Ed Eshuys, the one-time lieutenant to magnate Joe Gutnick, is working on a plan to revive Apex Minerals' moribund Wiluna gold mine through a $20 million recapitalisation.

It would mark Mr Eshuys' return to WA gold mining after he was replaced as managing director of St Barbara in early 2009, although it remains unclear whether Mr Gutnick will be part of the consortium contributing the money.

Mr Eshuys could not be reached for comment yesterday. Apex's under-pressure managing director Mark Ashley did not return calls.

If the recapitalisation goes ahead it would be full circle for Mr Eshuys, who helped Mr Gutnick run Great Central Mines when it owned the Wiluna gold operation more than a decade ago.

Since then the Wiluna mine has had a series of owners until Mr Ashley bought the asset off Owen Hegarty's Oxiana for $29.5 million in 2007 as part of his plan to become Australia's biggest specialist miner of so-called refractory gold deposits. Mr Ashley followed up the acquisition with more than $200 million in capital raisings.

But his Wiluna dream soon came unstuck, with operating difficulties reducing Wiluna's output and profitability.

By early 2010 Apex was teetering on the brink of collapse because of unsustainably high cash costs even in a record gold price environment, although Mr Ashley managed to keep the company afloat through a combination of small equity raisings and cost-cutting measures.

Concerns about Wiluna's future intensified again late last year amid complaints from mine site employees that they were not being paid as part of what they claimed was the latest cost-cutting tactic.

Apex's December quarterly reveals that it produced 9726 ounces in the three month period, for just 52,089oz for the calendar year - a far cry from Mr Ashley's 2007 plans for a 200,000 ounce-a-year mining house. The December quarter ounces were produced at an operating cost of $1696/oz, higher than the average realised gold price of $1667/oz, to leave Apex with only $365,000 in cash.

It is unclear what Mr Eshuys' plans for Wiluna are although it is expected he will replace Mr Ashley and reconfigure Apex's board.

Azure Capital and Morgan Stanley Smith Barney are trying to raise about $20 million at 0.4ยข per share, which would expand Apex's equity base by 48 per cent.

The West Australian

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