Warnings by Apex Silver executives last summer that the Colorado based silver miner was suffering from a severe liquidity crisis came to pass Monday as the company announced it will file for Chapter 11 bankruptcy this week.

The company announced Monday it had reached an agreement with 43% of its short-term debt holders of Apex Silver's convertible subordinated notes to agree to receive a pro rata shares of approximately $45 million in cash plus common stock of the reorganized company.

Last June Apex reached an agreement with San Cristobal silver mine joint venture partner Sumitomo Corporation to sell the rights for deferred payments to Sumitomo for $70 million. The deal provided Apex with $100 million in unrestricted cash and a combined total of $198.9 million in aggregate and restricted cash, and short and long-term investments.

Apex Silver's flagship mine is the San Cristobal operation in southern Bolivia. San Cristobal was expected to mine 15 million ounces of silver, 215,000 tonnes of zinc, and 75,000 tonnes of lead last year.  It is believed to contain 450 million ounces of silver and 8 billion pounds of zinc and 3 billion pounds of lead in proven and probable reserves.

However, the company's liquidity problems had been compounded by increased cash costs and high operating costs, while lead and zinc prices substantially declined.

The company delisted from the NYSE last month after concerns were raised about whether Apex Silver's financial position had become so impaired the exchange wondered if the miner could meet its financial obligations.