UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR THE INDIVIDUAL
NOTES REPRESENTED HEREBY, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE
BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE
DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE
DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH
SUCCESSOR DEPOSITARY.

      UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

      THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS
ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A ADOPTED UNDER THE SECURITIES ACT)
OR (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE
TRANSACTION IN COMPLIANCE WITH REGULATION S ADOPTED UNDER THE SECURITIES ACT;
(2) AGREES THAT IT WILL NOT WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS
SECURITY RESELL OR OTHERWISE TRANSFER THE SECURITY EVIDENCED HEREBY OR THE
ORDINARY SHARES ISSUABLE UPON CONVERSION OF SUCH SECURITY, EXCEPT (A) TO THE
ISSUER OR A SUBSIDIARY THEREOF; (B) TO A QUALIFIED INSTITUTIONAL BUYER IN
COMPLIANCE WITH RULE 144A ADOPTED UNDER THE SECURITIES ACT (IF AVAILABLE); (C)
TO PERSONS OTHER THAN U.S. PERSONS OUTSIDE THE UNITED STATES IN COMPLIANCE WITH
REGULATION S UNDER THE SECURITIES ACT, (D) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 ADOPTED UNDER THE SECURITIES ACT OR ANOTHER
AVAILABLE EXEMPTION UNDER THE SECURITIES ACT (IF AVAILABLE), OR (E) PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT; AND (3) AGREES
THAT IT WILL, PRIOR TO ANY TRANSFER OF THIS SECURITY WITHIN TWO YEARS AFTER THE

                                       1
<PAGE>

ORIGINAL ISSUANCE OF THIS SECURITY, FURNISH TO THE TRUSTEE AND THE ISSUER SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS MAY BE REQUIRED PURSUANT
TO THE INDENTURE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS "OFFSHORE
TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM
BY REGULATION S UNDER THE SECURITIES ACT. IN ANY CASE, THE HOLDER HEREOF WILL
NOT, DIRECTLY OR INDIRECTLY, ENGAGE IN ANY HEDGING TRANSACTION WITH REGARD TO
THIS SECURITY OR ANY COMMON STOCK ISSUABLE UPON CONVERSION OF SUCH SECURITY,
EXCEPT AS PERMITTED BY THE SECURITIES ACT.

      THE FOREGOING LEGEND MAY BE REMOVED FROM THIS SECURITY ON SATISFACTION OF
THE CONDITIONS SPECIFIED IN THE INDENTURE.


                                       2
<PAGE>

                            APEX SILVER MINES LIMITED
               4.0% Convertible Senior Subordinated Note due 2024

No. A-1                                                        CUSIP:  03760XAC5
Issue Date:  December 14, 2004                    Principal Amount:  $39,987,000
Issue Price:  $1,000.00
(for each $1,000 Principal Amount)

      APEX SILVER MINES LIMITED, a Cayman Islands company, promises to pay to
Cede & Co. or registered assigns, on September 15, 2024, the Principal Amount of
this Security. This Security is issued with a Principal Amount of THIRTY-NINE
MILLION NINE HUNDRED EIGHTY-SEVEN THOUSAND DOLLARS ($39,987,000).

      This Security shall not bear interest except as specified on the other
side of this Security. This Security is convertible as specified on the other
side of this Security.

      Additional provisions of this Security are set forth on the other side of
this Security.

                                       3
<PAGE>

      IN WITNESS WHEREOF, the Company has caused this Note to be duly executed.


Dated:    December 14, 2004
                                                     APEX SILVER MINES LIMITED

                                                  By: /s/
                                                     ---------------------------
                                                     Name:
                                                     Title:






TRUSTEE'S CERTIFICATE
OF AUTHENTICATION

BANK OF NEW YORK,
as Trustee,
certifies that
this is one of
the Securities
referred to in
the within-mentioned
Indenture.


By:  /s/
     -----------------------
     Authorized Officer

Dated:    December 14, 2004


                                       4
<PAGE>

               4.0% Convertible Senior Subordinated Note due 2024

1. Interest.

      The Company promises to pay interest in cash on the Principal Amount of
this Security at the rate of 4.0% per year from the Issue Date, or from the most
recent date to which interest has been paid or provided for, until the Stated
Maturity. During such period, the Company will pay interest semiannually in
arrears on each Interest Payment Date to Holders of record at the close of
business on each Regular Record Date immediately preceding such Interest Payment
Date. Each payment of interest on the Securities will include interest accrued
through the day immediately preceding the most recent Interest Payment Date (or
the Repurchase Date, Redemption Date, the Fundamental Change Redemption Date or,
in certain circumstances, the Conversion Date, as the case may be). Any payment
required to be made on any day that is not a Business Day will be made on the
next succeeding Business Day. The interest rate will be calculated using a
360-day year composed of twelve 30-day months.

      Interest on any Security that is payable, and is punctually paid or duly
provided for, on any Interest Payment Date shall be paid to the person in whose
name that Security is registered at the close of business on the Regular Record
Date for such interest at the office or agency of the Company maintained for
such purpose. Each installment of interest on any Security shall be paid in
same-day funds by transfer to an account maintained by the payee located inside
the United States.

2. Method of Payment.

      Subject to the terms and conditions of the Indenture, the Company will
make payments in respect of Principal Amount, Redemption Prices, Make-Whole
Payments, Repurchase Prices, Fundamental Change Redemption Prices and at Stated
Maturity to Holders who surrender Securities to a Paying Agent to collect such
payments in respect of the Securities. In addition, the Company will pay
interest from the Issue Date until Stated Maturity, as more fully described in
paragraph 1 hereof. The Company will pay any cash amounts in money of the United
States that at the time of payment is legal tender for payment of public and
private debts. However, the Company may make such cash payments by check payable
in such money.

3. Paying Agent, Conversion Agent, Registrar and Calculation Agent.

      Initially, The Bank of New York (the "Trustee") will act as Paying Agent,
Conversion Agent, Registrar and Calculation Agent. The Company may appoint and
change any Paying Agent, Conversion Agent, Registrar, co-registrar or
Calculation Agent without notice, other than notice to the Trustee except that
the Company will maintain at least one Paying Agent in the State of New York,
City of New York, Borough of Manhattan, which shall initially be an office or
agency of the Trustee. The Company or any of its Subsidiaries or any of their
Affiliates may act as Paying Agent, Conversion Agent, Registrar, co-registrar or
Calculation Agent.


                                       5
<PAGE>

4. Indenture.

      The Company issued the Securities pursuant to an Indenture dated as of
October 15, 2004 (the "Indenture"), between the Company and the Trustee. The
terms of the Securities include those stated in the Indenture and those made
part of the Indenture by reference to the Securities themselves and the Trust
Indenture Act of 1939, as in effect from time to time (the "TIA"). Capitalized
terms used herein and not defined herein have the meanings ascribed thereto in
the Indenture. The Securities are subject to all such terms, and Securityholders
are referred to the Indenture and the TIA for a statement of those terms.

      The Securities are unsecured obligations of the Company limited to
$100,000,000 aggregate Principal Amount (subject to Sections 2.07 and 2.14 of
the Indenture) and rank (i) subordinate in right of payment to future
unsubordinated indebtedness for the construction and development of the San
Cristobal Project which will be secured by the San Cristobal property and other
project assets or other assets, (ii) subordinate in right of payment to any
guarantee of the indebtedness described in (i) by the Company or its Affiliates
for the period the guarantee is in effect, and (iii) equal in right of payment
to all other existing and future unsecured and unsubordinated indebtedness of
the Company.

      The Company may, without the consent of the Holders of the Securities,
increase the Principal Amount of the Securities by issuing additional notes in
the future on the same terms and conditions, except for any differences in the
issue price and interest accrued prior to the issue date of the additional
notes, and with the same CUSIP number as the Securities. The Securities and any
additional notes would rank equally and ratably and would be treated as a single
class for all purposes under the Indenture. No additional notes may be issued if
any Event of Default has occurred with respect to the Securities. The Indenture
does not limit other indebtedness of the Company, secured or unsecured.

5.       Provisional Redemption.

      No sinking fund is provided for the Securities.

      The Company may redeem for cash any portion of the Securities at any time
prior to September 15, 2014 upon at least 30 days and not more than 60 days'
notice by mail to the Holders of the Securities, at a Redemption Price equal to
100% of the Principal Amount of the Securities to be redeemed plus accrued and
unpaid interest and the Make-Whole Payment, if (1) the Closing Sale Price of the
Ordinary Shares has exceeded 140% of the then applicable Conversion Price for at
least 20 trading days in any consecutive 30-day trading period ending on the
trading day prior to the mailing of the notice of redemption and (2) the shelf
registration statement covering resales of the Securities and the Ordinary
Shares is effective and available for use and is expected to remain effective
and available for use for the 30 days following the Redemption Date, unless
registration is no longer required. The Make-Whole Payment on the redeemed
Securities will equal $396.67 per $1,000 Principal Amount of Securities, minus
the amount of any interest actually paid or accrued and unpaid on the Securities
prior to the Redemption Date. The Company will make Make-Whole Payments on all
Securities called for redemption prior to September 15, 2014, including


                                       6
<PAGE>

Securities converted after the date the Company mailed the notice. The Company
may make Make-Whole Payments, at its option, either in cash or in Ordinary
Shares or a combination thereof. The Company will specify the type of
consideration for the Make-Whole Payment in the Redemption Notice (appropriately
adjusted to take into account the occurrence of certain events that would result
in an adjustment of the Conversion Rate with respect to the Ordinary Shares).
Payments made in Ordinary Shares will be valued at 95% of the average of the
closing sales prices of Ordinary Shares for the five consecutive trading days
ending on the third trading day prior to the Redemption Date. Because the sale
price of Ordinary Shares will be determined before the Redemption Date, if the
Company specifies that it will make payment of the Redemption Price in Ordinary
Shares, Holders of Securities bear the market risk that Ordinary Shares will
decline in value between the date the sale price is calculated and the
Redemption Date.

6. Optional Redemption.

      Beginning on September 15, 2014, the Company may redeem the Securities for
cash, as a whole or from time to time in part at the option of the Company at a
Redemption Price equal to 100% of the Principal Amount plus accrued and unpaid
interest, if any, to but not including the Repurchase Date. The Company will
give no less than 30 days or more than 60 days notice of redemption by mail to
Holders of Securities.

7. Purchase by the Company at the Option of the Holder.

      Subject to the terms and conditions of the Indenture, the Company shall
become obligated to purchase, at the option of the Holder, the Securities held
by such Holder on September 15, 2014 and September 15, 2019 at a Repurchase
Price equal to 100% of the Principal Amount of such Securities on the applicable
Repurchase Date plus accrued and unpaid interest, if any, to but not including
the Repurchase Date, upon delivery of a Repurchase Notice containing the
information set forth in the Indenture, at any time from the opening of business
on the date that is 25 Business Days prior to such Repurchase Date until the
close of business on the third Business Day prior to such Repurchase Date and
upon delivery of the Securities to the Paying Agent by the Holder as set forth
in the Indenture.

      The Repurchase Price may be paid, at the option of the Company, in cash or
by the issuance and delivery of Ordinary Shares of the Company, or in any
combination thereof in accordance with the Indenture. If the Company elects to
pay the Repurchase Price, in whole or in part, in Ordinary Shares, the number of
shares to be delivered in exchange for the portion of the Repurchase Price to be
paid in Ordinary Shares will be equal to that portion of the Repurchase Price
divided by 95% of the average closing sale price of Ordinary Shares for the five
trading days ending on the third business day prior to the applicable Repurchase
Date (appropriately adjusted to take into account the occurrence of certain
events that would result in an adjustment of the conversion rate with respect to
Ordinary Shares). The Company will not, however, deliver fractional shares in
repurchases using Ordinary Shares as consideration. Securityholders who would
otherwise be entitled to receive fractional shares will instead receive cash in
an amount equal to the market price of an Ordinary Share multiplied by such
fraction.

      At the option of the Holder and subject to the terms and conditions of the
Indenture, the Company shall become obligated to purchase all or a portion of
the Securities in integral multiples of $1,000 Principal Amount held by such
Holder no later than 30 days after the Fundamental Change Notice of the Company
for a Fundamental Change Redemption Price equal to 100% of the Principal Amount
of such Securities plus accrued and unpaid interest, if any, to but not
including the Fundamental Change Redemption Date, which Fundamental Change
Redemption Price shall be paid in cash.


                                       7
<PAGE>

      A third party may make the offer and purchase of the Securities in lieu of
the Company in accordance with the Indenture.

      Holders have the right to withdraw any Repurchase Notice or Fundamental
Change Redemption Notice, as the case may be, by delivering to the Paying Agent
a written notice of withdrawal in accordance with the provisions of the
Indenture.

      If cash (and/or securities if permitted under the Indenture) sufficient to
pay the Repurchase Price or Fundamental Change Redemption Price, as the case may
be, of all Securities or portions thereof to be purchased as of the Repurchase
Date or the Fundamental Change Redemption Date, as the case may be, is deposited
with the Paying Agent on the Business Day following the Repurchase Date or the
Fundamental Change Redemption Date, as the case may be, interest, if any, shall
cease to accrue on such Securities (or portions thereof) on such Repurchase Date
or Fundamental Change Redemption Date, as the case may be, and the Holder
thereof shall have no other rights as such (other than the right to receive the
Repurchase Price or Fundamental Change Redemption Price, as the case may be, if
any, upon surrender of such Security).

8. Notice of Redemption.

      Notice of redemption will be mailed at least 30 days but not more than 60
days before the Redemption Date to each Holder of Securities to be redeemed at
the Holder's registered address. If money and/or Ordinary Shares (if permitted
under the Indenture) sufficient to pay the Redemption Price of, and accrued and
unpaid interest, if any, with respect to, all Securities (or portions thereof)
to be redeemed on the Redemption Date is deposited with the Paying Agent prior
to or on the Redemption Date, on such Redemption Date, interest, if any, shall
cease to accrue on such Securities or portions thereof. Securities in
denominations larger than $1,000 of Principal Amount may be redeemed in part but
only in integral multiples of $1,000 of Principal Amount.

9. Conversion.

      Conversion Based on Ordinary Shares Price. Subject to the provisions of
this paragraph 9 and notwithstanding the fact that any other condition to
conversion described below has not been satisfied, Holders may convert the
Securities into Ordinary Shares on a Conversion Date (1) in any fiscal quarter
commencing prior to September 15, 2019 if the Closing Sale Price of the Ordinary
Shares for at least 20 trading days in a period of 30 consecutive trading days
ending on the last trading day of such preceding fiscal quarter is greater than
the conversion trigger price per share and (2) after September 15, 2019 and
prior to Stated Maturity, if the Closing Sale Price of the Ordinary Shares is
greater than or equal to the conversion trigger price per share on any day after
September 15, 2019. The "conversion trigger price" for any fiscal quarter shall
be 120% of the Conversion Price per share of Ordinary Shares on the last trading
day of such preceding fiscal quarter. If either of the foregoing conditions is
satisfied, then the Securities will be convertible at any time of the option of
the Holder, through their maturity.


                                       8
<PAGE>

      Conversion Based on Trading Price of Securities. Subject to the provisions
of this paragraph 9 and notwithstanding the fact that any other condition to
conversion described below has not been satisfied, Holders may convert the
Securities into Ordinary Shares during the five Business Day period after any
five consecutive trading day period in which the Trading Price per $1,000
Principal Amount of the Securities for each day of such five day period was less
than 98% of the product of the Closing Sale Price on the applicable date and the
number of Ordinary Shares issuable upon conversion of $1,000 Principal Amount of
the Securities.

      The "Trading Price" means, on any date, the average of the secondary
market bid quotations for the Securities obtained by the Trustee for $5,000,000
Principal Amount of Securities at approximately 3:30 p.m., New York City time,
on such date from three independent nationally recognized securities dealers
selected by the Company; provided that if at least three such bids cannot
reasonably be obtained by the Trustee, but two bids are obtained, then the
average of the two bids shall be used, and if only one such bid can reasonably
be obtained by the Trustee, one bid shall be used; and provided further that if
the Trustee cannot reasonably obtain at least one bid for $5,000,000 Principal
Amount of Securities from a nationally recognized securities dealer, then the
Trading Price per $1,000 Principal Amount of Securities shall be deemed to be
less than 98% of the product of (a) the number of Ordinary Shares issuable upon
conversion of $1,000 Principal Amount of Securities and (b) the Closing Sale
Price on such date.

      The Trustee (or other conversion agent appointed by the Company) shall
have no obligation to determine the Trading Price unless the Company has
requested such a determination; and the Company shall have no obligation to make
such request unless a Holder provides it with reasonable evidence that the
Trading Price per $1,000 Principal Amount of Securities would be less than 98%
of the product of the Closing Sale Price of Ordinary Shares and the number of
Ordinary Shares issuable upon conversion of $1,000 Principal Amount of
Securities. If such evidence is provided, the Company shall instruct the Trustee
(or other conversion agent) to determine the Trading Price of the Securities
beginning on the next trading day and on each successive trading day until the
Trading Price per $1,000 Principal Amount of Securities is greater than 98% of
the product of the Closing Sale Price and the number of shares issuable upon
conversion of $1,000 Principal Amount of the Securities.

      Conversion Upon Redemption. Subject to the provisions of this paragraph 9
and notwithstanding the fact that any other condition described herein to
conversion has not been satisfied, a Holder may convert into Ordinary Shares a
Security or portion of a Security which has been called for redemption pursuant
to paragraph 6 hereof, provided such Securities are surrendered for conversion
prior to the close of business on the second Business Day immediately preceding
the Redemption Date.

      Conversion Upon Occurrence of Certain Corporate Transactions. Subject to
the provisions of this paragraph 9 and notwithstanding the fact that any other
condition described herein to conversion has not been satisfied, in the event
the Company is a party to a consolidation, merger or binding share exchange
pursuant to which the Ordinary Shares would be converted into cash, securities
or other property as set forth in Section 10.15 of the Indenture, the Securities
may be surrendered for conversion at any time from and after the date which is
15 days prior to the date announced by the Company as the anticipated effective
time until 15 days after the actual effective date of such transaction, and at

                                       9
<PAGE>

the effective time of such transaction the right to convert a Security into
Ordinary Shares will be deemed to have changed into a right to convert it into
the kind and amount of cash, securities or other property which the holder would
have received if the holder had converted its Security into Ordinary Shares
immediately prior to the transaction. If such transaction also constitutes a
Fundamental Change, a Holder will be able to require the Company to redeem all
or a portion of such Holder's Securities pursuant to Paragraph 7 hereof and
Section 3.14 of the Indenture. In addition, if such transaction constitutes a
Fundamental Change, the Securities will cease to be convertible after the 15th
day following the actual effective date of the transaction giving rise to such
Fundamental Change.

      A Security in respect of which a Holder has delivered a Repurchase Notice
or Fundamental Change Redemption Notice exercising the option of such Holder to
require the Company to purchase such Security may be converted only if such
notice of exercise is withdrawn in accordance with the terms of the Indenture.

      The initial Conversion Rate is 34.9406 Ordinary Shares per $1,000
Principal Amount of each Security, subject to adjustment for certain events
described in the Indenture. The Company will deliver cash or a check in lieu of
any fractional Ordinary Share. The ability to surrender Securities for
conversion will expire at the close of business on September 15, 2024.

      To exercise its conversion right, a Holder must (1) complete and manually
sign the conversion notice (or complete and manually sign a facsimile of such
notice) and deliver such notice to the Conversion Agent, (2) surrender the
Security to the Conversion Agent, (3) furnish appropriate endorsements and
transfer documents if required by the Conversion Agent, the Company or the
Trustee and (4) pay any transfer or similar taxes, if required.

      A Holder may convert a portion of a Security if the Principal Amount of
such portion is $1,000 or an integral multiple of $1,000. No payment or
adjustment will be made for dividends on the Ordinary Shares except as provided
in the Indenture.

      The Conversion Rate will be adjusted for dividends or distributions on
Ordinary Shares payable in Ordinary Shares or other Capital Stock of the
Company; subdivisions, combinations or certain reclassifications of Ordinary
Shares; distributions to all holders of Ordinary Shares of certain rights to
purchase Ordinary Shares for a period expiring within 60 days of the record date
for such distribution at less than the Closing Sale Price of the Ordinary Shares
at the Time of Determination; distributions to such holders of assets (including
cash and Capital Stock of a Subsidiary) or debt or other securities of the
Company or certain rights to purchase securities of the Company; a tender or
exchange offer by the Company or any Subsidiary for the Ordinary Shares to the
extent that the cash and value of any other consideration included in the
payment per share of Ordinary Shares exceeds the current market price per share
of Ordinary Shares on the trading day next succeeding the Expiration Time.
However, no adjustment need be made if Securityholders may participate in the
transaction or in certain other cases. The Company from time to time may
voluntarily increase the Conversion Rate.


                                       10
<PAGE>

      Subject to Sections 10.22 and 10.23 of the Indenture, if the Company is a
party to a consolidation, merger or binding share exchange or a transfer of all
or substantially all of its assets, or upon certain distributions described in
the Indenture, the right to convert a Security into Ordinary Shares may be
changed into a right to convert it into securities, cash or other assets of the
Company or another person.

      The Conversion Rate will not be adjusted for accrued and unpaid interest.
Upon conversion, a holder will not receive any cash payment of interest (unless
such conversion occurs between a regular Record Date and the interest payment
date to which it relates). Instead, accrued and unpaid interest will be deemed
to be paid in full by the Ordinary Shares received by the Holder on conversion.

      Conversion After a Public Acquirer Change of Control. In the event of a
Public Acquirer Change of Control, the Company may, in lieu of increasing the
Conversion Rate by the Additional Ordinary Shares pursuant to Section 10.23 of
the Indenture, elect to adjust the Conversion Rate such that from and after the
Effective Date of such Public Acquirer Change of Control, Holders of the
Securities will be entitled to convert their Securities into a number of shares
of Public Acquirer Common Stock by adjusting the Conversion Rate in effect
immediately before the Public Acquirer Change of Control by multiplying it by a
fraction, the numerator of which will be (i) in the case of a share exchange,
consolidation, merger or binding share exchange, pursuant to which the Ordinary
Shares are converted into cash, securities or other property, the average value
of all cash and any other consideration (as determined by the Board of
Directors) paid or payable per Ordinary Share or (ii) in the case of any other
Public Acquirer Change of Control, the average of the Closing Sale Price of the
Ordinary Shares for the five consecutive trading days prior to but excluding the
Effective Date of such Public Acquirer Change of Control, and the denominator of
which will be the average of the Closing Sale Price of the Public Acquirer
Common Stock for the five consecutive Trading Days commencing on the Trading Day
next succeeding the effective date of such Public Acquirer Change of Control.

      Adjustment for Conversion Upon a Cash Take-Over Transaction. If a Holder
elects to convert Securities in connection with a Fundamental Change referred to
in clause (iii) of Section 3.14 of the Indenture pursuant to which 10% or more
of the consideration for the Ordinary Shares (excluding cash payments for
fractional shares and cash payments made in respect of dissenters' appraisal
rights) in the transaction or transactions otherwise constituting the
Fundamental Change does not consist of shares of Publicly Traded Securities (a
"Cash Take-Over Transaction"), the Company will increase the number of Ordinary
Shares issuable upon conversion of the Securities by a number of additional
Ordinary Shares (the "Additional Ordinary Shares") as set forth in Section
10.23(b) of the Indenture. The number of Additional Ordinary Shares should be
determined by reference to Section 10.23(b) of the Indenture, based on the date
on which the Cash Take-Over Transaction becomes effective (the "Effective Date")
and the price (the "Stock Price") paid per share for the Ordinary Shares in the
Cash Take-Over Transaction. If shareholders of Ordinary Shares receive only cash
in the Cash Take-Over Transaction, the Stock Price shall be the cash amount paid
per share. Otherwise, the Stock Price shall be the average of the Closing Sale
Price of the Ordinary Shares on the five trading-days prior to but not including
the Effective Date of such Cash Take-Over Transaction.


                                       11
<PAGE>

10. Conversion Arrangement on Call for Redemption.

      Any Securities called for redemption, unless surrendered for conversion
before the close of business on the Redemption Date, may be deemed to be
purchased from the Holders of such Securities at an amount not less than the
Redemption Price and Make-Whole Payments, if applicable, by one or more
investment bankers or other purchasers who may agree with the Company to
purchase such Securities from the Holders, to convert them into Ordinary Shares
of the Company and to make payment for such Securities to the Trustee in trust
for such Holders.

11.      Defaulted Interest.

      Except as otherwise specified with respect to the Securities, any
Defaulted Interest on any Security shall forthwith cease to be payable to the
registered Holder thereof on the relevant Regular Record Date or accrual date,
as the case may be, by virtue of having been such Holder, and such Defaulted
Interest may be paid by the Company as provided for in Section 11.02 of the
Indenture.

12. Denominations; Transfer; Exchange.

      The Securities are in fully registered form, without coupons, in
denominations of $1,000 of Principal Amount and integral multiples of $1,000. A
Holder may transfer or exchange Securities in accordance with the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay any taxes and fees required by
law or permitted by the Indenture. The Registrar need not transfer or exchange
any Securities selected for redemption (except, in the case of a Security to be
redeemed in part, the portion of the Security not to be redeemed) or any
Securities in respect of which a Repurchase Notice or Fundamental Change
Redemption Notice has been given and not withdrawn (except, in the case of a
Security to be purchased in part, the portion of the Security not to be
purchased) or any Securities for a period of 15 days before the mailing of a
notice of redemption of Securities to be redeemed.

13. Persons Deemed Owners.

         The registered Holder of this Security may be treated as the owner of
this Security for all purposes.

14. Unclaimed Money or Securities.

      The Trustee and the Paying Agent shall return to the Company upon written
request any money or securities held by them for the payment of any amount with
respect to the Securities that remains unclaimed for two years, subject to
applicable unclaimed property laws. After return to the Company, as the case may
be, Holders entitled to the money or securities must look to the Company for
payment as general creditors unless an applicable abandoned property law
designates another person.


                                       12
<PAGE>

15. Amendment; Waiver.

      Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Securities may be amended with the written consent of the
Holders of at least a majority in aggregate Principal Amount of the Securities
at the time outstanding and (ii) certain Defaults may be waived with the written
consent of the Holders of a majority in aggregate Principal Amount of the
Securities at the time outstanding. Subject to certain exceptions set forth in
the Indenture, without the consent of any Securityholder, the Company and the
Trustee may amend the Indenture or the Securities to cure any ambiguity,
omission, defect or inconsistency, or to comply with Article 5 or Section 10.15
of the Indenture, to secure the Company's obligations under this Security or to
add to the Company's covenants for the benefit of the Securityholders or to
surrender any right or power conferred, in exchange for Holders agreeing to
waive their right to require the Company to purchase all or a portion of their
Securities on a specified Repurchase Date, to add additional Repurchase Dates on
which Holders may require the Company to purchase all or a portion of their
Securities at the applicable Repurchase Price and, in addition, to pay such
Holders additional cash payments in connection therewith, to comply with any
requirement of the SEC in connection with the qualification of the Indenture
under the TIA, or as necessary in connection with the registration of the
Securities under the Securities Act or to make any change that does not
adversely affect the rights of any Holders.

16. Defaults and Remedies.

      Under the Indenture, Events of Default include (i) the Company defaults in
payment of interest when due under the Securities and such default continues for
30 days; (ii) default in payment of the Principal Amount, Redemption Price,
Make-Whole Payment, Repurchase Price or Fundamental Change Redemption Price, as
the case may be, in respect of the Securities when the same becomes due and
payable; (iii) failure by the Company to comply with other agreements in the
Indenture or the Securities, other than those referred to in clauses (i) and
(ii) above, subject to notice and lapse of time; (iv) certain events of
bankruptcy or insolvency affecting the Company or certain of its subsidiaries;
and (v) any Pledge Agreement shall cease to be in full force and effect or
enforceable, other than in accordance with its terms, or fails to give the
Trustee the liens, rights, powers and privileges purported to be created
thereby. A Default under clause (iii) above is not an Event of Default until the
Trustee notifies the Company, or the Holders of at least 25% in aggregate
Principal Amount of the Securities at the time outstanding notify the Company
and the Trustee, of the Default and the Company does not cure such Default (and
such Default is not waived) within the time specified in the Indenture after
actual receipt of such notice.

      Securityholders may not enforce the Indenture or the Securities except as
provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Securities unless it receives indemnity or security reasonably satisfactory
to it. Subject to certain limitations, Holders of a majority in aggregate
Principal Amount of the Securities at the time outstanding may direct the
Trustee in its exercise of any trust or power. The Trustee may withhold from
Securityholders notice of any continuing Default (except a Default in payment of
amounts specified in clause (i) or (ii) above) if it determines that withholding
notice is in their interests.


                                       13
<PAGE>

17. Trustee Dealings with the Company.

      Subject to certain limitations imposed by the TIA, the Trustee under the
Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with and collect obligations owed
to it by the Company or its Affiliates and may otherwise deal with the Company
or their Affiliates with the same rights it would have if it were not Trustee.

18. No Recourse Against Others.

      A director, officer, employee, agent, representative, stockholder or
equity holder, as such, of the Company shall not have any liability for any
obligations of the Company under the Securities or the Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Security, each Securityholder shall waive and release
all such liability. The waiver and release shall be part of the consideration
for the issue of the Securities.

19. Authentication.

      This Security shall not be valid until an authorized signatory of the
Trustee manually signs the Trustee's Certificate of Authentication on the other
side of this Security.

20. Abbreviations.

      Customary abbreviations may be used in the name of a Securityholder or an
assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with right of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).

21. GOVERNING LAW.

      THE LAW OF THE STATE OF NEW YORK SHALL GOVERN THE INDENTURE AND THIS
SECURITY.

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


                                       14
<PAGE>

The Company will furnish to any Securityholder upon written request and without
charge a copy of the Indenture that has in it the text of this Security in
larger type. Requests may be made to:

                  APEX SILVER MINES LIMITED
                  c/o Apex Silver Mines Corporation
                  1700 Lincoln Street
                  Suite 3050
                  Denver, Colorado 80203

                                       15
<PAGE>

                                 ASSIGNMENT FORM

To assign this Security,
fill in the form below:

I or we assign and
transfer this Security to

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

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

(Insert assignee's soc. sec. or tax ID no.)

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

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

------------------------------------
(Print or type assignee's name, address
and zip code)

and irrevocably appoint

__________________ agent to transfer
this Security on the books of the
Company. The agent may substitute
another to act for him.

                                CONVERSION NOTICE

To convert this Security into Ordinary Shares of the Company, check the box:

                                      |_|

To convert only part of this Security, state the Principal Amount to be
converted (which must be $1,000 or an integral multiple of $1,000):

$-----------------------------------

If you want the stock certificate made out in another person's name, fill in the
form below:

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

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

(Insert other person's soc. sec. or tax ID no.)

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

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

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

------------------------------------
(Print or type other person's name, address and zip code)


                                       16
<PAGE>


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

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

Date:  _____________________  Your Signature:___________________________________

------------------------------------------------------------------------------
     (Sign exactly as your name appears on the other side of this Security)


                                       17