ElQuevar NI 3-101 Tech Report FIN Sm

NI 43-101 Technical Report on Resources Apex Silver Mines Corporation

El Quevar Project Argentina

Prepared for:

Apex Silver Mines Corporation 1700 Lincoln Street, Suite 3050

Denver, Colorado 80203

SRK Project Number: 182801

Prepared by:

7175 W. Jefferson Ave.

Suite 3000 Lakewood, CO 80235

Effective Date: January 31, 2009 Report Date: February 27, 2009

Contributors: Endorsed by QP: Leah Mach, CPG, MSc Leah Mach, CPG, MSc Patrick Hollenbeck, B.A. Geology Dorinda Bair, BSc Geology Alva Kuestermeyer, MS Mineral Economics, CP, SME

Apex Silver Mines Corporation i El Quevar Project NI 43-101 Technical Report on Resources

SRK Consulting (US), Inc. February 27, 2009 El Quevar.NI 43-101 Technical Report on Resources.182801.KG.020.docx

Table of Contents 1 INTRODUCTION (ITEM 4) ................................................................................................. 1-1

1.1 Terms of Reference and Purpose of the Report ......................................................... 1-1 1.2 Reliance on Other Experts (Item 5) ........................................................................... 1-2

1.2.1 Sources of Information ................................................................................ 1-2 1.3 Qualifications of Consultants (SRK) ......................................................................... 1-2

1.3.1 Site Visit ...................................................................................................... 1-3 1.4 Units of Measure ........................................................................................................ 1-3 1.5 Effective Date ............................................................................................................ 1-3

2 PROPERTY DESCRIPTION AND LOCATION (ITEM 6) ................................................. 2-1 2.1 Property Location....................................................................................................... 2-1 2.2 Mineral Titles ............................................................................................................. 2-1 2.3 Location of Mineralization ........................................................................................ 2-4 2.4 Royalties, Agreements and Encumbrances ................................................................ 2-4 2.5 Environmental Liabilities and Permitting .................................................................. 2-7

3 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY (ITEM 7) ............................................................................................................ 3-1

3.1 Topography, Elevation and Vegetation ..................................................................... 3-1 3.2 Climate and Length of Operating Season .................................................................. 3-1 3.3 Physiography.............................................................................................................. 3-1 3.4 Access to Property ..................................................................................................... 3-1 3.5 Surface Rights ............................................................................................................ 3-2 3.6 Local Resources and Infrastructure ........................................................................... 3-2

3.6.1 Access Road and Transportation ................................................................. 3-2 3.6.2 Power Supply ............................................................................................... 3-2 3.6.3 Water Supply ............................................................................................... 3-2 3.6.4 Camp Site .................................................................................................... 3-2 3.6.5 Waste Disposal Area ................................................................................... 3-3 3.6.6 Manpower .................................................................................................... 3-3

4 HISTORY (ITEM 8) .............................................................................................................. 4-1 4.1 Ownership .................................................................................................................. 4-1 4.2 Past Exploration and Development ............................................................................ 4-2 4.3 Historic Mineral Resource and Reserve Estimates .................................................... 4-2 4.4 Historic Production .................................................................................................... 4-2

5 GEOLOGIC SETTING (ITEM 9) ......................................................................................... 5-1 5.1 Regional Geology ...................................................................................................... 5-1 5.2 Local Geology ............................................................................................................ 5-1

5.2.1 Alteration ..................................................................................................... 5-2 5.2.2 Structure ...................................................................................................... 5-3

5.3 Project Geology ......................................................................................................... 5-3 6 DEPOSIT TYPE (ITEM 10) .................................................................................................. 6-1 7 MINERALIZATION (ITEM 11) ........................................................................................... 7-1

7.1 Mineralized Zones ..................................................................................................... 7-1 7.2 Surrounding Rock Types ........................................................................................... 7-1

Apex Silver Mines Corporation ii El Quevar Project NI 43-101 Technical Report on Resources


7.3 Relevant Geological Controls .................................................................................... 7-2 7.4 Type, Character and Distribution of Mineralization .................................................. 7-2

8 EXPLORATION (ITEM 12) ................................................................................................. 8-1 8.1 Interpretation .............................................................................................................. 8-2

9 DRILLING (ITEM 13) .......................................................................................................... 9-1 9.1 Type and Extent of Drilling ....................................................................................... 9-1 9.2 Logging ...................................................................................................................... 9-2 9.3 Results ........................................................................................................................ 9-2

10 SAMPLING METHOD AND APPROACH (ITEM 14) ..................................................... 10-1 10.1 Sample Methods....................................................................................................... 10-1 10.2 Factors Impacting Accuracy of Results ................................................................... 10-1 10.3 Sample Quality and Parameters ............................................................................... 10-1 10.4 Relevant Samples ..................................................................................................... 10-1

11 SAMPLE PREPARATION, ANALYSES AND SECURITY (ITEM 15) .......................... 11-1 11.1 Sample Preparation and Assaying Methods – Alex Stewart ................................... 11-1 11.2 Sample Preparation and Assaying Methods – ALS Chemex ................................... 11-1 11.3 Testing Laboratories Certification ........................................................................... 11-2 11.4 Quality Controls and Quality Assurance ................................................................. 11-2

11.4.1 Blanks ........................................................................................................ 11-3 11.4.2 Duplicates .................................................................................................. 11-3 11.4.3 Standard Samples ...................................................................................... 11-5

11.5 Sample Security ....................................................................................................... 11-6 11.6 Interpretation ............................................................................................................ 11-6

12 DATA VERIFICATION (ITEM 16) ................................................................................... 12-1 12.1 Quality Control Measures and Procedures .............................................................. 12-1 12.2 SRK Verification ..................................................................................................... 12-1 12.3 Limitations ............................................................................................................... 12-1

13 ADJACENT PROPERTIES (ITEM 17) .............................................................................. 13-1 14 MINERAL PROCESSING AND METALLURGICAL TESTING (ITEM 18) ................. 14-1

14.1 Metallurgical Testing ............................................................................................... 14-1 14.1.1 Procedures ................................................................................................. 14-1 14.1.2 Results ....................................................................................................... 14-2

15 MINERAL RESOURCES AND MINERAL RESERVE ESTIMATES (ITEM 19) .......... 15-1 15.1 Drillhole Database ................................................................................................... 15-1 15.2 Topography .............................................................................................................. 15-1 15.3 Geology .................................................................................................................... 15-1 15.4 Oxidation State......................................................................................................... 15-2 15.5 Specific Gravity ....................................................................................................... 15-2 15.6 Grade Capping ......................................................................................................... 15-3 15.7 Compositing ............................................................................................................. 15-4 15.8 Variogram Analysis ................................................................................................. 15-4 15.9 Grade Estimation ..................................................................................................... 15-5

15.9.1 Model Validation ....................................................................................... 15-5 15.10 Resource Classification ............................................................................................ 15-6 15.11 Cut-off Grade ........................................................................................................... 15-6

Apex Silver Mines Corporation iii El Quevar Project NI 43-101 Technical Report on Resources


15.12 Resource Statement .................................................................................................. 15-7 15.13 Mineral Resource Sensitivity ................................................................................... 15-7

16 OTHER RELEVANT DATA AND INFORMATION (ITEM 20) ..................................... 16-1 17 INTERPRETATION AND CONCLUSIONS (ITEM 21) .................................................. 17-1

17.1 Field Surveys ........................................................................................................... 17-1 17.2 Analytical and Testing Data..................................................................................... 17-1 17.3 Exploration Conclusions .......................................................................................... 17-1 17.4 Resource Estimation ................................................................................................ 17-1

18 RECOMMENDATIONS (ITEM 22) .................................................................................. 18-1 18.1 Recommended Work Programs and Costs .............................................................. 18-1

19 REFERENCES (ITEM 23) .................................................................................................. 19-1 20 GLOSSARY ........................................................................................................................ 20-1

20.1 Mineral Resources and Reserves ............................................................................. 20-1 20.1.1 Mineral Resources ..................................................................................... 20-1 20.1.2 Mineral Reserves ....................................................................................... 20-1

20.2 Glossary ................................................................................................................... 20-2

List of Tables Table 1: Resource Statement, Yaxtché Deposit, as of December 31, 2008 ....................................... IV

Table 1.3.1: Key Project Personnel................................................................................................... 1-3

Table 2.2.1: Exploration and Exploitation Concessions at El Quevar .............................................. 2-3

Table 2.3.1: Exploration Projects with Mineralized Zones .............................................................. 2-4

Table 2.4.1: Details of the Purchase Option and JV Agreements ..................................................... 2-6

Table 5.2.1.1: Simplified Paragenetic Sequence for the Hydrothermal Phases ................................ 5-3

Table 5.2.1.2: Hydrothermal Phases Related to Geological Evolution of the Project Area ............. 5-3

Table 9.1.1: El Quevar Drilling by Program and Contractor ............................................................ 9-1

Table 10.4.1: Summary of Relevant Samples, Excluding Yaxtché* .............................................. 10-2

Table 11.4.1: Standards Used in the El Quevar QA/QC Program .................................................. 11-3

Table 11.4.2.1: Summary of Quarter Core Duplicates ................................................................... 11-4

Table 11.4.2.2: Percentage of Quarter Core Duplicate Assays* ..................................................... 11-4

Table 11.4.2.3: Summary of Coarse Duplicates ............................................................................. 11-4

Table 11.4.2.4: Percentage Coarse Duplicate Assays * .................................................................. 11-5

Table 11.4.2.5: Summary of Pulp Duplicates ................................................................................. 11-5

Table 11.4.2.6: Percentage Pulp Duplicate Assays* ....................................................................... 11-5

Table 11.4.3.1: Results of Standard Sample Analysis .................................................................... 11-6

Table 14.1.1.1: Composite Head Analysis ...................................................................................... 14-1

Apex Silver Mines Corporation iv El Quevar Project NI 43-101 Technical Report on Resources


Table 14.1.2.1: Test Results from Whole Ore Leaching ................................................................ 14-2

Table 14.1.2.2: Test Results from Selective Silver Flotation ......................................................... 14-2

Table 14.1.2.3: Test Results from Silver and Bulk Sulfide Flotation ............................................. 14-3

Table 14.1.2.4: Test Results from Flotation Tailings Cyanidation ................................................. 14-3

Table 14.1.2.5: Combined Silver Recovery from Flotation and Tailings Cyanidation .................. 14-4

Table 14.1.2.6: Summary of Test Results on El Quevar Sample Composites ................................ 14-4

Table 15.3.1: Statistics of Raw Silver Assay Intervals within the Yaxtché Grade Shell ............... 15-2

Table 15.4.1: Raw Silver Assay Statistics by Oxidation Type ....................................................... 15-2

Table 15.5.1: Specific Gravity Statistics ......................................................................................... 15-3

Table 15.6.1: Statistics of Capped Silver Assay Intervals within the Yaxtché Grade Shell ........... 15-4

Table 15.7.1: Statistics of Silver Composite Intervals within the Yaxtché Grade Shell ................ 15-4

Table 15.8.1: Silver Variogram Parameters .................................................................................... 15-4

Table 15.9.1: El Quevar Block Model Limits ................................................................................. 15-5

Table 15.9.2: El Quevar Grade Estimation Parameters .................................................................. 15-5

Table 15.9.1.1: Comparison of Kriged and Nearest Neighbor Estimations ................................... 15-6

Table 15.12.1: Resource Statement, Yaxtché Deposit, as of December 31, 2008 .......................... 15-7

Table 15.13.1: Tonnage and Grade of Indicated Resource by Cut-off ........................................... 15-7

Table 15.13.2: Tonnage and Grade of Inferred Resource by Cut-off ............................................. 15-8

Table 20.2.1: Glossary .................................................................................................................... 20-2

Table 20.2.2: Abbreviations ............................................................................................................ 20-3

List of Figures Figure 2-1: Location Map of El Quevar Project ............................................................................... 2-8

Figure 2-2: Exploration and Exploitation Concessions of El Quevar Project .................................. 2-9

Figure 2-3: Three Areas of Exploration Focus at El Quevar Project .............................................. 2-10

Figure 5-1: Regional Geology of the El Quevar Project ................................................................... 5-5

Figure 5-2: Local Geology of the El Quevar Project ........................................................................ 5-6

Figure 5-3: Representative Section through the Yaxtché Structural Trend ...................................... 5-7

Figure 9-1: Drillhole Location Map .................................................................................................. 9-3

Figure 11-1: Duplicate QA/QC Samples ........................................................................................ 11-8

Figure 11-2: Standard Samples GBM ............................................................................................. 11-9

Figure 11-3: Standard Samples STD 1-6 ...................................................................................... 11-10

Apex Silver Mines Corporation v El Quevar Project NI 43-101 Technical Report on Resources


Figure 14-1: Whole Ore Leach Kinetics ......................................................................................... 14-6

Figure 14-2: Leach Kinetics for Flotation Tailings Cyanide .......................................................... 14-7

Figure 15-1: Yaxtché Drillhole Location Map ............................................................................... 15-9

Figure 15-2: Grade Shell Plan View ............................................................................................. 15-10

Figure 15-3: Grade Shell Oblique View, Looking West .............................................................. 15-11

Figure 15-4: Grade Shell Cross-section Looking West ................................................................ 15-12

Figure 15-5: Location Map Specific Gravity samples .................................................................. 15-13

Figure 15-6: Specific Gravity Plot for Breccia Samples .............................................................. 15-14

Figure 15-7: Specific Gravity by Oxidation State ........................................................................ 15-15

Figure 15-8: Probability Plot of Silver Assays ............................................................................. 15-16

Figure 15-9: Block Model Cross Section, Looking West ............................................................. 15-17

Figure 15-10: Block Model Elevation 4795 ................................................................................. 15-18

Figure 15-11: Swath Plots Block Model vs. Composites ............................................................. 15-19

Figure 15-12: Grade Tonnage Curve Indicated and Inferred Resources ...................................... 15-20

List of Appendices

Appendix A Certificate of Author

Apex Silver Mines Corporation I El Quevar Project NI 43-101 Technical Report on Resources


Summary (Item 3)

Apex Silver Mines Corporation (“Apex Silver” or the “Company”), a subsidiary of Apex Silver Mines Limited, has engaged SRK Consulting (US), Inc. (“SRK”) to prepare a Technical Report for the El Quevar Project (“El Quevar” or the “Project”) to meet the requirements of Canadian National Instrument 43-101 (“NI 43-101”). This report reflects the most recent resource based on drill data produced between 2006 and 2008. Apex Silver has been exploring the Project since acquiring exploration rights to El Quevar in 2004.

Property Description and Location El Quevar is located in the Argentine Republic (“Argentina”), in the Northwest geographic region of the Puna/Altiplano. The Project is approximately 300km west-northwest of the provincial capital city of Salta in the western part of Salta province.

The Project is accessed from Salta by following National Road 51 (“NR51”) to the turn off to Provincial Road 27 (“PR27”) for approximately 226km (Figure 2-1). From Salta to San Antonio de los Cobres NR51 is 166km of paved road and beyond San Antonio de los Cobres to Provincial Road 27 (“PR27”), NR51 is a well-maintained gravel road. At the intersection between NR51 and PR27, El Quevar is accessed by traveling south for approximately 30km and then east on the access road for 15km.

Ownership El Quevar includes 10 exploitation concessions totaling 14,622.32ha and six exploration concessions totaling 50,365.28ha. A total canon payment of US$37,750 was assessed for the exploitation concessions in 2008, and all annual payment canons for the exploitation concessions are current. Apex Silver through its subsidiary Silex Argentina S.A. (“Silex”) controls all exploration concessions at El Quevar.

Surface rights are owned and administered by Salta province, and as a result there are no required agreements for access and in this area, no existing infrastructure limiting exploration activities. Apex Silver, through its subsidiary Silex, acquired the first two exploitation concession at El Quevar (Quirincolo I and Quirincolo II) in 2004 and began exploration on these two concessions at that time. In 2006, Apex Silver formed a joint venture (“JV”) agreement with Hochschild Mining PLC (“Hochschild”) and its subsidiary Minera Hochschild Argentina (“Minera Hochschild”) expanding the Project to include five additional exploitation concessions. Since then, nine more concessions have been added to the Project through property purchase from Mansfield Minerals, Inc. and purchase option agreements with Saravia Carlos Alberto and Salta Exploraciones S.A. (“SESA”). Apex Silver and Hochschild have recently formed the company Minera El Quevar, S.A. (“Minera El Quevar”) to manage the exploitation concessions with the exception of Viejo Campo. Apex Silver is the operator and holds 65% of Minera El Quevar.

Viejo Campo, while still part of El Quevar, is currently not included in the JV agreement and is managed separately by Apex Silver. Apex Silver has recently entered into an agreement with SESA regarding Viejo Campo and can earn a 60% interest in the property after a US$600,000 payment to SESA and a US$1,000,000 investment in Veijo Campo.

Apex Silver Mines Corporation II El Quevar Project NI 43-101 Technical Report on Resources


Geology and Mineralization El Quevar is interpreted as an intermediate sulfidation (“IS”) to high sulfidation (“HS”) epithermal deposit associated with caldera collapse, stratovolcano formation and development of dacitic domes. These types of deposits form under acidic, oxidizing conditions within 1km of the surface and between 150º and 250ºC. They are often associated with silicic to intermediate volcanic rocks and hot spring deposits, and share similar ages as their host rocks. Host rocks include andesite, rhyodacite and locally rhyolite. IS and HS epithermal deposits are both characterized by wallrock replacement, breccias, sulfide disseminations and siliceous vein filling. Quartz may also have a crustiform texture. Typical alteration assemblages include advanced argillic, alunite and kaolinite with pyrophyllite deeper in the system. These may be accompanied by sericite, adularia and chlorite. Gangue minerals include vuggy quartz and silica as well as barite. Carbonate and selenides are usually absent and manganese minerals are rare in HS types. However, manganese minerals are more abundant in IS deposits and selenide minerals may be present locally. Barite is often present in association with gold. Ore mineralogy include native gold, electrum, gold and silver telluride minerals, bornite, enargite, tennantite, covelite, chalcopyrite, sphalerite and galena, and epithermal deposits normally show vertical zoning. Zoning in IS deposits are often characterized by antimony, bismuth and gold anomalies with some silver values. The boiling zone is marked by high-grade silver and the lower parts of these systems are richer in lead and zinc. There is typically more copper in these systems than zinc and lead. This contrasts with HS deposits, which generally are base-metal poor (Guilbert, et al, 1986; Camprubí, et al, 2006; Taylor, 2007; Sillitoe, 2008).

At El Quevar, mineralization is related to the formation of El Quevar Volcanic Complex (“CVQ”). Silver and base metal mineralization is found in brecciated structural zones, spatially related to dacitic flows and domes. Within the Project area, exploration models are based on mapping, drilling and geophysical data collected within the Yaxtché and Copán structural trends in Quevar Sur. The resource for the Project is within the Yaxtché structural trend.

Mineralization at El Quevar has been deposited in association with vuggy silica in individual zones averaging 1 to 15cm wide but may reach 1m wide in some areas. Mineralized breccia occurs as both fault breccia (FBV) and hydrothermal Breccia (BXH) and as open space filling, disseminations and massive zones and includes the following mineral species:

• Sulfosalts: Enargite, tethraedrite, tennantite, bismutite and pyrargirite;

• Sulfide minerals: Pyrite, galena and sphalerite;

• Sulfate minerals: Plumbojarosite; and

• Native silver (Silex Argentina S.A., 2008b).

The Yaxtché structural trend is a “structural corridor” 750m long and 40 to 150m wide, characterized by strong to moderate silica and quartz-alunite alteration and bounded by two faults. At surface, the mineralization branches into three separate structures. The strike is variable between 090º in the eastern area to 300º in the western area. The structure dips from 70 to 65ºN at surface and flattens to 45 to 55ºN at depth (Silex Argentina S.A., 2008b).

Evidence from kinematic indicators suggest that the Yaxtché structural trend could be offset on both the east and west by 035º faults identified during trench mapping and geophysical surveys.

Apex Silver Mines Corporation III El Quevar Project NI 43-101 Technical Report on Resources


In addition, argillic alteration mapped at surface in these areas point to potential drilling targets that could extend the Yaxtché structural trend (Silex Argentina S.A., 2008b).

Exploration Prior to Apex Silver, five companies engaged in limited exploration at El Quevar between 1970 and 1999. Exploration was conducted at the Project between 1970 and 1995 by Fabricaciones Militares, BHP-Utah Minerals International and Industrias Peñoles, S.A.B. de C.V. Additional exploration prior to 1995 included excavation of several small pits at Yaxtché and Mani. It is not known which company or parties completed this work. In 1997 Minera Hochschild, completed a six hole, reverse circulation (“RC”) and diamond drilling program in the Mani structural trend and in 1999, Mansfield Minerals, Inc. collected samples from surface (Silex Argentina S.A., 2008a).

Apex Silver acquired exploration rights to El Quevar in October 2004. Between October 2004 and August 2006, Apex Silver mapped in the Quevar Sur area at 1:5,000 and 1:10,000 scales. At this time, various outcrops were sampled. Apex Silver began drilling at the Project in June of 2006 and between 2006 and 2008 has completed 15,506.3m of diamond drilling in 81 drillholes. In addition a ground based geophysical program was completed between December 2007 and February 2008 by Quantec Geoscience Argentina S.A. and in late 2007, 24 samples from six drillholes in the Yaxtché structural zone were submitted to Brockway and Franquesa Consultores (“BFC”) for petrographic and reflected light microscopy work. As a follow up to the petrographic work, 14 of the 24 samples had electron microprobe work to confirmation mineral species (Silex Argentina S.A., 2006; 2007; 2008a; 2008b).

Resource Estimation and Resource Statement SRK conducted a resource estimation for the Yaxtché deposit at El Quevar using the data provided by Apex Silver. Forty-five core holes were drilled in the resource area. The mineralized breccia trends 090° to 120º and dips 50° to the north. Silver exhibits a zonation within the breccia with higher grades at the margins and a sharp contact with the host rock. Within the mineralized breccias, the central core tends to have low silver values. SRK constructed a grade shell at 10g/t silver to constrain the resource estimation. Assays were composited into 2m intervals from the top of the hole with a break at the grade shell boundaries. Silver grades were estimated with ordinary kriging using only composites within the grade shell. To further define waste blocks within the grade shell, indicator kriging with a 25g/t silver discriminator was conducted. Blocks with an indicator value less than 0.5 were considered waste and not included in the resource statement.

The resources for the Yaxtché deposit as of December 31, 2008 are shown in Table 1.

Apex Silver Mines Corporation IV El Quevar Project NI 43-101 Technical Report on Resources


Table 1: Resource Statement, Yaxtché Deposit, as of December 31, 2008 Source Class Cut-off kt Ag g/t Ag koz

Oxide Indicated 85 304 168 1,644 Inferred 85 94 259 784

Mixed Indicated 120 156 237 1,192 Inferred 120 5 322 50

Sulfide Indicated 120 939 197 5,954 Inferred 120 7 202 46

Total Indicated 1,399 195 8,790 Inferred 106 258 881

Conclusions and Recommendations Conclusions Apex has undertaken exploration at El Quevar using a systematic approach and according to industry best practices. Several target areas have been identified based on the presence of outcropping mineralized breccia. Typically, target exploration was initiated with mapping and sampling, followed by trenching and sampling to define drill targets. All drilling is HQ and NQ sized core. Apex Silver has established procedures to ensure that data is collected in a systematic manner, and have ensured that appropriate QA/QC protocols have been implemented.

Samples have been analyzed by Alex Stewart in Mendoza and ALS Chemex in Mendoza and La Serena, Chile. Both of these laboratories are local facilities of international laboratories. Apex Silver is using appropriate sample preparation and analytic procedures for this type of mineralization and has a proper laboratory QA/QC program in place.

The Quevar project covers an area of about 20km x 30km with excellent exploration potential. Apex Silver has been conducting exploration for the past four years in a systematic and thorough manner and identified several targets in Quevar Sur on which they have conducted drilling. The exploration practices adopted by Apex Silver meet or exceed industry best practices.

Recommendations Apex Silver has been conducting exploration at Quevar over the last four years in a systematic manner. The Yaxtché trend has received the most drilling to date and a resource has been estimated for that area. It appears that the western extension has been offset by faulting and the eastern extension has not yet been limited by drilling. In addition, several other targets have been defined in surface mapping and sampling programs and in a recent reinterpretation of geophysical data.

SRK recommends that following work programs at El Quevar:

• Conduct additional specific gravity tests on the half core archived at the Quevar site to obtain more data for Yaxtché especially on material within the grade shell. This work can be performed during the ongoing exploration program at an estimated cost of US$5,000;

• Perform check analyses at ALS Chemex on the pulps originally analyzed by Alex Stewart prior to initiation of the QA/QC program. These samples should also include blank and standard reference samples. It is also recommended that pulps originally

Apex Silver Mines Corporation V El Quevar Project NI 43-101 Technical Report on Resources


analyzed at ALS Chemex should be checked at Alex Stewart. Approximately 10% of the pulps should have check analyses performed, or about 200 samples. It is estimated that the cost would be approximately US$10,000;

• Continue exploration at Quevar, specifically to;

o Explore the west and east extensions of Yaxtché,

o Test geophysical targets generated from the new interpretation in 2008, and

o Define further drill targets through continued surface mapping and sampling.

It is recommended that the drilling program start with approximately 1,500m of drilling at Yaxtché followed by an evaluation of the results and a follow up program. The cost of this program is US$600,000.

Apex Silver Mines Corporation 1-1 El Quevar Project NI 43-101 Technical Report on Resources


1 Introduction (Item 4)

Apex Silver Mines Corporation (“Apex Silver” or the “Company”), a subsidiary of Apex Silver Mines Limited, has engaged SRK Consulting (US), Inc. (“SRK”) to prepare a Technical Report for the El Quevar Project (“El Quevar” or the “Project”) to meet the requirements of Canadian National Instrument 43-101 (“NI 43-101”). El Quevar is located approximately 300km by paved and unpaved roads west-northwest of the city of Salta in the western part of Salta province, Argentine Republic (“Argentina”). This report reflects the most recent resource based on drill data produced between 2006 and 2008. Apex Silver has been exploring the Project since acquiring exploration rights in 2004.

The Company was founded in 1993 as a mining, exploration and development company focusing on traditional silver producing regions in Latin America. The main objective of Apex Silver is to become a significant producer of silver, lead and zinc. To this end, the Company acquires properties that have exploration and development potential and divests those properties that are not of continuing interest.

Apex Silver, through its subsidiary Silex Argentina S.A. (“Silex”), acquired the first two exploitation concession at El Quevar (Quirincolo I and Quirincolo II) in 2004 and began exploration on these two concessions at that time. In 2006, Apex Silver formed a joint venture (“JV”) agreement with Hochschild Mining PLC (“Hochschild”) and its subsidiary Minera Hochschild Argentina (“Minera Hochschild”) expanding the Project to include five additional exploitation concessions. Since then, nine more concessions have been added to the Project through property purchase from Mansfield Minerals, Inc. and purchase option agreements with Saravia Carlos Alberto and Salta Exploraciones S.A. (“SESA”). Apex Silver and Hochschild have recently formed the company Minera El Quevar, S.A. (“Minera El Quevar”) to manage the exploitation concessions with the exception of Viejo Campo. Apex Silver is the operator and holds 65% of Minera El Quevar. To maintain this position, Apex Silver must complete a feasibility study by 2010 and begin production within another 2 years (2012).

Viejo Campo, while still part of El Quevar, is currently not included in the JV agreement and is managed separately by Apex Silver. Apex Silver has recently entered into an agreement with SESA regarding Viejo Campo and can earn a 60% interest in the property after a US$600,000 payment and a US$1,000,000 investment.

All exploration concessions will continue to be managed by Apex Silver. Property agreements are discussed in detail in Section 2.

1.1 Terms of Reference and Purpose of the Report This report is intended to provide Apex Silver with an independent resource review and technical report that follows existing regulations in Canada. The report meets the requirements for NI 43-101 and conforms to Form 43-101F1 for technical reports.

Resource and Reserve definitions are as set forth in the Appendix to Companion Policy 43-101 CP, “Canadian Institute of Mining, Metallurgy and Petroleum – Definitions Adopted by CIM Council, August 20, 2000 (“CIM”).



1.2 Reliance on Other Experts (Item 5)

1.2.1 Sources of Information SRK’s opinion contained herein is based on information provided to SRK by Apex Silver throughout the course of SRK’s investigations. The sources of information include data and reports supplied by Apex Silver and Silex personnel as well as documents cited in Section 19.

Much of the information is drawn from four reports:

• El Quevar, Argentina-Property Description, Internal Report by Silex Argentina S.A., 2008;

• El Quevar Project, Drilling Campaign Report January-July 2008, Internal Report by Silex Argentina S.A.;

• Proyecto El Quevar, Internal Report 2006, by Silex Argentina S.A.; and

• El Quevar Project, Drilling Campaign Report, February-June 2007, Internal Report, by Silex Argentina S.A.

SRK has relied on information from Apex Silver regarding the validity of its exploration and mining concessions and has not independently verified their validity. SRK has also relied on Apex Silver regarding surface ownership of the exploration and mining concessions.

1.3 Qualifications of Consultants (SRK) The SRK Group is comprised of over 850 staff, offering expertise in a wide range of resource engineering disciplines. The SRK Group’s independence is ensured by the fact that it holds no equity in any project and that its ownership rests solely with its staff. This permits SRK to provide its clients with conflict-free and objective recommendations on crucial judgment issues. SRK has a demonstrated record of accomplishment in undertaking independent assessments of Mineral Resources and Mineral Reserves, project evaluations and audits, technical reports and independent feasibility evaluations to bankable standards on behalf of exploration and mining companies and financial institutions worldwide. The SRK Group has also worked with a large number of major international mining companies and their projects, providing mining industry consultancy service inputs.

This report has been prepared based on a technical and economic review by a team of consultants sourced principally from the SRK Group’s Denver, US office. These consultants are specialists in the fields of geology exploration, mineral resource and mineral reserve estimation and classification, open pit and underground mining, mineral processing and mineral economics.

Neither SRK nor any of its employees and associates employed in the preparation of this report has any beneficial interest in Apex Silver or in the assets of Apex Silver. SRK will be paid a fee for this work in accordance with normal professional consulting practice.

The individuals who have provided input to this technical report, who are listed below, have extensive experience in the mining industry and are members in good standing of appropriate professional institutions. Ms. Mach is a Qualified Person for this report and is responsible for all Sections of this report.

The key project personnel contributing to this report are listed in Table 1.3.1. The Certificate of Author for Leah Mach is provided in Appendix A.



Table 1.3.1: Key Project Personnel Name Title Discipline Leah Mach Principal Resource Geologist Resources P.J. Hollenbeck Senior Resource Geologist Resources Dorinda Bair Senior Geologist Geology Alva Kuestermeyer Associate Metallurgist Metallurgy and Processing

1.3.1 Site Visit El Quevar was visited by Leah Mach, the QP for this report during the week of November 9, 2008, for four days. During this visit SRK verified drill logs and reviewed core handling, splitting, logging practices and core facilities. Ms Mach also visited the exploration sites during the site visit.

1.4 Units of Measure Metric units are used throughout this report, except where otherwise stated.

1.5 Effective Date The effective date of this Technical Report is January 31, 2009. The effective date of the resource estimate is December 31, 2008; the data used in the resource estimation was produced between 2004 and 2008.



2 Property Description and Location (Item 6) 2.1 Property Location El Quevar is located in Salta Province, Argentina in the Northwest geographic region on the Puna/Altiplano. The Project is northwest of Salta, the provincial capital, and accessed by approximately 300km of paved and unpaved roads. El Quevar is 90km by road from San Antonio de los Cobres and 15km east of the village of Salar de Pocitos. Salar de Pocitos is the nearest inhabited location with a population of 150 people. Both the Project and Salar de Pocitos are within the San Antonio de los Cobres municipality. The Project is located between geographic coordinates 24º11’00”S, 67º01’00”S and 24º28’25”S, 66º41’20”S and at an average elevation of 4,700m above sea level (“masl”). El Quevar lies entirely within La Reserva Natural Los Andes. This reserve is multi-use and classed as Categoría de Manejo de Uso Múltiple VIII, which allows production/extraction activities including mining and exploration. The reserve’s main purpose is for the preservation of vicuña. Project location is shown in Figure 2-1.

2.2 Mineral Titles Argentina is a federal republic, composed of 23 provinces and one autonomous city, the capital Buenos Aires. Argentina has Federal, Provincial and Municipal governments with input into mining regulation. The National Mining Code regulates mining activities in Argentina and is administered by the Federal government. However, natural resources are owned by individual provinces, which regulate the mining law within their boundaries. This includes granting concessions and enforcing compliance through regular investigations by inspectors (Silex Argentina S.A., 2008).

There are four types of properties that include three different exploration concessions and mines or exploitation concessions.

• Cateo or claim (exploration concession);

• An air survey permit (exploration concession);

• An underground survey (exploration concession); and

• Minas or mines, which is an exploitation concession (Godoy, 2007).

All concessions are granted by the regulating province either by a judicial or administrative decision. Exploration concessions are essentially paper locations while exploitation concessions must be surveyed with monuments placed at the corners (Silex Argentina S.A., 2008).

In Salta province, all concessions are granted by a judge in the Mining Court. Each property is recorded by number in the Mining Court registry, and each property has its own judicial file. In addition, the Mining Secretariat records the property in the Registro Gráfico (“Land Register Office”) and adds the property to a digital map of the area. Should an exploration concession be submitted for change to an exploitation concession, it must be surveyed prior to granting the exploitation concession. The survey must be conducted according to specific procedures and requirements as defined by law, and must include the participation of the mining office authorities (Godoy, 2007; Silex Argentina S.A., 2008).

In exploration concessions, the air and underground surveys are seldom used in favor of cateos. In all cases, exploration concessions are granted for a limited surface area and period of time.



These concessions are divided into “surface units” of 500ha and each concession can have a maximum of 20 units or 10,000ha. A 500ha exploration concession can be held for 150 days and for every additional unit of 500ha the time increases by 50 days. The maximum is a 1,100 day term for a 10,000ha concession. During this time, total hectares must be reduced incrementally at 300 days and 700 days after the exploration concession is granted unless the concessionaire declares the property to be a mine and applies for an exploitation concession (Godoy, 2007; Silex Argentina S.A., 2008).

Only 20 exploration concessions or 200,000ha can be held by a single legal entity or individual per province. Exploration concessions have a one-time canon payment, which is variable from year to year and fixed for a given year by the National Ministry of Economy. Landowners within the concession must be notified and cannot oppose the concession but can request a bond from the concessionaire. Exploration activities cannot be conducted near crops and gardens, buildings and facilities and requires acceptance by the property owner. An exploration plan must be filed and followed for the associated concession, and failure to do so may result in termination of the concession. Prior to any activities, an environmental report must be filed with, and approved by, the provincial mining authority. Additional environmental reports are required on a bi-annual basis while the exploration concession is valid. On expiration of the exploration concession, all data and documentation from the activities must be filed with the provincial mining authority. In addition to this, exploration cannot be conducted near cemeteries, infrastructure including roads, pipelines and railroads, public water or any public facilities (Godoy, 2007; Silex Argentina S.A., 2008).

Exploitation concessions are granted if any mineral discovery is made either by the concessionaire or third parties within the area and term of the concession. Exploitation concessions have payments that are fixed annually by the National Ministry of Economy. There are no fixed time limits associated with exploitation concessions but duration can be affected by the following three conditions:

• Timely payment of annual fees;

• An appropriate and reasonable capital investment; and

• Continuous workflow.

El Quevar falls within the jurisdiction of the Salta Province. The Project includes 10 exploitation concessions totaling 14,622.32ha and six exploration concessions totaling 50,365.28ha. A total canon payment US$37,750 was assessed for the exploitation concessions in 2008, and all annual payment canons for the exploitation concessions are current. All exploration and exploitation concessions are listed in Table 2.2.1 and shown in Figure 2-2. SRK did not review the validity of the claims.



Table 2.2.1: Exploration and Exploitation Concessions at El Quevar

Expedient No. Property

No. of Hectares

Type of Concession Owner

Presentation Date

Date Granted by The Mining Court of Salta

Concessions (days)

ExpirationDate

Annual Payment

Canon Status 18036 Quirincolo I 3,500.00 Exploitation Silex 22-Dec-04 03-Jun-05 - - 8,750 Paid and in good standing 18037 Quirincolo II 3,500.00 Exploitation Silex 22-Dec-05 03-Jun-05 - - 8,750 Paid and in good standing

3902 Castor 203.58 Exploitation SESA 50%/Minera Hochschild 50% 21-Aug-61 19-Dec-05 - - 1,000 Paid and in good standing

17114 El Quevar II 329.08 Exploitation SESA 01-Sep-04 Title - - 1,000 Paid and in good standing 1578 Vince 44.72 Exploitation Minera Hochschild 22-May-89 07-Aug-96 - - 125 Paid and in good standing 1542 Armonia 17.90 Exploitation Minera Hochschild 08-Feb-86 26-Jul-04 - - 50 Paid and in good standing

12222 Quespejahuar 18.00 Exploitation Minera Hochschild 01-Feb-85 02-Feb-04 - - 75 Paid and in good standing 18332 Toro I 436.60 Application for Exploitation Minera Hochschild 13-Feb-06 In Progress - - 1,250 No canon payment until 2°

semester of 2009 18359 Nevado I 2,161.39 Application for Exploitation Saravia Carlos Alberto 27-Mar-06 19-Oct-06 - - 5,500 No canon payment until 2°

semester of 2009 18745 Quevar I 7,975.45 Exploration Silex 25-Apr-07 07-Mar-08 850 07-Aug-10 - Paid and in good standing 18784 Quevar III 9,991.26 Exploration Silex 16-May-07 12-Mar-08 1100 20-Apr-11 - Paid and in good standing 18786 Quevar IV 9,968.46 Exploration Silex 16-May-07 12-Mar-08 1100 30-Apr-11 - Paid and in good standing 18785 Quevar V 6,500.30 Exploration Silex 16-May-07 12-May-08 750 03-Jul-10 - Paid and in good standing 19136 Quevar VI 6,987.05 Exploration Silex 28-Feb-08 05-Dec-08 800 20-Mar-11 - Paid and in good standing 19195 Quevar VII 8,942.76 Exploration Silex 29-Apr-08 In Progress - - - Paid and in good standing

18079 Viejo Campo 4,411.05 Application for Exploitation SESA In Progress - - 11,250 No canon payment until 1° semester of 2011

Subtotal El Quevar (ha) 64,987.60 Subtotal Annual Canon 37,750 *Source: Silex Argentina S.A. 2009



2.3 Location of Mineralization Apex Silver controls a large concession area in a highly prospective part of Salta province. Mineralization has been identified on most of its concessions, and exploration by other companies is ongoing on adjacent properties. El Quevar covers 64,987.60ha of exploration and exploitation concessions with many promising areas of mineralization. Of these, there are three focused areas of exploration (Figure 2-3):

• Quevar Sur;

• Quevar Norte; and

• Viejo Campo.

Quevar Sur is the area of most intense exploration and contains the Quevar resource. The mineralization associated with the resource is located at the center of the concession block and this resource lies entirely within the Armonia exploitation concession number 1542 on land controlled by Apex through a JV agreement with Hochschild. This agreement is discussed in Section 2.4. The resource is located in the Yaxtché structural trend, which extends onto adjacent concessions controlled by the JV or under purchase agreement with the JV or Apex Silver and other companies. All exploration concessions are 100% owned and controlled by Apex Silver through its subsidiary Silex. Two exploitation concessions are 100% owned by Apex through Silex, with the remaining eight exploitation concessions part of JV agreements and royalties as discussed in Section 2.4. Mineralized zones at El Quevar are listed in Table 2.3.1.

Table 2.3.1: Exploration Projects with Mineralized Zones Quevar Sur Quevar Norte Viejo Campo Yaxtché structural trend (Resource area) North Breccia Main structure Yaxtché Northeast Tetera Breccia QZ Veins Yaxtché East Black structure Breccias Mani structural trend Oriental Breccia Brecciated Veins Copán structural trend Ailapuna Breccia Argentina Breccia

2.4 Royalties, Agreements and Encumbrances Surface rights are owned and administered by Salta province, and as a result there are no required agreements for access and in this area there is no existing infrastructure limiting exploration activities. Apex Silver, through its subsidiary Silex, acquired the first two exploitation concession at El Quevar (Quirincolo I and Quirincolo II) in 2004 and began exploration on these two concessions at that time. In 2006, Apex Silver formed a JV agreement with Hochschild and its subsidiary Minera Hochschild expanding the Project to include five additional exploitation concessions. Since then, nine more concessions have been added to the Project through property purchase from Mansfield, and purchase option agreements with Saravia Carlos SESA.

As part of the JV agreement Apex Silver holds a 65% interest and manages El Quevar. To maintain this position, Apex Silver must expend US$1 million by May 22, 2009, complete a feasibility study by 2010 and begin production within an additional 2 years (2012). Apex Silver has fulfilled the expenditure of US$1,000,000 as part of this agreement.



Apex Silver and Hochschild have recently formed the company Minera El Quevar to manage the exploitation concessions with the exception of Viejo Campo. Minera El Quevar is 65% held by Apex Silver and 35% held by Hochschild. Viejo Campo and the exploration concession will continue to be managed by Apex Silver.

Viejo Campo, while still part of El Quevar, is currently not included in the JV agreement with Hochschild. This concession is under an agreement between SESA and is managed separately by Apex Silver. Under the terms of the agreement, Apex Silver can earn a 60% interest in the property after a US$600,000 payment and a US$1,000,000 investment. After the initial payment and investment, Apex Silver can do one of the following:

• Elect to form a JV with Apex Silver as the Operator of Viejo Campo holding a 60% interest and SESA holding the remaining 40% interest; or

• Elect to acquire an additional 20% interest in Viejo Campo for a total of an 80% interest by initiating a feasibility study at Viejo Campo within three years from the exercise of the call option.

Should Apex Silver choose to form a JV with SESA, Apex Silver must make a one-time cash payment of US$250,000 within 30 days of this decision to the SESA. In addition, with the formation of any JV, SESA has 90 days to agree to enter into the JV or to convert its 40% interest into either:

• 3% NSR (the “First NSR”) on precious metal from Viejo Campo; or,

• 1% NSR (the “Second NSR”) on the remaining metals from Viejo Campo.

Should SESA elect to exchange its 40% interest for the NSR's discussed above, Apex Silver have the right to purchase 50% of the First NSR for US$2,000,000 and 50% of the Second NSR for US$1,000,000 within the first 3 years of commercial production.

To maintain these call options for the foreseen term of three years after the beginning of the production, Apex Silver must make an annual payment of US$100,000 to SESA. This will be allocated to the final price of the call option if Apex Silver exercises it within three years.

Table 2.4.1 shows the details of the purchase option and JV agreements.



Table 2.4.1: Details of the Purchase Option and JV Agreements

Expedient No. Property Owner Type of Contract

Effective Date

Duration of Contract

Payments

Due Date NST

Investment Expiration

Date

Advances Report

Due Date Amount US$ Expiration Date Amount US$ Expiration

Date Date 3902 Castor

Sesa

Exploration 16-Mar-06 5 years On the Effective Date 25,000 16-Mar-06 1% 6 months 16-Sep-06 17114 El Quevar II Contract 16-Mar-06 16-Mar-11 6 months after the ED 25,000 16-Sep-06 12 months 16-Mar-07

(w/a Purchase 12 months after the ED 50,000 16-Mar-07 18 months 16-Sep-07 option right) 24 months after the ED 100,000 16-Mar-08 24 months 16-Mar-08

36 months after the ED 200,000 16-Mar-09 30 months 16-Sep-08 48 months after the ED 500,000 16-Mar-10 36 months 16-Mar-09 60 months after the ED 1,100,000 16-Mar-11 42 months 16-Sep-09

48 months 16-Mar-10 54 months 16-Sep-10

Total 2,000,000 60 months 16-Mar-11

3902 Castor

MH Argentina S.A.

JV 22-May-06 1st Exploration

Year 250,000 22-May-07 6 months 22-Nov-06

1578 Vince 22-May-06 2nd Exploration

Year 250,000 22-May-08 12 months 22-May-07

1542 Armonia 22-May-06 3rd Exploration

Year 500,000 22-May-09 18 months 22-Nov-07 12222 Quespejahuar 24 months 22-May-08 18332 Toro I 30 months 22-Nov-08

Total 1,000,000 36 months 22-May-09 18359 Nevado I

Saravia Carlos Alberto

Exploration 22-Jun-07 5 years On the Effective Date 30,000 22-Jun-07 Contract 22-Jun-12 6 months after the ED 30,000 22-Dec-07

(w/a Purchase 12 months after the ED 80,000 22-Jun-08 option right) 24 months after the ED 100,000 22-Jun-09

36 months after the ED 200,000 22-Jun-10 48 months after the ED 300,000 22-Jun-11 60 months after the ED 750,000 22-Jun-12

Total 1,490,000 *Source: Silex Argentina S.A. 2009



Should El Quevar go into production a 3% NSR royalty will be paid to Salta province, a 1% NSR royalty will be paid to SESA for any production from the Quevar II concession and 50% of the Castor concession under purchase option with SESA. The Viejo Campo NSR is discussed above. Should there be any production from Nevado I, a 1% NSR royalty will also be paid to Saravia Carlos Alberto.

Within the concession block are 22 perlite quarries. Ownership of these quarries is listed in Section 13. Access across land controlled by Apex is granted by the province and can only be contested if access impinges on exploration or mining activities. Currently there are no agreements or objections to activities being conducted either by the perlite quarry operators or Apex Silver in the concession area concerning surface access.

2.5 Environmental Liabilities and Permitting There are no environmental liabilities associated with the Project. El Quevar lies entirely within La Reserva Natural Los Andes a multi-use area classed as Categoría de Manejo de Uso Múltiple VIII, which allows production/extraction activities including mining and exploration. The reserve’s main purpose is for the preservation of vicuña. As a requirement of exploration activities on province land, the concessionaire must complete an Environmental Information Report (“EIR”) for the concession prior to any activities and must submit a new report every two years. There are three levels of permitting:

• Prospecting requiring an EIR Stage 1;

• Drilling and Exploration requiring an EIR Stage 2; and

• Production requiring an EIR Final Stage.

At this time, all 17 concessions are permitted for exploration. SRK has not reviewed the exploration permits.

SRK Job No.: 182801

File Name: Figure 2-1.doc Date: 01/30/09 Approved: LM Figure: 2-1

El Quevar, Salta Province, Argentina

Source: Silex Argentina, S.A., 2008

El Quevar Project Location Map

SRK Job No.: 182801

File Name: Figure 2-2.docx Date: 2/2/2009 Approved: DKB Figure: 2-2

El Quevar,

Salta Province, Argentina

Source: Silex Argentina, S.A., 2008; Modified by SRK, 2009

Exploration and Exploitation Concessions of

El Quevar Project

SRK Job No.: 182801

File Name: Figure 2-3.docx Date: 2/2/2009 Approved: DKB Figure: 2-3

El Quevar,


Source: Silex Argentina, S.A., 2008; Modified by SRK, 2009

Three Areas of Exploration Focus at

El Quevar Project



3 Accessibility, Climate, Local Resources, Infrastructure and Physiography (Item 7)

3.1 Topography, Elevation and Vegetation El Quevar is located in an east-west oriented valley immediately west of Nevado de Pastos Grandes, a 6,130m peak, and east of the salt flat, Salar de Pocitos. Relief within the concession block ranges from low in the resource area to moderate and high near Viejo Campo on the flanks of Nevado de Pastos Grande. Elevations range from 4,300m to 5,200m in the mineralized zones. The Project camp facilities are located 10km west of the resource area where the valley opens onto a large alluvial fan. Elevation at the camp is 3,700m.

The Project is within the Domino Andino-Patagónico (“Andean-Patagonian Domain”) bio-geographical province of Argentina. In Argentina, this province parallels and includes the Andes Mountains from north to south and extends from the mountains across Chile to the Atlantic Ocean at approximately 45ºS latitude. The Andean-Patagonian Domain is dominated by mineral soils consistent with arid, low-moisture environments showing no diagnostic horizon development. Classified as aridisols and entisols, these soils support limited vegetation characteristic of steppe climates adapted to harsh conditions and include grasses and low growing woody plants. In the driest, rocky areas vegetation disappear completely (Vector Argentina S.A., 2008).

3.2 Climate and Length of Operating Season The climate is characteristic of high mountain environments. The weather is extremely dry and ranges from polar conditions on the higher mountain peaks to arid steppe environments at the valley floors. Most precipitation falls between November and March as heavy rains, hail and snow. Total precipitation is variable and can range from 50mm in dry years to 200mm during wetter years. Temperatures during the winter months vary from 10ºC day during the day to -25ºC at night. During the summer months, temperatures in the daytime can reach 25ºC falling to -5º C night at night. The operating season is year round at the Project (Vector Argentina S.A., 2008).

3.3 Physiography El Quevar lies in the physiographic region of the Puna Block and extension of the Bolivian Altiplano which is marked by high plateaus and broad valleys flanked by even higher mountains. The median elevation of the Puna in this area is 3,800m. There is 2,470m of vertical relief from the Salar de Positos to the peak of Nevado de Pastos (Vector Argentina S.A., 2008).

3.4 Access to Property The Project is accessed from Salta by following National Road 51 (“NR51”) to the turn off to Provincial Road 27 (“PR27”) for approximately 226km (Figure 2-1). From Salta to San Antonio de los Cobres NR51 is 166km of paved road and beyond San Antonio de los Cobres to Provincial Road 27 (“PR27”), NR51 is a well-maintained gravel road. At the intersection between NR51 and PR27, El Quevar is accessed by traveling south for approximately 30km and then east on the access road for 15km.



3.5 Surface Rights Surface rights at El Quevar are controlled and administered by Salta Province. There are no required agreements for access and no existing infrastructure limiting exploration activities.

3.6 Local Resources and Infrastructure Salar de Pocitos, a village of 80 people, is approximately 18km west of El Quevar and the nearest permanent habitation to the Project area. San Antonio de los Cobres supports a population of approximately 4,200 people and is located 100km from the Project. Salar de Pocitos has a first aid facility and San Antonio de los Cobres has a hospital with a Level II rating. Salta, located just under 300km to the east, is a large city with approximately 465,000 people. Salta has a major airport and provides the primary support for the Project (Vector Argentina S.A., 2008a).

The area is a remote, rural setting with the chief economy related to animal husbandry and exploration and mining support. The local population follows a traditional subsistence lifestyle of growing limited crops, raising camelids, sheep and cattle and producing woolen articles for sale (Vector Argentina S.A., 2008a).

3.6.1 Access Road and Transportation El Quevar is connected to Salta by approximately 300km of well-maintained gravel and paved roads. A railway connecting Salta, Argentina and Antofagasta, Chile is within 5km of the Project area. This railway is currently undergoing maintenance and restoration. It is a government owned railway and the government estimates that service along the line will be restored in 1 to 2 years (Vector Argentina S.A., 2008a).

3.6.2 Power Supply There is currently no external electric power to El Quevar. The camp is powered by two 275kVA diesel, Caterpillar generators. A 354kVA, high-tension power line passes approximately 30km north of El Quevar resource area and within 10km of the concession block. This power line runs between Argentina and Chile, approximately 409km. and is owned by Termo Andes (Silex Argentina, S.A., 2008a; Mercado, 2009).

In addition, a high-pressure gas pipeline has been constructed by Salta Province to support mining operations on the Puna. This pipeline is located 5km from the resource area and passes through the concession block controlled by Apex. This pipeline is 185km long and extends from Burras River, through San Antonio de los Cobres and ending in Salar de Pocitos Station. This is a six inch line with a capacity of 210,000m3/day (Silex Argentina, S.A., 2008a; Mercardo, 2009).

3.6.3 Water Supply Water for camp use is pumped from a well located at the camp. This well is approximately 100m deep. The maximum capacity of this well is 29m3/day (Vector Argentina S.A., 2008a). Water for future mining activities would be supplied from additional wells.

3.6.4 Camp Site Apex Silver’s camp is located approximately 10km west of the resource area on a large alluvial fan at 3,700m elevation. This camp is modular and can house 96 people. The four main buildings include a full kitchen and dining area, offices, supervisors and workers rooms. In



addition, there is a covered core shed, two generator sheds and a small shed over the well (Vector Argentina S.A., 2008a). \

Should the project become an operating mine, it would be necessary to construct a man camp for the majority of the mine workers because of the distance from population centers.

3.6.5 Waste Disposal Area Wastewater from the camp is passed through a system that includes aerobic digestion, sedimentation and chlorination. After this process, the liquids are sent to an infiltration well for introduction into the ground. Remaining solids will be stored in sealed containers and transported to Salar de Pocitos for final disposal (Vector Argentina S.A., 2008a).

Currently, domestic waste is disposed of at Salar de Pocitos and industrial waste is temporarily stored on site. Future plans include construction of a landfill with an impermeable membrane for solid, non-industrial disposal and a transfer station for temporary storage for hazardous wastes. These two areas will be constructed close to the present camp on property controlled by Silex. Routine maintenance of vehicles is currently conducted in Salta (Vector Argentina S.A., 2008a).

The mining and exploration concessions contain sufficient area for process facilities, tailings and waste rock disposal should the project become an operating mine.

3.6.6 Manpower Laborers for exploration are available from the local communities of Salar de Pocitos, San Antonio de los Cobres and Salta. Geologists are available throughout Argentina. There is a history of mining in the region and skilled miners are available should the Project become an operating mine.



4 History (Item 8) El Quevar is located in an important mining region of Argentina. Between 1930 and 1950, there was small-scale mining of lead and silver from limited workings but no recorded production. Limited mining was from the Yaxtché area at the Quespe Jaguar Mine. Most of the mining activity was at Mani.

An exploitation permit was granted for Castor 3902 in 1961. This exploitation concession has been split in half and SESA controls one-half while Hochschild controls the other.

The first organized exploration was completed in the 1970’s when Fabricaciones Militares drilled three or four drillholes on the property. The exact number of drillholes is unknown and no data remains. However, the drillholes were thought to be drilled in Quevar Norte. Later that same decade, BHP-Utah Minerals International (“BHP”), a subsidiary of BHP Billiton, drilled three holes; one in the Mani structural trend and two in the breccia between Mani and Copán structural trends. There is no data available for this exploration program.

Additional exploration prior to 1995 included excavation of several small pits at Yaxtché and Mani. It is not known which company or parties completed this work.

During the 1990’s, the exploration division of Industrias Peñoles, S.A.B. de C.V. (“Peñoles”) explored the Quevar Sur of the Project area. This was a limited program collecting surface samples only and no mapping was completed. Analytical results for the sample and exact sample locations are not available to Apex Silver.

In 1985, 1986 and 1989, Quespejahuar No. 12222, Armonia No. 1542 and Vince No. 1578 respectively were converted to exploitation permits. These are currently held by Minera Hochschild and explored by Apex Silver as part of the JV agreement.

Minera Hochschild completed a six hole, reverse circulation (“RC”) and diamond drilling program in the Mani and west structural trend in 1997. In addition to this work, Minera Hochschild took surface samples and constructed eight trenches across the Mani structural trend. Apex Silver has access to this data.

In 1999, Mansfield collected samples from surface and a number of small exploration pits in the Yaxtché structural trend at Quevar Sur. This data has been provided to Apex Silver.

Quirincolo I 18036 and El Quevar II were converted to exploitation permits in 2004. Quirincolo I is controlled by Silex while El Quevar II is held by SESA. These are currently explored under the agreements discussed in Section 2.

Apex Silver started exploration at El Quevar through its subsidiary Silex in 2004. Since then, four exploration programs have been completed which include 3,000 surface samples and 15,506.3m of core drilling in 81 drillholes.

Quirincolo II 18037 was converted to an exploitation permit in 2005. This exploitation permit is held by Silex,

4.1 Ownership Minerals and surface rights belong to the Salta Province, Argentina, and through canon payments and royalty agreements with the province, companies explore and extract minerals. Past



exploration activities and mining activities have included the following individuals and companies through agreement with Salta Province:

• 1930-1950: Artisanal miners extracted silver and lead ore from Mani and Yaxtché structural trends;

• 1970’s: Fabricaciones Milatares explored Quevar Norte and later that decade, BHP explored Quevar Sur including the Mani and Copán structural trends;

• 1990’s: Peñoles explored Quevar Sur;

• 1997: Hochschild explored the Mani structural trend; and

• 1999: Mansfield conducted surface exploration work in the Yaxtché structural trend at Quevar Sur.

4.2 Past Exploration and Development The Project has been periodically explored since 1930. Some limited small-scale production occurred between 1930 and 1950 in the Mani and Yaxtché structural trends. Exploration has included surface sampling, trenching, pitting and approximately seven drillholes prior to 1980. There is no data available for this exploration work. Exploration work was focused in small areas in El Quevar Sur and El Quevar Norte where silicified silver-bearing quartz veins outcrop. More recent exploration has included detailed surface mapping, and 15,506.3m of core drilling in 81 drillholes.

4.3 Historic Mineral Resource and Reserve Estimates There are no historic resource and reserve estimates for El Quevar.

4.4 Historic Production There is no recorded historic production for El Quevar. Previous production from small workings at the Project have been limited to artisanal-style mining, focused at Yaxtché at the Quespe Jaguar Mine, and in the Mani structural trend. Most production is thought to have been in the Mani area. Mining was focused on the extraction of silver and base metals.



5 Geologic Setting (Item 9) 5.1 Regional Geology El Quevar is located in the eastern Puna Block, which is the southern extension of the Bolivian Altiplano physiographic province. The regional geology is dominated by the Tertiary age El Quevar Volcanic Complex (“CVQ”), which hosts the Project mineralization. This volcanic complex covers approximately 1,150km2 and is thought to have formed in a rift basin that developed between the Cretaceous and Paleocene (Petrinovic, 1999; Silex Argentina, S.A., 2008b).

The CVQ formed between the Tertiary and Quarternary periods in a series of volcanic eruptions, culminating in caldera collapse with subsequent doming and formation of a stratovolcano. Most of the volcanic complex formed between 19.0 and 0.5Ma in five main pulses dated at 19 to 17Ma, 13 to 12Ma, 10Ma, 7 to 6Ma and 1 to 0.5Ma. Lithology includes extensive pyroclastic flows near the extrusive center including ignimbrite sheets of lithic and crystal-lithic tuffs. Above this are rhyolite flows equivalent to the Quirón rhyolite indicating that for a period subsequent pulses were increasingly silicic. This was followed by an intermediate volcanic event that included andesitic flows and resurgent domes of dacitic composition. Doming is associated with multiple intrusions of different phases and mineralizing events. The CVQ is spatially related to the 305° trending Calama-Olacapato-Toro regional lineament. A smaller, secondary set of regional lineaments, bearing 025°, are interpreted as older and related to folding in the Paleozoic basement rocks (Petrinovic, 1999; Silex Argentina, S.A., 2008a; Silex Argentina, S.A., 2008b).

The CVQ is underlain by Ordovician age, greenschist facies metapelites and, in some places, by Miocene to Pliocene age, red sandstone that is correlative to the Pastos Grandes Group. Late Pleistocene glaciation and fluvial processes have eroded the complex, creating erosional windows and depositing extensive alluvial fans. Erosional windows in the project area have exposed intrusive domes, structural controls and areas of extensive hydrothermal alteration. These erosional windows correspond to Quevar Sur (the resource area), Quevar Norte and Viejo Campo in the Project Area (Silex Argentina, S.A., 2008a; Silex Argentina, S.A., 2008b). Regional geology is shown in Figure 5-1.

5.2 Local Geology El Quevar lies within the Calama-Olacapato-Toro regional lineament. Local geology at El Quevar is dominated by Tertiary volcanic flows and intrusive rocks overlain in places by Pleistocene moraine and Quaternary rockslide, alluvium and colluviums deposits. There has been no radiometric age dating of rocks within the project area, but dates for the CVQ vary between 19±2Ma to 0.5 Ma. The volcanic sequence begins with volcanic glass and perlites, overlain by dacitic domes, fault related breccia zones including El Quevar Breccia, lithic tuffs and finally capped by dacitic flows. The lithologic sequence from oldest to youngest is listed below:

• Perlites and volcanic glass (PE);

• Dacitic domes (DD);

• El Quevar Breccia (BXQ);



• Lithic tuffs (TDL);

• Dacitic flows (LD); and

• Quaternary (QC)-(QA)-(QM).

Perlite occurs at the base of the exposed volcanic sequence and is massive, green colored and shows no alteration. Porphyritic dacitic domes composed of plagioclase feldspar, quartz and biotite have the greatest exposure in the project area. In places, porphyritic dacite hosts the mineralization. This relationship has been identified at surface. El Quevar Breccia (BXQ) is primarily a monomictic breccia of dacitic composition and confined to fault zones between dacitic domes. This breccia is matrix supported with sub-rounded to angular clasts ranging from 0.5 to 30cm in size. El Quevar Breccia is the primary host rock for mineralization. Both the porphyritic dacite and El Quevar Breccia show hydrothermal alteration. These rocks and the breccia zones are overlain by lithic tuffs that are primarily monomictic, matrix supported tuff with, sub-rounded to angular clasts, 4 to 70cm in size. Lithic tuffs show weak argillic and propyllitic alteration in some places. Capping the sequence is a series of dacitic flows that show porphyritic and flow banding textures. These rocks are composed of plagioclase, quartz and biotite. Feldspars in the dacitic flows are up to 5cm in size. The dacitic flows show no hydrothermal alteration. Quaternary cover consists of alluvium, colluvium and morainal deposits found along creeks and hillsides. According to drilling information, moraine deposits are locally up to 40m deep (Silex Argentina S.A., 2008b). Local geology is shown in Figure 5-2.

5.2.1 Alteration Hydrothermal alteration found throughout CVQ is associated with structural controls. These controls are identified structural trends and related breccia zones. This hydrothermal alteration is identified as silicic, advanced argillic, argillic and propylitic. El Quevar Sur and Norte are the most explored areas of the Project and are used as models for exploration elsewhere in the Project area. In Quevar Sur and Norte, the most abundant and easily identifiable alteration is argillic composed of kaolinite, illite and smectite. Argillic alteration, silicification and vuggy quartz are often associated with significant Ag and Pb/Zn content. The next most abundant alteration is advanced argillic composed of kaolinite, alunite and dickite. Alunite occurs as both crystalline and porcelaneous material. Silicification with vuggy quartz and both types of alunite is restricted to the mineralized structures. Propyllitic alteration consisting mainly of chlorite and pyrite is also found distal to the mineralization. At El Quevar Sur propylitic alteration is only observed in the deeper drillholes (Silex Argentina S.A., 2008b).

Within the structural trends and associated breccias, the hydrothermal alteration displays lateral zoning. The zoning pattern is identified by pervasive silicification at the center extending outward into advanced argillic and argillic alteration. The advanced argillic to argillic transition is as follows:

• Quartz-alunite

• Quartz-kaolinite; and

• Chlorite-smecitite.

Higher-grade areas are associated with hydrothermal breccia zones showing strong and pervasive silicification and vuggy silica. The vuggy silica is interpreted to be the result of acid leaching and preceded the deposition of galena and sphalerite. These silica zones may be up to 10m thick.



Table 5.2.1.1 summarizes a simplified paragenetic sequence for the hydrothermal phases and Table 5.2.1.2 places the hydrothermal phases in the context of the geological evolution of the Project area (Silex Argentina S.A., 2008b).

Table 5.2.1.1: Simplified Paragenetic Sequence for the Hydrothermal Phases Hydrothermal Phases* Alteration Intensity

Fresh Fresh rock n/a PHASE I Clay, fine pyrite S STRONG

PHASE II + III Gray and white silica, intense pyrite M MEDIUM

PHASE IV + V Acid leaching followed by Ag-sulfosalts +/- Barite +/- Alunite +/- Clay +/- Galena +/- Sphalerite W WEAK

*Simplified, refer to table 5.2.1.2.

Table 5.2.1.2: Hydrothermal Phases Related to Geological Evolution of the Project Area Time Sequence Geologic Event/Hydrothermal Phase

1 Dacite dome intrusion / extrusion 2 Fault induced brecciation of Dacite 3 Hydrothermal Brecciation 4 PHASE I Pervasive alteration clay + pyrite 5 PHASE II Gray + white silica alteration and infill, FBV* 6 PHASE III Pyrite alteration and infill, FBV 7 PHASE IV Acid leaching, leading to secondary porosity generation, FBV 8 PHASE Va Barite +/- alunite +/- clay infill, FBV 8 PHASE Vb Ag-sulfosalts +/- galena +/- sphalerite 9 Uplift and erosion of Quevar complex 10 Extrusion of Dacitic flows

*FBV= Fault Breccia Vein

5.2.2 Structure The two main structural trends identified at El Quevar Sur and Norte have an azimuth of 090 to 095º and 035º. Alteration and mineralization identified in the Project area occurs along the 090 to 095º striking structural trend. Domes have been emplaced where these structures and at the 035º striking structures intersect.

Recent trench mapping at El Quevar Sur has identified a dextral, normal fault striking 280º and dipping 70ºNW, which is interpreted as related to the Yaxtché structural zone. The second structure shows normal, sinistral movement and strikes 010º, dipping 75ºSE. This crosscuts and offsets the 280º structure. These intersections and offsets are of exploration interest, and are being used as a guide for other targets at El Quevar (Silex Argentina S.A., 2008b).

Apex Silver is also drilling and has intercepts in the Mani and Copan structural trends. These intercepts are not included in the current resource estimate.

5.3 Project Geology Within the Project area, exploration models are based on mapping, drilling and geophysical data collected within the Yaxtché and Copán structural trends in Quevar Sur. The resource for the Project is within the Yaxtché structural trend.



At Quevar Sur, mineralization is confined to the structural trends and related breccias zones including Yaxtché, Copán, Mani and Argentina. The Argentina zone can reach 10m in width in places. Exploration has not identified a correlation between lithology and mineralization, but the primary host rocks in Project area are porphyritic dacitic domes. Within the structural trends, individual mineralized zones average 1 to 15cm but can reach 1m in width. These zones can aggregate mineralized intervals up to 25m in width. The mineralization is deposited in association with vuggy silica zones that can reach 10m in width. Mineralized breccia occurs as both fault breccia (FBV), which is matrix supported with angular clasts and fine silica matrix and as hydrothermal breccia (BXH) also a matrix supported breccia with angular to subangular clasts. Hydrothermal breccia commonly contains oxides and boxworks and is found in many areas of the Project. Andrea Breccia is an example of hydrothermal breccia. Mineralization at El Quevar includes:

• Sulfosalts: Enargite, tethraedrite, tennantite, bismutite and pyrargirite;

• Sulfide minerals: Pyrite, galena and sphalerite;


• Native silver.

These minerals occur as open space filling, disseminations and in massive zones (Silex Argentina S.A., 2008b).

The Yaxtché structural trend is a “structural corridor” 750m long and 40 to 150m wide, characterized by strong to moderate silica and quartz-alunite alteration. The Yaxtché mineralized zone is bounded by a hangingwall and a footwall fault. At surface, the mineralization branches into three separate structures. The strike is variable between 090º in the eastern area to 300º in the western area. The structure dips from 70 to 65ºN at surface and flattens to 45 to 55ºN at depth (Silex Argentina S.A., 2008b). Figure 5-3 shows a representative cross section through the Yaxtché structural trend.

Yaxtché is strongly silicified. Vuggy silica is found both at surface and at depth. Near surface, the vugs are partially filled with alunite and minor barite. At depth, the vugs are filled with barite, white and pink alunite, sulfides and silver sulfosalts. Massive sulfide minerals are also found in places at depth (Silex Argentina S.A., 2008b).

Apex has interpreted the central part of the Yaxtché zone as a horst block that has been rotated up to the north where most of the drilling has been focused. Apex has observed a transition to a more gold-rich regime at shallower depths in this area, and based on zoning in epithermal systems is of the opinion that part of the mineralization has been eroded. Drilling and structural mapping in trenches have identified 035º striking faults at the east and west ends of the main zone and local geological and geophysical features including argillic alteration mapped at surface strongly suggest that the zone continues both east and west and has been down dropped relative to the central part of Yaxtché. This also suggests that the upper parts of the mineralized zone may be preserved in these down-dropped extensions, providing for the possibility of more silver mineralization in these areas. These areas are the principle targets of the current drilling program, which is due to begin in February 2009. (Alvarez, et al., 2009; Silex Argentina S.A., 2008b).

SRK Job No.: 182801

File Name: Figure 5-1.doc Date: 2/19/2009 Approved: DKB Figure: 5-1


Source: Silex Argentina,S.A., 2009 Modified by SRK, 2009

Regional Geology Map

31 Eolian Sand Dune Deposits 30 Colluvium Deposits 29 Lacustrian Deposits 28 New Alluvium Deposits 27 Detrital Flows 26 Alluvial Fans 25 Salars 24 Cerro Blanco Pyroclastic Flows 23b Peinnado Basalt 23a Cerro Condor Andesite 22c Porphyritic Dacitic Domes 22b Basalt 22a Stratovolcano related Porphyritic Andesite 21 Dacite and Andesite Flows and Domes 20 Laguna Amarga Ignimbrite Flows and Dacitic Domes 19 Stratovolcano Andesits Flows and Breccias 18 Rosada Ignimbrite Flow 17 Los Colorados Ignimbrite Flow 16 Volcanic Complex Andesite and Dacite Flows 15 Sues Formation La Hoyada Volcanic Complex 14a Andesite and Dacite Volcanic Breccia 14b Andesite and Dacite Volcanic Breccia and Flows 14c Domes and Intrusives 14d Dacitic Ignimbrite Flows 14 Tebenquincho Formation 13 Agua Dulce Andesite and Dacite Bodies 12 Vizcachera Formation-Upper Member 11 Vizcachera Formation-Lower Member 10 Geste Formation 9 Pantanoso Formation 8 Patquia de la Cuesta Formation 7 Las Yeguas Formation 6 Basic-Ultrabasic Tramontana Complex Gabbro and Gabbro- Basalt 5 Falda Cienaga Formation 4 Sedimentary-Volcanic Cortaderas Chicas Complex 3 Las Planchadas Formation 2 Fambalasto Formation 1 Antofalla Metamorphic Group

Explanation

Concession Block Boundary

SRK Job No.: 182801


El Quevar Project, Argentina

Source: Silex Argentian, S.A., 2008

Local Geology of the El Quevar Project

YAXTCHE

MANI

COPANARGENTINA

SRK Job No.: 182801



Source: Apex, 2008

Representative Section through the Yaxtché

Structural Trend



6 Deposit Type (Item 10) El Quevar is interpreted as an intermediate sulfidation (“IS”) epithermal deposit with some high sulfidation (“HS”) characteristics. El Quevar is associated with caldera collapse, stratovolcano formation and development of dacitic domes. These types of deposits form under acidic, oxidizing conditions within 1km of the surface and between temperatures of 150º and 250ºC. They are often associated with silicic to intermediate volcanic rocks and hot spring deposits, and share similar ages as their host rocks. Host rocks include andesite, rhyodacite and locally rhyolite. IS and HS epithermal deposits are both characterized by wallrock replacement, breccias, sulfide disseminations and siliceous vein filling. Quartz may also have a crustiform texture. Typical alteration assemblages include advanced argillic, alunite and kaolinite with pyrophyllite deeper in the system. These may be accompanied by sericite, adularia and chlorite. Gangue minerals include vuggy quartz and silica as well as barite. Carbonate and selenides are usually absent and manganese minerals are rare in HS types. However, manganese minerals are more abundant in IS deposits and selenide minerals may be present locally. Barite is often present in association with gold. Ore mineralogy includes native gold, electrum, gold and silver telluride minerals, bornite, enargite, tennantite, covelite, chalcopyrite, sphalerite and galena, and epithermal deposits normally show vertical zoning. Zoning in IS deposits are often characterized by antimony, bismuth and gold anomalies with some silver values. The boiling zone is marked by high-grade silver and the lower parts of these systems are richer in lead and zinc. There is typically more copper in these systems than zinc and lead. This contrasts with HS deposits, which generally are base-metal poor (Guilbert, et al, 1986; Camprubí, et al, 2006; Charchaflié, 2007; Taylor, 2007; Sillitoe, 2008).

El Quevar lies within the extension of the Bolivian metallogenic province that extends from Bolivia north into Peru and south into northern Argentina and Chile. El Quevar is specifically located in the Altiplano and Cordillera Occidental Polymetallic Belt, which is the western most region of this metallogenic province. This belt includes many types of epithermal deposits including IS and HS epithermal deposits. El Quevar is more characteristic of IS type epithermal deposits and is similar to San Antonio de Lipez, Mulatos Todos Los Santos and San Cristobal in Bolivia (Arce, 2008). Other large IS deposits found worldwide include the Fresnillo deposit in Zacatecas State, México. Fresnillo is a silver producer and has been in production since Colonial times (Camprubí, et al, 2006). Apex Silver is currently using Bolivian-type IS and to a lesser extent HS epithermal deposits as a model for exploration in this region.



7 Mineralization (Item 11) Within the Project area, exploration models are based on mapping, drilling and geophysics data collected within the Yaxtché and Copán structural trends in Quevar Sur. The resource for the Project is within the Yaxtché structural trend (Silex Argentina S.A., 2008b).

7.1 Mineralized Zones At Quevar Sur, mineralization is confined to the structural trends and associated breccia zones including Yaxtché, Copán, Mani and Argentina. Within the structural trends, mineralization is associated with vuggy silica in zones averaging 1 to 15cm wide but may reach 1m in width in some areas. Mineralized breccia occurs as both fault breccia (FBV), which is matrix supported having angular clasts with a fine silica matrix and as hydrothermal Breccia (BXH) also a matrix supported breccia with angular to subangular clasts. Hydrothermal breccia commonly contains oxide minerals and boxwork textures and are also associated with faulting (Silex Argentina S.A., 2008b).

Mineralized zones are associated with the following three hydrothermal alteration zones:

• Silicification;

• Advanced argillic; and

• Argillic.

Argillic and advanced argillic are transitional and show the following three assemblages:

• Quartz-alunite

• Quartz-kaolinite; and

• Chlorite-smecitite.

The higher-grade areas of mineralization are associated with hydrothermal breccias showing strong and pervasive silicification with vuggy silica (Silex Argentina S.A., 2008b).

7.2 Surrounding Rock Types The lithologic sequence from oldest to youngest at El Quevar is

• Perlites and volcanic glass (PE);

• Dacitic domes (DD);

• El Quevar Breccia (BXQ);

• Lithic tuffs (TDL);

• Dacitic flows (LD); and

• Quaternary (QC)-(QA)-(QM).

Exploration has not identified a correlation between lithology and mineralization, but the primary host rock in Project area are porphyritic, dacitic domes composed of plagioclase, feldspar, quartz and biotite. Dacitic domes have the greatest areal extent in the Project area. El Quevar Breccia (BXQ) is primarily a monomictic breccia of dacitic composition. This breccia is matrix supported with sub-rounded to angular clasts ranging from 0.5 to 30cm in size.



Mineralization is found in the El Quevar Breccia found within and extending between the dacitic domes. Both the porphyritic dacite and El Quevar Breccia show extensive hydrothermal alteration (Silex Argentina S.A., 2008b).

7.3 Relevant Geological Controls Alteration and mineralization identified in the Project area are controlled by a 090 to 095º structural trend. Domes have been emplaced at the intersection of the structures oriented 090 to 095º and 035º. Structures that may offset the mineralization are normal, sinistral faults that strikes 010º, dipping 75ºSE and occurs at each end of the Yaxtché zone. The intersections of the 090 to 095º and 035º trending structures and possible offsets relating to the 010º fault are of exploration interest, and are being used as a guide in other areas of El Quevar (Silex Argentina S.A., 2008b). It appears that mineralization at Yaxtché has been terminated by these faults and Apex Silver reports that it has identified the probable continuation of mineralization to the west and east.

7.4 Type, Character and Distribution of Mineralization Mineralization occurs as open space filling, disseminations and in massive zones. Ore mineralization includes:

• Sulfosalts: enargite, tethraedrite, tennantite, bismuthinite and pyrargirite;

• Sulfide minerals: pyrite, galena and sphalerite;


• Native silver.

Mineralization is found in strongly silicified, advanced argillic and agillic alteration zones. Vuggy silica associated with silicification alteration is found both at surface and at depth within the El Quevar Breccia. Near surface, the vugs are partially filled with alunite and minor barite. At depth, the vugs are filled with barite, white and pink alunite, sulfides and silver sulfosalts. Massive sulfide minerals are also found in places at depth (Silex Argentina S.A., 2008b).

In Yaxtché structural trend the mineralized zone is 750m long and 40 to 150m wide. It is characterized by strong to moderate silica alteration and quartz-alunite bounded by two faults; one in the hangingwall and one in the footwall of the mineralized zone. At surface, the mineralization branches into three separate structures. The strike is variable between 090º at the eastern end to 300º in the western end. The structure dips from 70 to 65ºN at surface and flattens to 45 to 55ºN at depth (Silex Argentina S.A., 2008b).

Silver mineralization tends to be concentrated at the upper and lower contacts zones of the breccia with the host rock and may locally occur in a central zone as well. Copper mineralization is located in the central core of the breccias and has better grades higher in the system. Lead mineralization tends to track silver mineralization, while zinc mineralization is exterior to the silver mineralization. Higher gold grades tend to be located below elevations of 4,700m



8 Exploration (Item 12)

Exploration was conducted at the Project between 1970 and 1980 by Fabricaciones Militares, BHP-Utah Minerals International and Peñoles. The first organized exploration was completed in the 1970’s when Fabricaciones Militares drilled three or four drillholes in Quevar Norte. Later that same decade, BHP drilled three holes in breccia found along the Mani structural trend in Quevar Sur. BHP’s exploration model was thought to be a porphyry copper system. During the 1990’s, the exploration division of Peñoles explored Quevar Sur. This was a limited program collecting surface samples only and no mapping was completed. These exploration projects predated requirements for reporting data to the Salta Province and Apex Silver has been unable to obtain any data on these exploration programs.

Minera Hochschild completed a six hole, RC and diamond drilling program in the Mani structural trend in 1997. In addition to this work, Minera Hochschild took surface samples and constructed eight trenches across the Mani structural trend. Apex Silver has this data.

In 1999, Mansfield collected samples from surface and a number of small exploration pits in the Yaxtché structural trend and Quevar Sur. This data has been provided to Apex Silver.

Apex Silver acquired exploration rights to El Quevar in October 2004. Between October 2004 and August 2006, Apex Silver mapped in the Quevar Sur area at 1:5,000 and 1:10,000 scales. At this time, various outcrops were sampled. Outcrop sampling included channel, panel and select chip samples. This information was used to design a diamond drilling program. This 17-hole core drilling program was completed between June and August of 2006 and totaled 2,373.8m. The drilling company used for this drilling phase was Major Perforaciones S.A., a subsidiary of Major Drilling based in Mendoza, Argentina. These holes were drilled in Quevar Sur targeting the Mani, Copán and Yaxtché structural trends (Silex Argentina S.A., 2006).

Between March and June 2007, Apex Silver drilled 19 additional core holes totaling 2,481.75m using Bolland Minera S.A. based in Buenos Aires, Argentina as the drilling contractor. Seventeen of these holes were drilled in Quevar Sur and two were exploration holes in Quevar Norte. Those drilled at Quevar Sur include nine drilled in the Yaxtché structural trend to infill and test the extension of the mineralized zone, seven holes were drilled in the Mani structural trend and one was drilled exclusively for exploration. The two holes drilled in Quevar Norte were exploration holes drilled approximately 3km northeast of the Yaxtché structural trend. In addition to drilling, 16 trenches totaling 3,300m were excavated and sampled. Of these four trenches were constructed in Quevar Norte and twelve in Quevar Sur (Silex Argentina S.A., 2007).

A ground based geophysical program was completed between December 2007 and February 2008, using an IP/Resistivity with 3-D Pole/Dipole survey over El Quevar Sur. This work was contracted to Quantec Geoscience Argentina S.A. based in Mendoza, Argentina. Line separation was at 200 and 400m with markers at 50m intervals along lines. The instruments used were an Iris Elrec-6 receiver and an Iris VIP 3000 transmitter. The offset dipole array provides information to approximately 600m depth at the center of the survey. The purpose of this survey was to identify sulfide mineralization that may be associated with the high sulfidation epithermal system and it was expected that these areas would have high chargeability and wide conductive zones (Quantec Geoscience Argentina, S.A., 2008).



In late 2007, Apex Silver submitted 24 samples from six drillholes in the Yaxtché structural zone to Brockway and Franquesa Consultores (“BFC”), based in Santiago, Chile, for petrographic and reflected light microscopy work. In January of 2008, BFC provided a report identifying the host rocks as lithic tuff, volcanic breccia and altered volcanic breccia. Minerals identified in reflected light included pyrite, sphalerite, enargite, tennantite-tetrahedrite, covellite, pryargyrite, chalcopyrite, galena, native silver and argentite. Argentojarosite and plumbojarosite were identified using an electron microprobe. As a follow up to this work, 14 of the 24 samples had additional electron microprobe work for confirmation purposes. The results of the additional analysis were reported by BFC in June of 2008 (Brockway, 2008; Brockway, 2008a).

A third drilling program was completed between January and June 2008. This program included 43 diamond drillholes totaling 10,650.75m. The two drilling companies used for this program were Patagonia Drill, a subsidiary of Boart Longyear, based in Mendoza, Argentina and the Argentine division of Falcon Drilling Ltd., based in Salta. Falcon Drilling Ltd. is a Canadian company. The third drilling program focused on definition drilling and infill drilling at Yaxtché and exploration around the Copán structural trend. Apex Silver completed and sampled 21 additional trenches in this area and remapped much of Quevar Sur and Norte.

8.1 Interpretation None of the exploration data prior to 1997 is available for review and exploration methods used by Fabricaciones Militares, BHP and Peñoles are unknown. Apex Silver has access to the more recent data from its JV partner Minera Hochschild and from Mansfield. Apex Silver has used this data and through additional exploration has generated multiple targets and focused infill and definition drilling on its resource area at Yaxtché. Drilling and sampling procedures used by Apex Silver are discussed in the following sections. SRK considers the exploration methods used by Apex Silver to be appropriate for this type of deposit. The work carried out by Apex Silver has been conducted according to industry best practices.



9 Drilling (Item 13) 9.1 Type and Extent of Drilling Apex Silver has completed 15,506.3m of diamond drilling in 81 drillholes between 2006 and 2008. Two holes were drilled at Quevar Norte and the remainder were drilled at Quevar Sur. The total area drilled is approximately 4.8km x 2.3km, with the majority of holes drilled at Yaxtché over an 850m strike length. The drillholes are oriented perpendicular to the mineralized structures.

Drilling was conducted by four separate drilling companies and completed during three drilling programs. All core drilled was HQ size (6.35cm). It was necessary to reduce to NQ (4.76cm) in only one drillhole (QVD63) due to bad ground. Table 9.1.1 summarizes the drilling by program and drilling contractor and Figure 9-1 shows drillhole locations.

Table 9.1.1: El Quevar Drilling by Program and Contractor Program Contractor Meters No. of Holes 2006 Major Perforaciones S.A. 2,373.80 19 2007 Bolland Minera S.A. 2,481.75 19 2008 Patagonia Drill/Boart Longyear 8,415.75 35 2008 Falcon Drilling Ltd. 2,235.00 8 Total 15,506.3 81

Drilling activities are monitored by two operations chiefs, one per shift, who divide their time between drilling and camp responsibilities. Drill sites are located using a handheld Global Positioning System receiver (“GPS”) by a Silex technician. A bulldozer is used to prepare the site and the site is then verified by a geologist who marks the hole orientation on the ground with either paint or three wooden stakes. A collar stake is set out with the hole number, planned drilling depth, azimuth and inclination for the drillers. Once the drill rig is on site and ready to drill, the azimuth and inclination of the set-up is checked by a geologist. Azimuth must be within ±2º and inclination within ±1º of the planned drillhole.

Contractors tricone through the overburden to solid rock and casing is set in the upper part of the hole prior to coring. Drilling is performed in two, 12 hour shifts and core is picked up twice daily during shift change. A shift report on drilling activities is provided at that time by the drilling contractor. During drilling, active drills are visited two to three times per day by a geologist or the operations chief. Water for drilling is controlled by Silex who employs a dedicated helper for this purpose. Water trucks for drilling are provided by the drilling contractor. It is the drilling contractor’s responsibility to keep the drill site clean. All drilling fluids are collected in a sump and clear water is allowed to drain off. In addition, sheets of PVC material are placed under drilling equipment in case of spills.

After completion of a drillhole, the drilling contractor performs a downhole survey. During the 2008 drilling program, Falcon Drilling Ltd., provided a Sperry Sun and Patagonia Drill provided a Reflex Photobor. Downhole surveys are made at 25m intervals and are checked by an operations chief. When the downhole survey is completed, the drilling contractor places polyvinyl chloride (“PVC”) pipe in the hole and cements the drillhole collar. The drillhole is then marked with drillhole number, total depth, azimuth and inclination. After the drill is moved



off the drill site, the operations chief verifies that the site has been left in acceptable condition and takes the collar coordinates with a GPS.

9.2 Logging Core is placed in wooden boxes holding 3m of core at the drill and moved to the core shed by an operations chief or a technician, twice daily. The core is either in the custody of the drilling contractor or Silex at all times. In the core shed, a technician cleans the core with water and a brush and marks the box at meter intervals and verifies depths. The technician also marks the start and end of the interval and writes the drillhole number on the top and side of the core box. Next the technician measures and records geotechnical information including recovery, rock quality designation (“RQD”) >10cm and both mechanical and physical fracture frequency. Core recovery is 90% or better.

Geologists describe the core on paper logs, and then enter the data into a computer. The paper log has sections for comments and a graphic log with a separate area for drawing fractures. Mineralization, alteration and alteration intensity are also recorded on the log sheet and there is an area for sample interval, sample number and analytical results. The geologist marks the core for any additional observations including passive infrared mineral analyzer (“PIMA”) measurements. The geologist then selects sample intervals and samples for density measurements. Once this is completed, the core is photographed and split for analysis. Sample length within the mineralized zone is a nominal 1m, but may vary due to changes in lithology. The entire mineralized zone is sampled and 2 to 3m on either side of the zone.

Drill core is stored onsite in a locked facility and each hole is color coded for ease of identification. A paper file is maintained for each stored drillhole with a checklist for each item that must be completed for every hole and included in the file. This includes a hole summary, geological log, geotechnical log, analytical results, drill reports, certificate from the surveyor, photographs, downhole survey information and density measurements.

9.3 Results At the time, all drill programs had been completed and SRK did not observe active drilling. SRK found the completed drill pads to be clean and marked as described. The core logging and storage facilities at El Quevar are clean and well organized enabling Apex Silver to easily locate reference core and supporting data. SRK is of the opinion that Apex Silver is using industry best practice for its drilling and core logging procedures.

SRK Job No.: 182801

File Name: Figure 9-1.doc Date: 1/23/2009 Approved: DKB Figure: 9-1

El Quevar, Salta Province, Argentina Source: Data from Silex

Argentina, S.A., 2008. Modified by SRK Consulting, 2009

Drillhole Location Map



10 Sampling Method and Approach (Item 14) 10.1 Sample Methods Sample intervals are marked on the core by a geologist. Sample intervals are a nominal 1m length in the mineralized zone, but may be longer or shorter at changes in lithology. Outside the mineralized zone, samples are 2m in length. In general, only the mineralized zone and a few meters above and below are sampled. If necessary, the geologist may also draw a cut line longitudinally on the core to guide the sample technician in splitting the core. The beginning and end of each sample interval is marked on the core box. Drill core is split using a core saw in competent zones and a trowel in broken zones. Each sample is placed in a plastic bag with two labels, one inside with the sample and one placed on the outside of the bag. The bag is then folded over and stapled. Sample numbers are randomly generated and recorded on color-coded sheets for later correlation.

10.2 Factors Impacting Accuracy of Results El Quevar mineralization is a competent breccia with areas of open space. Mineralization occurs as open space filling, disseminations and zones of massive sulfide minerals. More rarely, native silver has been observed in core and identified during ore microscopy studies. Because of void space and the possibility of localized concentrations of mineralization as well as rare “nugget” silver, it is important that Apex Silver provide a large, representative sample for analysis. It is SRK’s opinion that Apex Silver is taking appropriate measures to ensure that sampling is unbiased.

QA/QC discussed in Section 12 did not detect any deficiencies in analytical results. SRK is of the opinion that Apex Silver is collecting adequate sample to compensate for mineral distribution and size of sulfide minerals and the rare occurrence of native silver.

10.3 Sample Quality and Parameters Drill core recoveries are reported at 90% or better. The majority of samples in the mineralized zone are 1.0m. Outside the mineralized zone samples are 2.0m in length. The maximum sample interval is 4.0m and the minimum interval was 0.3m. Samples intervals were determined with consideration to lithologic controls. Internal waste was sampled and samples were taken several meters on either side of the mineralized zone in wallrock. Should the wallrock sample have elevated analytical results, Apex Silver takes additional samples into the wallrock. It is SRK’s opinion that the sampling method and sample length are appropriate for the deposit.

10.4 Relevant Samples A summary of relevant samples for the drilling outside the Yaxtché zone is presented in Table 10.4.1. A resource estimation has been conducted for Yaxtché and is presented in Section 15.



Table 10.4.1: Summary of Relevant Samples, Excluding Yaxtché* DHID Area From To Interval Angle Ag (g/t) QVD-02 Mani East <30g/t -55.0 QVD-32 Yaxtché 21.6 27.5 5.9 -55.0 62 QVD-15 Andrea <30g/t -58.0 QVD-16 Andrea 180.0 180.0 1.0 -53.0 171 QVD-14 Copan <30g/t -59.0 QVD-51 Copan 104.0 113.0 9.0 -58.0 236 QVD-55 Copan 29.0 32.0 3.0 -45.0 213 QVD-56 Copan 117.0 236.0 9.0 -54.0 75 QVD-57 Copan 158.0 163.0 5.0 -55.0 83 QVD-59 Copan 189.0 190.0 1.0 -60.0 43 QVD-62 Copan <30g/t -46.0 QVD-63 Copan 220.0 227.0 7.0 -69.0 91 QVD-67 Copan <30g/t -65.0 QVD-01 Mani <30g/t -50.0 QVD-08A Mani 45.0 49.0 4.0 -68.0 131 QVD-09 Mani <30g/t -55.0 QVD-10 Mani <30g/t -50.0 QVD-11 Mani 15.0 24.0 9.0 -50.0 111 QVD-12 Mani 36.0 39.0 3.0 -60.0 37 QVD-13 Mani 12.0 20.0 8.0 -63.0 76 QVD-17 Mani 21.0 26.0 5.0 -58.0 35 QVD-26A Mani 48.0 56.0 8.0 -85.0 90 QVD-27 Mani <30g/t -55.0 QVD-28 Mani <30g/t -88.0 QVD-29 Mani <30g/t -60.0 QVD-31 Mani <30g/t -65.0 QVD-33 Mani 52.0 54.0 2.0 -90.0 45 QVD-34 Quevar Norte 47.0 48.0 1.0 -69.0 42 QVD-35 Quevar Norte <30g/t -60.0 QVD-05 Yaxtché Ne 71.0 77.0 6.0 -55.0 57 QVD-25 Yaxtché NE <30g/t -47.0

* Intervals are near true width because holes were drilled near perpendicular to mineralization.



11 Sample Preparation, Analyses and Security (Item 15)

El Quevar samples have been prepared and analyzed at two laboratories, Alex Stewart (QVD-01 through QVD-42) and ALS Chemex (QVD-43 through QVD-78). ALS Chemex has a prep lab in Mendoza, Argentina and samples are sent to La Serena, Chile for analysis.

11.1 Sample Preparation and Assaying Methods – Alex Stewart Samples were shipped to the Alex Stewart laboratory in Mendoza, Argentina by Silex, where they were prepped and analyzed. The sample preparation procedure (P-5) consists of the following steps:

• Receiving and checking sample identification numbers against submittal form;

• Weighing;

• Primary and secondary crushing to 80% passing 10 mesh;

• Splitting in a riffle splitter to 800g +100g;

• Grinding to 85% passing 200 mesh; and

• 200g sample is placed in a sample envelope.

The samples were analyzed for 39 elements by ICP (ICP-MA-390) with four acid digestion of a 0.2g sample. The lower and upper detection limits for silver in this package are 5 and 2,000ppm, respectively. All samples were analyzed for silver and gold by fire assay of a 50g sample with gravimetric finish for silver (AG4A-50) and Atomic Absorption (“AA”) finish for gold (Au4-50). The lower detection limit is 2ppm for silver and 0.01ppm for gold.

11.2 Sample Preparation and Assaying Methods – ALS Chemex Samples were shipped to the ALS Chemex laboratory in Mendoza, Argentina by Silex, where the samples were prepped. The pulps were returned to the Silex office in Mendoza where new sample identification numbers were assigned to the samples and QA/QC samples were inserted. The sample prep procedures (Prep-31) consist of the following:

• Receiving and checking sample identification numbers against the submittal form;

• Weighing;

• Crushing to 70% passing 10 mesh;

• Splitting to 250g;

• Pulverizing to 85% passing 200 mesh; and

• Placing sample in sample envelope.

Samples are analyzed for 33 elements by ICP (ME-ICP61) using four acid digestion, with lower and upper detection limits for silver of 0.5 and 100ppm, respectively. The silver overlimits were analyzed by fire assay with AA finish (Ag-AA62) with lower and upper detection limits of 1 and 1,500ppm, respectively, and those resultant overlimits were analyzed by fire assay with gravimetric finish (AG-GRA22) with lower and upper detection limits of 5 and 10,000ppm, respectively. Gold is analyzed by fire assay with AA finish (Au-AA24) with lower and upper



detection limits of 0.005ppm and 10ppm, respectively; gold overlimits are analyzed by fire assay with gravimetric finish (Au-GRA22), with lower and upper detection limits of 0.05 and 1,000ppm respectively. Overlimits of lead, zinc, and copper are analyzed by AA with a multi acid digestion.

11.3 Testing Laboratories Certification ALS Chemex in La Serena has the following certifications:

• ISO 9001:2000 number 8989 issued July 2005; and

• Instituto Nacional de Normalizacion Chile ISO 17025.Of2005 issued November 2003 effective to November 2009.

Alex Stewart in Mendoza has ISO 9001:2000 certification but does not have laboratory certification.

Alex Stewart and ALS Chemex are international companies with local facilities in many countries. The laboratories and provide services to many mining and exploration companies worldwide.

11.4 Quality Controls and Quality Assurance Apex Silver commenced its QA/QC program with drillhole QVD-043, at the time that it started sending samples to ALS Chemex. There is no QA/QC data for the earlier samples sent to Alex Stewart other than the internal laboratory QA/QC program.

Apex Silver has an extensive and thorough Quality Assurance/Quality Control (“QA/QC”) program that includes two types of blanks, three types of duplicates, six precious metal standard reference samples (“standards”) and four base metal standards. For surface sample submissions including channel, panel and select outcrop samples, Apex Silver inserts a standard, coarse blank and pulp blank at a frequency of one per 50 samples or approximately 2%. For drilling programs, Apex Silver inserts the following QA/QC samples into the sample stream:

• Standard-one per 20 samples (5%);

• Coarse Duplicate-one per 20 samples (5%);

• Pulp Duplicate- one per 20 samples (5%);

• Core Duplicate- one per 50 samples (2%); and

• Pulp Blank and Coarse Blank-one per 20 samples (5%).

The coarse blank and precious metal standards are site specific. The coarse blank was collected from a fresh dacite flow, younger than the rocks in the mineralized zone and located approximately 3.5km southeast of the camp. The precious metal standards were generated from material collected at the site and prepared by Alex Stewart. Apex Silver purchased a fine blank from ASA. Base metal standards are certified reference material purchased from Geostats Pty Ltd., (“Geostats”) in Australia. Table 11.4.1 lists the standards, expected analytical result and source of standard material.



Table 11.4.1: Standards Used in the El Quevar QA/QC Program Standard Au ppm Ag ppm Pb % Zn % Source

STD-1 0.34 18 ASA STD-2 1.47 53.91 ASA STD-3 4.22 129 ASA STD-4 1.16 34 ASA STD-5 4.33 103 ASA STD-6 10.36 491 ASA

GBM396-10 *0.24 11.6 0.102 10.601 Geostats GBM398-1 *0.173 5.1 26.741 20.376 Geostats GBM900-3 *1.3 7.4 0.087 0.072 Geostats GBM996-3 *0.1 44.2 0.289 32.333 Geostats

The QA/QC samples are inserted into the sample stream in two steps. At the El Quevar camp, coarse blanks and core duplicates are inserted into the sample shipment. The samples are taken to Salta by Apex Silver, and then shipped to either ALS Chemex (“ALS”) or ASA, both located in Mendoza for sample preparation. Each lab prepares the sample for analysis, after which all sample materials are returned to Silex’s Mendoza office. Silex stores the reject materials, renumbers the samples, inserts the remaining QA/QC samples and submits the pulps for analysis to the respective labs. Pulps prepared by ALS are returned to ALS for analysis and likewise pulps prepared by ASA are returned to ASA for analysis. The QA/QC samples submitted into the sample stream at this time include standards, pulp duplicates and pulp (fine) blanks.

11.4.1 Blanks Blank samples help to identify contamination during the sample preparation and analytical process. About 5% of the samples submitted to the lab are coarse blanks and about 5% are fine blanks.

SRK has examined the results of the analyses of the coarse blanks and finds that 299 analyses were conducted with no failures as defined as 5 times the lower detection limit. Only three analyses had results greater than detection limit and those were 0.8ppm Ag or less. There were 220 fine blank samples and no failures were identified. Thirty samples were greater than detection limit and all were less than 2.5ppm, which is five times the lower detection limit.

The results from the blank sample analysis indicate that there has been no contamination during the sample preparation stage.

11.4.2 Duplicates Duplicate samples are used to monitor sample batches for potential sample mix-ups and to monitor the data variability as a function of laboratory error and sample homogeneity. Apex silver used core duplicates, coarse duplicates and pulp duplicates in its QA/QC program. Each is discussed separately in the sections below; Figure 11-1 presents the results in graphical format.

Core Duplicates The second half of a drill core sample is assayed to determine the reproducibility of assays for different halves of the core to detect any sampling bias, as well as to assess the natural grade variability of the deposit. The halved core remaining after the original split was cut lengthwise again to produce a quarter core sample. The quarter core does not represent a true duplicate, as



the duplicate sample size is one-half the original sample size. Apex Silver submits core samples at a rate of 1 in 50 samples. Table 11.4.2.1 presents a summary of the core duplicates and the results are shown in Table 11.4.2.2.

Table 11.4.2.1: Summary of Quarter Core Duplicates Criteria Number Original > Dup Original < Dup Original = Dup

All Samples 108 23 23 62 21% 21% 57%

>5 times LDL 32 15 16 1 47% 50% 3%

Table 11.4.2.2: Percentage of Quarter Core Duplicate Assays* Number Falling within Percent Difference Criteria Number 5% 10% 20% 25% 50% >= 50%

All Samples 108 71 73 85 88 98 10 66% 68% 79% 81% 91% 9%

>5 times LDL 32 9 11 18 20 29 3 28% 34% 56% 63% 91% 9%

*reporting within specific percentage differences

The results show that of the samples more than five limes the lower detection limit (>2.5g/t Ag), 56% were within 20% of the original assay and that the original assay was greater than or equal to the duplicate 50% of the time which indicates that there is no bias in the cutting of the core. The graph of the core duplicates (Figure 11-1) shows that there are two samples where the original assay was significantly greater than the duplicate. The high values in these two samples indicates that there may have been some coarse silver present in the core that produced the variation between the duplicates.

Coarse Duplicates A sample preparation (coarse) duplicate sample was taken after the crushing stage to test the adequacy of the crushing size. Apex Silver requested that coarse duplicates be made at a frequency of 1 in 20 samples. A summary of the coarse duplicates is presented in Table 11.4.2.3 and the results are shown in Table 11.4.2.4.

Table 11.4.2.3: Summary of Coarse Duplicates Criteria Number Original > Dup Original < Dup Original = Dup

All Samples 205 39 31 135 19% 15% 66%

>5 times LDL 54 29 21 4 54% 39% 7%



Table 11.4.2.4: Percentage Coarse Duplicate Assays * Number Falling within Percent Difference Criteria Number 5% 10% 20% 25% 50% >= 50%

All Samples 205 164 178 189 193 195 10 80% 87% 92% 94% 95% 5%

>5 times LDL 54 31 43 51 53 53 1 57% 80% 94% 98% 98% 2%


The results show that the original assay was greater than or equal to the duplicate 61% of the time. Although the original sample was greater than the duplicate more than half the time, the results show that the difference between the assays was quite small with 80% being within 10% of the original and 94% being within 20% of the original. Figure 11-1 also shows that the variation between the samples is quite small.

Pulp Duplicates Pulp duplicates were made after the pulverization stage to test the accuracy of the laboratory. Apex Silver requests that pulp duplicates be made at a frequency of 1 in 20 samples. Table 11.4.2.5 presents a summary of the pulp duplicates and Table 11.4.2.6 presents the percentage of the duplicates reporting within specific percentage ranges.

Table 11.4.2.5: Summary of Pulp Duplicates Criteria Number Original > Dup Original < Dup Original = Dup

All Samples 229 43 44 142 19% 19% 62%

>5 times LDL 58 30 26 2 52% 45% 3%

Table 11.4.2.6: Percentage Pulp Duplicate Assays* Number Falling within Percent Difference Criteria Number 5% 10% 20% 25% 50% >= 50%

All Samples 229 186 198 211 212 218 11 81% 86% 92% 93% 95% 5%

>5 times LDL 58 45 54 58 58 58 0 78% 93% 100% 100% 100% 0%


About half of the original assays (55%) were greater than the duplicates, but the precision is quite good with 93% within 10% of the original and 100% within 20% of the original.

11.4.3 Standard Samples Apex Silver requested that Alex Stewart prepare and certify six standard samples from Quevar material to test the silver assays and purchased standard samples from Geostats Pty primarily to test the base metal assays. Table 11.4.3.1 presents the results of the analysis of the standard samples and Figures 11-2 and 11-3 illustrate the results in graphical format. A failure is defined as outside two standard deviations of the mean.



Table 11.4.3.1: Results of Standard Sample Analysis Expected Value Ag Observed % of Failures

Standard Number Mean Std Dev Mean Std Dev Expected Mis-labels >22 Std Dev STD-1 33 18.0 4.9 16.5 2.3 92% 0 0 STD-2 16 53.9 8.1 50.3 2.0 93% 0 0 STD-3 27 129.5 11.5 128.1 2.9 99% 0 0 STD-4 33 34.4 7.0 31.7 2.4 92% 0 0 STD-5 27 102.7 11.4 101.5 3.7 99% 0 0 STD-6 29 491.4 86.3 495.1 33.0 101% 0 1

GBM396-10 13 11.6 0.7 12.0 0.6 104% 0 0 GBM398-1 17 5.1 0.8 4.9 0.7 97% 0 0 GBM900-3 17 7.4 1.0 7.7 0.6 103% 0 0 GBM996-3 15 44.2 4.0 42.0 2.7 95% 0 1

Total 227 0 2

The results indicate that the laboratory has produced reliable results with the results within 7% of the expected value for all samples.

11.5 Sample Security Drill core and samples are kept in a locked facility at the El Quevar campsite. Prior to the establishment of the camp, the samples were stored in a secure location at the company’s facility in Salar de Pocitos. Samples are shipped to Silex headquarters in Salta by company personnel and then are shipped to the laboratory in Mendoza by a commercial carrier. Once the samples were received by Alex Stewart, Silex had no further contact with the samples. As mentioned in previous sections, Silex personnel received the prepared pulps from ALS Chemex to insert QA/QC samples before shipment to the analytical laboratory in La Serena. Only the sample identification numbers were changed, and the sample envelopes were not opened.

Silex personnel were responsible for logging, sampling, splitting, and shipping core to the laboratory facilities, as is standard practice in exploration. No officer, director, or employee of the company was involved in sample preparation once samples were received by the laboratory.

11.6 Interpretation The sample preparation and analytic procedures used by Apex Silver are appropriate for the metals that are tested and meet industry standards.

The QA/QC program meets or exceeds industry standards for blanks, standard and duplicate samples. Analysis of the blanks, standard samples and duplicate samples indicate that ALS Chemex is performing at an acceptable level. The blanks show that there is no contamination during the sample preparation stage. The duplicate samples show increasing precision from core duplicates to coarse duplicates to pulp duplicates, which is the expected outcome. The standard sample analysis indicates that the lab has good precision in its analysis.

SRK recommends that Apex Silver also submit about 5% of its samples to a second laboratory as a cross check on the primary lab.



The QA/QC program was not started until the 2008 drilling campaign during which ALS Chemex was the primary lab. SRK suggests that Apex Silver submit pulps originally assayed by Alex Stewart during the earlier campaigns to ALS Chemex for cross checks

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12 Data Verification (Item 16) 12.1 Quality Control Measures and Procedures Apex Silver has instituted several measures to ensure that the data produced by its exploration programs meets industry standards. A field handbook has been developed that discusses rock types, alteration, mineralization, procedures for drilling and mapping, and laboratory QA/QC protocols to standardize all procedures in the field.

The assay data is received from the laboratory as electronic files and as hard copies of the assay certificates. The electronic data is transferred directly to Microsoft Excel workbooks with six separate sheets for collar coordinates, assays, downhole surveys, lithologic, alteration, and oxidation information. The laboratory certificates are received as hard copies and are maintained in the Silex office in Salta.

Silex personnel also visit the assay laboratories on a routine basis for inspection of preparation and analytic procedures.

12.2 SRK Verification SRK conducted a site visit to the property and the Silex office at which time the following verification checks were conducted:

• Visits to each of the exploration targets with examination of trenches, outcrops, and drill pads;

• Examination of drill core and logging and sampling procedures;

• Comparison of lithologic logs to database;

• Comparison of assay certificates to 10% of the database, with no errors detected;

• Review of cross-sections and geologic model; and

• Review and analysis of laboratory QA/QC procedures and results.

SRK did not identify any errors in the database and found the drilling and logging procedures to meet industry standards.

12.3 Limitations SRK did not independently collect and analyze samples from the Quevar property.



13 Adjacent Properties (Item 17) Silex has provided the following information on adjacent properties. El Quevar is located within an active exploration area. The Project lies within the La Reserva Natural Los Andes and the municipality of San Antonio De Los Cobres. Adjacent properties include exploration permits and exploitation concessions held by various mining companies and individuals. None of these concessions have published resources and the mineralization at the Project does not extend onto adjacent properties. To the north, the Project shares boundaries with SESA, Argentina Diamonds, Ltd. and ADY Resources. On the east the concession boundaries are shares with Desarrollo de Proyectos Mineros S.A., Arieu Sergio Roberto, Carlos Saravia and Arieu Pedro Eugenio. BHP Billiton Exploration, Inc. SUC Argentina holds concessions adjacent to the south and west of the Project. Also on the south is an adjacent concession held by La Milagros S.R.L. and on the west a concession held by FMC Minera del Altiplano a subsidiary of FMC Corporation.

In addition to this, there are 20 perlite quarries located within the El Quevar Project concession block. This includes provisionary as well as active quarries. Companies and individuals holding concessions for perlite quarries within the El Quevar concession block include the following:

• Dalborgo Sergio Antonio (one quarry);

• Casamiro Cresencio (one quarry);

• Cruz Hipolito Gumercindo (one provisional quarry);

• Fernandez Tomas Alberto (one provisional quarry);

• Jose German Verimonte (two quarries);

• Juan Morales Onix (one quarry);

• Margehtti Ricardo Javier (three quarries);

• Mariana Perlita Salta S.R.L. (one quarry);

• Minaclar SCA (two quarries);

• Patrico Martinez (one quarry);

• Perfiltra S.A. (four quarries);

• Roberto Lopez (one provisional quarry); and

• Sola Juan Esteban (one quarry).

Access across land controlled by Apex is granted by the province and can only be contested if access impinges on exploration or mining activities. Currently there are no agreements or objections to activities being conducted either by the perlite quarry operators or Apex Silver in the concession area concerning surface access.



14 Mineral Processing and Metallurgical Testing (Item 18)

14.1 Metallurgical Testing In 2008, Apex Silver commissioned Dawson Metallurgical Laboratories, Inc. of Salt Lake City, Utah to complete test work on six sample composites from the El Quevar project. The metallurgical program was designed to investigate the following:

• Whole ore cyanidation;

• Selective silver flotation followed by bulk sulfide pyrite flotation of the silver flotation tailings;

• Sequential sulfide silver-lead, zinc and pyrite flotation on a high-grade sulfide sample;

• Cyanidation of the pyrite flotation tailings; and

• Combined flotation and tailings cyanidation.

14.1.1 Procedures Forty-five individual samples from drillholes were composited into six composites for the metallurgical test program. The composites were designated as:

• Oxide low grade;

• Mixed medium grade;

• Mixed high grade;

• Sulfide low grade;

• Sulfide medium grade; and

• Sulfide high grade.

The composites were crushed through a 10 Tyler mesh and split into 1 kg charges. One charge from each composite was then split into four 250g samples with two of the splits pulverized and submitted for head analysis. Table 14.1.1.1 shows the results from the head analysis.

Table 14.1.1.1: Composite Head Analysis

%

Sample Ag-ppm Au-ppm Pb Pbns Zn Znns Fe Bi As Sb Cu S (tot) S (sulf) S (=)

Oxide Low 58 <0.17 0.41 0.02 0.023 0.0019 3.25 0.008 0.17 0.061 0.013 3.64 0.751 2.89

Mixed Medium 251 <0.17 0.15 0.00 0.004 0.0019 2.18 0.082 0.08 0.095 0.048 4.37 0.761 3.61

Mixed High 2,020 0.27 1.02 0.12 0.022 0.002 4.16 0.086 0.37 0.302 0.016 3.24 1.04 2.20

Sulfide Low 72 <0.17 0.11 0.00 0.022 0.0018 4.83 0.022 0.04 0.042 0.07 7.50 0.376 7.12

Sulfide Medium 193 0.17 0.28 0.03 0.097 0.002 4.06 0.043 0.05 0.8 0.136 6.28 0.498 5.78

Sulfide High 832 0.58 1.60 0.18 1.70 0.0283 12.50 0.184 0.21 0.396 0.822 17.20 0.6 16.60

The whole ore leach tests were conducted at a pH of ~11 for 95h and 50% solids at a cyanide concentration of 5/L and P80 grinds of 69 to 78 microns.



Selective sulfide flotation was conducted using hydrated lime and sodium metabisulfite in the primary followed by conditioning with Cytec 3418A and 3477 at a target grind of P80 74 microns. A bulk flotation of the silver tailings was performed on the silver flotation tailings for recovery of the pyrite by the addition of copper sulfate and potassium amyl xanthate.

Cyanidation tests of the flotation tailings were conducted for 72h using a 5g/L cyanide concentration at pH11 and 50% solids.

14.1.2 Results Whole Ore Leaching Silver recovery from the whole ore leaching tests indicated recoveries between 57% and 83% with the higher recoveries being obtained on composites with lower sulfur values. The cyanide consumption rate was reasonable, varying between 1.4 to 3.4kg/t, except for the high-grade sulfide sample at 10.4kg/t. In general, the leach kinetics indicate a 48h leach time as shown in Figure 14-1. Table 14.1.2.1 summarizes the test results from the whole ore leaching.

Table 14.1.2.1: Test Results from Whole Ore Leaching Assay (g/t-Ag) Ag Extracted Test No. Composite Grind* P80-µ Assay Head Calc. Head Leach Residue g/t % NaCN Consumption (kg/t)

1 Oxide - Low-grade 71 58 62 26 36 58 1.4 2 Mixed - Medium Grade 71 251 263 45 218 83 2.7 3 Mixed - High-grade 69 2,020 2,060 343 1,718 83.4 3.1 4 Sulfide - Low-grade 78 72 72 40 32 44.2 2.2 5 Sulfide - Medium Grade 75 193 196 85 112 56.9 3.4 6 Sulfide - High-grade 72 832 884 335 552 62.4 10.4

* P80 of leach residue.

Sulfide Flotation The results from selective silver flotation tests indicate a wide range of recoveries, ranging from 36% to 96%, with the higher recoveries observed in the sulfide composites. Table 14.1.2.2 summarizes the test results from selective silver flotation.

Table 14.1.2.2: Test Results from Selective Silver Flotation

% Recovered by Flotation* Back-Calc Head Test No. Grind P80-µ Composite Ag S= Ag-ppm wt%-S=

7 63 Low-grade Oxide 36.2 1.9 65 2.81 8 68 Mixed Medium Grade 74.5 21.5 314 3.48 9 68 Mixed High-grade 78.1 <1.0 1,785 2.3

10 80 Sulfide Low-grade 79.1 74.2 80 6.58 11 76 Sulfide Medium Grade 88.1 63.7 189 6.15 12 73 Sulfide High-grade 95.7 88.4 839 16.56

* Ag + pyrite ro's for all comps except sulfide high-grade which included Zn ro also.

The silver and bulk flotation tests showed good metal recoveries for silver, copper, lead and zinc recoveries into the pyrite concentrate for the sulfide composites as shown in Table 14.1.2.3.



Table 14.1.2.3: Test Results from Silver and Bulk Sulfide Flotation

Recovered into Product (%)

Test No. Grind P80-µ Composite Product Wgt Ag Pb Cu Zn Fe As Sb Bi 7 63 Low-grade Oxide Ag Ro Con 1.62 32.9 2.2 19.6 3.3 3.3 1.6 2.4 13.5

Pyrite Ro Con 2.25 3.3 2.8 4.8 3 3.5 2.6 2.1 2.3

Flotation Tails 96.12 63.8 95 75.6 93.6 93.2 95.8 95.5 84.2 8 68 Mixed Medium Grade Ag Ro Con 2.08 50.3 2.9 69 26.2 23.8 6.1 13.5 34.8

Pyrite Ro Con 2.54 24.1 22 4.3 18.2 9.2 13.3 8 3.3

Flotation Tails 95.38 25.5 75.2 26.7 55.6 67 80.6 78.6 61.9 9 68 Mixed High-grade Ag Ro Con 1.75 77.2 2.4 21.7 20.2 4.5 1.9 5.9 8.5

Pyrite Ro Con 1.99 0.9 0.5 21.4 1.3 5.4 0.9 1.4 5.6

Flotation Tails 96.25 21.9 97.1 56.9 78.5 90.1 97.2 92.7 85.9 10 80 Sulfide Low-grade Ag Ro Con 2.19 16.4 6.2 16.4 13.1 10.4 12.7 13.2 10.8

Pyrite Ro Con 14.26 62.7 26 63.8 70.4 77.4 74 57.4 62.3

Flotation Tails 83.55 20.9 67.9 19.8 16.6 12.3 13.3 29.5 26.9 11 76 Sulfide Medium Grade Ag Ro Con 2.69 26.9 22 23 24.4 16.1 17.3 21.4 17.2

Pyrite Ro Con 11.01 61.2 41.7 67.9 71.5 70.4 54.2 54.5 66.5

Flotation Tails 86.31 11.9 36.4 9 4.1 13.5 28.5 24.1 16.3 12 73 Sulfide High-grade Ag Ro + Scav Con 3.47 36.4 43.2 27.9 26 2.7 16 28 20.2

ZnSO4/MBS Zn Ro Con 21.6 51 44.4 64.9 70.5 59.7 68.8 58.5 54.1

depressant Pyrite Ro Con 12.16 8.3 5.3 4.3 2 32 10.2 5 13

Flotation Tails 62.77 4.3 7 2.8 1.5 5.6 5 8.6 12.7 13 73 Sulfide High-grade Ag Ro + Scav Con 3.24 51.7 52.2 45.1 13.2 1.0 24.2 41.5 34.6

ZnSO4/NaCN Zn Ro Con 6.98 31.7 39.6 47.2 82.7 4.6 41 44 45.6

depressant Zn Ro Tails 89.78 16.5 8.2 7.7 4 94.4 34.8 14.5 19.8 * Selective Ag/Pb Followed by Zn Flotation Conducted on Sulfide High-grade Composite.

Flotation Tailings Cyanidation Cyanidation test results of the flotation tailings indicate a wide range of silver recovery, between 43% and 85%, with the higher recoveries observed in the sulfide composites. Table 14.1.2.4 summarizes the test results from the flotation tailings cyanidation.

Table 14.1.2.4: Test Results from Flotation Tailings Cyanidation Assay (g/t-Ag) Ag Extracted from Tails

Test No. Composite Grind (2) P80-µ Assay Head Calc Head Leach Residue g/t % Ag Extr. Overall NaCN Consump (kg/t)

14 Oxide - Low-grade 71 43 42 24 18 42.6 27.2 1.4

15 Mixed - Medium Grade 71 84 82 33 49 59.7 15.2 1.6

16 Mixed - High-grade 69 406 383 181 203 53 11.6 1.5

17 Sulfide - Low-grade 78 20 14 6 8 56.5 11.8 1.3

18 Sulfide - Medium Grade 75 26 24 7 17 70.3 8.4 1.4

19 Sulfide - High-grade 72 58 54 8 46 85.2 3.7 2.7 (1) 72h, 5g/L NaCN, 50% Solids. (2) P80 of whole ore leach residue.

The leach kinetics for the flotation tailings cyanidation show a 48h leach time (see Figure 14-2).



Combination of Flotation and Tailings Cyanidation A combination of test results using flotation and tailings cyanidation indicates silver recoveries between 63% and 99% as summarized in Table 14.1.2.5.

Table 14.1.2.5: Combined Silver Recovery from Flotation and Tailings Cyanidation

Ag Recovered, % from Ore Head Assay** Composite Flotation Flot Tails Leach Total* oz/t-Ag wt% - S= Low-grade Oxide 36.2 27.2 63.4 65 2.81 Mixed Medium Grade 74.5 15.2 89.7 314 3.48 Mixed High-grade 78.1 11.6 89.7 1,785 2.3 Sulfide Low-grade 79.1 11.8 90.9 80 6.58 Sulfide Medium Grade 88.1 8.4 96.5 189 6.15 Sulfide High-grade 95.7 3.7 99.4 839 16.56 * Flotation + Flotation Tails Leach. ** Head assay back-calculated from flotation tests.

Summary of Test Results The results from the various test procedures indicate that viable silver recoveries was obtained on the six El Quevar sample composites as summarized in Table 14.1.2.6.

Table 14.1.2.6: Summary of Test Results on El Quevar Sample Composites

Ag Recovered, % from Ore Head Assay** Composite Flotation Flot Tails Leach Total* Whole Ore Leach oz/t-Ag S=, wt% Low-grade Oxide 36.2 27.2 63.4 58 65 2.81 Mixed Medium Grade 74.5 15.2 89.7 83 314 3.48 Mixed High-grade 78.1 11.6 89.7 83.4 1,785 2.3 Sulfide Low-grade 79.1 11.8 90.9 44.2 80 6.58 Sulfide Medium Grade 88.1 8.4 96.5 56.9 189 6.15 Sulfide High-grade 95.7 3.7 99.4 62.4 839 16.56 * Flotation + Flotation Tails Leach. ** Head assay back-calculated from flotation tests.

The best test results yielded silver recoveries of about 90% using a combination of flotation and tailings cyanidation on all six samples, except for the low-grade oxide, which exhibited a recovery of 63.4%.

Based on the metallurgical test results, the envisioned flow sheet for the process plant would comprise the following unit processes:

• Primary crushing;

• SAG and ball mill grinding with a vibrating screen and cyclones for size classification;

• Rougher and cleaner flotation with regrind for the production of a final sulfide silver concentrate;

• Thickening, filtering, and packaging for shipment of final sulfide silver concentrate;

• Leaching (cyanide) of the flotation tailings;



• Counter-current decantation circuit with thickeners producing a silver-bearing PLS;

• Merrill-Crowe circuit for processing the PLS solution producing a doré for shipment to off-site refinery;

• Cyanide destruction circuit; and

• Disposal of final plant tailings.

Due to the complexity of the deposit and the identified rock types to date, future metallurgical test work should investigate various flow sheet designs for the process plant so that individual processing circuit(s) can be bypassed to optimize the plant operation and metal recoveries.

SRK Job No.: 182801

File Name: Figure 14-1.doc Date: 11-02-08 Approved: ALK Figure: 14-1


Source: Dawson Metallurgical Laboratories, Inc.

Whole Ore Cyanide Leach – 5g/L NaCN, 50% Solids –

Silver Extraction Rate

SRK Job No.: 182801

File Name: Figure 14-2.doc Date: 11-02-08 Approved: ALK Figure: 14-2


Source: Dawson Metallurgical Laboratories, Inc.

Rougher Tailings Cyanide Leach – 5g/L NaCN, 50%

Solids



15 Mineral Resources and Mineral Reserve Estimates (Item 19)

SRK has conducted a resource estimation on the Yaxtché zone of El Quevar using Maptek’s Vulcan software.

15.1 Drillhole Database The drillhole database was compiled and maintained by Silex personnel in Argentina. The database was given to SRK as a Microsoft Excel workbook including six worksheets, containing collar coordinates, downhole surveys, assays, lithology, alteration, and oxidation state.

The database contains 81 core holes drilled by Silex over the entire Quevar property. Three of these holes were drilled adjacent to holes that did not reach the required depth. Forty-five drillholes are contained within the Yaxtché resource area (Figure 15-1).

The drill samples were analyzed at Alex Stewart Assayers and ALS Chemex. All samples were analyzed using a multi-element ICP package that includes silver by both labs. All samples from drillholes QVD-001 through QVD-042 were also analyzed at Alex Stewart for silver by fire assay with gravimetric finish. Samples from QVD-043 through QVD-078 were analyzed at ALS Chemex with only the silver overlimits analyzed by fire assay with gravimetric finish. SRK used a priority of fire assay first, then ICP, in the resource database.

The database has been verified by SRK and is considered to be of sufficient quality for resource estimation.

15.2 Topography The topographic survey for Quevar Sur was done by PDOP Servicios Topográphicos (PDOP), based in Mendoza. The survey was conducted in May and June of 2008 and covers the exploration targets in the Quevar Sur area. PDOP used GPS Trimble R3 and Trimble ME Base Station for the survey. The contour interval is 2m and the data is in the Grauss-Kruger Projection, Datum WGS-84. The topographic data was provided to SRK as point file in Excel and as an AutoCAD drawing file.

PDOP also surveyed drillholes, trenches, and other exploration points requested by Silex at the end of the annual field seasons.

15.3 Geology The silver mineralization is contained within the breccia zone that trends about 290° and dips approximately 50° to the north. The higher grade silver mineralization is concentrated along the upper and lower margins of the breccia zone. There is a clear grade boundary between unmineralized rock and the mineralized breccia. SRK created a grade shell by constructing cross-sections perpendicular to the trend of the mineralization and drawing polygons around the mineralized intercepts at a 10g/t Ag cut-off. Fifteen cross-sections were constructed about 50m apart. The polygons were snapped to the drillholes to ensure that all relevant assays were included within the grade shell. Figures 15-2, 15-3, 15-4 show the grade shell in plan view, oblique view and in cross-section, respectively. Table 15.3.1 presents statistics of assay intervals within the grade shell.



Table 15.3.1: Statistics of Raw Silver Assay Intervals within the Yaxtché Grade Shell Statistic Value Mean 71 Median 16 Standard Deviation 287 Minimum 0 Maximum 7,304 CV 4.0 Count 1,600

15.4 Oxidation State The database contains information on oxidation state for each drillhole. Intervals were coded as oxidized, mixed, or sulfide. SRK constructed triangulated surfaces with Vulcan software to code the cells in the block model with the appropriate code.

Statistics were run for the assay data by oxidation type (Table 15.4.1) to determine the need to model silver grades by oxidation type. The assays were also visually reviewed by drillhole to see if there was a difference in grade at the change in oxidation state. Based on the visual examination and the statistics, SRK decided that there is no clear differentiation in silver grades by oxidation state and did not use oxidation type in the estimation.

Table 15.4.1: Raw Silver Assay Statistics by Oxidation Type All samples Samples < 1,500g/t

Statistic Oxide Mixed Sulfide Mixed Sulfide Mean 61 150 65 76 54 Median 25 26 15 24 15 Standard Deviation 148 697 230 157 136 Minimum 0 1 0 1 0 Maximum 1,445 7,304 4,470 1,020 1,372 CV 2.4 4.6 3.5 2.1 2.5 Count 140 118 1342 116 1337

15.5 Specific Gravity Apex has performed 260 density measurements on core samples from 17 drillholes using the water displacement methodology. The methodology is as follows:

• Core samples 10cm in length were selected at a frequency of about 10 to 15m downhole;

• Samples were dried and if necessary, coated with varnish to make the sample impermeable;

• The rock type and oxidation state were noted on the data sheet as well as the length of the sample and whether it was whole or half core;

• The scale was set to 0 and the core sample was weighed;

• A graduated test tube was filled 1,000mL of water, and the level was noted on the data sheet;



• The sample was placed in the water and the water level was noted;

• The density was calculated according to the following equation; Weight of Rock (g)/(Volume of water (ml)– Volume of sample(mL))

Twenty-one samples are within the Yaxtché mineralized envelope including sixteen breccias samples. Within the mineralized envelope, one sample is oxide, three are mixed and the remainder are sulfide. The locations of the density samples are shown in Figure 15.5.

SRK determined outlier values based on observation of plots of SG values for the breccia only (Figure 15.6) and for all material by oxidation state (Figure 15-7). Table 15.5.1 presents statistics of the SG measurements of the breccia and non-breccia material, inside and outside the grade shell.

Table 15.5.1: Specific Gravity Statistics Breccia Non-Breccia Statistic All* Grade Shell* Oxide** Sulfide*** Unclassified Mean 2.36 2.35 2.11 2.24 2.41 Median 2.36 2.33 2.11 2.23 2.44 Standard Deviation 0.14 0.14 0.10 0.13 0.18 Minimum 2.08 2.17 1.95 1.85 2.01 Maximum 2.58 2.58 2.26 2.62 2.64 CV 0.06 0.06 0.05 0.06 0.08 Count 40 15 20 165 18

* Excludes outlier value of 3.89 ** Oxide excludes outlier values of 1.69, 2.52, 2.53, and 2.58 *** Sulfide excludes outlier values of 1.23 and 5.83

The majority of the samples from the brecciated material are sulfide, with only one oxide and two mixed samples. The majority of the material inside the mineralized envelope is breccia. SRK has assigned the following SG values to the block model based on the SG data that has been obtained thus far:

• Outside the Grade shell;

o Oxide – 2.11,

o Mixed – 2.16, and

o Sulfide – 2.24.

• Inside Grade Shell;

o Oxide – 2.11,

o Mixed – 2.16, and

o Sulfide – 2.35.

15.6 Grade Capping The assays within the grade shell were plotted on log normal probability plots to determine the presence of outliers, which could materially impact grade estimation (Figure 15-8). Four silver



grades at 2,000g/t (99.8 percentile) occur as outliers to the assay values and those grades were capped prior to compositing. Table 15.6.1 presents statistics of the capped assays.

Table 15.6.1: Statistics of Capped Silver Assay Intervals within the Yaxtché Grade Shell Statistic Value Mean 65 Median 16 Standard Deviation 185 Minimum 0 Maximum 2,000 CV 2.9 Count 1,600

15.7 Compositing The assays were composited on 2m downhole intervals starting at the top of the drillhole, with breaks at the grade shell boundary. Thus, the composite intervals within the grade shell are 2m in length except where the drillhole exits the grade shell. The 2m interval was chosen to regularize the assay intervals which are predominately 1m or 2m in length. The average length of composites is 1.97m. Table 15.7.1 presents statistics of the composite data.

Table 15.7.1: Statistics of Silver Composite Intervals within the Yaxtché Grade Shell Statistic Value Mean 64 Median 19.7 Standard Deviation 155 Minimum 0 Maximum 1866 CV 2.4 Count 853

15.8 Variogram Analysis SRK developed variograms for Ag using the corellogram function and the 2m composites within the grade shell. Spherical modeling was used to fit the experimental variograms. Table 15.81 presents the fitted variogram parameters.

Table 15.8.1: Silver Variogram Parameters Parameter Value Nugget 0.5 Sill differential 0.499 Orientation of Ellipsoid Bearing 020° Plunge -50° Dip 00° Range Major 75m Semi-major 50m Minor 10m



15.9 Grade Estimation A block model for the Yaxtché area was created in Vulcan with coordinates and block size as shown in Table 15.9.1. The coordinates are in the Argentina System, Grauss-Kruger Projection, WGS-84 Datum.

Table 15.9.1: El Quevar Block Model Limits Direction Minimum Maximum Dimension Block Size (m) East 3,418,400 3,419,400 1,000 10 North 7,306,200 7,307,400 1,200 10 Elevation 4,500 5,502 1,002 3

The block model contains variables for silver, oxidation state, density, percentage of the cell within the grade shell, and class.

Silver grades were estimated within the grade shell using only composites within the grade shell in two passes as shown in Table 15.92.

Table 15.9.2: El Quevar Grade Estimation Parameters Parameter Pass 1 Pass 2 Search Ellipsoid Bearing 020° 020° Plunge -50° -50° Dip 00° 00° Search distance Major 75m 150m Semi-major 75m 150m Minor 20m 40m Composites Minimum 4 4 Maximum 10 10 Maximum/drillhole 3 3 Minimum Drillholes 2 2

The block grades were visually compared to the composite grades by section and by elevation. It appeared that there had been some “smearing” of higher grade into areas where the composite grades were relatively low. SRK therefore did an estimation to define waste blocks within the grade shell with indicator kriging at 25g/t silver threshold. Composites with silver grades less than 25g/t silver were assigned an indicator value of 0 and composites greater than 25g/t silver were assigned a value of 1. The search parameters were the same as in Pass 2 in Table 15.8.2, but with a minimum requirement of 1 composite and a maximum of 5 composites per block estimation. Blocks with indicator values less than 0.50 were considered waste and not used in the resource statement. Figures 15-9 and 15-10 present a typical cross-section and plan view of the block model.

15.9.1 Model Validation The block model was validated by the following procedures:

• Visual inspection of block and composite grades by section and elevation;



• Comparison of kriged grades and composite grades in swath plots; and

• Comparison of kriged grades and nearest neighbor estimates.

SRK examined block and composite silver grades by cross-sections oriented perpendicular to the grade shell (azimuth 020°) and parallel to the strike of the grade shell (azimuth 290°), as well as by elevation. The block grades compared well to the composite grades once the waste blocks had been defined as described in the section above.

SRK generated swath plots at 75m intervals west to east and at 30m elevation ranges (Figure 15-11). The swath plots show some smoothing as would be expected in a kriging estimation.

SRK also did a nearest neighbor estimation and compared the two estimates visually and tested for global bias and conservation of metal by comparing statistics at a 0.0g/t silver cut-off. Table 15.9.1.1 presents the tonnage and grade of both estimations.

Table 15.9.1.1: Comparison of Kriged and Nearest Neighbor Estimations Grades Tonnage Min Max Average Kriged Model 14,234,725 0.97 647 54.1 Nearest Neighbor 14,222,564 0.25 1,867 52.5 Percent Difference 0.1% 2.9% (Kriged-NN)/Kriged)

15.10 Resource Classification Resources were classified according to CIM guidelines as indicated and inferred based on the following criteria:

• Study of variogram ranges; and

• Study of geologic model and grade distribution.

Blocks that were estimated in the first pass, within 1 variogram range and with a minimum of two drillholes, were classified as indicated. Blocks estimated in the second pass, within 2 variogram ranges, and also with a minimum of two drillholes were classified as inferred.

15.11 Cut-off Grade The resource cut-off grades were determined for oxide and mixed/sulfide based on silver price, metallurgical recoveries and open pit or underground mining methods. The following parameters were used to calculate the cut-off grades:

• Silver price: $12.00/oz - $0.39/g

• Recovery: Oxide – 65%

Mixed – 90%

Sulfide – 95%

• Process: $20/t

• Mining: Open Pit - $1.75/t

Underground - $25/t



The cut-off grade was calculated for open pit and underground separately by the following equation: (Process cost + Mining cost) / (Silver price / recovery)

SRK ran a pit optimization on the Yaxtché resource with the above parameters and the resulting pit contained all the oxide material. Apex Silver plans to mine the mixed and sulfide material by underground methods should future studies indicate that the deposit is economically viable. Therefore the cut-off grade for the oxide resource is 85g/t silver and the cut-off grade for the mixed/sulfide resource is 120g/t silver.

15.12 Resource Statement The resources for the Yaxtché deposit at El Quevar are contained in Table 15.12.1

Table 15.12.1: Resource Statement, Yaxtché Deposit, as of December 31, 2008 Source Class Cut-off kt Ag g/t Ag koz

Oxide Indicated 85 304 168 1,644 Inferred 85 94 259 784

Mixed Indicated 120 156 237 1,192 Inferred 120 5 322 50

Sulfide Indicated 120 939 197 5,954 Inferred 120 7 202 46

Total Indicated 1,399 195 8,790 Inferred 106 258 881

15.13 Mineral Resource Sensitivity Tables 15.13.1 and 15.13.2 contain tonnage and grade of the Yaxtché Indicated and Inferred resources, respectively, at various silver cutoffs. The grade tonnage curves are shown in Figure 15.12.

Table 15.13.1: Tonnage and Grade of Indicated Resource by Cut-off Cut-off (Ag g/t) Ag g/t kt

25 98 5,075 50 123 3,611 75 152 2,439

100 181 1,687 125 208 1,216 150 237 865 175 269 611 200 301 438 225 327 338 250 351 267



Table 15.13.2: Tonnage and Grade of Inferred Resource by Cut-off Cut-off (Ag g/t) Ag g/t kt

25 143 232 50 198 154 75 244 115

100 271 99 125 292 87 150 299 83 175 311 76 200 334 65 225 340 61 250 353 54

SRK Job No.: 182801

File Name: Figure 15-1.docx Date: 11-02-08 Approved: LEM Figure: 15-1


Yaxtché Drillhole Location Map

SRK Job No.: 182801



Grade Shell Plan View

SRK Job No.: 182801



Grade Shell Oblique View, Looking West

SRK Job No.: 182801


El Quevar,


Grade shell Cross-section

Looking West

SRK Job No.: 182801



Location Map Specific Gravity samples

SRK Job No.: 182801



Specific Gravity Plot for Breccia Samples

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SRK Job No.: 182801



Specific Gravity By Oxidation State

SRK Job No.: 182101


El Quevar,


Probability Plot of

Silver Assays

SRK Job No.: 182801



Block Model Cross-section,

Looking West

SRK Job No.: 182801



Block Model Elevation 4795

SRK Job No.: 182801


El Quevar,


Swath Plots Block Model vs. Composites

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El Quevar,


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16 Other Relevant Data and Information (Item 20) There is no other relevant data or information for El Quevar.



17 Interpretation and Conclusions (Item 21)

The El Quevar property is a volcanic hosted silver deposit occurring within a regional fault zone. The host rock has been brecciated and mineralized along a structure that trends about 290° and dips about 50° to the north. The Yaxtché deposit has been drilled along a strike length of 650m and is open to the east and west. The structure appears to have been faulted at both east and west ends and a possible extension have been identified, but not yet drilled. Gold, copper, lead, and zinc minerals are also present in the structure. The metals show a zonation with silver and lead present at the margins of the breccia zone, gold in the core of the zone and zinc at the lower elevations.

Several additional target areas have been defined at Quevar Sur, including Yaxtché, Mani, Copan, Andrea, and Argentina. Quevar Norte and Viejo Campo also have promising exploration targets that have not yet been drilled, with the exception of two holes in Quevar Norte.

17.1 Field Surveys Apex has undertaken exploration at El Quevar using a systematic approach and according to industry best practices. Several target areas have been identified based on the presence of outcropping breccia. Typically, target exploration was initiated with mapping and sampling, followed by trenching and sampling to define drill targets. All drilling is HQ and NQ sized core. Apex Silver has established procedures to ensure that data is collected in a systematic manner, and have ensured that appropriate QA/QC protocols have been implemented.

17.2 Analytical and Testing Data Samples have been analyzed by Alex Stewart in Mendoza and ALS Chemex in Mendoza and La Serena, Chile. Both of these laboratories are local facilities of international laboratories. Apex Silver is using appropriate sample preparation and analytic procedures for this type of mineralization and has a proper laboratory QA/QC program in place.

17.3 Exploration Conclusions The Quevar project covers an area of about 20km x 30km with excellent exploration potential. Apex Silver has been conducting exploration for the past 4 years in a systematic and thorough manner and has identified several targets in Quevar Sur on which they have conducted drilling. The exploration practices adopted by Apex Silver meet or exceed industry best practices.

17.4 Resource Estimation SRK has conducted a resource estimation on the Yaxtché target using ordinary kriging within a grade shell constructed at a 10g/t silver cutoff. Waste blocks within the grade shell were further delimited with indicator kriging at 25g/t silver cut-off to minimize “smearing” of grade. Oxide, mixed and sulfide zones were defined, and separate cutoff grades were determined for oxide as potentially mineable by open pit and for mixed/sulfide as potentially mineable by underground methods.

Apex Silver has conducted specific gravity measurements on core samples, but only 15 are within the Yaxtché grade shell, and of those, only one is oxide and two are mixed. SRK has assigned a specific gravity value to oxide and mixed blocks based on the average of all oxide and mixed blocks, respectively and separate values to sulfide within and outside the grade shell based



on the average values inside and outside the shell. SRK recommends that additional tests be conducted on the half core that is archived at site.



18 Recommendations (Item 22) Apex Silver has been conducting exploration at Quevar over the last four years in a systematic manner. The Yaxtché trend has received the most drilling to date and a resource has been estimated for that area. It appears that the western extension has been offset by faulting and the eastern extension has not yet been limited by drilling. In addition, several other targets have been defined in surface mapping and sampling programs and in a recent reinterpretation of geophysical data.

18.1 Recommended Work Programs and Costs SRK recommends that following work programs at El Quevar:

• Conduct additional specific gravity tests on the half core archived at the Quevar site to obtain more data for Yaxtché especially on material within the grade shell. This work can be performed during the ongoing exploration program at an estimated cost of US$5,000;

• Perform check analyses at ALS Chemex on the pulps originally analyzed by Alex Stewart prior to initiation of the QA/QC program. These samples should also include blank and standard reference samples. It is also recommended that pulps originally analyzed at ALS Chemex should be checked at Alex Stewart. Approximately 10% of the pulps should have check analyses performed, or about 200 samples. It is estimated that the cost would be approximately US$10,000;

• Continue exploration at Quevar, specifically to;

o Explore the west and east extensions of Yaxtché,

o Test geophysical targets generated from the new interpretation in 2008, and

o Define further drill targets through continued surface mapping and sampling.

It is recommended that the drilling program start with approximately 1,500m of drilling at Yaxtché followed by an evaluation of the results and a follow up program. The cost of this program is US$600,000



19 References (Item 23)

Alvarez, N. and Blakestad, B., 2009, Personal Communication.

Arce, O.R., 2008, Metalogenia y Yacimientos Metalíferos de Bolivia, Presentated at: XXVII Curso Latinoamericano de Metalogenia UNESCO-SEG-SGA, La Paz, Bolivia, Agosto de 2008.

Brockway, M., 2008, Petrografías and Calcografías de 24 Muestras de Sondajes de Exploraciones El Quevar, Unpublished Report for Silex Argentina, S.A., 9p.

Brockway, M., 2008a, Electronic Microscopy Study of El Quevar Drillholes Samples, Unpublished Report for Silex Argentina, S.A., 32p.

Cambrubí, A., and Albinson, T., 2006, Depósitos eptermales en México: actualización de su conocimiento y reclasificación empírica, in: Boletín de la Sociedad Geológica Mexicana Volumen Conmemorativo del Centenario, Revisión de Algunas Tiplogías de Depósitos Minerales de México, Tomo LVIII, Núm. 1, pp. 27-81.

Charchaflié, D., Tosdal, R.M., and Mortensen, J.K., 2007, Geologic Framework of the Veladero High-Sulfidation Epithermal Deposit Area, Cordillera Frontal, Argentina, Economic Geology, vol. 102, pp. 171-192.

Sillitoe, R.H., 2008, Major Gold Deposits and Belts of the North and South American Cordillera: Distribution, Tectonomagmatic Settings, and Metallogenic Considerations, Economic Geology, v. 103, pp. 663-687.

Dawson Metallurgical Laboratories, Inc. (July 2, 2008), Report Describing Preliminary Cyanidation and Flotation Testing of Several Composite Samples from the El Quevar Project, prepared for Apex Silver Mines Corp.

Taylor, B.E, 2007, Epithermal Gold Deposits, Natural Resources of Canada Website, 27p. http://gsc.nrcan.gc.ca/mindep/, accessed January, 2009.

Godoy, B., 2007, Argentina: Mining Prospecting and Exploration Legal Framework-Guidelines for Foreign Investors, 02 January 2007, Environmental & Energy website accessed January 8, 2009, http://www.mondaq.com/article.asp?articleid=45028.

Guilbert, J.M. and Park, C.F.Jr., 1986, The Geology of Ore Deposits, W.H. Freeman Company, New York, New York, p532-537.

Mercardo, Norberto, 2009, Personal Communication.

PDOP Servicios Topográphicos, 2007, Informe Técnico de los Levantimientos Topográficos en las Zonas del Proyecto Quevar, Memo to Silex Argentina.

PDOP Servicios Topográphicos, 2008, Informe Técnico de los Levantimientos Topográficos en las Zonas del Proyecto Quevar, Memo to Silex Argentina.

Quantec Geoscience Argentina, S.A., 2008, Geophysicla Report on: 3D Off-Set Pole Dipole Survey at El Quevar Project, Salta, Argentina, Unpublished Report for Silex Argentina, S.A., 41p.

Silex Argentina S.A., 2006, Proyecto El Quevar, Unpublished Internal Report, 17p.



Silex Argentina S.A., 2007, El Quevar Project, Drilling Campaign Report, February-June 2007, Unpublished Internal Report, 21p.

Silex Argentina S.A., 2008, System for Granting Mining Property in the Argentine Republic, Unpublished Internal Report.

Silex Argentina S.A., 2008a, El Quevar, Argentina-Property Description, Unpublished Internal Report.

Silex Argentina S.A., 2008b, El Quevar Project, Drilling Campaign Report January-July 2008, Unpublished Internal Report, 35p.

Petrinovic, I.A., 1999, La Caldera de colapso del Cerr o Aquas Caliente, Salta, Argentina: evolución y equema structural, Acta Geologica Hispanica, v.34, no2-3, p 243-253.

Vector Argentina S.A., 2008, Informe de Impacto Ambiental Para la Etapa De Prospección, Prospecto Quevar VI, Proyecto el Quevar Departamento Los Andes, Provincia de Salta, Environmental Report prepared for Silex Argentina, S.A.

Vector Argentina S.A., 2008a, Informe de Impacto Ambiental Campamento Habitacional e Instalaciones Auxiliares, Proyecto El Quevar Salar de Pocitos Departamento Los Andes, Provincia de Salta, Environmental Report prepared for Silex Argentina, S.A.



20 Glossary 20.1 Mineral Resources and Reserves 20.1.1 Mineral Resources The mineral resources and mineral reserves have been classified according to the “CIM Standards on Mineral Resources and Reserves: Definitions and Guidelines” (December 2005). Accordingly, the Resources have been classified as Measured, Indicated or Inferred, the Reserves have been classified as Proven, and Probable based on the Measured and Indicated Resources as defined below.

A Mineral Resource is a concentration or occurrence of natural, solid, inorganic or fossilized organic material in or on the Earth’s crust in such form and quantity and of such a grade or quality that it has reasonable prospects for economic extraction. The location, quantity, grade, geological characteristics and continuity of a Mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge.

An ‘Inferred Mineral Resource’ is that part of a Mineral Resource for which quantity and grade or quality can be estimated on the basis of geological evidence and limited sampling and reasonably assumed, but not verified, geological and grade continuity. The estimate is based on limited information and sampling gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drillholes.

An ‘Indicated Mineral Resource’ is that part of a Mineral Resource for which quantity, grade or quality, densities, shape and physical characteristics can be estimated with a level of confidence sufficient to allow the appropriate application of technical and economic parameters, to support mine planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drillholes that are spaced closely enough for geological and grade continuity to be reasonably assumed.

A ‘Measured Mineral Resource’ is that part of a Mineral Resource for which quantity, grade or quality, densities, shape, physical characteristics are so well established that they can be estimated with confidence sufficient to allow the appropriate application of technical and economic parameters, to support production planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drillholes that are spaced closely enough to confirm both geological and grade continuity.

20.1.2 Mineral Reserves A Mineral Reserve is the economically mineable part of a Measured or Indicated Mineral Resource demonstrated by at least a Preliminary Feasibility Study. This Study must include adequate information on mining, processing, metallurgical, economic and other relevant factors that demonstrate, at the time of reporting, that economic extraction can be justified. A Mineral Reserve includes diluting materials and allowances for losses that may occur when the material is mined.



A ‘Probable Mineral Reserve’ is the economically mineable part of an Indicated, and in some circumstances a Measured Mineral Resource demonstrated by at least a Preliminary Feasibility Study. This Study must include adequate information on mining, processing, metallurgical, economic, and other relevant factors that demonstrate, at the time of reporting, that economic extraction can be justified.

A ‘Proven Mineral Reserve’ is the economically mineable part of a Measured Mineral Resource demonstrated by at least a Preliminary Feasibility Study. This Study must include adequate information on mining, processing, metallurgical, economic, and other relevant factors that demonstrate, at the time of reporting, that economic extraction is justified.

20.2 Glossary Table 20.2.1: Glossary

Term Definition Assay: The chemical analysis of mineral samples to determine the metal content. Capital Expenditure: All other expenditures not classified as operating costs. Composite: Combining more than one sample result to give an average result over a larger distance. Concentrate: A metal-rich product resulting from a mineral enrichment process such as gravity concentration or

flotation, in which most of the desired mineral has been separated from the waste material in the ore. Crushing: Initial process of reducing ore particle size to render it more amenable for further processing. Cut-off Grade (CoG): The grade of mineralized rock, which determines as to whether or not it is economic to recover its

gold content by further concentration. Dilution: Waste, which is unavoidably mined with ore. Dip: Angle of inclination of a geological feature/rock from the horizontal. Fault: The surface of a fracture along which movement has occurred. Footwall: The underlying side of an orebody or stope. Gangue: Non-valuable components of the ore. Grade: The measure of concentration of gold within mineralized rock. Hangingwall: The overlying side of an orebody or slope. Igneous: Primary crystalline rock formed by the solidification of magma. Kriging: An interpolation method of assigning values from samples to blocks that minimizes the estimation

error. Lithological: Geological description pertaining to different rock types. Milling: A general term used to describe the process in which the ore is crushed and ground and subjected to

physical or chemical treatment to extract the valuable metals to a concentrate or finished product. Mining Assets: The Material Properties and Significant Exploration Properties. Stratigraphy: The study of stratified rocks in terms of time and space. Strike: Direction of line formed by the intersection of strata surfaces with the horizontal plane, always

perpendicular to the dip direction. Sulfide: A sulfur bearing mineral. Variogram: A statistical representation of the characteristics (usually grade).



Abbreviations The metric system has been used throughout this report unless otherwise stated. All currency is in U.S. dollars. Market prices are reported in US$ per troy oz of gold and silver. Tonnes are metric of 1,000kg, or 2,204.6lbs. The following abbreviations are used in this report.

Table 20.2.2: Abbreviations Abbreviation Unit or Term A amp AA atomic absorption Ag silver Au gold °C degrees Centigrade cm centimeter cm2 square centimeter cm3 cubic centimeter ° degree (degrees) dia. diameter EIR Environmental Impact Report FA fire assay g gram g/L gram per liter g/t grams per tonne h hour ha hectares kg kilograms km kilometer km2 square kilometer koz thousand troy ounce kt thousand tonnes kV kilovolt kVA kilovolt amperes Ma mega years m meter m2 square meter m3 cubic meter masl meters above sea level mg/L milligrams/liter mL milliliter mm millimeter mm2 square millimeter mm3 cubic millimeter Mt million tonnes NI 43-101 Canadian National Instrument 43-101 oz troy ounce % percent ppb parts per billion ppm parts per million QA/QC Quality Assurance/Quality Control SG specific gravity t tonne (metric ton) (2,204.6 pounds) y year

Appendix A Certificate of Author

Group Offices in: North American Offices: Australia Denver 303.985.1333 North America Elko 775.753.4151 Southern Africa Reno 775.828.6800 South America Tucson 520-544-3688 United Kingdom Toronto 416.601.1445 Vancouver 604.681.4196 Yellowknife 867-699-2430

SRK Consulting (U.S.), Inc. 7175 West Jefferson Avenue, Suite 3000 Lakewood, Colorado USA 80235 e-mail: [email protected] web: www.srk.com Tel: 303.985.1333 Fax: 303.985.9947

CERTIFICATE of AUTHOR I, Leah Mach, CPG, MSc do hereby certify that: 1. I am a Principal Resource Geologist of:

SRK Consulting (US), Inc. 7175 W. Jefferson Ave, Suite 3000 Denver, CO, USA, 80235

2. I graduated with a Master of Science degree in Geology from the University of Idaho in 1986. 3. I am a member of the American Institute of Professional Geologists. 4. I have worked as a Geologist for a total of 22 years since my graduation in minerals

exploration, mine geology, project development and resource estimation. 5. I have read the definition of “qualified person” set out in National Instrument 43-101 (“NI

43-101”) and certify that by reason of my education, affiliation with a professional association (as defined in NI 43-101) and past relevant work experience, I fulfill the requirements to be a “qualified person” for the purposes of NI 43-101.

6. I am responsible for all Sections of the technical report titled NI 43-101 Technical Report on

Resources, Apex Silver Mines Corporation, El Quevar Project, and dated February 27, 2009 (the “Technical Report”) relating to the Lucky Jack property. I visited El Quevar Project property during the week of November 9, 2008 for four days.

7. I have not had prior involvement with the property that is the subject of the Technical Report. 8. I am independent of the issuer applying all of the tests in section 1.4 of National Instrument

43-101. 9. I have read National Instrument 43-101 and Form 43-101F1, and the Technical Report has

been prepared in compliance with that instrument and form. 10. I consent to the filing of the Technical Report with any stock exchange and other regulatory

authority and any publication by them for regulatory purposes, including electronic publication in the public company files on their websites accessible by the public, of the Technical Report.

SRK Consulting (US), Inc. Page 2 of 2

Certificate of Author.LM.doc

11. As of the date of this certificate, to the best of my knowledge, information and belief, the Technical Report contains all scientific and technical information that is required to be disclosed to make the Technical Report not misleading.

Dated this 27th Day of February, 2009. Leah Mach, CPG, MSc CPG 10940 (“Signed”) (“Sealed”)

Apex Silver Mines Corporation, NI 43-101 Technical Report on Resources, El Quevar Project, Argentina, January 31, 2009

Dated this 27th Day of February, 2009.

Leah Mach, CPG MSc CPG 10940 (“Signed”) (“Sealed”)

Documents

ElQuevar NI 3-101 Tech Report FIN Sm