San Cristobal is located in the Potosi district of southwestern Bolivia and hosts approximately 450 million ounces of silver and 8 billion pounds of zinc and 3 billion pounds of lead contained in 231 million tonnes of open-pittable proven and probable reserves. As the ore body is open both at depth and laterally, reserve expansion potential is considered excellent



 

The San Cristobal deposit occupies the central portion of a depression associated with volcanism. The four-kilometer diameter depression is filled with fine to coarse-grained volcanoclastic sedimentary rocks. Disseminated and stockwork silver-lead-zinc mineralization formed locally both within the volcanoclastic sediments and in the intrusions themselves.

Initially, the two largest areas of mineralization, the Jayula and Tesorera deposits, were drilled separately. Subsequent drilling resulted in a nearly two-fold increase in reserves as it was discovered that the Jayula and Tesotera deposits were one large and continuous deposit, now called the San Cristobal orebody.

The current assessment of proven and probable reserves at San Cristobal, updated in December 2006 on the basis of  $8.51 per ounce silver,  $0.86 per pound zinc and $0.47 per pound lead, were as follows:

The company commenced development and construction of San Cristobal following Board approval received in December 2004.  This project is scheduled to commence operation in the third quarter of 2007 and achieve full production by the fourth quarter of 2007.  Mining activities have been contracted out to Washington Group International. 

We began construction on the San Cristobal project during the first quarter of 2005.  Project construction has been completed and we anticipate the first sale of concentrates during the third quarter of 2007.  Major mechanical equipment includes the flotation circuit, filtration plant and the 10-kilometer tailings line, including piping and booster pumping stations for the 15-kilometer water supply system.  Major components include the Semi-Autogenous Grinding (SAG) and two ball mills have been installed.  

We have completed construction of a power line from the town of Punutuma to San Cristobal and we began drawing power from the national power grid during November 2006.

A long-term agreement is in place for the transportation of the concentrates by rail to the port in Mejillones, Chile.  Construction of the 65 kilometer rail spur from the mine site to the main rail line began during the third quarter of 2006 and was completed during the second quarter of 2007.

Concentrates will be unloaded from the rail cars at a facility at the port in Mejillones and then loaded into ships for export.  Construction of the Mejillones port facility was completed during the second quarter of 2007.

Once the concentrates have arrived in Mejillones, they will be shipped by bulk carriers to smelters around the world.  We have signed long-term sales agreements with thirteen smelters in Europe, Australia, and Asia for the sale of a majority of the planned production of zinc and lead concentrates for the first five years of production at San Cristobal.  We anticipate selling the remainder of our production on a spot basis.

We have all necessary permits and approvals in hand in order to begin production at the project.

The San Cristobal mill is comprised of two principal sections: the first one includes crushing and grinding of ore, the second – conventional flotation, recovery and conditioning of three types of marketable concentrates which constitute the operation’s final products.  The concentrates are ultimately shipped by rail in sealed 21-tonne containers to the coast and on to a wide variety of smelters for final recovery of silver, zinc and lead.

The ore’s primary lead material is silver-rich galena (lead sulfide) and the primary zinc material is sphalerite (zinc sulfide).  Initially, the ore is fed into a primary crushing plant consisting of a gyratory crusher, overland conveyor and ancillary equipment.  As a result, the ore is reduced in size from approximately 40 inches to about 12 inches.  It is then fed into a SAG mill where water and some flotation reagents are added.  The SAG mill product is fed to the classification circuits and is equally split into two ball mill grinding circuits where the ore is ground to a size such that 80% of the particles are smaller than 104 microns.  A flash flotation circuit is installed within each classification section to liberate coarse galena, prevent over-grinding and enhance metal recovery.

 The ground ore exits the ball mill section and reports to the lead rougher/scavenger flotation circuit where a lead rougher concentrate is produced.  The concentrate is then reground and cleaned before reporting to column flotation from which the overflow is used to produce lead concentrates and the underflow - bulk concentrates.  Both types of concentrates undergo thickening and filtration to reduce moisture weight content to approximately 8% before the final product is shipped to the port.

 The tailings from lead rougher/scavenger circuits report to zinc rougher/scavenger flotation circuit where zinc sphalerite is separated.  The concentrate is reground and cleaned before reporting to column flotation from which the overflow is used to produce zinc concentrates which undergo thickening and filtration to reduce moisture weight content to approximately 8% before the final product is shipped to the port.  Tailing from zinc rougher/scavenger circuit reports to the zinc tailing thickener and ultimately to a tailings dump.  Process water from all thickening stages is recycled back into the mill.

Based upon the bankable-quality feasibility study completed by the independent engineering firm of Kvaerner (E&C Metals Division), San Cristobal is expected to be among the world’s largest producers of both silver and zinc.
 

The management of Apex Silver also strongly believes that in order to achieve success in developing a new project, a mining company must secure strong support from the local community. This support is best earned through a focused and long-term corporate commitment that produces measurable improvement in the social and economic well-being of the community members.  For further information on Apex Silver’s sustainable development practices, please view the video at the left and our Community Relations webpage.

This website also contains information about adjacent properties on which we have no right to explore or mine. We advise U.S. investors that the SEC's mining guidelines strictly prohibit information of this type in documents filed with the SEC. U.S. investors are cautioned that mineral deposits on adjacent properties are not indicative of mineral deposits on our properties.