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Goldman Sachs have a target 65 cents as per Minesite article:-

Goldman Sets An Aggressive Price Target For Apex Minerals, As Production Ramps Up To 150,000 Ounces Of Gold Per Year


By Our Man in Oz



It is a few months behind schedule, and over budget, but the flow of gold from the re-developed Wiluna project of Apex Minerals is starting to produce some fascinating forecasts from traditionally conservative mining analysts in Australia. The latest, which even caught Apex chief executive, Mark Ashley, off guard, came from the clever chaps at Goldman Sachs who suggested a 12 month share price target for Apex which is close to triple the company’s current price. According to a Goldman’s report, circulated to clients of the firm earlier this week, Apex is heading for A65 cents a share, compared with A25 cents on the March 16 review date. What made the analysts optimistic (but cautious because they maintained a hold recommendation on the stock) was the steady ramp-up at Wiluna which is seen as “the key for a re-rating”.
Ashley hadn’t seen the Goldman report when Minesite’s Man in Oz called for a chat so he declined to pass judgment on the broking firm’s numbers. But, he was much more forthcoming about the work underway at Wiluna, and forthright about the problems at the project, which he estimates have added “between three and four months” to the timetable and around A$30 and A$35 million to the capital cost. Despite the frustration of missed deadlines and bigger bills than he expected, Ashley reckons most, if not all, of the commissioning problems are behind Wiluna, which now promises to grow quickly from its current annualised output rate of around 120,000 ounces of gold to the next target of 150,000oz and up to 200,000oz. “We are on track now,” Ashley said. “Importantly, we’ve been helped by the stronger gold price which means we’re still looking at a margin of between A$500 and A$600 an ounce.”

Goldman told its clients that Apex would end the June 30 year with a net loss, before non-recurring items, of A$8 million. But, next financial year the full benefit of mining the relatively high gold grades at the mines in and around Wiluna in central Western Australia would start to kick in. The forecast 2010 profit is a healthy A$33.9 million, but nothing compared to the prediction of A$90.1 million for 2011. The broker’s optimism is conditional. “The key for Apex is to ramp up production at Wiluna and start generating positive cash flows”, Goldman said. “On our estimates there is little room for error.”

Ashley acknowledges that the position is not perfect but said the bulk of the hard work is behind the company. He declined to specify why there had been delays and cost overruns but hinted that there might be issues dating back to the structure of the deals which led to the creation of Apex. Those original arrangements saw the company acquire a series of relatively difficult mines and consolidate their sulphur-rich ore at its biological oxidation (Biox) plant, acquired as part of a regional gold-asset consolidation process launched well before last year’s sharp upward surge in the gold price.

“The important point today is that all major components of the commissioning of the Wiluna plant are complete”, Ashley said. “Since mid-February the plant has been producing at a monthly rate of more than 9,000oz.” Ashley said the company’s initial target of an annualised 120,000 ounces was reached on several occasions in February. “We’re now focussed on consolidating recent improved production rates and recoveries.”

Though he declined to specify what went wrong at the Wiluna project site last year, he did say Apex was “in dispute” over matters to do with the original deal. “When we started to commission [the plant] there were issues that we found needed to be put right”, he said. “That meant the commissioning team was taken away from commissioning to fix those other problems, which took a couple of months. We still started the plant on time, but the problem was that not all of the automated systems which should have been done were done. For a while it was a bit hand-to-mouth, but now we’re now on track to produce 120,000oz of gold a year, and then 150,000oz”.

Ashley said that despite the delays and the additional costs the profit margins at Wiluna remained highly attractive. “We’ve always targeted a margin of A$500 to A$600 an ounce, and we’re still on schedule thanks in part to the help from the gold price,” he said. “We’re also seeing a lot more reserves at Wiluna than we had previously expected. At the end of last year we found another underground source independent from where we’re currently mining, and that will come on in the third quarter and give us the 150,000oz a year.”

Apex shareholders, as well as celebrating the start of positive cash flows from the company’s Wiluna operation might have a second reason to smile later in the year as exploration gets back into full swing. “We’ve really cut back on exploration to preserve cash and get into production,” Ashley said. “But we hope to re-start that work by mid-year, particularly to follow up a number of new zones which have been identified that don’t even make it into an inferred resource at this stage.” The message in that comment is that the return to exploration in a region with a long history of revealing high-grade gold shoots promises to deliver a solid flow of drilling news and perhaps an upgrade in the project’s reserves.