PRC Pike River Coal

[RossT]

Despite not being too pleased of late with the Prc delays, I bought back in once the tunnel reached about sub 100m to go (about mid $1.80,s). A four week or so run up to first coal, only needing to get to $2 to have met my goal $$. What could be simpler....

I think the famous American economist - Homer Simpson, best summed the current situation with his thesis entitled - "DOH" !!!!!!!!!!!

[peterfindlay]

Modest volume of 750,000 PRC shares traded today losing 18c since yesterday and now just $1.44.

Conversely there is a report from Gujarat in India about current spot price for Hard Coking Coal up to $400 per tonne.


"Hard coking coal prices are also rising very rapidly as is evident in annual contract prices rising from USD 96 per MT in 2007 to USD 300 per MT in 2008, and as against annual contracted rates of USD 300 per MT the current spot rates range between USD 380 - 400 per MT; and even at this price the availability is scarce."


http://www.equitybulls.com/admin/news2006/news_det.asp?id=39642
Seems to me that institutional holders are having to dump shares for whatever they can get for them. At $300+ per tonne of hard coking coal PRC at $1.44 is a bargain. If HCC price holds up or is even more for the April 2009 contract round then the likely dividend payout when PRC hits full production next year makes $1.44 per share one of the best share prices around.

Having said that its likely that PRC SP will sink even lower as overseas investors seek to recover cash anyway they can regardless of how good the company fundamentals are.

Your post is excellent, as it is very informative and factual. Well done.

The pricing information conveyed exceeds that contained in the number of reports that I have received in recent weeks of spot coking coal prices ranging from US$350 - $385/t tonne. My understanding is that pricing at these levels will be sustained, if not exceeded, for the year commencing 1 April 2009. It confirms the irrationality associated with the recent downward price pressure on these shares.

Clicking on the link supplied, gives further insight into the likely future price behaviour of coking coal. It provides some support to the expectation that NZO's (and other shareholders who may be able to ride on the back of their future sell down) confidence in being able to command a far higher price than present, as well as their intended strategy of receiving a premium to the SP prevailing at the time of sale. Perhaps the existing shareholders are the logical buyers of such a stake, particularly given their appetite for future supplies, and they gain both ways, as shareholders, and purchasers of the product.

I, for one, refuse to follow those who sold at levels at or near $1.44, and to succumb to the fear that is prevailing. If you examine the research of the likes of ABN Amro and McDouall Stuart, in the context of the known information about the future price assumptions relating to coking coal, you can see that the near term price assumptions are very realistic, and the long term price assumptions could easily be exceeded.

Sure, it is tough to hang in there, and even tougher for those, who for whatever reason, need to sell. Fortune not only favours the brave, it favours the patient. The markets will inevitably return to something far more rational and less extreme than is currently prevailing. History reminds us that markets spend far more time trading on fundamentals, than on fear. Let us hope that the time it takes to return to normal market behaviour exceeds our expectations, and that Pike delivers on its production targets as to both volume and timing.

My view is that we can look forward to:


Two further interest rate reductions by Xmas, at 50 points each, very positive for equities and currency,
The possibility of the Reserve Bank moving on interest rate settings earlier than planned,
Reducing returns from fixed interest investments,
Equities being likely to recover faster than property,
Renewed interest in commodities,
A currency likely to be near 60 cents by Xmas,
Pike hitting the seam in the next 2 – 3 weeks,
A world class mine,
Pike’s revenues for the next 2 years still looking to be extremely good, with 2010 looking to be US$350+ tonne, but does it really matter if it is maintained at or around US$300 tonne, the key is getting to the coal, and then confirming the production capability,
Possible reserve upgrades.

My hope is that as and when such factors transpire, that they are fairly reflected in the SP. No matter what happens in the short term, I remain confident that in 12 months time, the SP will bear no resemblance to $1.44.

[Rabbi]

Excellent post peterfindlay.

Yes, this shareprice of PRC is now trading so far below fundamental value its not funny. The big question is, when will this financial mayhem in the USA blow over, and until that question is answered, all the buyers are sitting on the fence waiting for the dust to settle.

I'm lining up one of the Australian junior Oilers and the question I am asking myself is

How ridiculously cheap am I going to buy this share for?; while at the same time keeping my powder dry:D

[Drone]

Your post is excellent, as it is very informative and factual. Well done.

The pricing information conveyed exceeds that contained in the number of reports that I have received in recent weeks of spot coking coal prices ranging from US$350 - $385/t tonne. My understanding is that pricing at these levels will be sustained, if not exceeded, for the year commencing 1 April 2009. It confirms the irrationality associated with the recent downward price pressure on these shares.

Clicking on the link supplied, gives further insight into the likely future price behaviour of coking coal. It provides some support to the expectation that NZO's (and other shareholders who may be able to ride on the back of their future sell down) confidence in being able to command a far higher price than present, as well as their intended strategy of receiving a premium to the SP prevailing at the time of sale. Perhaps the existing shareholders are the logical buyers of such a stake, particularly given their appetite for future supplies, and they gain both ways, as shareholders, and purchasers of the product.

I, for one, refuse to follow those who sold at levels at or near $1.44, and to succumb to the fear that is prevailing. If you examine the research of the likes of ABN Amro and McDouall Stuart, in the context of the known information about the future price assumptions relating to coking coal, you can see that the near term price assumptions are very realistic, and the long term price assumptions could easily be exceeded.

Sure, it is tough to hang in there, and even tougher for those, who for whatever reason, need to sell. Fortune not only favours the brave, it favours the patient. The markets will inevitably return to something far more rational and less extreme than is currently prevailing. History reminds us that markets spend far more time trading on fundamentals, than on fear. Let us hope that the time it takes to return to normal market behaviour exceeds our expectations, and that Pike delivers on its production targets as to both volume and timing.

My view is that we can look forward to:


Two further interest rate reductions by Xmas, at 50 points each, very positive for equities and currency,
The possibility of the Reserve Bank moving on interest rate settings earlier than planned,
Reducing returns from fixed interest investments,
Equities being likely to recover faster than property,
Renewed interest in commodities,
A currency likely to be near 60 cents by Xmas,
Pike hitting the seam in the next 2 – 3 weeks,
A world class mine,
Pike’s revenues for the next 2 years still looking to be extremely good, with 2010 looking to be US$350+ tonne, but does it really matter if it is maintained at or around US$300 tonne, the key is getting to the coal, and then confirming the production capability,
Possible reserve upgrades.

My hope is that as and when such factors transpire, that they are fairly reflected in the SP. No matter what happens in the short term, I remain confident that in 12 months time, the SP will bear no resemblance to $1.44.

Excellent post, thanks.

US markets have surged over +3% on the day, the volatilty there is astounding at the moment. I can't see PRC going lower today. Good luck all.

[Juggernaut]

Is someone able to post an updated chart for PRC

[Placebo]

Yes, though it seems to me Peterfindlay's post is preaching to the converted - is everyone looking for validation of their own irrational optimism?

Hope is a very poor investment strategy.

[Drone]

Yes, though it seems to me Peterfindlay's post is preaching to the converted - is everyone looking for validation of their own irrational optimism?

Hope is a very poor investment strategy.

Whats irrational? The only thing I would grant you is that maybe it is irrational to fight an irrational market, in the short term at least... :)

[manxman]

The new date for hitting first coal has been reflected in an amendment to the terms of the convertible bonds agreed with Liberty Harbor LLC, which now requires first coal by 15 October 2008.

Has anyone any idea of the consequences if "first coal" is not achieved by 15 October?

[bermuda]

Has anyone any idea of the consequences if "first coal" is not achieved by 15 October?

The market wont like it and for those with cash it will represent a wonderful buying opportunity.

[duncan macgregor]

The market wont like it and for those with cash it will represent a wonderful buying opportunity. BERMUDA You will have a great dead cat bounce followed by a crashing market which will be more to the point than a couple of days late in production. Macdunk

[bermuda]

BERMUDA You will have a great dead cat bounce followed by a crashing market which will be more to the point than a couple of days late in production. Macdunk

Hi Macdunk,
I do value your logic which has proved itself over the last year.
But I have so much admiration for the perseverance of the NZO/PRC team in bringing this huge project to fruition. I want to be part of it and see it flourish.

Greenspan has played the puppet to Bush and I agree this will give us a dead cat bounce before new problems arise not only in the USA but also in Europe and Russia.

But I will stay with PRC until the coking coal price drops below $US300/MT which as you know is 3 times the IPO forecast. China is a monster which is very hard to grasp and India also has a huge thirst for commodities.

Where have you got your money parked?
Cheers

[RossT]

Weekly Update 22 September 2008.

The tunnel advance was stopped for four days during the week whilst the floor, which had become muddy and difficult to access near the face, could be excavated and replaced. Operations recommenced on 21 September with a rebuilt floor and good conditions in the tunnel and at the face, yielding 5 metres advance for the day. A surface borehole drilled to the tunnel horizon is located at approximately 2234 metres, which indicates good conditions at that location. 76.5 metres to go.

[Wilkins_Micawber]

"Weekly Update 22 September 2008. The tunnel advance was stopped for four days during the week whilst the floor, which had become muddy and difficult to access near the face, could be excavated and replaced. Operations recommenced on 21 September with a rebuilt floor and good conditions in the tunnel and at the face, yielding 5 metres advance for the day. A surface borehole drilled to the tunnel horizon is located at approximately 2234 metres, which indicates good conditions at that location. 76.5 metres to go."

5 metres per day would = just over 2 weeks to go (if no more delays occur) ...

[shasta]

"Weekly Update 22 September 2008. The tunnel advance was stopped for four days during the week whilst the floor, which had become muddy and difficult to access near the face, could be excavated and replaced. Operations recommenced on 21 September with a rebuilt floor and good conditions in the tunnel and at the face, yielding 5 metres advance for the day. A surface borehole drilled to the tunnel horizon is located at approximately 2234 metres, which indicates good conditions at that location. 76.5 metres to go."

5 metres per day would = just over 2 weeks to go (if no more delays occur) ...

PRC - Presentation as released to the ASX

http://www.stocknessmonster.com/news-item?S=PRC&E=ASX&N=305986

[shasta]

PRC - Presentation as released to the ASX

http://www.stocknessmonster.com/news-item?S=PRC&E=ASX&N=305986

Is this a positive/negative for Pike River? :confused:

Solid Energy to close Reefton mine

Solid Energy's Terrace Mine in Reefton in Buller will probably close in less than a year.

Simon Doig, Solid Energy's general manager of south operations, said the future of the company's smallest mine had been in doubt for some time, The Greymouth Star reported today.

A number of mining plans had been analysed over the past year to determine if it could be profitable and it would produce until at least mid-2009.

There was also a likelihood of further production if mining targets could be met and increased coal prices achieved.

"The mine has been scaled back over the past year and will be operating with a single shift," Mr Doig said.

"After reviewing a variety of mine plans and marketing options, we've decided that a limited amount of investment in development should be made to allow it to remain open until the end of June next year."

The prospects after that would depend on it hitting its production targets and achieving better returns for that production.

Solid Energy also operates a distribution centre at Reefton which processes and ships coal from a variety of sources.

The Terrace Mine currently employs 31 people at Reefton.

Originally a private mine, it was bought by Solid Energy's predecessor, Coal Corp, in 1988. It is producing about 40,000 tonnes of sub-bituminous coal a year for industrial and household markets in the upper South Island.

- NZPA

[Sideshow Bob]

Is this a positive/negative for Pike River? :confused:



Labour - experienced miners up for hire, already on the coast.

I spoke to a mining consultant briefly and he said that the costs of running that mine were about double what they should be.

[ritchie]

sideshow and Shasta...look at the time of your postings...you are ajhead of yourselves by 2 hours.

Good for when the market opens

[trackers]

PRC - Presentation as released to the ASX

http://www.stocknessmonster.com/news-item?S=PRC&E=ASX&N=305986

Very good and informative report imo, no hints of any further delays... let the countdown to production begin

[manxman]

Interesting that Liberty Harbor has converted some of its bonds to 2.6 million shares.
The only reason I can see for this is that they are unloading, which will tend to hold the SP down.

[RossT]

It's the same report that has been on Pikes website since the start of august, with just a few changes included; shows current sp, shows Abn amro sp forecast, an FX table, and a couple of "world data charts".

Those Liberty harbour bonds ( 50 of 600 ) were converted ages ago.

I'd say the fact that Liberty harbour ( being a part of Goldman Sachs, who you'd imagine would be pulling in cash any how they could at the mo ) haven't converted any more bonds to shares that they could "cash up" is a sign of good confidence in their view of Pikes propects.

Although they very well may be selling the shares from the first 50 bonds at the moment as Manxman said, holding the sp. ( ? )

[Drone]

Back in @ 149. Too cheap, couldn't resist. With first coal very close think there is significant short term upside here.

Cheers.

[pietrade]

Right-on. When the diff. between PRC and NZO was much greater (from 20 - 50c), I sold off my PRC and bought NZO. Now that the diff. is only 9c, it must be about time to swap back.

[the machine]

62.5m to go, including last 4 m of expanded bootend section

M

[OutToLunch]

With the tunnel x-sectional area about to drop back from 44 m2 to 22.5 m2 we might see a sprint to the finish line?

[Dr_Who]

62.5m to go, including last 4 m of expanded bootend section

M

You guys crack me up sitting with a ruler and a stop watch at the PRC tunnel. :D

[manxman]

You guys crack me up sitting with a ruler and a stop watch at the PRC tunnel. :D

Except that

there is a deadline to be met with regard to the Liberty Harbor investment. First coal was to be in late September. The deadline as far as Liberty is concerned is mid October. The consequences of missing the deadline are not clear.
THERE IS ONE HELL OF A PARTY TO BE ARRANGED FOR FIRST COAL :D

[OutToLunch]

You guys crack me up sitting with a ruler and a stop watch at the PRC tunnel. :D

And how did you feel when you first got to take her home for the night after going out for months? A lil' twitchy? :eek::D

[Nitaa]

Out to Lunch.

I think you are on the mark somewhat. The penetration of the tunnel has been lengthy. Its bit like foreplay. Some young bucks want to go straight in and get out. PRC is slowly feeling their way, making sure they hit all the right spots and after a lengthy wait the cream rises to the top. Then BAM POP WAM. Sparks are flying and PRC are producing (coking coal that is). All good thing COME to those who wait and PRC, NZO investors are very close to seeing Pike reach the climax that so many have been waiting for.. The time has comeith

[Corporate]

Out to Lunch.

I think you are on the mark somewhat. The penetration of the tunnel has been lengthy. Its bit like foreplay. Some young bucks want to go straight in and get out. PRC is slowly feeling their way, making sure they hit all the right spots and after a lengthy wait the cream rises to the top. Then BAM POP WAM. Sparks are flying and PRC are producing (coking coal that is). All good thing COME to those who wait and PRC, NZO investors are very close to seeing Pike reach the climax that so many have been waiting for.. The time has comeith



hahahahah well said!

[OutToLunch]

Out to Lunch.

I think you are on the mark somewhat. The penetration of the tunnel has been lengthy. Its bit like foreplay. Some young bucks want to go straight in and get out. PRC is slowly feeling their way, making sure they hit all the right spots and after a lengthy wait the cream rises to the top. Then BAM POP WAM. Sparks are flying and PRC are producing (coking coal that is). All good thing COME to those who wait and PRC, NZO investors are very close to seeing Pike reach the climax that so many have been waiting for.. The time has comeith

Sheesh... and I thought I was being a bit risque! ;):eek::o

[AMR]

Out to Lunch.

I think you are on the mark somewhat. The penetration of the tunnel has been lengthy. Its bit like foreplay. Some young bucks want to go straight in and get out. PRC is slowly feeling their way, making sure they hit all the right spots and after a lengthy wait the cream rises to the top. Then BAM POP WAM. Sparks are flying and PRC are producing (coking coal that is). All good thing COME to those who wait and PRC, NZO investors are very close to seeing Pike reach the climax that so many have been waiting for.. The time has comeith

Haha!:eek::D:)

[Sideshow Bob]

Nita,

With posts like that, and an avatar photograph as such, you don't want to over-excite McDunk!!


Sideshow Bob

[Billy Boy]

Nita,

With posts like that, and an avatar photograph as such, you don't want to over-excite McDunk!!
Sideshow Bob
!!!Sideshow Bob !!!!
Chat her up old son, seams your might have the right name, and
we can all enjoy the show :D Bugger Mc Dunk's heart. :D
BB

[Dr_Who]

Something to think about and for some sleepless nights ahead.

http://business.smh.com.au/business/steel-industry-in-china-crumples-20080929-4qct.html

[bermuda]

Something to think about and for some sleepless nights ahead.

http://business.smh.com.au/business/steel-industry-in-china-crumples-20080929-4qct.html

I think I read just yesterday about Iron Ore contracts going higher.

The Chinese are very clever. They will grab this opportunity to try and reduce the price of coking coal. It is locked in until April next year. What prices will be after that I dont know but I am picking they be still in the vicinity of $US300/mt.....you never know they might be higher.

The big news is that PRC are about to hit the coal...after about 10 years of work.

[bermuda]

Something to think about and for some sleepless nights ahead.

http://business.smh.com.au/business/steel-industry-in-china-crumples-20080929-4qct.html

I think I read just yesterday about Iron Ore contracts going higher.

The Chinese are very clever. They will grab this opportunity to try and reduce the price of coking coal. It is locked in until April next year. What prices will be after that I dont know but I am picking they be still in the vicinity of $US300/mt.....you never know they might be higher.

The big news is that PRC are about to hit the coal...after about 10 years of work.

[AMR]

I think I read just yesterday about Iron Ore contracts going higher.

The Chinese are very clever. They will grab this opportunity to try and reduce the price of coking coal. It is locked in until April next year. What prices will be after that I dont know but I am picking they be still in the vicinity of $US300/mt.....you never know they might be higher.

The big news is that PRC are about to hit the coal...after about 10 years of work.

Yes, it could be another bluff by Baosteel.

Those negotiations are dirty...they do things like pass initiatives to permit coal mining a few days before the contract talks.

[macduffy]

Yes, it could be another bluff by Baosteel.

Those negotiations are dirty...they do things like pass initiatives to permit coal mining a few days before the contract talks.

I wouldn't call it "dirty".
You can't blame a buyer for using every trick in the book when negotiating in what has been a sellers' market until recently. Bluff is very much part of the process.

;)

[OutToLunch]

It will be interesting to see how Bao's comments pan out, given that they are no doubt more keen than anyone to see raw material costs come down. Either they're calling it as it is, or they're bluffing to scare the market into selling them cheaper ore and coke, a bit like OCP recently trying to scare the phosphate 'market' by claiming that their planned expansion will bring longterm prices well down from current levels (clearly aimed at discouraging new phosphate operations from starting up).

Somewhere through the smoke and mirrors lies the truth. However even if Chinese growth dropped to ZERO next year, doesn't that mean that their economy will still be as large as it is this year?

[Drone]

Pike jumps about 8c late in the day, now in positive territory for the day on the biggest down day in US markets in 20 years! Not bad.

[RossT]

Pike jumps about 8c late in the day, now in positive territory for the day on the biggest down day in US markets in 20 years! Not bad.

Hits a low of $1.48 early, then as I write this over 100,000 shares in a number of trades, have gone thru at $1.65....entertaining stuff...

[Billy Boy]

Hits a low of $1.48 early, then as I write this over 100,000 shares in a number of trades, have gone thru at $1.65....entertaining stuff...
BUGGER !!!
I wanted more at that nice price.... not this new one.
BB:mad:

[Scuffer]

Patience BB everything comes to he who waits you might just get your wish and it may go even lower the yanks are doodling with the global economy and the chinese might not be so hungry for resources when nobody is buying what they make, keep your fingers crossed that there is an end in sight.

[RossT]

http://www.stuff.co.nz/4712489a13.html

Rail track being laid for the coal loading depot at Ikamatua.

[blockhead]

BUGGER !!!
I wanted more at that nice price.... not this new one.
BB:mad:

Blockhead is finding it all too stressful and tomorrow is heading for the Coast for a week whitebaiting, will come back when the dust has settled, may have reached the coal face by then and George may have the US back on rails.
Be at the Waita River BB in case you up that way

[ritchie]

For the life of me I will never understand shares.

If someone could ex[plain or answer my query that woukld be great.

Pike river have had contracts in place for some time now..and good contracts at that...so we are told. And Bermuda mentioned that the price of coking coal may even go higher.

I know Pike are running a bit behind in schedule.....and am certianly aware of the USA crash.

But surley if the contract for the coal are there and the fundamentals havnt changed......and the coal is just about seeing fresh air...why such a decline from....will it was $2.50 at one stage.....and now we are even closer.

Seems the closer we get to the coal the more the share price goes down.

Some will say its not fundamentals that drive the price but the good old market(Punters)......which yeah is right of course...dosnt really take einstein to work that out........just dosnt make sense. Well to me anyway.

[sideline]

For the life of me I will never understand shares.

If someone could ex[plain or answer my query that woukld be great.

Pike river have had contracts in place for some time now..and good contracts at that...so we are told. And Bermuda mentioned that the price of coking coal may even go higher.

I know Pike are running a bit behind in schedule.....and am certianly aware of the USA crash.

But surley if the contract for the coal are there and the fundamentals havnt changed......and the coal is just about seeing fresh air...why such a decline from....will it was $2.50 at one stage.....and now we are even closer.

Seems the closer we get to the coal the more the share price goes down.

Some will say its not fundamentals that drive the price but the good old market(Punters)......which yeah is right of course...dosnt really take einstein to work that out........just dosnt make sense. Well to me anyway.

1) most other resource stocks are down significantly with the general market
2) it will be a long time before investors see any divi here - I guess 2 years. That discourages
some.

[macduffy]

Well, apart from the general nervous mood of the market at present and the " flight to safety", there's always been a big " Buy the rumour, Sell the fact " factor in PRC's SP. The nearer they get to the coal, the nearer we get to the fact and the less reason there is for speculators to remain involved.
At least, that's the way I see it.

;)

Disc: Not holding.

[duncan macgregor]

For the life of me I will never understand shares.

If someone could ex[plain or answer my query that woukld be great.
Some will say its not fundamentals that drive the price but the good old market(Punters)......which yeah is right of course...dosnt really take einstein to work that out........just dosnt make sense. Well to me anyway. RICHIE it takes some little time to realise that Mr Market is a hysterical fool not ruled by common sense. Fundamentals only work in a rational environment. Mr market rushes between moments of great expectation to moments of pending disaster, making a joke out of rational common sense. Work out the price of coal if you must, it wont make any difference to the share price. Apollo mining shares in the sixties went up and down with the Apollo space program, which opened my eyes to the logic of studying the behaviour of the market, and less of the company. The time to buy is when the market starts to show a confirmed uptrend after the market gets oversold and not before.
Coming up will be strikes from that bastard warfy union which should see the price drop to unrealistick levels from time to time which will make this worth a watch. Macdunk

[Scuffer]

The union are settled into a 3 year deal at Lyttelton Dunk, so they are sitting cosily around the coal campfire together with LPC management all toasting marshmallows, pass the pinot please.;)

[Drone]

First coal to be intersected this week according to website. Good job. Go long.

[Billy Boy]

First coal to be intersected this week according to website. Good job. Go long.
Next week I think they said :)
BB

[Drone]

Next week I think they said :)
BB

Na mate - "within the next week" i.e pre next monday (as I read it)

Haha doesn't really matter either way though does it - its a bargain!

Disc - I own PRC posit

[AMR]

PRC holding up nicely today, considering that others on the ASX (MCC, GLC, COK) are getting smashed.

Disc: No PRC atm.

[Dr_Who]

PRC holding up nicely today, considering that others on the ASX (MCC, GLC, COK) are getting smashed.

Disc: No PRC atm.

MCC is looking cheap considering there was a T/O not too long back for a much higher price.

[RossT]

NZ/US just took a major tumble to 62 cents before recovering to 63 cents. No one can complain about the currency not going the right way...

[bermuda]

NZ/US just took a major tumble to 62 cents before recovering to 63 cents. No one can complain about the currency not going the right way...

Not even PRC will escape the blood today. DOW down 600 pts.

Bring on the coal.

[macduffy]

NZ/US just took a major tumble to 62 cents before recovering to 63 cents. No one can complain about the currency not going the right way...

No one, that is, except importers, retailers, motorists, consumers generally!

:rolleyes:

[Major von Tempsky]

Waal, down 700 points now.

But if readers of this thread want to escape their Alice in Wonderland milieu try reading the Bloomberg sharemarkets site which reports a gathering collapse of commodity markets with oil down below $90 to $88 overnight and teh FALL OF HARD COKING COAL PRICES.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aPp0CRolUP_M&refer=home

That better? Now you can go and join in on the TEL thread ;-)

[Major von Tempsky]

Waal, down 700 points now.

But if readers of this thread want to escape their Alice in Wonderland milieu try reading the Bloomberg sharemarkets site which reports a gathering collapse of commodity markets with oil down below $90 to $88 overnight and teh FALL OF HARD COKING COAL PRICES.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aPp0CRolUP_M&refer=home

That better? Now you can go and join in on the TEL thread ;-)

[Bob C]

Now "only" down 328 points and just above the 10,000 mark - its a roller-coaster for sure....

[RossT]

No one, that is, except importers, retailers, motorists, consumers generally!

:rolleyes:

You don't say ? Thats probably why I posted in an exporters thread.

[the machine]

would be nice if prc have a nice hunk of coal from the tunnel [albeit roof intersection] to show the media today or tomorrow - must be very close

M

[Toddy]

PRC could be in for a tough time.

Chinese steel makers delaying orders.

http://www.bloomberg.com/apps/news?pid=20601081&sid=adKMczAWp2do&refer=australia

[The BOWMAN]

Pretty large volume for the last two days and price is going downwards. Who is selling? and why?

[Dr_Who]

What PRC needs to do it be more transparent with the 1 yr fixed price contract that has been signed. IS there are clause in the contract that allows the buyer to walk if the coal price falls to a certain level? Also any clause for penalty charges for delay in coal delivery?

[777]

Pretty large volume for the last two days and price is going downwards. Who is selling? and why?

Have a read of the link Toddy posted in the post before yours.

[upside_umop]

Maybe the best time to buy is actually when they hit the coal face!

[RossT]

Was looking good there for a while last night, Rio, Bhp, Xtrata, all up strongly on the Ftse, then it all hit the fan in the last hour of the American markets.

[Oiler]

Maybe the best time to buy is actually when they hit the coal face!

:D I agree U_U... we havent hit the coal face "yet" ??? why????? wait for the cost blow out and the market to get some sanity :eek::eek:

I think we have a long wait for that to happen.

Oiler

[blockhead]

Hey BB, you thinking of going to agm in Greymouth 28th Nov, thought I might go and have a look at the mine facilities.

[Mysterybox]

http://www.youtube.com/watch?v=79cKRJ10EPk

Pike river in real life, if anyone is interested to see.

[the machine]

http://www.youtube.com/watch?v=79cKRJ10EPk

Pike river in real life, if anyone is interested to see.


thanks

M

[pietrade]

Thanks for the link - but getting into youtube sure can use up some time, with all the many VERY INTERESTING other sites, from 9/11 exposures to UFOs to 2 headed babies. It's like opening Pandora's box. Cheers

[Outshined]

Many of you planning to take a look at the mine on the 28th Nov? I think I'll be heading up.

[Mr Tommy]

tunnel update: they have 32m to go but the seam will be intersected in 5m

[manxman]

Many of you planning to take a look at the mine on the 28th Nov? I think I'll be heading up.

Planning to head down from the far north. All the sexy gear we saw at the last AGM will be underground, but we may get a good look at the coal prep plant. Might pick up some free dolomite for the garden.

First coal tantalizingly close. Massive thirst developing.

[Robomo]

First coal reached should be auctioned off on trademe - 1 kg keepsakes for say $5.00 (in a nice presentation plastic bag of course). Pike River could then claim spot price sale of $5,000 per tonne. Should put the SP up!

[the machine]

mondays update reports drill holes from tunnel face into the coal seam

progress for week was only 12m due to completing training and shifting from drill and blast to the borer, with different tunnel profile required.

slow and steady

m

[RossT]

Dow up 8%, Energy index up 12%, Dow coal index up almost 19% overnight !

[Wilkins_Micawber]

Dow up almost 8%, Energy index up almost 12%, Dow coal index up almost 19% overnight !

... and probably first coal today ... will be interesting to see what affect this all has on the SP ... (and NZO...) ...

[RossT]

Dow up 8%, Energy index up 12%, Dow coal index up almost 19% overnight !

Dow up over 11%, Energy index over 14%, Dow coal index over 22% !!!!!

[Placebo]

PRC up 14% on opening.

Nice :)

[OutToLunch]

Could someone please remind me what PRC's cost of production (incl transport) is? Having trouble finding it....:o:(

[bermuda]

Could someone please remind me what PRC's cost of production (incl transport) is? Having trouble finding it....:o:(

The cost of transport from the coal preparation plant to Lyttelton is $39 per tonne.The production cost estimate at the mine will be in the IPO.

[OutToLunch]

Found it, thanks bermuda. IPO (Table, 4, Section 3.3.2) states total opex costs (mining + transport) of NZD77/tonne. Quite a bit less than selling it at US300/tonne. What a shame it looks like this latter number will fall, courtesy of the Yanks stuffing everything up... question is, by how much, and for how long?

[bermuda]

Found it, thanks bermuda. IPO (Table, 4, Section 3.3.2) states total opex costs (mining + transport) of NZD77/tonne. Quite a bit less than selling it at US300/tonne. What a shame it looks like this latter number will fall, courtesy of the Yanks stuffing everything up... question is, by how much, and for how long?

All the world's refineries and oil pipelines are past their used by date.They will need replacing.This is a massive requirement. Also China's and India's appetite for steel is immense.

The recent news about China shutting down steel plants doesnt help but the Chinese are experts in price negotiation. Recent reports indicate prices will hold..Even at $US250 a tonne PRC will have a great run...especially at todays exchange rates. There wont be any problem selling it that's for sure.

[OutToLunch]

All the world's refineries and oil pipelines are past their used by date.They will need replacing.This is a massive requirement. Also China's and India's appetite for steel is immense.

The recent news about China shutting down steel plants doesnt help but the Chinese are experts in price negotiation. Recent reports indicate prices will hold..Even at $US250 a tonne PRC will have a great run...especially at todays exchange rates. There wont be any problem selling it that's for sure.

Time will tell... I do have concerns about what a bankrupt US will do to the world economy so was wondering whether "first coal" would be a useful point at which to take some gains off the table. However even using USD150/tonne at an exchange rate of 0.6 and assuming 1/3 tax leaves PRC with future EPS of over 40c at full production. Over simplistic but even halving that figure supports the current share price on a p/e of less than 8. Someone might like to tighten these figures up but on the face of it PRC does look reasonably well cushioned against a fall in the HCC price. And PRC having some of the best coal around will help too.

Edit: forgot to include options and partly paid shares so adjust above EPS figure downwards by a factor of (say) 27/31...

[upside_umop]

:D I agree U_U... we havent hit the coal face "yet" ??? why????? wait for the cost blow out and the market to get some sanity :eek::eek:

I think we have a long wait for that to happen.

Oiler

That provison will be coming in soon if no coal is brought to the surface...

Good long term project...just so many other opportunities out there.

I see you sold your PPP oiler? why what?! haha

[The BOWMAN]

Pike web site says the report is updated. I can't remember where to get the report. Anyone knows?

[Sehnsucht888]

UBS is also listed as having an updated report.... Where oh where...

[manxman]

Where oh where...

Just there - behind the first coal.

[OutToLunch]

Just there - behind the first coal.

And the first coal should have been reached by now? :confused:

[RossT]

And the first coal should have been reached by now? :confused:

My crystal ball indicates an ann tommorrow. ( A complete guess, and the crystal ball has no indication of its contents, good or bad ).
But some good news would be nice. Fingers crossed, especially since I just upped my holding in prc today, buying back in after selling yesterday.

[Wilkins_Micawber]

My crystal ball indicates an ann tommorrow. ( A complete guess, and the crystal ball has no indication of its contents, good or bad ).

Has the tunnel collapsed? Have they finally reached the coal seam, or are they playing mind games? Someone is playing with the web site and the Tunnel Progress is no longer available. Announcement coming hopefully (whatever that may be...)

[Sehnsucht888]

The whole site seems to be a bit stuffed. No information on Annual Reports, or Analyst reports either....
-----
Annual Reports
Up one level

There are currently no items in this folder.
-----

Looks like someone may have stuffed up updating it..

[whirly]

Announcement this evening!
:):):)

[Bob C]

EL: 1604 HRS Pike River Coal Limited

MINE: PRC: Pike River Strikes Coal

PIKE RIVER (PRC) STRIKES COAL

Pike River Coal Limited has struck coal after two years of tunnelling
underneath a remote West Coast mountain range to reach one of the most
valuable coal deposits in the country.

Tunnellers cut through the last few metres of an access tunnel stretching
nearly 2.3 kilometres under the Paparoa Range to intersect with the Brunner
seam of premium-grade hard coking coal, essential in the steel-making
process.

This was a major engineering project with the largest and longest tunnel in
New Zealand since the second Manapouri tunnel was completed in 2001.

Chief Executive Gordon Ward says everything is now in place to start mining
New Zealand's largest-known hard coking coal deposit.

"Whilst tunnelling has taken longer to break through because of poor rock
conditions in much of the last 300 metres, we have now very much de-risked
the development and can begin operating as a coal mine."

During its production ramp-up phase, Pike River is scheduled to produce its
first 100,000 tonnes by March 2009 and another 100,000 tonnes by June 2009.
From mid 2009 onwards the mine is scheduled to achieve its "steady state"
production rates of approximately one million tonnes a year.

"We're taking all necessary safety precautions every step of the way and it's
a credit to our staff and our contractors that no serious accidents or
environmental incidents have occurred through the two years of tunnelling to
reach the coal."

The breakthrough comes after international annual benchmark contract prices
for premium hard coking coal rose 200% six months ago, enabling Pike River to
settle first coal sales to 31 March 2009 at US$300 tonne. This price compares
with the original price forecast in the IPO prospectus 18 months ago of US$98
tonne.

Mr Ward says while the world's current financial difficulties were likely to
have some negative impact on next year's steel production in some regions and
therefore potentially on coal prices, it will take time for that impact to be
determined. An offsetting factor is the recent significant reduction in the
New Zealand dollar against the US dollar, which has a favourable impact on
export prices. The New Zealand dollar has depreciated by 23% against the US
dollar since March 2008.

Mr Ward noted that Pike River is establishing a new and valuable source of
high quality coking coal for the world's steel market, with fixed supply
contracts already in place for Japan and India and strong interest from other
coke and steel-producing nations.
End CA:00171620 For:PRC Type:MINE Time:2008-10-17:16:04:19


© Direct Broking Limited 2005.

[digger]

But who would have believed just two months ago that at this announcement NZO would be only 1-09 and oil less than 70 dollars US ?
Digger

[shane_m]

this is good news, well done!

[Mysterybox]

:) oh.. thats nice

[biker]

TV 3 showing coverage of the breakthrough on the news shortly

[RossT]

TV 3 showing coverage of the breakthrough on the news shortly

Great piece just on TV1 News. Look for a good day on monday. ( Dow dependent ).

The whole mining sector sell-off has been well overdone.

[the machine]

the accomplishment thus far re tunnel, production facilities etc etc etc has to be acknowledged and in particular considering all the barriers put up before the mine could start.

nil incidents.

am on record being not in favour of the last financial package but we move on.

now we look forward to prc delivering the goods, with verry high enviromental credentials
[hows the blue duck population going / pest trapping etc ] as we as shareholders have spent a fortune and look forward for some good news stories.

dividends in 2 years time

M

[Sideshow Bob]

Congratulations Guys!! :)

http://tvnz.co.nz/view/video_popup_windows_skin/2211077

[bermuda]

Congratulations Guys!! :)

http://tvnz.co.nz/view/video_popup_windows_skin/2211077

Thanks Sideshow,
She has been a long haul. Congratulations to all. Particularly Gordon Ward for his perseverance and to Peter Whittall for his ability,experience and management skills.

A fantastic effort.

[Mysterybox]

How much approx could we expect from a dividend? Or is it too early to speculate on this? Thx.

[Mysterybox]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10538115

[Unicorn]

From the Sydney Morning Herald, something of interest to PRC holders ...

the-east-is-in-the-red-the-whiteknuckle-ride-begins (http://business.smh.com.au/business/the-east-is-in-the-red-the-whiteknuckle-ride-begins-20081017-539p.html)

[Balance]

From the Sydney Morning Herald, something of interest to PRC holders ...

the-east-is-in-the-red-the-whiteknuckle-ride-begins (http://business.smh.com.au/business/the-east-is-in-the-red-the-whiteknuckle-ride-begins-20081017-539p.html)

Sobering reading. This is classic economics at play. Insufficient steel capacity leading to huge steel price increases leading to more capacity being built requiring more iron ore, coal etc. Now overcapacity leading to stockpile and price decreases.

So who is left holding the hot coal?

[upside_umop]

I particulary liked the bit about 50,000 sky-scrapers...amazing.

Still, its seems a little while off. Plenty of time to jump back into coal the train.

[Mr Tommy]

From herald on saturday "The estimated $230 million cost of the tunnel includes full use of contingency funding."

The tunnel is 2300m long, thats $100,000 per metre, $1000 per centimetre. This doesnt sound right to me, is $230M the full cost of everything so far, not just the tunnel ?

[Sehnsucht888]

Hi Tommy - yes its the cost for the mine development - being the entire project, not just the tunnel.

[Placebo]

Hi Tommy - yes its the cost for the mine development - being the entire project, not just the tunnel.

Hmm, taking out my envelope for a moment's calculation ;), if it cost $230m to set up the operation thus far, and they have now reached the coal...

Projection is to mine 1 million tonnes of coal per year (from next year); 100,000 tonnes by March 09
Current market prices are approx $300 USD per tonne

So by March 09, the revenue will be approx $30m (US dollars).
Each fully year after that, revenue will be approx $300m (USD).

So in short, by the end of the first full year's production, Pike River will have more than recovered the cost of its initial outlay. Meaning that future year's production will be basically clear profit.

That's a pretty rapid return on investment, isn't it...?

[bermuda]

Hmm, taking out my envelope for a moment's calculation ;), if it cost $230m to set up the operation thus far, and they have now reached the coal...

Projection is to mine 1 million tonnes of coal per year (from next year); 100,000 tonnes by March 09
Current market prices are approx $300 USD per tonne

So by March 09, the revenue will be approx $30m (US dollars).
Each fully year after that, revenue will be approx $300m (USD).

So in short, by the end of the first full year's production, Pike River will have more than recovered the cost of its initial outlay. Meaning that future year's production will be basically clear profit.

That's a pretty rapid return on investment, isn't it...?

Hi Placebo,
A good analysis
Sure is a rapid payback. But not as good as Tui.... that was 4 months. NZO and PRC are going to fly when the BEAR gets off the runway. And then add on Kupe.Not sure what the payback there will be but it is a long term cornerstone project for NZO.

[manxman]

So in short, by the end of the first full year's production, Pike River will have more than recovered the cost of its initial outlay. Meaning that future year's production will be basically clear profit.

That's a pretty rapid return on investment, isn't it...?

Magnificent return. That's why we're here. Remember that the final investment decision was predicated on a coal price of about $100 per tonne, and there was enough profit in that after wages, power costs, tea and bikkies etc, to justify the risk. And the $300/tonne probably won't last. But if it drops to $200/tonne that stlll leaves a profit somewhere between very nice and even nicer.

The $300 only lasts until 31 March as I understand it. After that, the Chinese and the Australians do some serious talking about the price of coal, and the Indians and Kiwis accept the result.

[RossT]

Goldman Sachs JBWere reckons $US300 a tonne for coking coal will stick for next year before retreating to $US250 a tonne by 2011. Macquarie reckons an increase to $US350 a tonne next year is a chance, falling to $US275 a tonne in 2011.

It would be a mistake to lump coking coal of Pikes quality in with the general bearish mood currently seen for iron ore and indeed lower grade coking coal. Iron ore is everywhere. Coking coal with 1% ash, and extremely high fluidity definitely isn't! I'd be pretty surprised if Pike isn't on someones radar.....

[Dr_Who]

Does anyone have a copy or detail of the fixed one year contract PRC has signed to supply coal at the price of $300?

[Xerof]

yeah, PRC do :D:D

Why should Companies provide copies of contractual arrangements to Joe Public?

[777]

yeah, PRC do :D:D

Why should Companies provide copies of contractual arrangements to Joe Public?

Exactly......

[Dr_Who]

yeah, PRC do :D:D

Why should Companies provide copies of contractual arrangements to Joe Public?

Maybe there is a clause that states if coal price falls to a certain level the buyer can pull out of the fixed price of $300? Or maybe there is a clause for late delivery penalty? Or do you just make assumptions that the contract has no conditions attached?

[RossT]

Dow coal index up 15% last night, Dow up almost 5%, Bhp and Rio up 10 and 12% today, and yet Pike drops a cent ?????????

[blockhead]

Dow coal index up 15% last night, Dow up almost 5%, Bhp and Rio up 10 and 12% today, and yet Pike drops a cent ?????????

Pike haven't sold a bag of coal yet

[friedegg]

Pike haven't sold a bag of coal yet
yes they have,a few bags are for sale outside the 4 square in reefton with a warning attached "this coal may melt your burner in due time but it sure heats up your house"

[RossT]

Pike haven't sold a bag of coal yet

They've pre-sold all production to 31 march 09 @ US$300 / tn.

[Unicorn]

Hmm, taking out my envelope for a moment's calculation ;), if it cost $230m to set up the operation thus far, and they have now reached the coal...

Projection is to mine 1 million tonnes of coal per year (from next year); 100,000 tonnes by March 09
Current market prices are approx $300 USD per tonne

So by March 09, the revenue will be approx $30m (US dollars).
Each fully year after that, revenue will be approx $300m (USD).

So in short, by the end of the first full year's production, Pike River will have more than recovered the cost of its initial outlay. Meaning that future year's production will be basically clear profit.

That's a pretty rapid return on investment, isn't it...?

There are some quite substantial production, transport, royalty and tax costs to come out of revenue before you can call it profit!

With Panamax ship carrying about 50,000 tonnes, the project running a bit behind time, and the supply chain holding a fair bit of product, it is quite possible that sales in the March year might only reach 50,000 tonnes.

Prices for next year will be very interesting. My guess is around $200, but in the current environment anything could happen. There is tremendous potential, but in the current climate and with significant sales still 6 months away there is still quite a bit of risk.

[Placebo]

There are some quite substantial production, transport, royalty and tax costs to come out of revenue before you can call it profit!

With Panamax ship carrying about 50,000 tonnes, the project running a bit behind time, and the supply chain holding a fair bit of product, it is quite possible that sales in the March year might only reach 50,000 tonnes.

Prices for next year will be very interesting. My guess is around $200, but in the current environment anything could happen. There is tremendous potential, but in the current climate and with significant sales still 6 months away there is still quite a bit of risk.


Thanks Unicorn. I realise that I am not factoring in the costs of operating a mine (which must be wildly expensive), pay packets, tax etc etc. Not sure what royalties are? Also presumably there's compliance costs around resource consents etc which may only have finite timeframes... So what I am describing is obviously "revenue" not "profit".

In any case, all those costs are likely to be less than the cost of the product.

I guess how you view this depends on whether you are an optimist or a pessimist (translation: realist ;)). An optimist would say, blue skies ahead, it's all plain sailing, they've hit the coal, count your money :D. The pessimist would say: One decent quake, she's a goner :(.

The question is, is Mr Market an optimist or a pessimist?

[blockhead]

They've pre-sold all production to 31 march 09 @ US$300 / tn.

My point is Ross, there haven't been train loads of coal going to Lyttelton, we are only starting to export, the other mines are selling their product already. We are nearly there !!

All but completely derisked

[Rabbi]

My point is Ross, there haven't been train loads of coal going to Lyttelton, we are only starting to export, the other mines are selling their product already. We are nearly there !!

All but completely derisked

A coal mine-by definition- is never completely de-risked. Future risks include flooding of the mine, earthquakes, fire in the mine, build up of methane gas, Tunnel collapse, and these are only geological.

Other factors are... collapse of coal price(happening already!) miners strikes, wharvies strikes, cancellation of orders, and I'm sure others can think of more.:eek:

Much can go wrong in a coal mine.

The upside is, these risks should be already factored into the SP (along with the global market recession) so there should be plenty of upside once they start moving the black stuff in the right direction.;)

[Robomo]

"Derisking" - a meaningless term really. Who would have thought up until a few months ago that big investment banks in the USA were anything other than conservative and a really safe investment. Nothing is ever riskfree.

[warthog]

"Derisking" - a meaningless term really. Who would have thought up until a few months ago that big investment banks in the USA were anything other than conservative and a really safe investment. Nothing is ever riskfree.

Anybody who has had anything to do with Goldman Sachs, Morgan Stanley, Bear Stearns, Lehman Brothers etc. and has their eyes open knows/knew that they were anything but "conservative and a really safe investment".

[upside_umop]

hog, its a failure of policy, not investment banks.

edit: maybe a new thread is due...do you reckon 1 year ago they knew what they were in for? i dont think so...

[the machine]

offtopic

warthog, do you know about this?


Thursday, October 23, 2008

Heritage's Warthog-1 a major new Uganda discovery
Heritage Oil reported today it has achieved a significant new oil discovery with its exploration well drilled at the northern end...


regards

M

[manxman]

My point is Ross, there haven't been train loads of coal going to Lyttelton, we are only starting to export, the other mines are selling their product already. We are nearly there !!

All but completely derisked

It would be a nice touch to send the first train away at the end of the AGM.

[the machine]

does anyone know if the coal wagons will be covered for trip to lyttleton.

otherwise the fines may blow away over the countryside

M

[bermuda]

does anyone know if the coal wagons will be covered for trip to lyttleton.

otherwise the fines may blow away over the countryside

M

Of course they are which will negate my wish to drop some mt champagne bottles from the bridge at Moana into the first coal train delivery.

PS The coal will be stored at Lyttelton out in the open but under a controlled water mist operation.

[the machine]

Of course they are which will negate my wish to drop some mt champagne bottles from the bridge at Moana into the first coal train delivery.

PS The coal will be stored at Lyttelton out in the open but under a controlled water mist operation.

thanks bermuda


had this vision of a bad proportion of the coal profits blowing away over the green countryside

guess you will have to find another use for the champagne

regards

m

[Balance]

Anyone done a comparison of Ozzie coalers against Pike? They have all tumbled like ten pins but which one is now the cheapest and least risky?

The article below from Steelguru makes sobering reading.

OCTOBER 24, 2008

South Korean coking coal imports down in September

Korean imports of coking coal dropped by 17.5% YoY to 1.19 million tonnes in September 2008.

Australia became the largest supplier of coal to Korea during the month, however it also declined by 30.95% due to the hike prices, up sharply by 239.64%.

The imports of other coking coal saw a drop by 71.7% to 880,000 tonnes in the same month.

(Sourced from Yieh.corp)

[Nitaa]

Not sure whether this got anyones attention the other day but i thought i would like to put some things into perspective. The cost of building the railroad is going to be more than double NZ yearly's gpd. Chinas economy has slowed to 9% which for a country with around 20% of the words population is saying something. Although i only have an indirect interest through nzo the following must give some insight to the likely demand over the coming years dispite the anticipated slowdown

SHANGHAI, China (AP) -- China's leaders have approved 2 trillion yuan, or $292 billion, in spending on railways construction, stepping up planned investments to help fend off an economic slowdown, the official Xinhua News Agency said Monday.


A train makes its way past the Beijing Ancient Observatory in Beijing, China, on Monday.

The early approval last week by the State Council, or Cabinet, for the spending is meant to help support faltering economic growth, Xinhua cited a Railway Ministry official, Wang Yong, as saying.

The railways development plan calls for 2 trillion yuan in construction spending by 2020, but the ministry official said total spending is likely to exceed that amount.

China is in a railway-building boom, adding hundreds of miles a year in an expansion that rivals the construction of railroads in the 19th century American West.

It is hoping to ease congestion, promote economic growth in isolated areas and bind restive regions such as Tibet and the Muslim northwest more closely to the rest of China.

Plans call for the railway system to expand to 75,000 miles (120,000 kilometers) by 2020 from the current 48,750 miles (78,000 kilometers).

Ramping up construction can help create jobs at a time when the country's economic boom appears to be stalling, with growth in the third quarter reported to be the slowest in five years, although still a robust 9 percent. Watch how China can affect the world economy »


Expanding the rail system would also help alleviate severe bottlenecks, especially for transport of the coal that is used to generate three-quarters of China's electricity supply.

The freight lines now are heavily overloaded, with volume expanding by nearly 9 percent a year, while freight transport capacity grows by only 3.4 percent a year, Xinhua said

[peat]

ya know... just wondering here.... oil is looking a little like it might be changing direction.... and PRC had done a full 78% retracement from its high.... with a stop below .8 or.9 ... risk reward could be considered ok at 1.25 ish .... hmmmmm

[RossT]

http://tinyurl.com/6fczqg

Increase to capital expenditure budget of $23 million.
Net additional funds of $10 million needed, are being arranged.

[Mr Tommy]

Final tunnel update has just been released on the Pike site.

"Pike River has been producing coal since 17 October, with the access tunnel within three metres of its target length of 2.3km. Given the proximity to completion, this will be the last update on the access tunnel progress"

[Nitaa]

ya know... just wondering here.... oil is looking a little like it might be changing direction.... and PRC had done a full 78% retracement from its high.... with a stop below .8 or.9 ... risk reward could be considered ok at 1.25 ish .... hmmmmm78%. This figure may need revising

[Mr Tommy]

Just read the Sept quarterly report that has been emailed out tonight, has a photo of the first truck of coal. Great to see.

[RossT]

Just read the Sept quarterly report that has been emailed out tonight, has a photo of the first truck of coal. Great to see.

The fact they need to come up with another $10 million to cover a shortfall in the revised captial costs is a concern surely?

[dumbass]

ya know... just wondering here.... oil is looking a little like it might be changing direction.... and PRC had done a full 78% retracement from its high.... with a stop below .8 or.9 ... risk reward could be considered ok at 1.25 ish .... hmmmmm

peat , was thinking along same lines , risk seems clearly defined at 120 with 78.6 just below , good long with a divergent rsi

[Footsie]

I think the $1.00 mark is much more of a psychological target where it will put up a fight

[trackers]

*sniff* *sniff*, I smell a bargain!

Might pick some up this week, now that it is producing, commodity's starting to do ok again around the world, and $300 a tonne locked in anyway I'm surprised PRC is bucking the trend

[Dr_Who]

The fact they need to come up with another $10 million to cover a shortfall in the revised captial costs is a concern surely?

Any further cost further down the track that we dont know about?

[biker]

*sniff* *sniff*, I smell a bargain!

Might pick some up this week, now that it is producing, commodity's starting to do ok again around the world, and $300 a tonne locked in anyway I'm surprised PRC is bucking the trend



$300 a tonne is only locked in until March, and how much will they actually have available to market by then?

The price after that is now anyone's guess, as I understand it.

[Billy Boy]

Still seams to be running hand in hand with NZO.
Might continue to do this until we get a better
handle on production costs etc.
We have had "first coal"... Now its
"First shipment"
BB:)

[AMR]

NZO seems to be much better value that PRC at this point and less exposed to project risk...I notice NZO's share price has overtaken PRC's once again. Too much gloom and doom surrounding the steel industry.

[RossT]

Too much gloom and doom surrounding the steel industry.

http://tinyurl.com/5qo9gj


http://www.kyivpost.com/business/bus_general/30799

[the machine]

$300 a tonne is only locked in until March, and how much will they actually have available to market by then?

The price after that is now anyone's guess, as I understand it.

anyone know what the saleterms are

ie

cnf
fob

draw an example from iron ore:
likes of bhp and rio use cnf for their iron ore and buyers are duty bound accept product as it arrives, however some of the newer iron ore shippers are fob and that is risky because relies on buyer providing the vessel [and hence with iron ore price dropping] buyers don't provide the vessel, so they do not have to buy the high contract price.

if prc were to lock in the sale per cnf, then they would avoid this risk in future

M

[Dr_Who]

PRC has breached the $1.20 support line. Is it heading for 80 cents? Any chartists out there can give us a picture?

[RossT]

PRC has breached the $1.20 support line. Is it heading for 80 cents? Any chartists out there can give us a picture?

Sorry Dr can't help you with the charting, but with the way the arse has fallen out of steel demand and it raw ingredients, and commodities in general, and the state of the credit markets, - How is PRC actually placed to come up with the additional 10 mill they now need? This definitely can't be helping the sp....

I would have dove back into PRC with both feet at this price normally but really just not on if I go with my current gut feelings. I think from memory this is exactly where the sp was when I bought in the very first time, who would have thought....

[bull....]

Probably a good chance the share price will hit the lows again.

When you consider they have only a years contract at good coal prices , what price will they acheive after that , **** a worst case senario may be that the mine is even unprofitable to operate if spot price of coal falls far enough.

[Dr_Who]

What is cost of production per lb?

[AMR]

What is cost of production per lb?

Per tonne this isn't quite a gold mine.

I believe that it was in the mid 50s the last time Peter Whithall mentioned something. Oil prices have fallen and so has the kiwi, so things might be more favourable now.

[Balance]

What is cost of production per lb?

Relax.

PRC start losing money at around $65 per tonne but price will have to drop to US$55 per tonne before PRC start bleeding cash.

[digger]

Relax.

PRC start losing money at around $65 per tonne but price will have to drop to US$55 per tonne before PRC start bleeding cash.

Bleeding cash is a relative thing.Think of the finanical mess the world would be in if it got down to 55 a tonne. What would happen at those levels is that there would be so much unemployment that wages and general costs would also be driven down to somewhat restore the balance[pun intended].

[the machine]

prc need to control the shipping rather than let buyers dictact when they send a ship

M

[Dr_Who]

$1.05 today. It is near the IPO price. Any new research report out there? I want to have another read of any current report by analyst and see their views.

[RossT]

$1.05 today. It is near the IPO price. Any new research report out there? I want to have another read of any current report by analyst and see their views.

Double digit sp coming up I should imagine. My personal view - In the current state of the credit markets and commodity prices the fact they are short 10 mill to finish funding this thing has stuffed it.

If they come up with the 10 mill, awesome, if they don't..... ? what then...?

I also would have liked to see the tunnel update on the website continue until the end of the hardrock work, ie - when the shaft was completed.

And speaking of the shaft ( the $5 mill one ).. hows that progressing, is tunneling to the shaft site base going well, is the remur on site, is the raise bore rig scheduled for a specific arrival date ?

Or is it all dpendent on funding now? Who knows.

Disc. Sold my last at 1.40

[Corporate]

Double digit sp coming up I should imagine. My personal view - In the current state of the credit markets and commodity prices the fact they are short 10 mill to finish funding this thing has stuffed it.

If they come up with the 10 mill, awesome, if they don't..... ? what then...?

I also would have liked to see the tunnel update on the website continue until the end of the hardrock work, ie - when the shaft was completed.

And speaking of the shaft ( the $5 mill one ).. hows that progressing, is tunneling to the shaft site base going well, is the remur on site, is the raise bore rig scheduled for a specific arrival date ?

Or is it all dpendent on funding now? Who knows.

Disc. Sold my last at 1.40


Surely if it comes down to it. NZO will back them $10m from there war chest! I would find it hard to believe they would let the project fail on $10million given there ownership.

[Dr_Who]

Good point RossT. My main concern is that there are further cost that would exceed $10 million. Also, once the contract expires, they will need to re-negotiate a new coal price. Who knows where coal price will be mid 2009.

[RossT]

Surely if it comes down to it. NZO will back them $10m from there war chest! I would find it hard to believe they would let the project fail on $10million given there ownership.

When I said "stuffed it" I was refering the the current state of the sp. I feel there's a certain amount of uncertainty about Prc at the mo. I should have worded my last post a bit differently, but no, I didn't imagine the 10 mill required would cause the whole project to fall over.

[Footsie]

coal prices will go back to where they were before all this started

$100

and all the brokers need to update their reports to reflect this.
some still have $350 a tonne.


but from 2010 onwards perhaps a pick up again as china spends its US$600m

But crunch your numbers on a coal price of $100 for mid 2009 onwards and an exchange rate of US70c and a need to raise an additional say $30m

I think you find you'll get a valuation of around $1.00
the above figures are roughly what was stated in the prospectus.

Failing all this, PRC appears to be a trending stock. dont try and pick a bottom just wait for a new uptrend to emerage which could be 6 months away

[Dr_Who]

Thanks Footsie. I agree with your analysis. There is a possibility that it can go to 80 cents as the market is discounting all commodities. Just have to look at the Aussie stocks to know PRC is only going one way.

There will be a time to pick up PRC again, just dont know when.

[Crypto Crude]

well well well... Lizard made a real savy move selling around 2 bucks if I remember...
Mackdunk... its all over in the comp...
:cool:
.^sc

[temuk]

anyone know what the saleterms are

ie

cnf
fob

draw an example from iron ore:
likes of bhp and rio use cnf for their iron ore and buyers are duty bound accept product as it arrives, however some of the newer iron ore shippers are fob and that is risky because relies on buyer providing the vessel [and hence with iron ore price dropping] buyers don't provide the vessel, so they do not have to buy the high contract price.

if prc were to lock in the sale per cnf, then they would avoid this risk in future

M

FOB = free on board and CIF = cost, insurance & freight
but havn't heard of cnf before

[Hoop]

The Chinese pumping money to keep their economy growing by at least 8%pa
+ the sudden dip in the $NZ, one would have thought that would've been positive news for Pike today... not so it seems..as the price ploughs into the strong 90-110c support band.... closed 102c down 11c (9.7%):p

[777]

http://resources.alibaba.com/topic/12822/CNF_FOB_etc_.htm

[AMR]

It seems to have fallen at around the same rate as the aussie coal miners. Price of coal is impacting more than $10m of extra costs I would guess. I'm rubbish at fundamentals but it would seem that the market is pricing in PRC getting hammered at the negotiation table for next years contract. Will do a chart later tonight.

[Nitaa]

It seems to have fallen at around the same rate as the aussie coal miners. Price of coal is impacting more than $10m of extra costs I would guess. I'm rubbish at fundamentals but it would seem that the market is pricing in PRC getting hammered at the negotiation table for next years contract. Will do a chart later tonight.fair aessessment amr. Many infrastructure projects are going to get canned or have already been canned. However i dont think investors should underestimate the strength of the emerging markets. China spending $200b on railroads ove rthe next decade alone plus a $500b stimulus package announced yesterday. Bit too early to call but i would say buying anything under $1.00 and willing to hold a minimum of 3 years and you will be fine. If you are looking to sell shorter than that then a loss is on the cards

[Bilo]

Double digit sp coming up I should imagine. My personal view - In the current state of the credit markets and commodity prices the fact they are short 10 mill to finish funding this thing has stuffed it.

If they come up with the 10 mill, awesome, if they don't..... ? what then...?

I also would have liked to see the tunnel update on the website continue until the end of the hardrock work, ie - when the shaft was completed.

And speaking of the shaft ( the $5 mill one ).. hows that progressing, is tunneling to the shaft site base going well, is the remur on site, is the raise bore rig scheduled for a specific arrival date ?

Or is it all dpendent on funding now? Who knows.

Disc. Sold my last at 1.40

There are still the 22million options to be taken up before June 2009 at $1.30. $10M looks pretty safe.

[the machine]

FOB = free on board and CIF = cost, insurance & freight
but havn't heard of cnf before

ok cif is the go.

pike need to have control over when cargo is shipped and not reley on buyer sending or not sending a ship.

look what has happenned with iron ore from western australia.

M<

[the machine]

It seems to have fallen at around the same rate as the aussie coal miners. Price of coal is impacting more than $10m of extra costs I would guess. I'm rubbish at fundamentals but it would seem that the market is pricing in PRC getting hammered at the negotiation table for next years contract. Will do a chart later tonight.

if coal mines in queensland flooded again this summer then problem solved

M

[Dr_Who]

PRC 97 cents! :eek:

Will it hit 80 cents? :eek:

In 1 yr it has gained 200% and back down again. WOW!

[Wiremu]

They'll stone you when you're at the breakfast table
They'll stone you when you are young and able
They'll stone you when you're trying to make a buck
They'll stone you and then they'll say good luck
But I would not feel so all alone
Everybody must get stoned

And stoned are the coal companies -
ASX performance 1st September 2008 to 12 November 2008:

GCL down 63%
CEY down 46%
COK down 51%
WHS down 62%
GNM down 49%
PRC down 48%

[friedegg]

the two indian steel companies who invested in pike and are buying a lot of the coal,how are they doing in this market?i see last night on cnbc the top listed steel producer in india took a hammering on thier market,so will they be able to buy the coal now?

[OutToLunch]

I see from the Pike website that UBS have an updated report on PRC dated Nov 3 -- but there's no link to the report itself. Has anyone read it? What's the guts in terms of share valuation and HCC price outlook? Thanks in advance.. :)

[RossT]

http://tinyurl.com/55jyyc

Coking coal to half contract price for next year?

[friedegg]

http://tinyurl.com/55jyyc

Coking coal to half contract price for next year?
so if they can do 1mill a year thats only $250mill revenue at todays rate of 55cents,is that enough to make prc prosper or will it fold at those prices?

[Wiremu]

friedegg

The two Indian companies aren't steel companies - they are coke manufacturers.

The PRC propsectus was based on a steel price of US$98 per tonne, so a 2009 price of US$140 is still 40% more than the prospectus, to which can be added the exchange rate gain since that time.

At a price around 50% more than the prospectus they should do very well. If the price hadn't peaked to US$300 per tonne for a variety of mainly one-off reasons, and then dropped back, we would all be rejoicing at the news.

[digger]

friedegg

The two Indian companies aren't steel companies - they are coke manufacturers.

The PRC propsectus was based on a steel price of US$98 per tonne, so a 2009 price of US$140 is still 40% more than the prospectus, to which can be added the exchange rate gain since that time.

At a price around 50% more than the prospectus they should do very well. If the price hadn't peaked to US$300 per tonne for a variety of mainly one-off reasons, and then dropped back, we would all be rejoicing at the news.

Wiremu,i agree with you. The world has made a titanic change with the finanical meltdown.I am already finding that a dollar now has a lot more bargining power than just a few months ago.In many ways getting to grips with this new reality will be a personal battle and a realinement from our company directors. This US$140 might be top 2009 prices---who knows.Certainly China is fast running out of development needs with all the factory closures,so where is the growth coming from. As investers we really have to face this in the shortest time possible. No point in looking back to the good old days we never had of 300 a ton.
In my short 67 years i have never seen such a drastic turn around since last july to now.If an old bugger can adapt some of you younger ones will have to accept it as well.
Digger

[Dr_Who]

Will PRC go lower than 80 cents?

[croesus]

My pick is 50c. maybe even 35c

Very simply.... 4 lines

More funding needed.

Not sure yet when Coal will be at the Railhead.?

What will be the coal value when the current contract rolls over....?

Are we going to revisit 1929....??????

enjoy your weekend.

[Dr_Who]

Most of the Aussie coal stocks have broken 2 yr support levels and heading into unknown territory. These aussie companies are all bringing in good income with div.

[Billy Boy]

Will PRC go lower than 80 cents?

That would be very fine if it did Doc,
I would be back in boots and all if it does :)
Cheers BB

[RossT]

[QUOTE=croesus;234433]My pick is 50c. maybe even 35c

What will be the coal value when the current contract rolls over....?

QUOTE]

Current contracts are already being renegotiated lower by the looks of it.

http://tinyurl.com/68xhdv

Funding had better be sorted and ann'd soon, especially seeing as how the equipment for the shaft is due to be shipped here from Oz. The sp will tank if theres any delay with that ( the shaft ) due to lack of funding.

[digger]

Blueprint of railways development
Xin Dingding, China Daily
China has long had plans for laying 120,000 km worth of railways by 2020, but as the global economic slowdown begins to bite, it looks as though the money will be spent faster than planned to help speed flagging economic growth in China.

In September and October, the Ministry of Railways announced eight new railway projects in various parts of the country. Their investment has added up to 405 billion yuan, equaling 78 percent of the total investment that China poured into railway construction from 2003 to 2007.

... Though most of the investment was approved in 2007 when China's economy was still in a double-digit growth mode, the projects could still be highlights of the government's moves to spur domestic demand, he says.
(17 November 2008)
END story.


Might pay to hang on to those Pike shares for a while yet.Sounds like a lot a steel making coming up.
Digger

[Corporate]

Might pay to hang on to those Pike shares for a while yet.Sounds like a lot a steel making coming up.
Digger

Yeah i'm not sure it would be a good idea to sell now, well below IPO

[GTM 3442]

Depressions mean public works. Infrastructure. Fashion dictates that railways will come to the fore as being fuel-efficient as energy prices rise.

Rail = (rails + wheels) = steel = coal.

Krupps made their fortune shipping rails & railway tyres across the Atlantic.

Seems to me that PRC will be bought out from under the poor old kiwis kiwis by people with a longer investment horizon.

[Billy Boy]

Seems to me that PRC will be bought out from under the poor old kiwis kiwis by people with a longer investment horizon.

I too am beginning to think this way :mad:
BB

[blockhead]

You going to meeting in Greymouth on Friday BB ?

[the machine]

with the mine opening on thursday and agm on friday, coupled with a couple of good days on the dow, then should be a good week for prc sp

m

[Billy Boy]

You going to meeting in Greymouth on Friday BB ?
No I cant get, would like too...
Might be going to Nelson next week to buy another air/plane
Wanna come ??
BB

[blockhead]

Check your private message on Sharetrader BB

[Bilo]

Has any one tried to fax a meeting reply card to 09 494 0219?
I don't seem to be able to get past the "busy" tone.

[777]

If you are in Auckland try without the 09 prefix.

[Wiremu]

The prefix should be 04 as their office is in Wellington.

[Bilo]

If you are in Auckland try without the 09 prefix.
Thanks 777 but I have tried that.

[Bilo]

The prefix should be 04 as their office is in Wellington.
Thanks Wiremu I should have thought to check the Annual Review contacts.

[baxter]

Bloomberg TV reported the other night that George Soros had taken major stakes in two American coalmines and saw coal as the best of the commodities in which to invest.

[the machine]

Bloomberg TV reported the other night that George Soros had taken major stakes in two American coalmines and saw coal as the best of the commodities in which to invest.

think its thermal coal though


M

[AMR]

http://www.sharetrader.co.nz/picture.php?albumid=5&pictureid=73

PRC still in a downtrend until it breaks 1.10, showing no signs of accumulation unfortunately. Multiple sell signals generated in the way down, trend break at 220, double top at 171, pullback which respected resistance at 1.69, triangle breakdown at 1.29 (not shown).

I miss this stock...its been so good to me.

[the machine]

mine officially opened today and agm tomorrow [ok its friday already in nz]

interesting to see what the press make of it and what the sp is come cob friday.

M

[Rabbi]

mine officially opened today and agm tomorrow [ok its friday already in nz]

interesting to see what the press make of it and what the sp is come cob friday.

M

I'd say all the ducks-apart from the future price of coal-are lining up quite nicely. Nice low NZ dollar is a bonus.:)

[bermuda]

mine officially opened today and agm tomorrow [ok its friday already in nz]

interesting to see what the press make of it and what the sp is come cob friday.

M

My Bro is up the tunnel today. Hope he gets out alive. Will send you any goss I get.

Looking good.

[Outshined]

I'm about to head up there in a few minutes. I'll post anything that seems of particular interest.

[RossT]

Well the official opening was a media non-event, and rather than all the ducks lining up, I'd say it's a bit more of a dead duck situation at the moment. Uncertainty about just where hcc prices will fall to, and funding being the main factors.

Will the agm shed some light on the funding still required? I would hope so as sp looks like it won't be holding on to triple digits.

[the machine]

Well the official opening was a media non-event, and rather than all the ducks lining up, I'd say it's a bit more of a dead duck situation at the moment. Uncertainty about just where hcc prices will fall to, and funding being the main factors.

Will the agm shed some light on the funding still required? I would hope so as sp looks like it won't be holding on to triple digits.


guess pike did not pay costs to get the media there, instead left the $ in the bank

certainly need an upbeat agm

M

[Mr Tommy]

Bit in the NBR about the opening...

http://www.nbr.co.nz/article/brownlee-opens-pike-river-coal-mine-38364

[RossT]

Additional funding has been secured.

Target production forecast to June 09 ( previously 200,000 tn ) has been lowered by 20% due to delays.

[Mysterybox]

Is there an estimate on the year for maximum production to be achieved? And is this 20% fall likely to significantly affect this estimate in the long run?

[upside_umop]

it was a given wasnt it? everyone knew how delayed it was and there was no new 'technique' announced to deliver the same amount. maybe they were to take less tea breaks...who knows.

its just too hard to tell what coking coal will do...i prefer thermal coal now.

disc sold 1.95 bought 1.92 sold 1.50 and then sold half of my indirect holding of NZO 1.34.

[tricha]

it was a given wasnt it? everyone knew how delayed it was and there was no new 'technique' announced to deliver the same amount. maybe they were to take less tea breaks...who knows.

its just too hard to tell what coking coal will do...i prefer thermal coal now.

disc sold 1.95 bought 1.92 sold 1.50 and then sold half of my indirect holding of NZO 1.34.

Qinhuangdao coal prices slide by 18% in a week http://digg.com/img/badges/80x15-digg-badge-2.gif (http://www.chinamining.org/digg/submit.php?url=http://www.chinamining.org/News/2008-11-28/1227851058d19670.html)
(China Daily)
Updated: 2008-11-28 13:33
Counter: 22

Coal prices at Qinhuangdao port, China's largest coal port, witnessed the sharpest fall in the year in the past week, with steam coal over 5,500 kilocalories dropping to 570 yuan per ton on Thursday, or 18 percent lower than that of seven days ago according to statistics provided by Qinghuangdao Port Group.

The dramatic coal price slide in China is largely due to the global economic downturn and dwindling domestic demand.

"We are still not sure how serious the coal demand contraction will be next year, but it will be our top concern," an unnamed source with China National Coal Association said to China Business News.

"Coal miners in China have agreed unanimously that they will prohibit selling below cost and will only make delivery upon purchase contract and full payment," the source said.

[Dr_Who]

BHP, Rio May Have to Cut Coking Coal Prices 33%, Analysts Say

By Jesse Riseborough
Dec. 1 (Bloomberg) -- BHP Billiton Ltd. (http://www.bloomberg.com/apps/quote?ticker=BHP%3AAU), partner in the world’s biggest coking coal exporter, and Rio Tinto Group (http://www.bloomberg.com/apps/quote?ticker=RIO%3AAU) may have to cut contract prices by a third next year because of slumping demand from steelmakers, according to a survey of analysts.

Prices may drop to $200 a metric ton in the year starting April 1, from $300 a ton this year, according to the median forecast of nine analysts surveyed by Bloomberg. The forecasts ranged between $140 and $305.
A deepening global financial crisis has reduced demand for steel, prompting mills in Asia, Europe and North America to slash output. Marius Kloppers (http://search.bloomberg.com/search?q=Marius+Kloppers&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1), chief executive officer of BHP, said last week protracted cutbacks would affect its coking coal production.

“Conditions in the steel market have considerably worsened over the last few months,” Gerard Burg (http://search.bloomberg.com/search?q=Gerard+Burg&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1), an energy and minerals economist at National Australia Bank Ltd. in Melbourne, said today. “We are seeing something in the line of halving of pricing, which is certainly possible.”
BHP (http://www.bloomberg.com/apps/quote?ticker=BHP%3AAU), which last week scrapped a $66 billion hostile bid for Rio Tinto, fell 3.5 percent to A$29.91 at 12:04 p.m. Sydney time on the Australian stock exchange. Rio Tinto (http://www.bloomberg.com/apps/quote?ticker=RIO%3AAU), the world’s third- largest mining company, dropped 4.9 percent to A$44.30.

BHP and Mitsubishi Corp. (http://www.bloomberg.com/apps/quote?ticker=8058%3AJT) operate the BHP Billiton Mitsubishi Alliance venture, which owns mines in Australia. The nation is estimated by the government commodity forecaster to export about $44 billion of coking coal in the year ending June 30.

“This downturn is taking place in every single region of the world, highlighting the global synchronized nature of the slowdown and has been devastating for the raw materials suppliers to the steel industry,” Macquarie Group Ltd. analysts led by London- based Jim Lennon (http://search.bloomberg.com/search?q=Jim+Lennon&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1) said today in a report. “Demand has crashed everywhere and for every product.”
53% Drop?

The rapid retreat in demand for coking coal and iron ore forced analysts to slash forecasts last month. Coking coal prices may drop 53 percent to $140 a ton, Macquarie said today, reiterating a Nov. 17 forecast. ABN Amro Holding NV said Nov. 26 prices will drop 34 percent, from an earlier forecast for an 8 percent gain.

“Producers of steel feedstock face the position of rapid declines in demand, a build up of mine stocks, and a weak position going into the 2009-10 contract negotiations,” ABN Amro’s Melbourne-based analysts, led by Warren Edney (http://search.bloomberg.com/search?q=Warren+Edney&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1) said.

To be sure, Credit Suisse Group AG has forecast prices to rise to $305 a ton.
Contract price talks are held annually between producers and mills, usually beginning in late January. Suppliers have signaled an outcome of the talks is unlikely for many, many months, Macquarie said in the report.
Prices Tripled
Prices tripled to a record this year after floods disrupted mining in Australia’s Queensland state, forcing at least 6 producers to delay shipments from a region responsible for about two-thirds of global exports. Nippon Steel Corp. (http://www.bloomberg.com/apps/quote?ticker=5401%3AJP), the world’s second-biggest steel mill, agreed in April to accept BHP and Mitsubishi’s demand for a record annual increase in prices.
“We expect this year’s negotiation period to drag on because it is not in the interests of producers to rush to settlement in the current environment,” Fraser Phillips (http://search.bloomberg.com/search?q=Fraser+Phillips&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1), an analyst at RBC Capital Markets in Toronto, said in a Nov. 27 report. “We believe many will try to delay through Queensland’s rainy season, which starts next month, in case last year’s floods are repeated.”

ArcelorMittal (http://www.bloomberg.com/apps/quote?ticker=MT%3ANA), the world’s biggest steelmaker, last month said it would slash production by as much as 35 percent in the U.S. and 30 percent in Europe as demand slumps. Toyota Motor Corp. (http://www.bloomberg.com/apps/quote?ticker=7203%3AJP), the world’s second-largest carmaker, has forecast the biggest drop in profit in at least 18 years as a global slump cripples auto demand.

“It’s a little too early to see how the European steel mill cutbacks are going to flow into that market against the backdrop of Japanese steel mills still going well,” BHP’s Kloppers said Nov. 27. “Steel mills normally need to keep their coking batteries running. We will be impacted if this persists for a long period of time.”

Steel production in China, the biggest maker of the alloy, has slumped 17 percent so far this year, curbing demand for raw materials, Kloppers said.
To contact the reporter on this story: Jesse Riseborough (http://search.bloomberg.com/search?q=Jesse+Riseborough&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1) in Melbourne at jriseborough@bloomberg.net

[Placebo]

Yeah. Not good news. Add that to projections PRC may undershoot its year-end production target, this spec play may not end up the gold mine we all hoped for :(

[Dr_Who]

Yeah. Not good news. Add that to projections PRC may undershoot its year-end production target, this spec play may not end up the gold mine we all hoped for :(

I am trying to compare PRC with the other coal stocks in Aussie. The Aussie coals stocks are up and running with a good revenue and profit stream, yet still get hammered. PRC has yet to show income with continue increase cost to production. A double :(:(

[bull....]

The immediate risk is that the coal contracts they have secured will be re-negotiated at lower prices.
Aussie miners now being told take this price or we walk.

[Dr_Who]

The immediate risk is that the coal contracts they have secured will be re-negotiated at lower prices.
Aussie miners now being told take this price or we walk.

When does the current fixed contract expire? They have yet to deliver any coal and the cost of production continues to climb.

Any chartist can give us a view?

[friedegg]

i cant see the great concern on coking coal price drops really in this volitility,if its $140 next year and were at us50c theres not too much diff from $300 at us80c,a lot of humans have the brains of sheep and follow into the panic without being rational

[AMR]

$140 would be alright in fact. I remember the pundits being very pleased when $150 was going to be the benchmark (they went nuts when $300 was confirmed).

[RossT]

The initial coal production was 100k ton by end of March 09, and then another 100k ton by June 09, thus giving the 200k ton they projected to produce by the time hydro mining was to start. ( if my memory serves ? )

This has been reduced by 20% due to delays, so taking the late start to production, take 20% off the initial 100k tons, gives you 80k ton, then take off ( my guess ) 50k ton to fully stock the supply chain, leaves 30k ton saleable product by march 09.

Factor in the inevitable further teething delays, they probably weren't going to sell any significant volume of coal under their $300 us contracts anyway.....

[Scuffer]

Rumour has it that there is still staffing issues, pertaining to good quality experienced staff at the coal face, this is part and parcel of why the coal is not exiting at the rate first estimated.

[bermuda]

Rumour has it that there is still staffing issues, pertaining to good quality experienced staff at the coal face, this is part and parcel of why the coal is not exiting at the rate first estimated.

Scuffer,
You and your rumours.

I don't bloody believe it.

[AMR]

Just a fairly basic question here, can ex-copper or ex-zinc miners go to a coal mine and mine coal? Or is it a different ballgame?

[digger]

Just a fairly basic question here, can ex-copper or ex-zinc miners go to a coal mine and mine coal? Or is it a different ballgame?
My family in Canada were all miners.They at some stage were asbestoes,copper,nickel,uranium,nickel and gold,etc,etc. All that is needed is mining experience and away you go. My oldest brother took over a barick[misspelted] mine with no previous experience in that particular mineral and completed the job making himself a lot of money.Unfortunately like most miners they have a easy come easy go attitude and all the money was soon lost. However your question is simple----mining experience is mining experience and with very little further training can flow from one job type to another
Digger

[Dr_Who]

Rumour has it that there is still staffing issues, pertaining to good quality experienced staff at the coal face, this is part and parcel of why the coal is not exiting at the rate first estimated.

Where did you hear this rumour? Staffing issues and further delays possible. Wont be selling much coal at the existing contract before it expires. If I was to buy into coal, I prefer some of the Aussie coal stocks which are currently making good profit with low P/E.

The biggest concern is how long this recession will last and what effect it will have on commodities. We have not yet seen the bottom.

[Scuffer]

I can't tell you who told me that they have experienced staffing problems it is just the word that is out there I don't know if it is true or not but I can see it being a problem for PRC and Bermuda I did get it right about the flat bottomed boats but that wasn't a rumour that was just common sense deduction after looking into the proposal, which I was villified for on this thread. Have a nice day boys.

[bermuda]

I can't tell you who told me that they have experienced staffing problems it is just the word that is out there I don't know if it is true or not but I can see it being a problem for PRC and Bermuda I did get it right about the flat bottomed boats but that wasn't a rumour that was just common sense deduction after looking into the proposal, which I was villified for on this thread. Have a nice day boys.

Scuffer,
I seem to recall that you doubted the logistics of the flat bottomed boats. It could have been done no doubt about that. In fact it was all set to go until reality and common sense ( the rail option ) prevailed. Perhaps we misinterpreted your posts.

Anyway, I am sure Peter Whittall and his team will get the coal out. This is an International project of some magnitude. Rumours will always abound in this game.

[robjb5]

Where did you hear this rumour? Staffing issues and further delays possible. Wont be selling much coal at the existing contract before it expires. If I was to buy into coal, I prefer some of the Aussie coal stocks which are currently making good profit with low P/E.

The biggest concern is how long this recession will last and what effect it will have on commodities. We have not yet seen the bottom.

C'mon, Doc. youre a Time Lord,you tell us!!!

[Dr_Who]

You guys should have a look at GCL and MCC in Aussie. Both company making great profit and producing, yet getting slam dunk by this market. PRC have yet to ship any coal with continue increase cost.

It was only a few months back that someone tried a hostile T/O of MCC at over $20 and now sp trading at $3.06.

PRC at 94 cents. It may hit 80 cents which is support level. :-(

[brettdale]

You guys should have a look at GCL and MCC in Aussie. Both company making great profit and producing, yet getting slam dunk by this market. PRC have yet to ship any coal with continue increase cost.

It was only a few months back that someone tried a hostile T/O of MCC at over $20 and now sp trading at $3.06.

PRC at 94 cents. It may hit 80 cents which is support level. :-(

Everyone is getting burned, the energy companies are hardest hit.

This madness has to stop sometime.

[Dr_Who]

Looks like PRC may be testing 80 cents again soon. 92 cents now. :(

[Scuffer]

Honestly guys I don't see much coal sold before march if any, I think the $300/ ton is a bye bye I hope they prove me wrong but I can't see it happening, I am of the opinion that the rumour is correct and experienced staffing is an issue.

[Balance]

Honestly guys I don't see much coal sold before march if any, I think the $300/ ton is a bye bye I hope they prove me wrong but I can't see it happening, I am of the opinion that the rumour is correct and experienced staffing is an issue.

Not any more! Other mining companies around world cutting back production and expansion so like investment bankers, plenty looking for jobs.

[Balance]

Scuffer,
I seem to recall that you doubted the logistics of the flat bottomed boats. It could have been done no doubt about that. In fact it was all set to go until reality and common sense ( the rail option ) prevailed. Perhaps we misinterpreted your posts.

Anyway, I am sure Peter Whittall and his team will get the coal out. This is an International project of some magnitude. Rumours will always abound in this game.

It is a great project for NZ but for the West Coast in particular. There are a lot of benefits flowing from PRC and NZ is lucky it has happened.

However, PRC is coming onto the scene at the tail end of the commodity boom so don't expect great share price performance from hereon in.

[Rabbi]

Everyone is getting burned, the energy companies are hardest hit.

This madness has to stop sometime.

Unfortunately, not any time soon!

The "dead cat" is sinking further every time it bounces. The Fed tries to revive it with every fiscal stimulus known to mankind but this cat has a death of it's own.:D

[Dr_Who]

Energy and commodity stocks are getting hammered over night. PRC have yet to ship any coal. I think it may test 80 cents next week.

[tricha]

Rumour has it that there is still staffing issues, pertaining to good quality experienced staff at the coal face, this is part and parcel of why the coal is not exiting at the rate first estimated.

Yeah well I was talking to someone at the site recently and they have issues, relating to staff ? I did not ask. But

1 - The processing plant - is experiencing problems. Should be resolved soon.:confused: Not that important at this stage because of problem 2, ventilation.



2 - The vent shaft decline still had not accessed the position, that the raise bore, can then bore the vent to the top off the mine to install the ventilation fan.
We all know ventilation is a must in an underground mine.

And to top it off, the raise bore is sitting idle incurring a $30,000 a day cost. whats the staff cost for being idle ?

.:confused:How many days production lost and the exact cost, ask management to front up.


3 - Here is a staffing issue, unfortunately they are 50 kms inland from Greymouth and the mine is up a narrow metal road.
So your twelve hour shifts get extended to 14 hour days for the underground crew. Not much fun.
.................................................. ..............................

So they are like Horizon, CUE and Otto to name a few who have missed golden opportunties due to delays.
It happens

[Scuffer]

Thanks Tricha, I didn't want to get on any high horse but the rumours I heard are true then, I do not write what I don't think is true, vindicated again on this thread.

[bermuda]

Thanks Tricha, I didn't want to get on any high horse but the rumours I heard are true then, I do not write what I don't think is true, vindicated again on this thread.

And apparently they are still having problems with that rock overhang....lol

[bull....]

All this bad news about delays fits in with my price view on pike.

We could see a short term consolidation between 80 - 1.1 as price has completed wave 3 on the downside so wave 4 is a consolidation or short term upmove time to complete unknown , this is ususally followed by a final push to the down side and last support at 80 if broken will confirm move to historic lows my assumption considerably lower than now.

[Dr_Who]

Yep, looks like PRC is heading to 80 cents.:eek:

[Dr_Who]

Article from: Dow Jones Newswires (http://www.dowjones.com/)


MERRILL Lynch has revised its forecast on coal prices and reviewed its recommendation on the sector's miners.

Centennial Coal was upgraded to “neutral” but Gloucester Coal was cut to “underperform” and Macarthur Coal was also downgraded to “underperform”

The analysts downgraded its 2009 coking coal forecast by 58 per cent and thermal coal by 38 per cent on slowing steel output and weaker demand from utilities.

Merrill’s said Gloucester was at risk of significant price falls and pushback from steel mills on volumes and highlighted that Macarthur was the most exposed to coking coal prices and volumes.

Its pick of the Australian coal stocks is Felix Resources.
Dow Jones Newswires

[gbeenz]

10 December 2008
VENTILATION SHAFT RAISEBORE UNDERWAY
In an essential milestone step, Pike River Coal Limited has started the process of coring out a 108 metre ventilation shaft between its underground mine and the surface of the Paparoa Ranges on the West Coast.
Pike River is using a ‘raiseboring’ process to ream out the shaft which will be used to exhaust air and any gas from the mine face.
After many months of forming the surface site for the raisebore rig, including excavating the shaft collar and building retaining walls, a laydown area and a helicopter pad, the heavy raisebore equipment was brought in from Australia. The raisebore equipment was then lifted to the site in 5 tonne lots by a heavy lift helicopter.
The first step in constructing the shaft was to drill a 350 mm pilot hole down to the coal seam, which commenced on 7 December 2008 and has now been completed.
The pilot hole will intersect with the underground tunnel, which during the past month has been driven north 68 metres from the end of the 2.3 kilometre access tunnel. This northern roadway has been excavated largely in coal up to the edge of the projected shaft perimeter.
The northern roadway will now be driven through to the far side of the projected shaft perimeter and a chamber excavated, ready for the reaming head to be attached to the raisebore drill string during the next week. Large raisebore motors on the surface will then turn the reamer and pull it up through the ground, allowing the material to fall back down the shaft to be removed from underground.
Once the ventilation shaft is completed, by the end of the March 2009 quarter, an exhausting fan will be located over the shaft to draw air from the mine and it will be the mine’s backup ventilation fan. Until the fan is established the mine will continue to be ventilated via the tunnel under the current ventilation.
The main fans for the mine will ultimately be sited underground and exhaust up the ventilation shaft

[Dr_Who]

PRC just announced their work on the vent shaft. Vent shaft completion march quarter 2009.

Looks like further delays.

Your views?