale, open pit operation, processing 40,000 tonnes per day. In its first five years, the mine is expected to produce 27 million oz. of silver and 260,000 tonnes of zinc per year contained in concentrates, as well as lead credits. The average cash operating cost per oz of silver, net of lead by-product credits is projected to be US$1.23 and the average cash operating cost per lb of zinc is projected to be US$0.23 during those five years. Life-of-mine cash costs are now forecast to average US$1.83 per oz of silver and US$0.27 per lb. of zinc.

“We are determined to develop San Cristobal on terms, and at a time, that we believe would be most attractive for our stakeholders,” says the company’s Chief Executive Officer, Kieth Hulley. “We also intend to capitalize on the company’s proven ability to discover valuable mineral deposits by cost-effectively expanding our exploration activities in highly prospective countries like Mexico, El Salvador, Peru and Bolivia.”

At the end of the quarter, Apex had US$39.0 million in working capital, with US$40.7 million in cash and cash equivalents.