Former Apex boss in fresh payout battle
Former Apex boss in fresh payout battle

Former Apex Minerals boss Mark Ashley has lodged a statutory demand for almost $500,000 against his old company over allegedly unpaid termination entitlements.

Mr Ashley left the troubled Wiluna gold miner this year to be replaced by former St Barbara boss Ed Eshuys as part of a restructure to keep Apex afloat.

Mr Ashley was entitled to a $1.3 million payout, Apex announced in March, including a $720,000 termination, $300,000 of annual leave and $240,000 of unpaid salary.

The termination deal included a deed of settlement extinguishing claims Mr Ashley and Apex made against each other.

But Mr Eshuys said yesterday Apex disputed the extent of the termination payment.

"We dispute the amount because the number isn't right as to what his statutory after-tax entitlements are," he said.

"That's with our lawyers now."

Mr Ashley could not be contacted yesterday.

Despite raising almost $35 million in new debt and equity and from asset sales since February, Apex was forced back to the capital markets this week to raise an extra $2.7 million in working capital at 11¢. The shares closed steady at 11.5¢ yesterday.

Mr Eshuys said Apex had more pressing creditor debt than the company had disclosed before he took charge, which substantially reduced the amount of capital he had believed would be available for maintenance and development work at the Wiluna mine.

In its March prospectus for a $22.2 million rights issue, Apex said it would use $4.8 million of the proceeds from the raising to meet creditor payments.

A supplementary prospectus three weeks later raised that figure to $5.7 million.

According to yesterday's shareholder disclosure, Apex had paid $20.6 million in creditor liabilities outstanding at April 19, with another $2.1 million of trade liabilities outstanding along with $1.5 million in employee superannuation arrears.

Mr Eshuys said he had been unaware of how pressing many of Apex's liabilities were before taking charge of the company.

"They (trade creditors) had been pushing for payment of the bills and we weren't aware of it," he said.

"There were, in fact, exchanges of letters indicating these monies were going to be paid out of the entitlements issue. And we weren't aware of that."

A $4 million short-term debt facility extended by Andrew Forrest's The Metal Group to Apex in late March had been spent on back wages to employees and on "critical supplies" even before he took charge, Mr Eshuys said.

Despite the funding issue, Mr Eshuys said he was on track to meet promises to shareholders that the mine would be cash-flow positive by the end of September.

After producing only 7001 ounces of gold in the March quarter, at an average cost of $3025/oz, the company produced 9139oz in the June period at $1400 to $1600/oz.

"We now have good terms with most of our suppliers, we're back on credit with most of our suppliers, because not only did we pay them out, we've also maintained good credit terms since," he said.

Mr Eshuys said Apex expected to produce 15,000oz to 17,000oz in the September quarter at a cash cost of $1200 to $1300/oz.

"If the gold price stays where it is the operations will be cash-flow positive this quarter," he said.

The West Australian

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