APEX MINING CO., INC.
May 2, 2011

PHILIPPINE STOCK EXCHANGE, INC. Disclosure Department Tower One and Exchange Plaza Ayala Triangle, Ayala Avenue Makati City Attention: Ms. Janet Encarnacion Head, Disclosure Dept.

Dear Ms. Encarnacion: We are submitting herewith SEC Form 17-A for the year ended December 31, 2010.

Very truly yours,

ROSANNA A. PARICA Corporate Information Officer

Head Office: Unit 1704 17th Floor, Prestige Tower Condominium, F. Ortigas Jr. Road, Ortigas Center , Pasig City 1605 Tel. Nos.: 706-2805/706-2806 * Fax No.: 706-2804 Minesite: Maco, Compostela Valley

COVER SHEET
4 0 6 2 1
S.E.C. Registration Number

A P E X

M I

N I N G

C O .

I

N

C

.

(Company's Full Name)

1 7 T H F. O R T I

F L OOR G A S J R

P R E S T R D

I

G

E

T O W E R P A S I G C I T Y

O R TI GA S

(Business Address: No. Street City/Town//Province)

ROSANNA A. PARICA
Contact Person

706-2805
Company Telephone Number

1 2
Month

3 1
Day

SEC Form 17-A
FORM TYPE

0 6
Month

3 0
Day

Fiscal Year

Annual Meeting

Secondary License Type, If Applicable

Dept. Requiring this Doc.

Amended Articles Number/Section

Total Amount of Borrowings

of Stockholders

Domestic

Foreign

To be accomplished by SEC Personnel concerned

File Number

LCU

Document I.D. Cashier

STAMPS

ck ink for scanning purposes

SECURITIES AND EXCHANGE COMMISSION SEC FORM 17-A ANNUAL REPORT PURSUANT TO SECTION 17 OFTHE SECURITIES REGULATION CODE AND SECTION 141 OF CORPORATION CODE OF THE PHILIPPINES 1. 2. 3. 4. 5. For the calendar year ended December 31, 2010 SEC Identification Number 40621 BIR Tax Identification No. 000-284-138 Exact Name of issuer as specified in its charter: Apex Mining Co., Inc. Philippines Province, Country or other jurisdiction of incorporation or organization 6. (SEC Use Only) Industry Classification Code Unit 1704 17th Floor, Prestige Tower Cond., F. Ortigas Jr. Road, Ortigas Center, Pasig City 1605 Address of principal office : Postal Code (632) 7062805/7062806 Issuer’s telephone number, including area code Not Applicable Former name, former address, and former fiscal year, if changed since last report Securities registered pursuant to Sections 8 and 12 of the SRC, or Sec. 4 & 8 of the RSA Number of Shares of Common Stock Outstanding or Amount of Debt Outstanding 800,116,953 515,532,610 :

7.

8.

9.

10.

Title of Each Class Class A Class B 11.

Are any or all of these securities listed on the Philippine Stock Exchange? Yes [X] No [ ] Philippine Stock Exchange 756,918,238 shares (Php1.00 per share par value)

12.

Check whether the issuer: a.) has filed all reports to be filed by Section 17 of the SRC and SRC Rule 17.1 thereunder or Section 11 of the Revised Securities Act (RSA) and RSA Rule 11(a)-1 thereunder and Sections 26 and 141 of The Corporation Code of the Philippines during the preceding 12 months (or for such shorter period that the registrant was required to file such reports.) Yes [X] No [ ]

b) has been subject to such filing requirements for the past 90 days. Yes [ ] 13. 14. Not Applicable Not Applicable No [ X ]

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PART 1 Item 1. Business

BUSINESS AND GENERAL INFORMATION

Corporate Profile Apex Mining Co., Inc. (the “Company”) was incorporated and registered with the Philippine Securities and Exchange Commission (SEC) on February 26, 1970 primarily to carry on the business of mining, milling, concentrating, converting, smelting, treating, preparing for market, manufacturing, buying, selling, exchanging and otherwise producing and dealing in gold, silver, copper, lead, zinc brass, iron, steel and all kinds of ores, metals and minerals. On March 7, 1974, the Company listed its shares in the Philippine Stock Exchange (PSE) and attained status of being a public company on the same date. The Company is considered a public company under Rule 3.1 of the Implementing Rules and Regulations of the Securities Regulation Code, which, among others, defines a public corporation as any corporation with assets of at least P50 million and having 200 or more shareholders, each of which holds at least 100 shares of its equity securities. As of December 31, 2009, the Company has 2,883 shareholders (2008 - 2,900) each holding at least 100 shares. On August 24, 2005, Crew Gold Corporation (Crew Gold), an entity incorporated and doing business in Canada, and its associated Philippine company, Mapula Creek Gold Corporation (Mapula), acquired 28.03% and 44.88% of the Company’s shares, respectively, by virtue of the Share Purchase Agreement (SPA) entered into by both Crew Gold and Mapula with the previous majority shareholder (Puyat Group). The SPA involved the sale and transfer of a total of 549,966,524 shares (including 459,524,591 of the unlisted shares) for $6.6 million. Pursuant to the SPA, the Puyat Group divested fully its shareholdings in the Company. The SPA also provides, among others, the termination of all existing mine operating agreements of the Company. In relation thereof, on December 23, 2005, Crew Gold and PJS Investment Corporation, an entity owned by the Puyat Group, agreed that certain liabilities as of December 31, 2005 amounting to P83.2 million be assigned to the latter in order to facilitate the investment of Crew Gold into the Company. In October 2009, Crew Gold completed its divestment in the local mining industry and sold its equity share in the Company, as well as to local affiliates including Teresa Crew Gold (Philippines), Inc. (Teresa) and Mapula to Mindanao Gold Ltd. (Mindanao Gold), an entity incorporated and registered in Malaysia. As of December 31, 2009, the Company’s majority shareholder is Mapula Creek a Philippine incorporated company. On December 22, 2005, the Mines and Geosciences Bureau (MGB) approved the Company’s Mineral Production Sharing Agreement (MPSA) covering 679.02 hectares situated in Maco, Compostela Valley. On June 25, 2007, MGB approved the Company’s second MPSA covering an additional 1,558.5 hectares near the same area. On December 17, 2008, the Company entered into a service contract with local cooperatives composed of the indigenous people and local government units of Masara lines to explore the Sagaysagay vein discovered within the area of its second MPSA. The Company was registered with the Board of Investments (BOI) on July 11, 2008 as a new producer of gold, silver bullion, copper concentrates with gold, silver, zinc and lead values on a non-pioneer status under the 1987 Omnibus Investment Code. Under this registration, the Company is entitled to certain fiscal and non-fiscal incentives including four (4) year income tax holiday from start of commercial operations, which can be further extended for another three (3) years subject to compliance with certain conditions, simplified customs procedures, additional deduction for labor expense, and unrestricted use of consigned equipment for a period of ten (10) years. The Company is required to maintain a base equity of at least 25% upon start of commercial operations as one of the conditions of the registration. On January 1, 2009, the Company commenced commercial operations after achieving target production volume requirements. As of December 31, 2009, the Company is compliant with the provisions specified in its registration.

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The Company’s registered business address is at Unit 1704 17th Flr. Prestige Tower Cond., F. Ortigas Jr. Rd., Ortigas Center, Pasig City. The Company currently operates the Maco Mines in Maco, Compostela Valley, Davao. On October 13, 2010, the SEC approved the increase in capital stock of the Company from P800.00 million consisting of 800.00 million common shares, divided into 480.00 Class “A” shares and 320.00 million Class “B” shares, with a par value of P1.00 each to P2.80 billion consisting of 2.80 billion common shares divided into 1.68 billion Class “A” shares and 1.12 billion Class “B” shares, with a par value of P1.00 each. Of the increase in capital stock of P2.00 billion consisting of 2.00 billion common shares divided into 1.20 billion Class “A” shares and 800.00 million Class “B” shares, the amount of P560.94 million consisting of 560.94 million common shares was fully subscribed and paid for as follows: • Conversion of Company’s advances from Mapula in the amount of P1.26 billion, in exchange for 341.14 billion Class “A” shares with a par value of P1.00 per share, at an issue value of P3.70 per shares or an aggregate issue value of P1.26 billion. Conversion of Company’s advances from Mindanao Gold in the amount of P813.26 million, in exchange for 219.80 million Class “B” shares with a par value ofP1.00 per share at an issue value of P3.70 per share or an aggregate issue value of P813.26 million.

•

Share premium resulting from restructuring amounted to P1.50 billion, net of P15.40 million professional fees and other incidental costs incurred in relation to the transaction.
Products/Sales The Company’s mine produces bullion containing gold and silver. All of the mine’s production is smelted in Metalor refinery in Switzerland. The Company’s sales revenues for the year 2010 were from gold bullion shipments made to Metalor.

Sources of Materials and Supplies The Company’s ore production comes primarily from the Company’s mineral properties in Maco Equipment and maintenance parts and operating supplies are provided by a number of suppliers both domestic and foreign on competitive basis. Energy is primarily sourced from the Power Sector Assets and Liabilities Management Corporation under a long-term contract for the supply of electricity

Employees The total manpower of the Company as of December 31, 2010 consists of 769 full-time regular employees, as follows: Operations Finance(Accounting and Treasury) Administration Pasig Corporate Head Office Total 545 20 365 4 934

Mining Properties / Royalty Agreements On December 22, 2005, the Mines and Geosciences Bureau (MGB) approved the Company’s Mineral Production Sharing Agreement (MPSA) covering 679.02 hectares situated in Maco, Compostela Valley. On 2

June 25, 2007, MGB approved the Company’s second MPSA covering an additional 1,558.5 hectares near the same area where the existing operations are located. The company has already complied with the requirements for the MPSA which included the endorsement by the local government units in the locality of the mine, which endorsements Apex obtained. Also required was the free and prior informed consent (FPIC) of the indigenous peoples and indigenous communities (IPs/ICs) within the area covered by the application. With such IPs/ICs giving their FPIC to the Company’s application for the MPSA and to the continued operation and development, as well as to all related, collateral, incident and indirect projects/activities of the Company. In the area covered by the application, the Company executed in June 2005 a Memorandum of Agreement (MOA) with the IPs/ICs and the National Commission on Indigenous Peoples, agreeing to a royalty payment of 1.0% of gross output as required under the Philippine Mining Act of 1995. The company has been compliant relative to its obligations to the Maco Ancestral Domain Inc. for its various projects under the approved Ancestral Domain Sustainable Development Plan which the company assisted them to draft.

Pending Applications for Mineral Production Sharing Agreements (MPSA) 1) APSA 000099-XI – This was reactivated in 2010 but the Mines Geosciences Bureau (MGB) has included this application in their cleansing program and an Order of Denial was issued to the Company in February 2011. Presently, the Company filed a Motion for Reconsideration/Appeal with MGB as the management saw justifiable reasons for the delays in processing. 2) APSA 000249-XI – This was also reactivated in 2010 and processing of application is currently on-going with the MGB. This has an area of 353.453 hectares in Maragusan, Compostela Valley. 3) APSA 000165-XI – This application has an area of 2,799.61 located in Barangays Manurigao, Santa Fe, San Pedro, Municipality of Caraga, Province of Davao Oriental. This was reactivated in 2010 also and processing is still on-going with the MGB.

Government Regulations and Approvals Compliance with existing governmental regulations entails costs to the Company which are appropriately reflected either as expense or as capital asset based on the related financial reporting standards. Future and probable government regulations are considered but the effects can not be determined until the specific implementing guidelines are known. Other than the usual business licenses or permits, there are no government approvals needed on the sale of the Company’s products. Exploration and Development Exploration and development are undertaken in-house, in close consultation with the Abracadabra Speculative Ventures Inc. Technical Services Group.

OPERATIONS GEOLOGY AND EXPLORATION The exploration strategy for 2010 was (i) to improve the geological knowledge of the project area to aid identification of priority targets for exploration and to increase resource predictability; (ii) to confirm and verify the extensions of the known producing ore zones in the mine and (iii) to delineate with greater confidence of the previously reported inferred resource blocks. Apex embarked on ridge-and-soil sampling of the western portion of the tenement, where Sagaysagay veins and copper deposits such as Mapula and Kurayao are located, and on the Bonanza North area to test for the 3

extension of the Bonanza vein. Surface geological mapping in conjunction with this sampling discovered several vein outcrops, including the New Year vein. A total of 1230 soil samples were collected in 2010, of which 437 samples were from the Mapula-Sagaysagay area and 793 from the Bonanza North area. In Bonanza North, the Au grades obtained rangedup to 4.90 g/t Au, averaging 0.30g/t Au. Cu grades up to 0.12% Cu, averaging 0.01% Cu, were returned. For MapulaSagaysagay samples, Au grades ranged up to 8.68 g/t Au at an average of 0.37 g/t Au, with a peak Cu value of 0.79% Cu at an average of 0.04% Cu. Soil sampling results associated with the previously identified copper deposit included values in the range 0.2 g/t Au to 5 g/t Au. Using one underground rig and one surface rig to verify the vein extensions in the mine area, a total of 34 drillholes were completed for 3,872m. Several probe holes were drilled on veins such as Don Calixto, Kasapa, Masarita and Sandy, while definition drilling tested the north extension of the Bonanza vein. The most significant intercept was the BNZ-10-01 intersection at 165.68 g/t Au over 2.10 m drilled width, identifying a Bonanza extension at about 490m elevation. Underground drilling focused on testing the extensions of veins in the active mine areas particularly on the Masara, Masarita, Bibak and Bonanza veins. Two underground holes to verify the Sandy vein in Malumon Gap were also drilled. However, technical problems with the rig caused the early termination of these holes. Mechanized trenching tested the Sandy vein and its split in Malumon. A total of 541 tonnes at 2.97 g/t Au was extracted. Trenching also returned an average grade of 4.0 g/t Au from the Kasapa vein. Bulk sampling was also conducted in the St. Francis and Don Joaquin areas. Plans for 2011 The exploration program for 2011 will continue on two fronts. First, the drill testing of near-mine targets will be accelerated. Second, the defining of high tonnage porphyry-style targets will be intensified in the western part of the licensed area. Staff levels have been increased in both areas. An additional surface rig and two underground rigs are now engaged in near-mine drill testing bringing to five the total number of rigs operating for the Company. A goal of 1,500m per month has been set. Drilling in mine production areas will be given the highest priority until there is high confidence in Resource models and an optimum strategy for mine development. Priority areas for immediate mine exploration are the extensions of the Bonanza vein, both to the north and at depth, and the Bibak and Masara veins. As the year advances, the Sandy vein, with a focus on its eastern extension, Maria Inez veins and the Malumon area will be tested. The drilling program will be dynamic and will be subject for review as deemed necessary. In the 2nd half of 2011, exploration in the Don Fernando-Don Joaquin area will also be considered. Significant effort is still being given to the continued validation and verification of data and the digitizing of all data gathered. Reinterpretation of veins using digital wireframes will be undertaken as new results from drilling are gathered. Wireframing of veins and the Gems resource model is expected to be completed in the 2nd half of the year. In the western area, being explored for porphyry style mineralization, detailed geological mapping and soil sampling will be priority activities early in 2011. Soil sampling will be completed on the remaining ridges and spurs to be tested along the Maligaya-Malumon corridor and, where appropriate, infill sampling will be undertaken. Insights gained from mapping and the soil geochemical data will define areas for trench excavation and sampling to fully define drill targets in preparation for drill testing in the final quarter of 2011. Geological interpretation and modeling of the mine and western exploration areas are regarded as essential frameworks to all activities in 2011. Historically, geological activities have virtually been exclusively production driven. The urgent need to modernize geological targeting methodologies will be addressed in 2011. The benefits of this will be many. The known ore veins will be better defined and understood, resulting in i) improved vectoring of Resource extensions, ii) an optimum strategy for mine development, iii) greater confidence will be given to Resource estimates and iv) the chance of early discovery of new vein systems will be increased. Porphyry exploration will become ever more focused as the style and location of the intrusive bodies for priority targeting emerges.

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MINE Development A total of 6,733 meters of development was achieved in the year 2010, fifty-seven (57%) percent or 3,863 meters were in waste development and 43% or 2,870 meters were advanced in ore drives. The achieved development meterage was higher than the 4,266 meters attained in 2009.

Maligaya Main development consisted primarily of continuing the main declines to access the lower extensions of the Bonanza vein in Ramp #1 and the Masara, including the HW Split, veins in ramp #2 - all in the Maligaya mining area. During the year, ore development consisted of completion of ore drives at Masara on level 545 and continued the L530 towards the east. Exploratory drives on-vein in the Bibak zone on both L530 and L560 showed a pinch and swell narrow deposit with some economical values. Probe raises on-vein were also driven to confirm the gold values along the dip of the vein. Encouraging results confirmed the decision to block mineable reserves for mining by driving a series of raises spaced strategically, to be used eventually for shrinkage stoping. Underground Diamond drilling using Kempe drills and a LM 55 RIG was initiated to drill ahead of drifting to verify and guide the ore drive development. Priority infrastructure development completed in 2010 was the connection of the L530 drainage drive to Masarita tunnel for gravity drainage. The said drainage was able to extend towards Ramp #2 position to integrate the drainage system that contributed to reducing the costly pumping up to level 590 portal. Other infrastructure development included the excavation of dewatering sumps for pumping and the provision of raises for ventilation purpose, regrading and improvement of the L530 Masarita drainage and the furnishing of 530 Arkbro raise for ventilation and secondary access. Sandy In the Malumon area, main development of the decline was pursued below L815 for the development of the Main Sandy vein and the Sandy Split veins. L800 and L785 were established where secondary development is in progress. The decline to L770 and below continues advanced to eventually intercept the sandy vein at the lower levels. Ore drifting at Sandy vein continued on L815 and reached the eastern boundary limit. The ore drives in the main Sandy vein towards the western limit were also driven on Levels 800 and 785 and showed encouraging assay results. These drives will further continue to block additional reserves for mining. The decline to access the Maria Inez vein further south of the Sandy vein was developed from L800 of the existing Sandy main decline ramp to target the identified good grade ore shoot of Maria Inez vein at level 785. An additional development crosscut at Level 830 to access the Jessie vein, that was previously intercepted by underground drilling, was completed and started drifting the vein towards the east until it was decided to be stopped for further geologic evaluation. It was envisaged that the development of these additional vein systems would replace the reserves being mined at Bonanza and Sandy. ORE PRODUCTION Ore production attained in 2010 amounted to 214,650 metric tons with an average mined grade of 5.20 g/t Au compared to the 148,417 tons with a grade of 5.88 g/t produced in 2009. This translates to an average of 17,642 metric tons per month or an average of 588 tonnes per day. Sixty-five percent (65%) of this tonnage came from the combined long hole stopes and conventional handheld stoping from both Maligaya and Sandy and the remaining thirty-five (35%) aggregated from the ore drives. Below is the comparative table showing the distribution of the development meters advanced and ore produced for the year 2010 against the budget.

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MINE PRODUCTION TOTAL Mining Total Hauled to Surface Grade, Au Rate for the Month Ore Delivered to Mill Grade, Au Ore Development Headings Advance Grade Hauled to Surface Waste Development Headings Advance Stope Production Stopes Grade Hauled to Surface No. g/t t 8 5.5 131,326 8 5.4 140,130 No. m 15 6119 13 3863 No. m g/t t 9 3768 5.6 66,365 8 2870 5.0 69,845 Unit t g/t t/d t g/t Budget 197,690 5.5 542 197,690 5.5 Attained 214,650 5.2 588 188,310 5.4

Plans for 2011 Underground ore production is planned at a steady rate of 700 tons per day ore at an average grade of 4.52 g/t Au. To satisfy the optimum mill throughput of 640 tons per day, only the ore produced from underground with 4.0 g/t Au assay will be sent direct to the mill whilst the marginal ore below 4 g/t Au will be stockpiled at the Coarse ore stockpile. This will enhance the delivered grade to the mill to 5.09 g/t Au. Bonanzaand Sandy veins have been the focus of recent development work by Apex and will be the primary source of stoping ore. Stope production will be by longhole method and by conventional shrinkage stoping in the narrower vein systems. The ore production schedule is based on the latest resource update carried out by Apex in 2009 and represents a major increase in resource by adding a deeper extension to the Bonanza/Maligaya and Sandy veins, as well as the Maria Inez vein system. The use of handheld equipment will be extensively utilized for underground blast hole drilling in the narrow vein ore drives while the Jumbos will be concentrated on decline development and cross cuts to minimize dilution in ore drives and fast track development of decline and sublevel access crosscuts. Capital UG development for 2011 covers the main access declines below L515 in the Maligaya/Bonanza zone and the below L800 in the Sandy vein systems. One major capital development earmarked for 2011 is the decline and access crosscut to the Maria Inez vein at L785. This will enable blocking out of more ore resources to sustain the 700 tons per day mill feed requirement.

2010 Review – Mill Production Data

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Period 1Q 2010 2Q 2010 3Q 2010 4Q 2010 2010 2009

Tonnes Milled 42,076 46,826 47,435 56,249 192,586 151,320

Tonnes per Day 468 515 516 625 528 415

Grade, g/t Au Ag 4.69 30.41 5.27 29.13 4.76 30.16 4.93 32.79 4.92 30.73 5.09 32.69

% Recovery Au Ag 83.32% 61.61% 85.75% 59.55% 84.39% 55.83% 84.55% 59.95% 84.53% 59.20% 83.52% 50.12%

Metal Produced (oz) Au Ag 5,355 25,905 6,657 25,504 6,177 26,410 7,470 35,188 25,659 113,007 20,727 79,968

Table 1. 2010 vs. 2009 Mill Production Data

Apex Gold Production 2010
8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 1Q 2010 2Q 2010 3Q 2010 4Q 2010

Oz Au

Figure 1. Gold Production 2010

Apex Silver Production 2010
40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 1Q 2010 2Q 2010 3Q 2010 4Q 2010

Oz Ag

Figure 2. Silver Production 2010

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Apex Tonnage and Grade 2010
60,000 Tonnes Processed 50,000 40,000 30,000 20,000 10,000 0 1Q 2010 2Q 2010 Tonnes 3Q 2010 4Q 2010 Au Grade 4.80 4.60 4.40 5.40 Au Grade, g/t 5.20 5.00

Figure 3. Tonnage and Au Grade 2010

Gold recovery and metal produced slightly decreased for 3Q 3010 in comparison to 2Q 2010 and 3Q 2009 due to lower head grades experienced during September. 4Q sawthe commissioning ofnewly converted CIL tanks with an accompanying increase in throughput. Adding to the plant expansion mode are: the oxygen generator and sparging systems which are designed to increase recovery and optimize reagent consumption. Also several upgrading projects will be simultaneously undertaken to anticipate the expected increase of milling throughput. In 2010, the highest production was attained in the 4th quarter of 2010 at 56,249 total tonnes milled producing a total of 7,470 oz Au and 35,188 oz Ag. This was brought about by the 4 new leach tanks which had been commissioned during the latter part of September 2010. Before the completion of the new tanks, the CarbonIn-Leach (CIL) section was the bottleneck, limiting the Milling operation to an average of 500-550 tonnes per day (tpd). In the 4th quarter, average tonnage reached 625 tpd. Several upgrading projects for a sustainable 700 tpd operation will be operational in 2011, including: oxygen generator and spargers for CIL tanks, tailings line number 4, upgrading of slime circuit at the Crushing and Grinding sections and 2 additional leach tanks.

CORPORATE SOCIAL RESPONSIBILITY
Administration The Company continued to provide its employees improved benefits during the year. It revised and improved its existing in-house medical scheme by increasing the maximum benefit limits for inpatient cases, removing internal limits, and including all acknowledged children. The medicine allowance used to purchase outside medicines, on top of the free medicines provided by the Company likewise increased to P3,000, P4,000 and P5,000 per year for its rank & file, supervisory and managerial employees respectively. Management also approved the coverage of its employees under a group term life insurance in lieu of its existing in-house death benefits. With all these in place, Apex employees are relieved of financial burden in times of unwanted illnesses and death. As an incentive scheme, it distributed a rice bonus to its employees, both regular and contractual, for improved production performance in May and June. Employees received as much as two cavans of rice a month, enough to feed the family for 2 months. The rice bonus was subsequently converted into cash effective July 1 to give the employees more freedom of where to use the “fruits of their labour.” As the company moved forward to achieve its Vision, more technical and professional skills were needed to supplement those of local residents, neighbouring regions and contractors. The new cash bonus scheme, was implemented Company-wide effective July 2010. With a relatively good production, cash bonuses totaling were distributed among all employees in the months of July and August. For the month of September, however, production was low due to relatively low grade and thus, no bonus was 8

distributed. Employees again received cash bonuses additional 22% of basic salary in December.

during the last 3 months of the year attaining an

With the intention of filling a shortfall of manpower in various departments, particularly in the Mine Operations and Mine Services, Apex hired an additional 118 employees during the year From 816 employees as of end of December 2009 to 934 employees as at December. 31, 2010. Contractors’ personnel likewise increased due to the various projects implemented within the quarter, all designed to improve the mine’s operations, facilities and performance. The workforce and management relationship remained harmonious throughout 2010. It was characterized by trust, openness and constant communication, with the number of employees’ representatives doubling from four to eight. In October the employees elected two (2) representatives per work area from Maligaya, L-870 and the Mill and one (1) representative each from the Engineering Services and the Admin./General Support Group. The elected Employees’ representatives regularly met on a monthly basis with Management representatives where they raised issues and concerns, primarily on safety and health, as well as other labor and human resource - related matters. th The 4 quarter of the year, likewise, proved to be a productive period for the Company. The good production performance for the fourth quarter accorded the employees monthly cash bonuses averaging at 16%, 19% and 22% of the employees’ basic pay for October to December, respectively.

The Christmas holidays was indeed a joyful season, with the Company calendar, Vision mug, and Noche Buena packages for everyone, on top of their monthly production bonus, 2nd half of their 13th month pay and the cash converted unused sick leave credits. Company sports festival and Christmas activities ended the year for our employees in a joyous mood.

The following figures show the growth in both the total manpower, including contractors, and the regular Company employees.

A. BY EMPLOYMENT CATEGORY
DEC.'09
REGULAR CONTRACTORS Total

JAN. 832 481 1313

FEB. 837 534 1371

MAR. 839 551 1390

APR. 840 541 1381

MAY 847 506 1353

JUNE 844 417 1261

JULY 890 477 1367

AUG. 897 504 1401

SEPT. 924 502 1426

OCT. 932 515 1447

NOV. 940 517 1457

DEC. 934 488 1422

816 390 1206

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B. BY JOB CATEGORY (regular employees)
DEC'09 MANAGERS SUPERVISORS RANK & FILE Total JAN. FEB. MAR. APRIL MAY JUNE JULY AUG. SEPT. OCT. NOV. DEC.

32 132 652 816

36 137 659 832

37 138 662 837

37 145 657 839

37 143 660 840

37 144 666 847

38 142 664 844

40 139 711 890

41 140 716 897

43 143 738 924

44 152 736 932

44 152 744 940

44 148 742 934

Environmental Management Apex Mining Co., Inc. fully supported the government program on reforestation. For the CY-2010 the Central Nursery of the company has produced 244,000 seedlings of various tree plantation species, fruit trees, bamboo, etc. and planted about 5.55 hectares in open and denuded areas with corresponding 3,292 seedlings planted. Protection and maintenance on 97.18 hectares tree plantation was conducted. As part of vegetative measures, wattling structures using kakawate and wild sunflower was established on soil erosion prone areas to prevent further erosion. The company has also established a clonal garden for rubber trees and has plans to distribute the seedlings to the community. The company provided 36,908 seedlings assistance as part of the upland development program of the DENR, LGU and to the adjacent Barangays. The company maintained the rehabilitation of the two (2) Adopted Mangrove Projects at Barangay Bucana, Maco and Barangay Bongabong, Pantukan, Compostela Valley in support to the environmental protection at the coastal area. The company signed a MOA on Adop-A-River Program with the Barangay Council of Barangay Teresa, Maco, Compostela Valley Province and the Department of Environment and Natural Resources adopting Malumon and Buena Tigbao Creek. Facilities for environmental mitigating measures such as tailing ponds and silt ponds are being closely monitored regularly as well as with spillways and canals within the mine site. During this quarter the tailings dam embankment was raised by 5 meters from 625 masl to 630 masl. Clearing of water ways is being done whenever necessary to prevent clogging of drainages in the site and to prevent siltation of water channels. Regular repair and maintenance of access roads within the mine industrial areas is also being done. The Environmental Department of APEX conducted regular in-house environmental quality monitoring to attain the standards set by DENR such as, the air and water quality and hazardous waste. The Multi-partite Monitoring Team (MMT) conducted quarterly monitoring to ensure the company’s compliance to laws and policies that promotes a safe environment within and outside of the area of operation The company installed the new fume scrubber at the smelting furnace to serve as pollution control device. Continuous Information, Education and Communication Campaign to the concerned communities to provide the people information about the company and its activities in the area with emphasis on environmental protection and enhancement program was conducted.

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The Annual Environment Protection Enhancement Program budget for the year 2010 is Php 18.5 million. Actual expenditure totaled to Php 25.800 million.

Community Relations and Community Development: Delivering the right projects for the community remained the core function of the Community Relations Department. The challenges still remain – to segregate the wish list from the needs list. The bottom line is to deliver what the community needs and not what the community members want. APEX Mining Company, Inc. has always been proud of the way the community projects were delivered as everything went through a process that involved the representatives of the company and the stakeholders. The bulk of the projects remain centered on the approved ASDMP 2010 projects categorized below.

A. Health and Sanitation Program The Company believes that health is a primary concern of everybody. Thus, the effort of APEX to maintain the good health of the community people continued through the services provided by the Company clinic. The Health and Sanitation Programs covered medical assistance, including the following projects: • • • • Medical and pre natal check up and provision of medicines Nutrition feeding programs Collection and disposal of domestic waste of host communities, three times a week Transportation of emergency patients from outside the workforce.

The clinic caters not only APEX employees but also the community members from the impact and neighboring barangays of the company. Aside from the medicine assistance, free medical and dental consultation is also made available. Moreover, pre-natal check-ups and operation tuli (circumcision) were conducted.

B. Sustainable Livelihood Programs and Activities The best way to be of help to others is to help them become self-reliant. This Apex does by providing Sustainable Livelihood Programs such as conducting a 15 days Entrepreneurship Training for the Council of Women which included a final three days in Tagum City including the Graduation Ceremony at the Molave Hotel. The women developed business plans which were then presented to Apex for financial assistance. There was also TESDA Training for Dress-making for 9 participants, leading to NC II, at PSCB in Maco. Livestock dispersal projects were undertaken. In Tagbaros, there was a dispersal of tilapia fingerlings and development of the council’s Fish Pond Project.. There were also purchased goats for New Leyte National High School

C. Infrastructure Water is always of paramount importance in our lives. Water systems were improved. In Tagbaros, construction of water reservoir was initiated by the barangay and funded by Apex. To ensure the safe and easy access of some of the Tagbaros constituents to the main road, a steel footbridge was constructed. A waiting shed was also constructed in Mainitto provide safe place for some Mainit constituents during rainy season.. There were also church infrastructure projects, including provision of materials for the construction of GKK Chapel at Cristo Rey in Malamodao.

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D. Social Development Programs and Responsive Education The host communities, acting as the main implementers of development, were always given assistance in terms of their social activities towards personal and community growth. On a daily basis, fuel consumption for Davao del Norte buses were provided by the Company for the student transportation from host communities going to the respective schools. APEX assisted barangays, schools and religious activities through financial assistance and transportation as per community service requests from the host communities (fuel consumption only). Scholarships were also given high importance for students to try to ensure continuing education in poor communities. he Alternative Learning System Program for the out-of-school youth was also carried-out. The salaries of the two ALS teachers were provided by the Company.. Religious activities were also assisted financially. E. Indigenous Peoples Programs & Projects The Indigenous Peoples are fully integrated into programs and projects. The Company recognizes the need of these groups of people for capability-building. Training for the tribal council were conducted such as Training on Native accessories making in Mainit and a Seminar for the elders and leaders in Tagbaros. The need to propagate the culture of the Mansaka was also regarded as very important; the company assisted in the purchase of native beads for accessory making and textiles for the native costumes to be utilized during festivities led by New Leyte High School students. Education, as a very necessary and important factor in IP development, was given high priority with 6 students given Company scholarships. F. Information Education Campaigns To maintain the image of the Company, the ComRel Department constantly sought to disseminate the efforts of the Company through regular symposia about the environmental condition of the communities and areas where the Company is operating. Aside from this, lectures about responsible mining were conducted and the Company’s contribution to community development was also stressed. Monthly and quarterly monitoring was also conducted by the ASDMP Team. This was to ensure that all projects undertaken were being implemented in accordance with the agreed plan. The total Social Development Management Program (SDMP) fund for the year 2010 was Php 5.2 million pesos. Occupational Safety and Health: It is the mission of the company’s Safety and Health Department to promote the well-being of all stakeholders by embracing safety as a way of life, by achieving world class standards and by upholding a holistic approach to wellness. This is done with care and sincere commitment to realize a sustainable, responsible and globally recognized mining company. The department is committed to a safe and healthy work environment, and to ensuring that all employees, contractors and visitors go home to their families safe and sound. This commitment is underpinned by the company’s Annual Occupational Health and Safety Plan. Initiatives Undertaken in 2010 The department undertook a range of initiatives in 2010 to facilitate and increase the health and wellbeing of its staff, encourage a work/life balance and reduce the rate of illness and injury. Key Officers and senior managers actively supported and promoted healthy and active lifestyle choices. These values can increase employee productivity and a positive work culture, as well as decrease stress and minimize the impact of illness and injury. Activities ranged from encouraging physical activity and good nutrition, to empowering staff to self-manage their own health.

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Several training programs were also conducted to ensure that employees and contractors are aware of the programs being undertaken by the safety department. Some programs were an offshoot of the liaison with other government and private agencies. Trainings Fire Fighting (Maco BFP) Fire Extinguisher Usage (Mill, Admin) First Aid, BLS-CPR Mine Rescue Safety Orientation Visitors/OJT Newly Hired/Casuals Contractors Date March 2- 3/March 7-8, March 24, 2010 Jan. 18, 2010-June 11, 2010 (20 batches) Sept. 28-Oct. 7, 2010 Quarterly Jan. – Nov. 2010 Jan. – Nov. 2010 Jan. – Nov. 2010 No. of Participants 28 50 460 25 45 1,382 215 3,747

Likewise, safety officers also attended Occupational Safety and Health training programs. Trainings BOSH-Davao OSH-NET BOSH-Davao BOSH-Pagadian OSH Date July 12-15, 2010 July 21, 2010 August 20, 2010 October 25-29, 2010 November 22-26, 2010 No. of Participants 1 (Safety Manager) 2 (Safety Officers) 2 (Safety Officers) 1 (Safety Manager) 3 (Safety Officer, Civil Engineers)

During the year, drills were also conducted both for surface and underground. These drills are earthquake, fire and evacuation drills using stench gas warning. Month January Implemented Programs/Activities Blood Lead Level Testing, HBs Antigen Testing, Physical Examination of all members of Emergency Response Team (ERT) trainees.

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February 2010 March 2010 April 2010

Anti Hepa B injection to all GSD/Kitchen/Mess hall personnel. Diabetes Screening, Blood Typing, De-worming, Operation Timbang and Blood Pressure Monitoring to all employees. Drug Awareness Campaign; Hypertension A Silent Killer”, Hands On Training in BP Taking; Watch Your Weight, Disease Cannot Wait” Weight Reduction Program. Medical staff joined the DOLE Labor Day Celebration at Barangay Kinuban. Free Bone Scanning, Operation Tuli to the 4 impact barangays, Free Diabetes Screening. Health information campaign to 4 impact barangays. Anti Hepatitis B Screening Test to all ERT, First Aiders, Fire Fighting Trainees, Free Diabetes Screening / Monitoring. Conducted Annual Physical, Dental, Audiometry and Ultrasound to Apex employees. Water sampling at DOH Davao City for Bacteriological Examination of Water Apex Blood Donation Program, Anti-Cervical Cancer Vaccination. Hepatitis B Vaccination Education and Health Information Drive among underground and mill employees

May 2010 June 2010 July 2010 August 2010 September 2010 October 2010 November 2010 December 2010

APEX Mining Company actively participated in the Philippines Mine Safety and Environment Association Annual Conference and Competitions. A total of 40 delegates were sent to compete in the following events First Aid, Mucking, Machine Drilling and Firefighting. The company teams attained first place in First Aid competition, second in Fire Fighting and second and third places in hand mucking. Emergency Response Team members also prepared a presentation on Mine Rescue. The company received a citation in the Best Mining Forest category and for the Safest Mineral Processing Plant. Compliance with Environmental Laws The Company is committed to its environmental and policy statement of protecting and enhancing the environment and has spent total environmental expenses for the year 2009 of about P6.12 million.

Related Party Transactions Part III, Item 12 discusses related party transactions. Major Business Risks Risk Factors and Uncertainties 1. We will not be able to insure against all possible risks: Exploration for natural resources involves many risks, which even a combination of experience, knowledge and careful evaluation may not be able to overcome. The Company’s business is subject to a number of risks and hazards generally, including adverse environmental conditions, industrial accidents, labour disputes, unusual or unexpected geological conditions, ground or slope failures, cave-ins, changes in the regulatory environment and natural phenomena such as inclement weather conditions, floods and earthquakes. Such occurrences could result in damage to mineral properties or production facilities, personal injury or death, environmental damage to the Company’s properties or the properties of others, delays, monetary 14

losses and possible legal liability. If any such catastrophic event occurs, investors could lose their entire investment. Obtained insurance will not cover all the potential risks associated with the activities of the Company. Moreover, the Company may also be unable to maintain insurance to cover these risks at economically feasible premiums. Insurance coverage may not continue to be available or may not be adequate to cover any resulting liability. Moreover, insurance against risks such as environmental pollution or other hazards as a result of exploration and production is not generally available to the Company or to other companies in the mining industry on acceptable terms. The Company might also become subject to liability for pollution or other hazards which may not be insured against or which the Company may elect not to insure against because of premium costs or other reasons. Losses from these events may cause the Company to incur significant costs that could have a material adverse effect upon its financial performance and results of operations. Should a catastrophic event arise, investors could lose their entire investment. 2. Commodity Price Fluctuations - If the price of gold declines, our properties may not be economically viable: The Company’s revenues are expected to be, in large part, derived from the extraction and sale of base and precious metals such as gold. The price of those commodities has fluctuated widely, particularly in recent years, and is affected by numerous factors beyond the Company’s control including international, economic and political trends, expectations of inflation, currency exchange fluctuations, interest rates, global or regional consumptive patterns, speculative activities and increased production due to new or improved mining and production methods. The effect of these factors on the price of base and precious metals cannot be predicted and the combination of these factors may result in us not receiving adequate returns on invested capital or the investments retaining their respective values. If the price of gold (including other base and precious metals) is below our cost to produce gold, our properties will not be mined at a profit. Fluctuations in the gold price affect the Company’s reserve estimates, its ability to obtain financing and its financial condition as well as requiring reassessments of feasibility and operational requirements of a project. Reassessments may cause substantial delays or interrupt operations until the reassessment is finished. 3. Non-compliance with environmental regulation may hurt our ability to perform our business activities: The Company’s operations are subject to environmental regulation in the jurisdiction in which it operates. Environmental legislation is still evolving in this jurisdiction and it is expected to evolve in a manner which may require stricter standards and enforcement, increased fines and penalties for noncompliance, more stringent environmental assessments of proposed projects and a heightened degree of responsibility for companies and their officers, directors and employees. If there are future changes in environmental regulation, they could impede the Company’s current and future business activities and negatively impact the profitability of operations. 4. Exchange rate changes may increase the Company’s costs: The profitability of the Company may decrease when affected by fluctuations in the foreign currency exchange rates between US Dollars and Philippine Pesos because its sales proceeds and advances from affiliates are denominated in dollars.. The Company does not currently take any steps to hedge against currency fluctuations. 5. Our stock price could be volatile: The market price of our common shares, like that of the common shares of many other natural resource companies, has been and is likely to remain volatile. Results of exploration activities, the price of gold and silver, future operating results, changes in estimates of the Company’s performance by securities analysts, market conditions for natural resource shares in general, and other factors beyond the control of the Company, could cause a significant decline on the market price of common shares.

Item 2. Properties The Company owns real property in Davao where the warehouse office is situated. It likewise owns mining facilities and administrative support facilities in its Maco mine site. The Company leases milling plant from one of its affiliates, Teresa Crew Gold Corporation (“Teresa”) and in consideration thereof pays 15% of its net proceeds from sale of metals. On January 31, 2008, Teresa has decided to cease from its milling operations and lease related assets to the Company still for a consideration 15

equivalent to 15% percent proceeds received for shipments made. As of December 31, 2010, the agreement is deemed effective until cancelled by both parties. Machinery and equipment are acquired month to month as needed usually through direct purchase or through letters of credit, if imported, under supplier’s credit terms.

Item 3. Legal Proceedings

The Company is involved in various legal proceedings, claims and liabilities incidental to its normal business activities. The Company’s management and legal counsel are of the opinion that the amount of the ultimate liability, if any, with respect to these, including the following matters will not have a material adverse effect on the financial position and performance of the Company: a) The Company has two (2) MPSA applications pending approval by the MGB. These claims are subject of dispute over the Financial and Technical Assistance Agreement application of another mining company and are pending resolution under the Regional Panel of Arbitrators (the Panel). The Company has filed an Adverse Claim/Protest against the other mining company with the MGB regional office. On September 4, 1998, the Panel issued a decision dismissing the adverse claim of the Company. On July 21, 2006, the Company’s legal counsel filed a motion for reconsideration and on July 28, 2006, the Panel issued an Order requiring the other mining company to file its comment/opposition to the motion filed by the Company. On March 31, 2007, the Panel conducted a clarificatory hearing between both parties. As of todate, the case is still subject of appellate proceedings and for resolution of the Panel. Item 4. Submission of Matters to a Vote of the Security Holders There were no matters covered under this item submitted to the security holders for a vote. PART II OPERATIONAL AND FINANCIAL INFORMATION

Item 5. Market for Registrant Common Equity and Related Stockholders Matters Market Information The Company’s common shares are traded at the Philippine Stock Exchange. The high and low sales prices for each quarter within the last two (2) years and the interim period of January to March 2011 are, as follows:

2009 Jan – Mar Apr – Jun Jul – Sep Oct – Dec 2010 Jan - Mar Apr - Jun Jul- Sep Oct - Dec 2011 Jan - Mar

A Shares High 3.01 3.05 3.28 2.98 2.75 3.10 3.50 4.24 3.50

A Shares Low 2.85 3.00 2.80 2.90 2.66 3.00 3.45 4.20 3.50

B Shares High 3.00 3.02 2.98 3.00 3.00 3.04 3.50 4.27 3.40

B Shares Low 2.87 2.98 2.92 2.93 2.87 3.02 3.43 4.17 3.40

Holders As of 31 December 2010, the Company has 2,861 shareholders with Seven Hundred Fifty-Four Million Seven Hundred Thirteen Thousand Seven Hundred Three (754,713,703) common shares divided into Four Hundred

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Fifty-Eight Million Nine Hundred Eighty-One Thousand Eight Hundred Eighteen (458,981,818) Class A shares and Two Hundred Ninety-Five Million Seven Hundred Thirty-One Thousand Eight Hundred Eighty-Five As of 31 December 2010, the top twenty (20) stockholders of Apex are as follows:

Name of Stockholder Mapula Creek Gold Corporation Mindanao Gold Ltd. PCD Nominee Corp. PCD Nominee Corporation (Non-Filipino) Rexlon Industrial Corporation Cualoping Sec. Corporation Lucio W. Yan &/or Clara Yan Jalandoni, Jayme, Adams & Co., Inc. Northwest Insurance and Surety Co., Inc. Ignacio Ortigas Ansaldo, Godinez & Co., Inc. Prudential Sec., Inc. F. Yap Sec., Inc. JRT Sec. Corp. David Go Securities Fernando Gonzales First Integrated Capital Sec. Inc. (201204) Golden Tower Sec. and Holdings, Inc. Lippo Sec., Inc. A/C 112011076 Solar Sec., Inc.

Total Number of Shares 338,729,592 211,534,806 178,298,847 1,224,815 1,006,525 629,094 485,525 484,892 400,000 311,665 304,448 295,385 281,509 233,749 230,494 202,488 200,000 200,000 200,000 200,000

Percentage of Ownership 44.88 % 28.03% 23.62% 0.16% 0.13% 0.08% 0.06% 0.06% 0.05% 0.04% 0.04% 0.04% 0.04% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03%

Dividends The Company did not declare any cash dividends on each class of its common equity for 2009, 2010 and the interim period of January to March 2011. The Company has not established any restriction that would limit the ability to pay dividends on common equity. The Company does not have any plans of setting any restrictions on the matter in the immediate future. Recent Sales of Unregistered or Exempt Securities No securities were sold by the Company within the past three years which were not registered under the Code. There was no sale of reacquired securities during the same period. Item 6. Management Discussion and Analysis of Financial Condition and Results of Operations For the years ended December 31, 2010, 2009 and 2008 Information on the Company’s results of operations and financial condition presented in the 2010 Audited Financial Statements and accompanying. Financial Statements are incorporated hereto by reference. The Company’s operating revenue amounted to P1.547 billion in 2010 and P1.018 billion in 2009. The company’s operating revenue amounting to P802 million in 2008 was offset against Mine Exploration and Development Costs on that year. Higher realized gold prices and higher volume sold increased the operating revenues. Realized gold price per ounce averaged $1,390 in 2010 and $1,030 in 2009. Total gold shipped amounted to 22,851 oz and 19,732 oz in 2010 and 2009, respectively. Total costs and expenses incurred in 2010 and 2009 amounted to P1.695 billion and P1.702 billion, respectively, which included non-cash expenses amounting to P428.8 million and P355.1 million pertains to depreciation, depletion and amortization.

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Rentals primarily pertain to the lease of milling facilities from Teresa, which is settled through 15% revenue share from Apex’s sale of metals. Total costs and expenses during the commercial operating years of 2010 and 2009 amounted to P1.267 billion and P970 million, respectively and P253 million during the pre-operating commercial year of 2008. Other income (expense) included foreign exchange gains amounting to P65.2 million principally arising from the assumption of TCG liability and conversion of company’s advances from Mapula and Mindanao Gold into shares of stocks and translation of the foreign currency-denominated advances from Mindanao Gold Limited at P728 million at P43.84:$1 as of December 31, 2010, from P727 million at P46.20:$1 as of December 31, 2009 and nil as of December 31, 2008. In October 2009, Mindanao Gold Ltd, an entity incorporated and registered in Malaysia acquired from Crew Gold Corporation its equity share in the Company. In line with this agreement, outstanding intercompany advances to Apex from Crew Gold Corporation amounting to P727 million were transferred to Mindanao Gold Ltd. The Company has written off its liabilities of P83 million to PJS Investment Corporation arising from the settlement agreement entered into with the Company after the lapse of the two-year prescription period provided for by the Share and Purchase Agreement as previously agreed by Crew Gold Corporation and PJS Investment Corporation. The write-off is presented as other income net of other charges. Net losses before tax amounted to P85.5 million in 2010 from 599.5 million in 2009 and 351.6 million in 2008. Provision for deferred income tax is P35 million and P1 million in 2010 and 2009, respectively. Benefits from income tax amounted to P8 million in 2008. Net loss after tax amounted to P120.6 million and P600.8 million in 2010 and 2009, respectively, from P343.7 million in 2008. As explained above, the losses in 2009 were caused primarily by the non-cash expenses related to the recognition of depletion, write-off of input taxes and provision for impairment of assets in 2009. Cash as at the end of 2010 amounted to P17.8 million, compared to P16.8 million in 2009 and P27.3 million in 2008. Accounts Receivable from metal sales in 2010 amounted to P81 million compared to P147 million in 2009 which were collected early in the following year. In 2008, the sales of metals were conducted by its affiliate Teresa Crew Gold Corporation (Teresa) as an agent of the Company and accordingly, receivables were recognized in Teresa’s books. Other receivable arising from advances to suppliers amounted to P148 million compared to P26 million in 2009. Inventories were higher at P343.4 million compared to P194.5 million in 2009. Inventories amounted to P164.6 million in 2008. Other current assets were higher at P134.4 million compared to P75.5 million in 2009. The increase in Prepayments and Other Current Assets in 2010 was mainly due to the increase on input tax Deferred exploration and development costs additions consist of expenditures related to the exploration of the Sagaysagay vein in the amount of P90 million. It declined substantially by P1,262 million in 2009 due to the transfer of accumulated development costs including provision for reforestation costs directly related to Maco Mines into Mine and Mining Properties, in view of the company’s declaration of commercial operations. This reclassification amounted to P1,276 million, with a corresponding depletion costs of P153 million. Property, plant and equipment (PPE) as of December 31 decreased to P418.4 million in 2010 from P440.6 million in 2009 and P619.7 million in 2008. The decrease in 2010 was mainly due to net effect of disposal, depreciation and write-off of some assets totaling to P207.0 million, offset by additions of P184.7 million. Current liabilities as of December 31 amounted to P1.177.1 billion in 2010, compared to P2.983.1 billion in 2009 and P 2.811.4 billion in 2008.

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The increase in Accounts Payable and Accrued Liabilities to P292 million from P128 million and P104 million in 2009 and 2008, respectively, were mainly from increased purchases of goods and services. No significant amount of the company’s Trade payable have been unpaid within their acceptable terms. Advances from shareholders and affiliates decreased to P885 million in 2010 compared to P2.9 billion in 2009 and P2.6 billion in 2008 due to assumption of Teresa advances and company’s conversion of liabilities into shares of stocks by its majority shareholders and affiliated entities during the year. As discussed above, outstanding advances payable to Crew Gold Corporation amounting to P727 million were transferred to Mindanao Gold Ltd, while liabilities of P83 million to PJS Investment Corporation were written off. As of December 31, 2010, Non-current Liabilities amounted to P185.4 million, compared to P95.7 million in 2009 and P41.9 million in 2008. Deferred Income Tax Liabilities increased to P85.5 million in 2010 compared to P50.4 million in 2009 and P23.3 million in 2008. The increase in 2010 is mainly due to the higher unrealized foreign exchange gains of advances made by major shareholders. Under PAS no. 19, Accounting for Employees Benefits, the Company provided for the year Accrued Retirement Cost amounting to P19.6 million compared to P22.3 million in 2009 and P11.9 million in 2008. Provision for Mine Rehabilitation Costs increased to P80.3 million in 2010 from P23.0 million in 2009 and P6.6 million in 2008 due to the increase in estimated nominal cash flows for the rehabilitation of the Maco Mines. The decrease in Current Liabilities as discussed above significantly contributed to the decrease in Total Liabilities to P1.4 billion in 2010 from P3.1 billion in 2009 and P2.9 billion in 2008.

Deficit at year-end amounted to P1.9 billion in 2010 compared to P1.8 billion in 2009 and P1.2 billion in 2008 in view of the net losses for the year which were primarily caused by increase in purchase of raw materials, rent and recognition of depletion costs and provision for impairment as discussed above. Revaluation Surplus decreased to P92.0 in 2010 from P103.3 million in 2009 compared to P54.4 million in 2008 and P56.2 million in 2007. The decrease in 2010 resulted from the depreciation of revalued amount of fixed assets. Net cash provided (used) in operating activities amounted P172 million in 2010, P(7.2) million in 2009 and P(212.2) million in 2008. Cash used in investing activities, principally the addition to PPE and deferred exploration costs, amounted to P330 million in 2010 compared to P69.3 million and P258.1 million in 2009 and 2008, respectively. Net cash provided by financing activities amounted to P160.8 million in 2010 due to the effect of debt-to-equity conversion of shareholders’ advances. . In 2009 and 2008, cash provided by financing activities amounted P68.4 million and P415.3 million, respectively.

Stockholders’ Equity Stockholders’ Equity amounted to P973.8 million compared to capital deficiency (negative stockholders’ equity) of P965.6 million in 2009. The turnaround was brought about by the conversion into equity of advances from shareholders and affiliates totaling to P2.06 billion. Key Performance Indicators

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The key performance indicators discussed below are not based on Generally Accepted Accounting Principles (GAAP) financial measures and are therefore not audited. Similar data may be interpreted and presented differently when compared to other entities’ data. Tonnes Milled and Ore Grade Tonnage, ore grade and metal recovery determine production and sales volume. The higher the tonnage, grade of ore and recovery, the more metals are produced and sold. The mill plant processed a total of 192,586 tonnes with a mill heads of 4.94 gpt Au and 30.73 gpt silver, with average calculated metal recovery of 84.53% and 59.20%, respectively for gold and silver. This is 27% higher compared to the 2009 throughput of 151,320 tonnes. Likewise, gold ounces produced increased from 20,727 oz in 2009 to 25,659 oz in 2010. The minimal production in 2009 was attributed to the flash flood incident that occurred on January 15, 2009. Mining and milling operations were intermittent since then and came to normalize only on March 9, 2009. Gold ounces and silver ounces shipped for the year 2010 were 22,852 and 104,780, respectively.

Tonnes Mined and Tonnes per Day The Maco mine production attained 214,650 tons with a grade of 5.2 Au, g/t compared to the 148,417 tons with a grade of 5.88 g/t of gold ores produced in 2009. Ore produced were sourced from the stopes and on vein development drives. Development for 2010 achieved an aggregate total of 6,733 meters, 2,870 meters and 3,863 meters were on vein drifting and waste development drives respectively. The achieved development meter was higher compared to 4,266 meters attained in 2009. The lower production and development attained in 2009 was primarily attributed to the dewatering and rehabilitation of the Maligaya and Sandy mine resulting from the flash flood that occurred last January 2009. The average tonnes mined per day for 2010 is 588.

Total Production Cost Per Tonne and Operating Cost Per Ounce The Company’s average cash operating cost per tonne is a key performance indicator. A lower cash cost per tonne reflects an improvement in operating efficiency.

At the same cost level, higher production volume results to lower cost per tonne. The same essentially applies at the same production volume but lower operating cost. This is also applicable to cost per ounce gold, but in addition the gold grade is also considered, as it affects metal production, as well as the exchange rate, as it affects the conversion from dollars to pesos. In 2010, the total production cost (excluding marketing charges, rentals, excise taxes, royalties depreciation and amortization and other non-cash expenses) per tonne of ore milled was P4,594 from the total production cost of P884.8 million over ore milled of 192,586 tonnes. Total cash operating cost for the year amounts to P935.7 million (including marketing charges ,excise taxes and royalties) while cost per ounce to produced gold before silver revenue credits was P39,061 ($891/oz) in 2010. After silver revenue credit, the corresponding cost per ounce was P34,590 ($789/oz) in 2010.

FREE CASH FLOW (FCF)

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Despite the capital deficiency, the company earned a positive FCF of P216 million during the year. FCF is an indication of the Company’s ability to generate cash from its operations, less its capital expenditures, to support its working capital requirements. As of December 31, 2010, the peso to dollar exchange rate was at P43.84 compared to P46.20 as of December 31, 2009.

Item 7. Financial Statements The audited financial statements are presented in Part IV, Exhibits and Schedules.

Item 8. Information on Independent Accountants and other Related Matters External Audit Fees and Services Audit and Audit-Related Fees For 2010 and 2009, the audit was basically engaged to express an opinion on the financial statements of the Company. In addition, the audit included providing assistance to the Company in the preparation of its income tax return in as far as agreement of the reported income and costs and expenses with the recorded amounts in the books. The procedures conducted include those that are necessary under auditing standards generally accepted in the Philippines. This, however, did not include detailed verification of the accuracy and completeness of the reported income and costs and expenses. The audit fees for these services were P1.7 million for 2010 and P6.5 million for 2009.

Tax Fees A tax review was performed by external auditors as special engagement resulting in the availment of the Abatement Program of the Bureau of Internal Revenue in which the total taxes voluntarily paid were P11.07 million for 2009 and P9.8 million for the year 2008. All Other Fees There are no other services rendered by the external auditors other than the usual audit services asmentioned above.

Audit Committee’s Approval Policies and Procedures Prior to the commencement of audit work, the external auditors present their program and schedule to the Company’s Board Audit Committee which include discussion of issues and concerns regarding the audit work to be done.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure There are no changes in and/or disagreements with independent accountants on accounting and financial disclosure and no change in the Company’s independent accountants during the two most recent fiscal years or any subsequent interim period

PART III

CONTROL AND COMPENSATION INFORMATION

Item 9. Directors and Executive Officers of the Registrant

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As of 31 December 2010, the positions, names, ages and citizenship of all directors and executive officers of the Company are, as follows:
Position Directors: Chairman of the Board Director/Interim President Director Director Director Independent Director Independent Director Officers: VP-Operations/Resident Mgr VP-Administration VP-Finance/Treasurer VP-Services Corporate Secretary Colin D. Patterson Peregrino S. Resabal Rory Taylor Deogracias G. Contreras, Jr. Armando Castanos Baiverth Diabo Rodolfo Cruz Valeriano Bongalos Emelita Fabro Rodolfo G. Bravo Arceo D. Rubio Rosanna A. Parica 56 55 37 64 60 39 61 61 49 43 49 45 Australian Filipino South African Filipino Filipino Filipino Filipino Filipino Filipino Filipino Filipino Filipino Name Age Citizenship

Directors The following are the present directors of the Company whose terms of office are for one (1) year or until their successors are elected and qualified: COLIN D. PATTERSON He became a Director of the Company last December 18, 2009. He is currently the Chairman of the Board of the Company. He has some forty years’ experience in the mining industry, having worked extensively as Operations Manager, General Manager CEO, Managing Director and Chairman for some of the world’s largest and successful mining operations in South Africa, Vietnam, United States and Australasia. He owned and managed a consulting firm involved in numerous projects for clients worldwide including South Africa, Australia, Vietnam, Fiji, Malaysia, China, Japan and Philippines. He is currently the President and CEO of Mindanao Gold Ltd. PEREGRINO S. RESABAL Mr. Resabal was elected as Director of the Company last December 18, 2009. He is currently the President of the Company. He is also a registered APEC Engineer and has over 27 years of professional practice in the mining industry including a stint with the Roan Consolidated Mines in Zambia, Africa. Currently, he is the President of Peti Trading, Inc., the V.P. Operations-Director of Kadabra Mining Corporation and the V.P. Operations-Director of Paramina Earth Technologies, Inc. a company he manages and is engaged in mining and civil construction contracting, including gold, copper and zinc mining operations contracts in Papua New Guinea, Vietnam, Tanzania and India. DEOGRACIAS G. CONTRERAS, JR. He was elected as a Director in 2006. He was also appointed as EVP and General Counsel in June 2007 and became President and CEO of the Company in January 2008. Before joining the Company, he was previously Vice President for Legal and HR at Philex Mining Co. He was previously also the Executive Vice President of the Chamber of Mines of the Philippines. RORY TAYLOR He elected as Director of the Company last June 24, 2009 Stockholders’ Meeting. He is the Vice-President for Finance of Crew Gold Corporation. He has vast experience in auditing gold and platinum mining companies in both Africa and Canada. BAIVERTH DIABO He was appointed as Independent Director of the Company since October 2006. He is also Asst. to the

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President and CEO of Eastern Shipping Lines, Business Controller of King Plantation Co., Inc. , Business Controller of Eastern Aqua Ventures, Inc., Managing Director of Caliber Logistics Corporation, Head Business Development of Allah Copper Phorphyry, Inc., Asst. to the President of Saranggani Cocotech Corp., Asst. to the President of Eastship Container Terminal, Inc. RODOLFO CRUZ He is the Director of the Company since January 2006. He is also a Consultant of US AID, Consultant of FF Cruz Project Dev’t, Director of RAC, Director of San Dominico Minerals. ARMANDO CASTANOS He was elected as director of the Company since 2008. He is currently the President of Eltech Resources Corp. and Financial Consultant for various companies.

DAVID B. PUYAT He is a Director of the Company since September 2007 and Corporate Secretary since January 2006. Previously, he became a Director of the Company from December 2000 to October 2006. Also, he is a Director of Zero One Holdings, Inc., Director of Southern Horizon Mining Corporation, Corporate Secretary of ABP Holdings, Inc.; Corporate Secretary, Director and Sr. Vice President of The Manila Banking Corporation. Atty. Puyat died of cardiac arrest on March 27, 2010.

Significant Employees Apex is not aware of any employee who is not an executive officer named above but is expected to make a significant contribution to the business of Apex.

Family Relationships There are no family relationships among the officers of Apex. Involvement in Certain Legal Proceedings To the knowledge and information of Apex, none of its present members of the board of directors and its executive officers are presently or during the last five (5) years involved in any material proceeding, affecting, involving themselves and/or their property before any court of law or administrative body in the Philippines or elsewhere. To the knowledge of Apex, none of the members of its board of directors and executive officers has been convicted by final judgment of any offense punishable by laws of the Republic of the Philippines or of the laws of any other country. Item 10. Executive Compensation The executive officers of Apex are regular employees of the Company and are remunerated with a compensation package consisting of twelve (12) months base pay. They also receive whatever mid-year and year-end gratuity pay, if any, that the board of directors of the Company may approve and extend to the managerial, supervisory and regular employees. The aggregate compensation paid or incurred during the last two (2) fiscal years and estimated to be paid during the ensuing fiscal year to the executive officers, other officers and members of the board of directors of Apex are, as follows:

Summary of Compensation Table (Annual Compensation)

23

Compensation of Directors and Executive Officer 2011 (Estimated Salary/Fee/Bonus Directors Officers: Peregrino Resabal President Valeriano Bongalos VP-Operations Emelita Fabro VP-Administration Rodolfo Bravo VP- Finance/Treasurer Arceo Rubio VP-Services Rosanna Parica Corporate Secretary Total Officers All other officers & directors as a group unnamed 4,477,096 7,883,262 10,557,781 17,999,701 12,494,425 12,754,245 13,400,014 13,820,014 700,000 2010 Salary/Fee/Bonus 260,000 2009 Salary/Fee/Bonus 260,000 2008 Salary/Fee/Bonus 420,000

Compensation of Members of the Board of Directors The members of the board of directors of the Company are paid Philippine Pesos Twenty Thousand (Php20,000.00) for each meeting (whether regular or special) of the board of directors or the stockholders. Apart from the foregoing, there are no arrangements regarding the compensation (whether direct or indirect) of the members of the board of directors for their services. Employment Contracts and Termination of Employment and Change-In-Control Arrangements The contractual relationship between the executive officers and Apex are employer-employee in nature. The remuneration they receive from the Company is solely in the form of salaries and bonuses. Warrants and Options Outstanding: Repricing The chief executive officer and other executive officers of the Company do not hold any outstanding warrants or options. Security Ownership of Certain Record and Beneficial Owners As of 31 December 2010, the following owned at least five percent (5%) of the issued and outstanding shares of the Company:

Title of Class

Name and address of record owner and relationship with issuer

Name of beneficial owner and relationship with record owner

Citizenship

Number of shares held

%

24

A

MAPULA CREEK GOLD CORPORATION 17F Prestige Tower, Ortigas Center, Pasig City PHILIPPINES

Mindanao Gold Ltd. See note 1 below

Filipino

338,729,592

44.88

B

MINDANAO GOLD LTD. Suite 10.3, 10F Rohas Perkasa West Wing 8 Jalan Perak, 50450, Kuala Lumpur MALAYSIA

Mindanao Gold Ltd. See Note 2 below

Malaysian

211,534,806

28.03

A&B

PCD NOMINEE CORPORATION GF MSE Bldg., Ayala Avenue, Makati City PHILIPPINES

PCD Participants See note 3 below

Filipino

178,298,847

23.62

Mapula Creek Gold (“Mapula) is majority owned by. Mindanao Gold hold 10,000 Class B shares of Mapula thru a Purchase and Sale Agreement with Crew Gold Corporation. Mapula is the majority stockholder of the Company. Mr. Peri Resabal is the representative on the Mapula’s Board of Directors.
2

1

Mindanao Gold Ltd. is one of the majority stockholders of the Company as represented by Mr. Colin D. Patterson to exercise the voting power on behalf of Mindanao Gold and decide how all shares in the Corporation are to be voted.

PCD Nominee, Corp. (PCNC) is a wholly owned subsidiary of Philippine Central Depository Inc. (“PCD”), is the registered owner of the shares in the books of the Company’s transfer agent. The beneficial owner of such shares are PCD’s participants who hold the shares on their behalf or in behalf of their clients. As of March 31, 2010, King’s Power Securities owns on record 7,670,906 Class A shares and 5,662,000 Class B shares but of which does not qualify as beneficial owner owning more than 5% of the Company’s stock. No other PCD participant owns on record or beneficially more than five (5%) of the Company’s stock. PCD is a private company organized by the major institutions actively participating in the Philippine capital markets to implement an automated book-entry system of handling securities transaction in the Philippines. Except for the beneficial owners mentioned above, there is no other person or group who is known to the Corporation to be the beneficial owner of more than 5% of its voting securities. There is also no voting trust agreement involving shares of the Corporation. Item 11. Security Ownership of Certain Beneficial Owners and Management Security Ownership of the Members of the Board of Directors and Management The number of voting shares beneficially owned by the members of the board of directors and named executive officers as of 31 December 2010 are, as follows:
Title of Class B A A A B A B A Amount and nature of beneficial ownership 100 11,000 1,000 1 200 1 1 1 19,.345 Percent of Class 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% .00%

3

Name of beneficial owner COLIN D. PATTERSON DEOGRACIAS CONTRERAS JR. RODOLFO CRUZ BAIVERTH DIABO PEREGRINO S. RESABAL DAVID B. PUYAT RORY TAYLOR ARMANDO CASTANOS All officers and directors as a group

Citizenship Australian Filipino Filipino Filipino Filipino Filipino South African Filipino

25

The Company is not aware of any voting trust agreement or similar agreement in which a stockholder of five (5%) or more of the Company shares is a party to. Item 12. Certain Relationships and Related Transactions In the normal course of business, the Company transacted with companies which are considered related parties. A summary of the more significant transactions with related parties is shown on Note 16 of the Audited Financial Statements for the year ended December 31, 2010. One equipment supplier and once services contractor of the Company, namely Peti Trading, Inc. (Peti) and Paramina Earth Technologies. Inc., (Paramina) have had related transactions with the Company since 1991 and 1996 respectively. Mr. Peregrino S. Resabal, the current Apex President, is also the President of Peti and VP for Operations of Paramina. Transactions with these entities pertain to the supply of mine and mill equipment and consumables; lease of mining equipment, particularly hydraulic long haul drill rigs and shotcrete machines including the supply of cement additives. Both companies having participated in mine and mill equipment and consumables supply tenders and competitive services biddings long before Mr. Resabal was appointed as Apex President follows all company policies on bidding procedures to the latter. As of December 31, 2010, the Company has outstanding balances with Peti and Paramina amounting to P1,598,958.00 and P1,035,032.39 respectively. All transactions made between Peti, Paramina and Apex were done on an arm’s length basis and on commercial terms. Other than the foregoing, there is no transaction or proposed transaction undertaken or to be undertaken by the Corporation in which any director or executive officer was involved or had a direct or indirect material interest. The Corporation or its related parties have no material transaction with parties falling outside the definition “related parties” under Statement of Financial Accounting Standards/International Accounting Standards No. 24 that are not available for other, more clearly independent parties on an arm’s length basis. PART IV CORPORATE GOVERNANCE Item 13. Corporate Governance The Company has adopted a corporate governance evaluation and self-rating system which was approved by the board of directors. The Corporate Governance Compliance Officer, in coordination with other officers of Apex, measures and determines the level of compliance of Apex, the members of its board of directors, corporate officers, and other employees with the provisions of Apex’s Manual of Corporate Governance and other relevant laws, rules and regulations relating to corporate governance. The Corporate Governance Compliance Officer monitors compliance with Apex’s corporate governance standards and, together with the board of directors, reviews other leading practices (both within and outside the industry) which may be adopted by Apex. However, as of 31 December 2010, there were no concrete plans to improve Apex’s corporate governance.

Item 14 Exhibits and Reports on SEC Form 17-C (A) Exhibits and Exhibit Index

Statement of Management Responsibility for Financial Statements Report of Independent Auditors Audited Consolidated Financial Statements and Notes for the year ended December 31, 2009 Schedule E. Other Assets Schedule G. Indebtedness to Related Parties Schedule I. Capital Stock

(B)

Reports on SEC Form 17-C Date Items Reported Certificate of Corporate Governance Manual Certification

January 29

26

February 5

Appointment of Colin Patterson as Chief Operations Officer and Arne Isberg as Senior Vice President Notification of Mr. Peregrino Resabal in compliance with SRC Rule 23 (1) (A) Announcement of the demise of Atty. David B. Puyat
Resignation of Director/VP-Resident Manager Fernando Agustin effective May 10, 2010 New appointed officers: Emelita Fabro – VP Admin Valeriano Bongalos – VP Operations/Resident Manager Rodolfo Bravo – VP Finance/Chief Finance Officer Rosanna Parica – Corporate Secretary New Board Committees: Nomination Committee Members Deogracias Contreras, Jr. Peregrino Resabal Rodolfo Cruz (Independent) Colin Patterson (Chairman) Deogracias Contreras, Jr. Baiverth Diabo (Independent)

February 16 March 30 May 19

Compensation and Remuneration Members

Audit Committee Member

Baiverth Diabo (Chairman) Rory Taylor (Vice Chairman) David Puyat (+)

June 4 July 9 July 28 September 10 October 15

Certifications of Messrs. Rodolfo Cruz and Baiverth Diabo as Independent Directors Annual Stockholders’ Meeting; Organizational Meeting, Updates on Operations Debt to Equity conversion of related parties payables; amendment of Articles of Inc. Special Stockholders’ Meeting
SEC approval for the increase in authorized capital stock of 2,000,000,000,000 common shares

27

SIGNATURES

Pursuant to the requirements of Section 17 of the Code and Section 141 of the Corporation Code, this report is signed on behalf of the issuer by the undersigned, thereunto duly authorized, in the City of Pasig on 02 May 2011.

RESABAL

Note: The Company has no Comptroller Comptroller

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APEX IUINI]{G GO., ING.
STATEMENT OF MANAGEMENT'S RESPONSIBILITY FOR FINANCI,AL STATEMENTS
The management of Apex Mining Co., Inc. is responsible for all informatigl ryi-l"plo"1t1q9ry contained-in the finaniiat statements for the years ended December 31, 2010, 2009 and 2008. The financial statements have been prepared in conformity with generally accepted accounting principles and reflect amounts that arc based on the best estimates and informed judgment of management with an appropriate consideration to materiality.

In this regard management maintains a system of accounting and reportrng which provides for the necesiary intemal controls to ensure that transactions are properly authorized and recorded, assets are saieguarded against unauthorized use or disposition and liabilities are recognized.
The Board ofDirectsrs reviews the financial statements before such statements are approved and submitted to the stockholders of the company. Company, the independent auditors and appointed by the stockholderso his iiamined the irnancial statements of the company in accordance with generally accepted ts opinion on the faimess of presentation upon completion auditing standards stockholders.

Sycip, Gones, Velayo

&

Colin D. Patterson

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SUBSCRIBED AND SWORN to before me this day of exhibiting to me their respective PassporUSSS Numbers, as follows:

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NAMES

PassporUCTC/SSS No.

COLIN D. PATTERSON

E3069926 issued on

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UntilT/15/2018
PEREGRINO S. RESABAL RODOLFO G. BRAVO CTC No. 05982338 1l31l11Makati

sss#33-6031 520-9

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$6VsCa a Opinion In our opinion, the financial statements present fairly, in all material respects, the financial position of Apex Mining Co., Inc. as of December 31,2010, and its financial performance and its cash flows for the year then ended in accordance with Philippine Financial Reporting Standards.
Other Matter The financial statements of the Company as of and for the years ended December 31,2009 and 2008, which are presented for comparative purposes, were audited by other auditors whose report thereon dated April 8, 2010, expressed an unqualified opinion on those statements'

Report on the Supplementary Information Required Under Revenue Regulations No. 15-2010
Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplernentary information on taxes, duties and license fees in Note 27 to the financial statements is presented for purposes of filing with the Bureau of Internal Revenue and is not a required part of the basic financial statements. Such information is the responsibility of the management of Apex Mining Co, Inc. The information is also not required by Securities Regulation Code Rule 68. The information has been subjected to the auditing procedures applied in our audit of the basic financial statements. In our opinion, the information is fairly stated, in all material respects, in relation to the basic financial statements taken as whole.

SYCIP GORRES VELAYO & CO.

Aldrin M. Cerrado

ALALJrl4, 0-or1A/-/A

Partner CPA Certificate No. 86735
SEC Accreditation No. 0113-AR-2

Tax Identification No. 129-433-783

BIR Accreditation No. 08-00 I 998-45 -2009, June 1,2009, Valid until May 31,2012 PTR No. 2641511, January 3,2011, Makati City
February 21,2011

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gycip Gorres Vcloyo & Co.
6760 Ayala Avenue 1226 Makati City Fhilippines

Fax: {632) 8.19 0872 www.sgv.com"ph
BOA/PRC ReS. No. 0001 SEC Accreditation No. 001 2-FR-2

Phone: (632) 891 0307

INDEPEI{DENT AIJDITORS' REPORT

The Board of Directors and Shareholders

Apex Mining Co., lnc' Unit 1704, 17th Floor, Prestige Tower F. Ortigas Jr. Road, Ortigas Center Pasig City

Report on the Financial Statements
We have audited the acgompanying financial statements ofApex Mining Co., Inc., which comprise the balance sheet as at Decembi , il , i070, and the statement of comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information' pons ib il ity Manage ment's Res

for

the Financ ial

St at ements

Management is responsible for the preparation and fair presentation of these financial statements in

u.rorJun"" with Pliilippine Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatemen! whether due to fraud or error'

Auditors' Respons ibilitY
Our responsibility is to express an opinion on these financial statements based on our audit. We conducied our audit in accordance with Philippine Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from materialmisstatement'

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures judgment, including the in the financial statementr. rf," procedures selected depend on the auditor's to fraud or assessment of the risks of material misstatement of the financial statements, whether due error. ln making those risk assessments, the auditor considers internal control relevant to the entity's preparation und-fuir presentation ofthe financial statements in order to design audit procedures that are effectiveness ffiopriate in the ciicumstances, but not for the purpose of expressing an opinion on theaccounting the appropriateness of oiihe'entity's internal control. An audit also includes evaluating policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. basis for We believe that the audit evidence we have obtained is suffrcient and appropriate to provide a

our audit opinion.

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APEX MINING CO INC. BALANCE SHEET
DECEMBER 31,2010 (With Comparative Figures for 2009)

2010

2009

ASSETS

Current Assets
Cash (Note 4)

Receivables (Note 5) lnventories (Note 6) Other current assets Total Current Assets

P17,859,662 232,769,295 343,397,510 134

F16,836,351 177,053,157 194,539,059 75,573,198 464.001.765

Noncurrent Assets Mine and mining prope4ties (Note 9) Property, plant and equipment (Note l0) Defened exploration and development costs (Note 8)
Other noncurrent assets Total Noncurrent Assets

1,007,351,523 418,365,809 161,880,451
73

1,139,067 ,336

1.607.871

440,581,064 18,901,876 50,766,418 1,649,216,694

F2.336.355,776 P2,113,218,459

LIABILITIES AND BQUITY (CAPITAL DEFICIENCY)
Current Liabilities
Accounts payable and accrued liabilities (Note 11) Advances from shareholders and affiliate (Note l7 Total Current Liabilities ?292,109,620 1"795 111.415 1.177
F128,093,885 2,8ss,039 983.133.691

Noncurrent Liabilities Deferred income tax liabilities (Note 13) Accrued retirement benefits (Note 14) ote 12 Provision for mine rehabilitation cost Total Noncurrent Liabilities

85,487,863

t9,628,569 90,296,912 185,413

50,397,386 22,267,317

23.038,716 95,703,419

Equify (Capital DeficiencY)
Share capital (Note 15) Share premium

Revaluation surplus on properfy, plant and equipment (Note l0) Deficit Total Equiw (Capital Deficie

1,317,618,030 1,503,380,955 91,980,180 1.939.148.1

756,682,170

4,224,410
103,287,388
1,829,812,61 5.618.651

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APEX MINING CO.,INC. STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED DECEMBER 31' 2O1O (With Comparative Figures for 2009 and 2008)

2010

2009

2008

REVENUE
Gold

P1,441,831,547

Silver

I

P952,798, I 30 65,45 1,018,250,407

Depreciation, depletion and amortization (Notes 10 and l8) Materials and suPPlies (Note 6) Rent Salaries, allowances and employee benefits Loss on write-off of input VAT (Note 7) Impairment loss on properfy, plant and equipment (Note t0) q) Other operating expenses N