PRC Pike River Coal

[Balance]

Reggid

What was unreal was the increase in the hard coking coal price from US$98 to US$300.

Indications are the 2009 price will settle at US$135. So an increase from US$98 in 2007 to US$135 in 2009 will still be substantial, especially when the change in exchange rate is taken into account.

PRC is a great project for NZ. Get behind and support. The coal will see daylight sooner or later.

[Dr_Who]

Reggid

What was unreal was the increase in the hard coking coal price from US$98 to US$300.

Indications are the 2009 price will settle at US$135. So an increase from US$98 in 2007 to US$135 in 2009 will still be substantial, especially when the change in exchange rate is taken into account.


Why do you say $135? There is no indication that the contract price will be at $135. More likely to be below $110 or even below $100. These diehard PRC fan club have been holding onto PRC all the way up and all the way down. Time to wake up and face reality! Production cost will be far higher than $80 forecast. PRC have yet to make nay revenue. The tunneling has been delayed for a year. The area and earth in that area is unstable and could be a problem in the future. All other coal miners are cutting cost and cutting production while PRC is increasing cost with no revenue.

WAKE UP!

I would prefer to wait for the coking coal contract prices for 2009 set by the big boys in Aussie before I redo the numbers in PRC and decide to buy it or not.

[Wiremu]

Dr Who,

If you had bothered to attend the PRC shareholder briefing sessions you would know what the PRC production cost will be.

There is no indication that the 2009 price will be US$110 or below US$100. PRC could sell their coal as thermal coal and would receive US$100, so that has to be the base line. Those with knowledge of the market are stating HCC at US$135 +/- 5, and they would know.

Who says the Pike River area is unstable and could be a problem in the future?

And who says that all other miners are cutting production?

I think many posters on this thread have woken up and seen the reality, and that is Dr Who is a downramper with few real facts, and to quick to quote the negative and forget the positive. Indeed, wake up to Dr Who.

[Balance]

Dr Who,

If you had bothered to attend the PRC shareholder briefing sessions you would know what the PRC production cost will be.

There is no indication that the 2009 price will be US$110 or below US$100. PRC could sell their coal as thermal coal and would receive US$100, so that has to be the base line. Those with knowledge of the market are stating HCC at US$135 +/- 5, and they would know.

Who says the Pike River area is unstable and could be a problem in the future?

And who says that all other miners are cutting production?

I think many posters on this thread have woken up and seen the reality, and that is Dr Who is a downramper with few real facts, and to quick to quote the negative and forget the positive. Indeed, wake up to Dr Who.

Steady on, Wiremu. Fair's fair.

Dr Who is entitled to express his opinions just as anyone else is. If he is a down ramper, he has been right so far, so I will not be so fast to dismiss his opinions. We are not a communist state yet.

PRC has been dreadfully wrong in their production and capital expenditure forecasts to date so it's fair to question how accurate their costs of production will be. Heck, I can remember their IPO forecast that they will start producing coal from June 2008!

PRC is a great project for NZ. But it's tragic that they cannot seem to get things right and have missed on the US$300/tonne. Let's wish them well and hope that the coal starts coming out of the ground soon.

[Wiremu]

Balance

Questioning is one thing. But misleading and unsupported statements are quite another.

And if you read the threads Dr Who was not prepared to accept that I had a point of view so who should your fair's/fair comments be directed at?

[Dr_Who]

Do your own research mate, dont just listen to these geezers. As Balance puts it nicely, their forecast have been wrong to date. If you always rely on company and analyst forecast without doing your own research, you would have lost alot of hard earned money.

Good luck and enjoy the ride.

http://in.reuters.com/article/businessNews/idINIndia-38224620090226


Disc: I am not a shareholder

[Wiremu]

McCloskey Report 20 February 2009:

MARKETS – Metallurgical Coal
India: Met coal buyers have begun
agreeing provisional pricing deals with
their Australian suppliers at around
$150/t FOB for 2009-2010 tonnage. The
agreements involve leading buyers
SAIL, Vizag and the privately-held Jindal
group and suppliers include BHP
Billiton, Peabody, Anglo, Rio Tinto and
probably Xstrata and New Zealand’s
Solid Energy. The concept is that
provisional pricing will be incorporated
into ‘split’ cargoes over coming months,
with some tonnes at the provisional
price and the balance at ruling levels
(around $300/t for hard coking coal).
Brazil: Noble has sold 70,000t of US
low volatile coking coal to CSN for
delivery in April at c.$150/t FOB Norfolk.
A year ago the same material was at
$305/t. Meanwhile, small and midsized
US coking coal producers that generally
sell their material to US traders for
export have started to try to sell their
products directly to the BSM. They are
now offering low vol coal at $160-165/t
FOB and mid vol at $140-150/t FOB in
quantities that vary between 30,000 and 50,000t.

[blockhead]

mmmmn, just been reading the announcement regarding the options, exercise price of $1.25 within 2 years I see. Hard to guess what that makes them worth at this stage but obviously PRC thinks the price is only going one way. If every thing went to plan and no more mishaps @ $40 - $50 mil a time I guess $1.25 will prove to be good buying.

Think I might sell 20% of my holding at present prices and use it to buy back my rights @ .70c later in April..or lower if the price doesn't hold up

[777]

The point of the issue is to raise money. To price it so close to the current market price is risky. If the shares drop below 70c then why take up the rights is issue for a shortish term option. In fact the whole issue will fail if this is the case.

At this stage I will won't be taking mine unless there is a bigger margin between market price and 70c.

[Nitaa]

The point of the issue is to raise money. To price it so close to the current market price is risky. If the shares drop below 70c then why take up the rights is issue for a shortish term option. In fact the whole issue will fail if this is the case.

At this stage I will won't be taking mine unless there is a bigger margin between market price and 70c.Expect some positive news in the short term then

[blockhead]

You are referring to pricing I presume Nita, will definitely have an effect if it is well upwards of pessimists present thoughts

[Phaedrus]

As much as my heart agrees with your sentiments Digger, I suspect if we had Phaedrus post a chart of PRC, we'd find it's well and truely in a downtrend still, probably with all his indicators showing no signs of life at all. That was a fairly safe bet, Xerof!

More than anything else, though, this chart illustrates the crucial importance of having an exit strategy. The market gives - and the market takes away.

http://h1.ripway.com/78963/PRC39.gif

[Xerof]

:D:D


That was a fairly safe bet, Xerof!

Thanks Phaedrus

Hence PRC will be underwritten to ensure it's a 'success'

I'm still uneasy with what Liberty might look to do with their bonds. Unless the covenants have been renegotiated, Liberty will soon have the right to redeem the bonds, leaving PRC out of pocket on both cash and a rather ugly FX writedown. I guess it depends on whether they are in for the long haul or are now more concerned with preservation of cash themselves.

The conversion price will be lowered again, but if they do convert, they pick up the currency loss, whereas if they call the bonds, they get their cash out with 6.75% interest, and PRC carries the FX losses (in at over 80cents, out at market, say 50cents.....)

I think PRC need to cover this off in the rights issue documentation, so ordinary shareholders know where they stand.

[dayz]

That was a fairly safe bet, Xerof!

More than anything else, though, this chart illustrates the crucial importance of having an exit strategy. The market gives - and the market takes away.

http://h1.ripway.com/78963/PRC39.gif

Yes and hard to have a viable exit strategy with the NZ tax laws - too many trades & you get taxed, not enough & you go broke holding companies like PRC.

Maybe calling yourself a trader & being taxed for capital gains is the safer route.

[dayz]

dayz, why don't you bother to read the announcement before you make such an uninformed maiden speech....

OK so this post is a few days old, but I did read the announcement. My interpretation is clearly different from some others.

[freddy]

Dr Who,

PRC could sell their coal as thermal coal and would receive US$100, so that has to be the base line.

Where do you get 100 from?

http://www.globalcoal.com/news/coalnews.cfm

$US 60 with a down trend looks more like it.

[Wiremu]

Freddy,

Australia: Shippers are reporting increased
enquiry from Chinese generators, but they
say price ideas are ‘extremely low’ and are
concentrated on off-spec coal, typically
with low c.v. and high ash. Some sources
told MCR, the Chinese buyers are looking
for pricing in the $56-58/t range, basis
5,800kc NAR. Most shippers have reacted
with counter offers closer to the $70/t FOB
mark. The Chinese are looking to take
advantage of large tonnages of off spec
Australian thermal product, much of which
is from predominantly met coal shippers,
especially Queensland PCI producers
struggling to move tonnes.

If the thermal coal price is adjusted for low ash and the thermal factors in NZ coking coal there is a premium which would bring the price to around $100/t.

[Dr_Who]

Coking coal prices plunge as steel mills cut their orders

UBS estimates the hard coking coal price will settle at just $US85 a tonne this year.

http://business.watoday.com.au/business/coking-coal-prices-plunge-as-steel-mills-cut-their-orders-20090309-8tbt.html

[winner69]

Coking coal prices plunge as steel mills cut their orders

UBS estimates the hard coking coal price will settle at just $US85 a tonne this year.

http://business.watoday.com.au/business/coking-coal-prices-plunge-as-steel-mills-cut-their-orders-20090309-8tbt.html

.... but the NZD is falling fast Dr .... so we'll be OK in NZD terms at this price .... just look at the expected production costs to see this is a black gold mine

[Nitaa]

.... but the NZD is falling fast Dr .... so we'll be OK in NZD terms at this price .... just look at the expected production costs to see this is a black gold mineYes i agree. Its still viable.

At this rate Dr Who, with the decline in the $NZ if I give you $1 now you need to give me $1 back. But in 2 weeks time if you give me $1 i will only need to give you 10 cents back. For a limited time only . After that i cannot give you such a good deal

[Dr_Who]

Yeah, but you guys have been saying this all the way down from over $2.00 to $1.00 and now the sp is at 72 cents. Hardcore PRC holders. lol

[Nitaa]

Yeah, but you guys have been saying this all the way down from over $2.00 to $1.00 and now the sp is at 72 cents. Hardcore PRC holders. lolfyi Dr. I have never bought or held this stock. My exposure is simply through nzo.

Keep this in mind medium term. Bhp has cut around 10,000 of its workforce. Many mines not starting up or are closing due to sudden slowdown and lowering of commodity prices. But... China, USA and most countries are looking to stimulate the economy through infrastructure such as railroads, bridges etc. IMO commodity prices are going to remain volatile for a while with a seve risk of highly inflated costs if the economy abouts turn in short notice. Commodity produces may not be able to keep up with demand.

To keep you happy you can expect prc not to make a profit this year. I hope at least that puts a smile back on your face

[dayz]

This is my summary of the current situation

Risks

Short term risk - not raising the $45m (includes factors such as the current coal price, failure to finalise the underwriting) (perhaps not a large risk ?).

Medium term risk - another rockfall or difficulties with the remediation work (any guesses for % chance of this happening? - the $64k question.)

Long term risk - the longer term price of Coal (i.e. next year, eg another depression etc) and the real eventual cost of production.

Rewards

SP at a very low ~72c, a re-adjustment to ~$1.08 is a 50% return.

If things come right (risks 1 & 2 out of the way) then ~$1.44 is a 100% return.

If risk 3 is overcome with increasing commodity prices (high likelyhood of that) then 2-3 years a return to $2.20 is possible - a ~300% return (ignoring the free options).

Current share price

With the market pricing in a possibility of a 300% return it is :

a) Pessimistic - (esp. Due to current risk-aversion) the risks are not high enough to warrant such a discount even in the current climate.

b) Correct - the current price is about right (i.e. given other current opportunities etc).

c) Optimistic - this stock is too risky even at the ~70 c.

Given that I am not one to discount the collective wisdom of the market I would say that (b) had the most chance of being correct.
My guesses : (a) ~30% chance (b) ~50% chance (c) ~20% chance

disc.
My interest - purely as an interested observer since I chose (c) and sold yesterday, basically because I can not risk the small $ I had left in PRC (so if that's not the bottom I don't know what is !).

Good luck,
dayz

[boysy]

sp down to 70 cents will they have to reprice the rights issue

[Taijon]

A good post dayz. Good to see you haven't been put off by the borax you got for your earlier post.

A SP at 70 cents or below will be a major blow for the cash raising. NZO are only supporting the issue to the extent of taking up their entitlement which leaves around 70% not underwritten thus far - I haven't seen any other underwriting details.

Also the SP will likely fall further after the entitelment date passes. We will get some idea about the extent of a fall from the SP on the ASX as the date for entitlement for ASX PRC holders will come earlier than the NZ date. Your selling could be the right move but I'm holding a bit longer.

[geezy]

I remembered when PRC had their first rights issue(correct me if i m wrong of the term used) @ 90 cents, which i did not participate. and the head shares were also either very close and similar. no complains then and it well taken up.

This also happened with NZO on its options @ 1.50 and rights issue @ 1.00. heads were lower but it managed to garner enough support when entitlement date arrived.

PRC looks shaky here so is the rest of the world :) I think its good to hold on to it and pick up more when sp goes down further.

DISC: hold PRC

[Dr_Who]

Iron ore contract prices could fall 40pc in 2009 - ANZ

FALLING steel prices in China spell "clear warning signs" that may lead to iron ore prices declining as much as 40 per cent in 2009.

http://www.theaustralian.news.com.au/business/story/0,28124,25166875-36418,00.html

[Xerof]

I know it's not HCC, but looks like reasonable prices are being settled on for 2009 for thermal - only 44% down from last years pricing

picks for HCC at 135/150 looks reasonable to me, possibly conservative for PRC's top-of-the-line product

http://www.theaustralian.news.com.au/business/story/0,,25171188-643,00.html?from=public_rss

[Dr_Who]

Looks like the contract for this year is moving more towards the $90-$100. Very different from PRC's forecast.

Miners due to seal coking coal prices

PRICES for coking coal - Australia's biggest export - are expected to be settled within weeks, following reports the nation's big miners sealed thermal coal agreements with Japanese customers this week.

But analysts warn coking coal producers are still likely to wear a massive 60 per cent price drop this year, despite a better than expected result in the thermal coal talks.

The outcome of the negotiations is vital for the Australian economy, with an estimated $50 billion worth of coking coal shipped in the 12 months to April.

According to Japanese reports, Australia's two largest thermal coal producers - Rio Tinto and Swiss-based Xstrata - have agreed to prices of $US70 to $US72 a tonne with Nagoya-based Chubu Electric Power.

The new price, which takes effect at the start of the Japanese financial on April 1, is significantly lower than last year's rate of $US125 a tonne due to the sharp decline in energy demand brought on by the global financial crisis.

GoldmanSachs JBWere commodities analyst Malcolm Southwood said the result was in line with forecasts.

"A benchmark price of $US70 a tonne, if confirmed, would be at least $US10 a tonne below the sellers' initial objective and approximately 44 per cent below the prevailing Australia-Japan contract price," he wrote in a note to clients.

"But we would still regard it as a good outcome for the miners in the current market environment: Spot prices have fallen by $US25 a tonne since negotiations commenced, the demand outlook has deteriorated and the Australian dollar versus the US dollar has weakened by 30 per cent since this time last year."

Power plants use thermal coal to produce electricity, while steel mills need coking coal to make the metal. Prices for powdered coal for pulverised coal injection - a low-grade form of coking coal - have also reportedly been settled.

According to an article in industry journal Steel Business Briefing, Queensland's Macarthur Coal has signed a supply agreement with Korean steel giant POSCO that prices its PCI coal at $US90 a tonne - down from current levels of $US240 a tonne.

ANZ head of commodities research Mark Pervan said coking coal negotiations would be heavily affected by slowing global steel output.

"I would expect an outcome in the next week or two and I think we're going to see something in the order of a 60 per cent decline," he said.

"The coking coal producers will probably point to the fact that they don't want to be accepting much less than a $US20 a tonne premium to thermal so they won't want anything lower than $US90 a tonne."

BHP Billiton Mitsubishi Alliance - Australia's largest coal producer - secured a 200 per cent increase in coking coal prices to $US300 a tonne last year after flooding cut supplies in coal-rich Queensland.

BHP Billiton spokeswoman Sam Evans declined to comment on the negotiations.

[Placebo]

Thanks Doc. At least this will be one variable that is put to bed, so to speak.

The other is how much of a reduction in demand there will be.

[RossT]

Great to see PRC doing such a good job of keeping "joe shareholder" informed of the SPECIFIC work being done underground regarding fixing the shaft.

Or apart from dumping concrete down the hole out of an iriquois for remedial shaft support, maybe nothing else is being done because they don't have any money to do it until they hopefully get some from the share placement.....

And just how much is Liberty harbour going to stuff things up...stay tuned.

[Nitaa]

Recent sales of coking coal in China were in the range of $130-150 per tonne. Australia-based Macquarie Group Limited, a global provider of banking, financial and advisory services has forecasted a benchmark price of coking coal at $110 per tonne for 2009.

[Sehnsucht888]

Great to see PRC doing such a good job of keeping "joe shareholder" informed of the SPECIFIC work being done underground regarding fixing the shaft.

Or apart from dumping concrete down the hole out of an iriquois for remedial shaft support, maybe nothing else is being done because they don't have any money to do it until they hopefully get some from the share placement.....

And just how much is Liberty harbour going to stuff things up...stay tuned.


Maybe their priority is getting on to fixing it... What do you want to know? - that they have ordered 65 trucks of concrete?

[RossT]

Re: Liberty harbour.

http://www.stuff.co.nz/business/market-data/companies/2255855/Pike-River-seeks-extension

[Xerof]

Good, thanks Ross

IMO, this needs to be confirmed before they expect peeps to commit to the rights issue.

I see from another story out today that the Indians won't be taking up their rights.....

Of course the other issue shareholders have to contend with is they will be averaging in to a downtrend if they take the rights up, eh Phaedrus

[Dr_Who]

This is actually very bad news on top of all the other bad news.

The question now is what will happen if the sp goes below 70 and/or shareholders opt not to take up their rights? Is it wise for NZO to take up the rights that no one wants?

It will be an interesting year for PRC and NZO.

[boysy]

its rather hard to see the positives

- potential breach of production covenents concering liberty harbour ( US$55 million )
- delay in production another 2-3 months first
- prices falling from US$300 to (US$85 according to UBS) ( US$130 PRC estimate)
- Exports of hard coking coal down 35% in aus in feb
- No other major shareholders apart from nzo taking up rights issue


all in all not looking good for prc or nzo through their exposure

[Dr_Who]

The big boys in Aussie should have the coking coal price agreement for this year in a few weeks. I will wait for the price before I make a decision on PRC. If the price goes below the PRC forecast, they will have to eat their words. Either PRC is wrong or the investment bank analysts are wrong.

I am still skeptical they can deliver production in a few months. It was suppose to be out early last year. Construction cost has been blown out of the water. I assume production cost would also be up.

[blockhead]

So why is the price rising ???

[Placebo]

The big boys in Aussie should have the coking coal price agreement for this year in a few weeks. I will wait for the price before I make a decision on PRC. If the price goes below the PRC forecast, they will have to eat their words. Either PRC is wrong or the investment bank analysts are wrong.

I am still skeptical they can deliver production in a few months. It was suppose to be out early last year. Production cost has been blown out of the water. I assume production cost would also be up.

Ha! As if Investment Banks ever get anything wrong. Ever !! ;)

[777]

So why is the price rising ???


Maybe Hart is buying.

[Dr_Who]

Ha! As if Investment Banks ever get anything wrong. Ever !! ;)

I agree with you some what but in this circumstance I think the investment bank analysts got it pretty much right.

Thermal Coal settled at $70.... Merill Lynch and Citi expected $70, Macquarie $75 and UBS $60. The analyst was pretty spot on for thermal coal.

http://www.fnarena.com/index2.cfm?type=dsp_newsitem&n=F83A7E68-1871-E587-E176905C8FCE8BF0

[the machine]

I agree with you some what but in this circumstance I think the investment bank analysts got it pretty much right.

Thermal Coal settled at $70.... Merill Lynch and Citi expected $70, Macquarie $75 and UBS $60. The analyst was pretty spot on for thermal coal.

http://www.fnarena.com/index2.cfm?type=dsp_newsitem&n=F83A7E68-1871-E587-E176905C8FCE8BF0



pike don't agree with UBS re coking coal

http://www.stuff.co.nz/business/industries/2258159/Forecast-too-low-Pike-River

M

[boysy]

Pikes sort of stuck between a rock and a hard place they sort of have to talk up the price they will recieve as they have a rights issue on the table which could go either way depending on how things eventuate. will be interesting to see if prc sp can stay above that magic 70 cent mark in the weeks to come. It wouldnt be in their interest now to report any bad news or further delays but will be interesting to see if these emerge after the rights issue.

[trendy]

http://business.smh.com.au/business/coal-exporters-feel-the-chill-from-asian-downturn-20090310-8u5a.html

Coal exporters feel the chill from Asian downturn
Jamie Freed
March 11, 2009

THE demand for thermal coal - NSW's most valuable export - has begun to reduce dramatically in response to the need for less power to drive heavy industry in countries such as Taiwan, Japan and South Korea.

The spot price of thermal coal from Newcastle has plunged by 23 per cent to $US61.70 ($96.73) a tonne in the past three weeks, compared to the contract price of $US125 a tonne last year.

It is believed Xstrata and Rio Tinto have this week settled the annual benchmark contract price at $US70 a tonne with Japanese buyers, a 44 per cent fall from last year's contract price.

But for miners, the recent slackening of demand is even more worrying than the fall in price.

"There is an overabundance," said an industry source. "Customers are saying 'We don't need it right now' just like they did earlier with coking coal."

The iron ore market was the first bulk commodity market to collapse, followed by manganese and coking coal. Thermal coal demand had until recently been relatively unaffected by the global financial crisis.

Customers have started to request deferrals of shipments, particularly in Taiwan and Japan, which have been hit hard by a collapse in industrial production. A Wilson HTM analyst, Andrew Pedler, said about one-third of thermal coal production was used to fuel heavy industry, with the remainder used for commercial and residential power for which demand was more stable.

Taiwan's industrial output plunged 43 per cent in January, while Japan's plunged 31 per cent. That implies their need for thermal coal volumes could have fallen by 10 per cent or more. Japan is by far the largest customer of miners which ship coal from Newcastle and the country typically accepts more than 60 per cent of the total shipments. In contrast, China buys only 1 per cent of the coal shipped from Newcastle, since unlike with iron ore, it has sufficient domestic supplies.

The remainder of NSW thermal coal exports are split relatively evenly between Taiwan, South Korea and Europe.

The Hunter Valley Coal Chain Logistics Team has reported that operators sent 120,000 tonnes less than its internal estimates to the Newcastle port last week, citing "coal availability and demand profile issues". It said shipments in February were also lower than expected due to an "unfavourable demand profile".

The port is running at an annual rate of 84 million tonnes of exports in March, 11 per cent below the 94.5 million tonne capacity. It now has 15 vessels in the offshore queue, compared to the 50-odd that it often experienced during boom times.

Miners have been shipping a higher proportion of thermal coal versus coking coal than usual due to even weaker demand for the steelmaking product. In February, 89 per cent of shipments were thermal coal, compared with 83 per cent in January.

When it slashed production at its Queensland coking coalmines in January, Rio Tinto said demand for thermal coal remained relatively stronger than for coking coal. But when asked about the state of the thermal coal market yesterday, a Rio spokeswoman, Alison Smith, said: "It is not an issue we are wishing to make comment on at this point."

[blockhead]

Have to ask again, any takers on the question....why is the price rising ?

[Sehnsucht888]

blockhead - Because it got the cr*p sold out of it by people trading emotions, and there aren't any more cheap shares out there... (not that many contributed to the big drop in the last month).

Volume has been very low through this low patch, so either:
1) most holders have their heads in the sand
2) most holders are on holiday.
3) most holders think this is still a good thing.


disl:
I hold, but not huge quantities.
I'll take news on face value but won't read volumes into the absense of news.
I'll read the good, not much at the momnent though, and the bad, thanks RosstT - keeping these in the piciture at the moment.

I'll sell when I see I need too, but not because those that have ramped up and ramped down want me too, aye RossT..

DYOR, but at the moment the world is mostly in meltdown, but when things turn around some will do better than others. This may not be one, and there may be more rock fall, etc, etc, but at the moment PRC is still looking good compared to alternatives.

[boysy]

i personally see very little light at the end of this tunnel if or when they get there is anyones guess.

the facts are

-production further delayed till september 09 ( in prospectus first coal expected june 08)
- Demand destruction for coking coal with exports down over 35 % in aus in feb 09
- Prices falling from US$300 to US$85 (usb estimate) US$140 PRC estimate
- potential breach of production covenant with liberty harbour ( potential cost US$55 million )
- cost overuns ect
- Other major partners not participating in rights issue


all of the above are facts, im not holding my breath on the rights issue either that could go horribly wrong though im sure nzo would keep chucking money at PRC if things go pear shaped . Looks like nzo are putting their neck out on this one how much has this venture cost them so far and how much more will it end up costing them ?

[Sehnsucht888]

?

the facts are

- Other major partners not participating in rights issue


all of the above are facts


- I missed that - can you clarify.

Thanks

[Nitaa]

?
- I missed that - can you clarify.

ThanksThe major Indian shareholders have indicated they are not going to take up their rights issue

[Nitaa]

i personally see very little light at the end of this tunnel if or when they get there is anyones guess.

the facts are

-production further delayed till september 09 ( in prospectus first coal expected june 08)
- Demand destruction for coking coal with exports down over 35 % in aus in feb 09
- Prices falling from US$300 to US$85 (usb estimate) US$140 PRC estimate
- potential breach of production covenant with liberty harbour ( potential cost US$55 million )
- cost overuns ect
- Other major partners not participating in rights issue


all of the above are facts, im not holding my breath on the rights issue either that could go horribly wrong though im sure nzo would keep chucking money at PRC if things go pear shaped . Looks like nzo are putting their neck out on this one how much has this venture cost them so far and how much more will it end up costing them ?Yes i am not sure if nzo are thinking with a clear head. It seems like they have come this far that they cannot stop. This is likely to bite nzo in the bum and of course prc even more.

discl. hold nzo

[Dr_Who]

Have to ask again, any takers on the question....why is the price rising ?

Lots of things happen in the background that us public are not privy to. It concerns me that the company is not transparent and does not disclose information to the NZSE in a timely maner.

[Phaedrus]

Have to ask again, any takers on the question....why is the price rising?Before we worry about any possible reasons, Blockhead, let's look first at the rise itself.

The question being - is this a significant rise?

Is it bigger than any other retracement in this downtrend?
Is it on above average volume?
Has it broken above a possible resistance level?
Is the On Balance Volume rising?

http://h1.ripway.com/78963/PRC314.gif

[Nitaa]

"Analyst John Kidd, of investment banking and sharebroking group McDouall Stuart, said he expected the price for premium-quality hard coking coal to settle between US$120 to US$130 (NZ$228-$247) a tonne.

The figure was much higher than a UBS estimate of US$85 a tonne."

[Sehnsucht888]

The major Indian shareholders have indicated they are not going to take up their rights issue

Thanks Nita, that does ring a bell now that you mention it.

[blockhead]

"Analyst John Kidd, of investment banking and sharebroking group McDouall Stuart, said he expected the price for premium-quality hard coking coal to settle between US$120 to US$130 (NZ$228-$247) a tonne.

The figure was much higher than a UBS estimate of US$85 a tonne."

Such a variance from the "knowledgeable" brigade suggests they don't really have a clue and are just guessing.

Buyers @ 81c and sellers @ 90c this morning says there are big differences in peoples grasp of the value of a PRC share right now

[Dr_Who]

"Analyst John Kidd, of investment banking and sharebroking group McDouall Stuart, said he expected the price for premium-quality hard coking coal to settle between US$120 to US$130 (NZ$228-$247) a tonne.

The figure was much higher than a UBS estimate of US$85 a tonne."

Of cos they would say that they are advising on the rights issue. They also have a valuation north of $2.00 and the price has been below $1.00 for some time. Those that bought over $2.00 based on their valuation must be hurting bad right now.

Refer to my previous post. Most of the analyst I have quoted got thermal coal prices bang on so I would assume they will have coking coal price pretty close also. These analysts are saying coking coal to be btw $85-$110.


I agree with you some what but in this circumstance I think the investment bank analysts got it pretty much right.

Thermal Coal settled at $70.... Merill Lynch and Citi expected $70, Macquarie $75 and UBS $60. The analyst was pretty spot on for thermal coal.

http://www.fnarena.com/index2.cfm?type=dsp_newsitem&n=F83A7E68-1871-E587-E176905C8FCE8BF0

[Nitaa]

Of cos they would say that they are advising on the rights issue. They also have a valuation north of $2.00 while the price has been below $1.00 for some time. Those that bought over $2.00 based on their valuation must be hurting bad right now.

Refer to my previous post. Most of the analyst I have quoted got thermal coal prices bang on so I would assume they will have coking coal price pretty close also. These analysts are saying coking coal to be btw $85-$110.The market doesnt agree with you as the sp has increased around 15% in a very short time and i have just noticed it has jumped 12% today. Someones making money on this but its not me because i do not hold

[Dr_Who]

Very illiquid market. SP in PRC can easily be pushed up or down. PRC management does not disclose information to the NZSE in a timely manner and are not transparent. Will I buy PRC again? Probably not cos I dont trust management. There are plenty of coal stocks over in Aussie that are better buys and are generating a profit.

[boysy]

yes its up 12 % but on a mere $18,000 turnover. I think people have not yet realised the risks still involved in prc which are very real and numerous.

[RossT]

About a month now is it since the shaft collapse?

No matter how busy they are in "getting on with fixing it", an annoucement to shareholders as to the geological assessment of why the shaft went and therefore a geological report on the methodology to fix it should most definitely have been released. Still absolutely no information on the status of ground conditions inside the mine. Inexcusable, when coming to the market for more money. The risks, and potential for ongoing problems are being completely hidden. If there is good news do you keep it to yourself? Of course not, you tell every bugger....

[Nitaa]

yes its up 12 % but on a mere $18,000 turnover. I think people have not yet realised the risks still involved in prc which are very real and numerous.You are correct. I am actually taking the pss out of "The Glass Half Empty" (Dr Who).

I personally have never considered this stock due to the risks as well. ALso i acknowledge there has been a bit of funny business with PRC.

Where do they go now? Caught between a rock and a hard place? Admitteldy i am not up to speed with PRC but do they have a solution for the ventilation shaft?

[The BOWMAN]

About a month now is it since the shaft collapse?

No matter how busy they are in "getting on with fixing it", an annoucement to shareholders as to the geological assessment of why the shaft went and therefore a geological report on the methodology to fix it should most definitely have been released. Still absolutely no information on the status of ground conditions inside the mine. Inexcusable, when coming to the market for more money. The risks, and potential for ongoing problems are being completely hidden. If there is good news do you keep it to yourself? Of course not, you tell every bugger....

I wrote an email to them asking about the progress. Absolutely no response whatsoever.

[blockhead]

I wrote an email to them asking about the progress. Absolutely no response whatsoever.


Me as well

[nwood]

PIKE RIVER COAL (PRC) RIGHTS ISSUE FULLY UNDERWRITTEN

Pike River Coal Limited’s rights issue of $41 million announced on 3 March 2009 will be
fully underwritten. The renounceable rights issue is an entitlement to one share at 70
cents with an accompanying bonus option for every five Pike River shares held. The bonus
options have a two year term and can be exercised at $1.25 each.

A further $4 million placement on the same terms as the rights issue is being made to a
major institution and existing shareholder, AMP Capital Investors, bringing the total
equity raising to $45 million.

Andrew McDouall, managing director of McDouall Stuart Securities Limited, the lead
manager of the rights issue said “this level of underwriting shows the strong support
that exists for Pike River Coal even in the current difficult equity markets�. The offer
is being underwritten by McDouall Stuart Corporate Finance Limited and major shareholder,
New Zealand Oil & Gas Limited.

Pike River Coal’s chief executive Gordon Ward says “we are delighted that AMP Capital
Investors has made a significant additional investment in Pike River and are very pleased
that this rights offer will be fully underwritten�.

The offer is expected to open on or about 31 March 2009* and close on or about 17 April
2009*.

* These dates are subject to change and are indicative only. Pike River reserves the
right to amend this timetable without prior written notice, subject to the respective
Listing Rules of the NZSX and ASX and relevant legislation, although an announcement of
any changes will be made on the NZSX and ASX

[Xerof]

Answering our concerns with ruthless efficiency:D:D



Shaft Repairs


Pike River advises that remedial works on the ventilation shaft are progressing quickly. The
concrete pour to fill a cavity at the top of the rock fall in the shaft has been successfully
completed and an experienced contractor is currently mobilising from Australia to undertake the
“Alimak” raised shaft.
The Alimak raise will be an angled shaft constructed from the tunnel to intersect the main shaft at
about 50 metres above its base to re-establish ventilation to the mine. Under this method, a 2.5
metre shaft will be raised using explosives to drill and blast the rock. The walls of the Alimak shaft
are supported by rockbolting as it progresses each day, thereby overcoming the problems
encountered in not being able to access and support the lower zone of the original raise bored
shaft in a timely manner.


Liberty Harbor Convertible Bond Covenant Extension


On 13 March 2009, Pike River reached agreement with Liberty Harbor LLC (Liberty) to extend the
date by which Pike River’s production must average in excess of 66,667 tonnes per month from 1
July 2009 to 30 November 2009.
The US $27.5 million of Convertible Bonds held by Liberty have a remaining term of approximately
2 years and are convertible to new ordinary shares in Pike River at any time by Liberty at the then
applicable conversion price.
The Bonds were issued on terms and conditions which include a number of conditions and
covenants which are common to facilities of this nature. As part of these new arrangements, Pike
River has agreed to a revised interest rate and has obtained a right, in certain circumstances, to repay the Convertible Bonds in full before their financial maturity date of 11 March 2011.

[the machine]

how much do you think the rights will trade at?

M

[The BOWMAN]

Xerof, where did you get that from?

[Snow Leopard]

Xerof, where did you get that from?

Read page 2 (http://stocknessmonster.com/news-item?S=PRC&E=ASX&N=315335) :cool:

regards
Paper Tiger

[Sehnsucht888]

Read page 2 (http://stocknessmonster.com/news-item?S=PRC&E=ASX&N=315335) :cool:

regards
Paper Tiger

Well found PT.

Thats quite a significant something not included in the NZX PRC announcement.....
(As available through Directs site).

The NZX website announcement has a bit more information there:
"Pike River also said it reached agreement with convertible bondholder Liberty Harbor LLC to extend the date by which production must average in excess of 66,667 tonnes per month from July 1 to November 30. The $US27.5m ($NZ53m) of convertible bonds held by Liberty have a remaining term of about two years and are convertible to new ordinary shares."

"Commenting on the repair work in the mine, Pike River said 1500 tonnes of concrete has been flown in by helicopter and piped down the shaft to fill a cavity at the top of the rock fall. An angled shaft constructed from the tunnel to intersect the main shaft at about 50 metres above its base will re-establish ventilation to the mine."

So 3 different announcements with different levels of detail. Good one.

At least we now we know where things are at.

[Xerof]

PRC website is the place to look for complete details - the NZX announcements are bloody hopeless

[croesus]

1500 tonnes of Concrete.. by helicopter !!!....the owner of the chopper will be smiling

[nwood]

Apparently they had two full time heavy lifting choppers working as wheelbarrows non stop

[RossT]

Thats about 650 cubic meters of concrete. Works out to be enough to fill 45% of the volume of the original intact shaft.

https://www.directbroking.co.nz/DirectTrade/dynamic/announcement.aspx?id=2186729

Link is to more news on the uderwriting of the share issue.

[Nitaa]

Its going to cost approx $7m to fix the shaft

[nwood]

Its going to cost approx $7m to fix the shaft

do you have a source?

[Xerof]

page 8 of the Investment Statement, which is posted on PRC website.....

http://www.pike.co.nz/shareholder-section/rights-issue-2009/Investment_Statement.pdf

[Nitaa]

do you have a source?yes but allow an extra 20 or 30% ontop of that

[The BOWMAN]

Its going to cost approx $7m to fix the shaft

My understanding is that they are basically building another shaft. How long did the first shaft took, anyone remembers?

[RossT]

My understanding is that they are basically building another shaft. How long did the first shaft took, anyone remembers?

The top half of the original shaft is still going to be used.
A new angled shaft is being driven from somewhere in the mine pit bottom area upwards to intersect the vertical shaft section that remains, about at its midpoint, so about 50 meters up. The new angled drive will be driven using the alimak system. A system that PRC have already said is unsuitable for the ground conditions at the shaft area. Alimak is inherently high risk and therefore requires good ground conditions. That is why I was hoping for more detailed geological info in any news regarding fixing the shaft. If they couldn't safely alimak that ground before ( when they decided to change to raise-bore ) what makes them think they can alimak it now?

[winner69]

If they couldn't safely alimak that ground before ( when they decided to change to raise-bore ) what makes them think they can alimak it now?

... a change of luck maybe

[blockhead]

Go and have a look here, you get a bit of an idea

http://www.pike.co.nz/shareholder-section/stock-exchange-announcements/stock-announcements-2009/Vent%20Shaft%20Rock%20Fall%20Being%20Remedied%2019 Feb09.pdf

[The BOWMAN]

Go and have a look here, you get a bit of an idea

http://www.pike.co.nz/shareholder-section/stock-exchange-announcements/stock-announcements-2009/Vent%20Shaft%20Rock%20Fall%20Being%20Remedied%2019 Feb09.pdf

Thanks for that. I am puzzled why digging another alimak shaft will be quicker than clearing out the falling rock debris. Is it because the rock falling damaged the shaft so it is no longer usable?

[RossT]

Thanks for that. I am puzzled why digging another alimak shaft will be quicker than clearing out the falling rock debris. Is it because the rock falling damaged the shaft so it is no longer usable?


The top section of the shaft was basicaly "left hanging". Theres no way you could have safely cleared out the rockfall due to the risk of the rest of the shaft coming down on the area ( and workers ) being cleared. This was the purpose of the concrete flown in, to re-support the top section of the shaft. There is no feasible way to re-open the bottom area of the original shaft.

[Rabbi]

This time they have a "specialist" team from Australia doing the job.:)

[boysy]

you have to wonder why a "specialist " team is need after the fall why wouldnt they have used a specialist team to drill it in the first place.

[RossT]

you have to wonder why a "specialist " team is need after the fall why wouldnt they have used a specialist team to drill it in the first place.

I'd be very surprised if there is any Alimak gear in NZ, there just wouldn't be the work for it, hence the need to bring it in from Aussie. The same would have applied for the raise-bore equipment. So obviously if you are going to hire specialist machinery out ( the Aussies ) you'd want your own people working it. So yes there would have been a "specialist" crew working the raise-bore as well. There would still be Mcl Dowell tunnellers on the alimak platform doing the drill and blast I'd imagine, but the actual installation and operation of the alimak will be an Aussie crew.

[Dr_Who]

The top half of the original shaft is still going to be used.
A new angled shaft is being driven from somewhere in the mine pit bottom area upwards to intersect the vertical shaft section that remains, about at its midpoint, so about 50 meters up. The new angled drive will be driven using the alimak system. A system that PRC have already said is unsuitable for the ground conditions at the shaft area. Alimak is inherently high risk and therefore requires good ground conditions. That is why I was hoping for more detailed geological info in any news regarding fixing the shaft. If they couldn't safely alimak that ground before ( when they decided to change to raise-bore ) what makes them think they can alimak it now?

Thanks for the analysis RossT.

Your comments make alot of sense. Do you think they can meet this forecast of delivering coal by Sept this year?

I am very skeptical on their forecast delivery date and the contract price this year.

[friedegg]

Thanks for the analysis RossT.

Your comments make alot of sense. Do you think they can meet this forecast of delivering coal by Sept this year?

I am very skeptical on their forecast delivery date and the contract price this year.

your very skeptical fullstop

[boysy]

people have every right to be sceptical have PRC ever met their forcasts or targets so far ?

[the machine]

The top half of the original shaft is still going to be used.
A new angled shaft is being driven from somewhere in the mine pit bottom area upwards to intersect the vertical shaft section that remains, about at its midpoint, so about 50 meters up. The new angled drive will be driven using the alimak system. A system that PRC have already said is unsuitable for the ground conditions at the shaft area. Alimak is inherently high risk and therefore requires good ground conditions. That is why I was hoping for more detailed geological info in any news regarding fixing the shaft. If they couldn't safely alimak that ground before ( when they decided to change to raise-bore ) what makes them think they can alimak it now?


thought the top section of shaft was riskiest, hence reinforcing injections and that held up after rockfall.

the alimak is going through same level that was previously thought to be stable.

glad its them and not me.

M

[RossT]

thought the top section of shaft was riskiest, hence reinforcing injections and that held up after rockfall.

the alimak is going through same level that was previously thought to be stable.

glad its them and not me.

M

Yes, you're correct, that was the case, but you've hit the nail on the head when you say ...."previously thought to be stable". The alimak is now going thru ground that has proved itself to be anything but stable.

And regards the performance of the vent shaft when completed.. I see the new alimak section will be 2.5m in diameter when the whole shaft was meant to be 4.15m in diameter. That gives a hole that is only 36% the size it is meant to be, so lets hope it actually vents properly. I mean if someone took the flue off your log burner and put one on that only had an internal area 36% of the original then its not going to work very well. And if it will vent enough air then why didn't they just make the original shaft that smaller size to start off with? So PRC are now spending more than twice the money for less than half the original size of hole.

Dr who, do I think they'll reach their new targets, who knows, but it just seems such a long way off with so much work still to be ticked off. No doubt there will be the usual teething probs with the hydro miners, the processing plant, the slurry lines to the plant blocking up etc, all to be ironed out so it's anyones guess.

[manxman]

And regards the performance of the vent shaft when completed.. I see the new alimak section will be 2.5m in diameter when the whole shaft was meant to be 4.15m in diameter. That gives a hole that is only 36% the size it is meant to be, so lets hope it actually vents properly.

http://www.pike.co.nz/shareholder-section/stock-exchange-announcements/stock-announcements-2009/Vent%20Shaft%20Rock%20Fall%20Being%20Remedied%2019 Feb09.pdf

The diagram on Page 2 of this announcement shows the Alimak section as "initially 2m x 2m then stripped out to 4m x 4m final profile"

That's going to be an interesting exercise. Presumably you have to protect your working as best you can while using the Alimak gear to get up to the old shaft, then strip downwards, removing and replacing protection as you go. Then there's the gas...

You wouldn't want to be too nervous. I suppose that once they get the first hole through, there will be a howling gale as they try and restart development below.

As Machine says, glad its them not me.

[the machine]

hope coking coal only drops 40% like iron ore is mooted to be:


Goldman Deepens Iron Ore Price Forecast to 40% Drop on Slowdown
Share | Email | Print | A A A

By Jesse Riseborough

March 18 (Bloomberg) -- Goldman Sachs JBWere Pty deepened its contract iron ore price forecast to a record 40 percent decline because of slumping global steel production.

Prices for benchmark Australian iron ore may drop to $55 a metric ton in the year starting April 1, down from a record $91 this year, Goldman Sachs analysts led by Malcolm Southwood said in a report yesterday. It had forecast a 30 percent decline.

Goldman joins Macquarie Group Ltd. in cutting price forecasts for iron ore this week. The worst recession since World War II has slashed demand for steel, sending stockpiles soaring at ports in China, the biggest maker of the alloy.

“The major contract suppliers of iron ore will eventually be forced to concede bigger than previously expected price cuts,” the report said. “Negotiations could be protracted and acrimonious.”

Goldman cuts its earnings per share forecast for Rio Tinto Group by 21 percent in 2009 and 30 percent in 2010. BHP Billiton Ltd.’s EPS forecasts were also reduced 3 percent this year and 15 percent in 2010, the report said.

A 40 percent decline would be the biggest drop in Australian iron ore prices on record and comes after six consecutive years of gains, Goldman said.

To contact the reporter on this story: Jesse Riseborough in Melbourne at jriseborough@bloomberg.net

Last Updated: March 17, 2009 20:23 EDT


M

[blockhead]

.

And regards the performance of the vent shaft when completed.. I see the new alimak section will be 2.5m in diameter when the whole shaft was meant to be 4.15m in diameter. That gives a hole that is only 36% the size it is meant to be, so lets hope it actually vents properly. I mean if someone took the flue off your log burner and put one on that only had an internal area 36% of the original then its not going to work very well. And if it will vent enough air then why didn't they just make the original shaft that smaller size to start off with? So PRC are now spending more than twice the money for less than half the original size of hole.

Dr who, do I think they'll reach their new targets, who knows, but it just seems such a long way off with so much work still to be ticked off. No doubt there will be the usual teething probs with the hydro miners, the processing plant, the slurry lines to the plant blocking up etc, all to be ironed out so it's anyones guess.

I seem to recall the shaft is also to be used as an emergency exit if anything was to close the tunnel further towards the opening, hope 2.5m is enough to get miners and their tucker bags up and out

[zorba]

.
Coking coal negotiations set price in range US$115 - 125 ..... according to Citigroup report on Bloomberg.

This is great news for Pike. High quality PRC coking coal should fetch upper price range ...... US$120 and above is a much better price than I feared might apply.

Plus with the exchange rate in the mid 50s against the US dollar, Pike's net profit outlook in NZ$ looks pretty healthy.

Z

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a5KJPZNW35Cw

[Balance]

.
Coking coal negotiations set price in range US$115 - 125 ..... according to Citigroup report on Bloomberg.

This is great news for Pike. High quality PRC coking coal should fetch upper price range ...... US$120 and above is a much better price than I feared might apply.

Plus with the exchange rate in the mid 50s against the US dollar, Pike's net profit outlook in NZ$ looks pretty healthy.

Z

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a5KJPZNW35Cw

That is good news indeed.

Compared to some market expectations of $100 per tonne, this effectively could mean an extra US$20m or NZ$37m a year.

[Nitaa]

That is good news indeed.

Compared to some market expectations of $100 per tonne, this effectively could mean an extra US$20m or NZ$37m a year.Now i know your taking the pss there Balance.

Whats your take or what year do you think Pike will get under way?

[Balance]

Now i know your taking the pss there Balance.

Whats your take or what year do you think Pike will get under way?

Just commenting on the price of coal and its implications. The US$120/t is a big positive in my view, compared to the market's expectations.

When they get underway is the company's business and I am sure the legion of supporters will believe it will be 2009.

[Hoop]

That is good news indeed.

Compared to some market expectations of $100 per tonne, this effectively could mean an extra US$20m or NZ$37m a year.

The next perceived problem now is the recent tanking of the US$. May need more than US$120 to compensate against the risk of a possible medium to long term down trending US$ against other currencies scenario.

[dsurf]

Now i know your taking the pss there Balance.

Whats your take or what year do you think Pike will get under way?

I know this project has been "underway" for more than a decade and the slippages are measured in years!. However it is a 20 year project & it will be up & running in months, not years.

[Nitaa]

I know this project has been "underway" for more than a decade and the slippages are measured in years!. However it is a 20 year project & it will be up & running in months, not years.For the sake of PRC holders i hope you are right. I hold nzo so i am partly exposed as well. PRC's track record has been disapointing to say at best. The problem i am seeing is their risk managment is under question. Its not even up and running and they are always trying to put a bandaid over there problems. The concern is the bandaid is no cure

[fabs]

Let me prempt a possible Dr. Who down ramp regarding coke price for this year being between $ 115.00 -$ 125.00 PAUSE.

In a Nutshell PRC will not produce worthwhile tonnage over the next 12 months and by then the price will most likley drop another possible 50% so its best to mothball the project for the next 5- 10 years till the world economy sorts itself out.

[Hoop]

For the sake of PRC holders i hope you are right. I hold nzo so i am partly exposed as well. PRC's track record has been disapointing to say at best. The problem i am seeing is their risk managment is under question. Its not even up and running and they are always trying to put a bandaid over there problems. The concern is the bandaid is no cure

I disagree Nita...risk management is equal to that outlined in both prospectus released by Pike. Pike River Coal Management have outlined from the very beginning that PRC is a high risk investment...As the tunneling has proceeded there is the situation of derisking...however reading the 29 January 2008 rights Issue prospectus there is many pages outlining investor risk...at that stage I considered PRC to still be a high risk investment.

Basically I think may investors and commentators have been rather relaxed due to the lack of very serious tunneling problems especially so after the fault line problems.

A small section from 29/1/2008 rights prospectus
Section 6 What are my risks? Pages 16 to 23 (of 64) on PDF file (http://www.pike.co.nz/reports/other-documents/Pike_River_Prospectus_ver_36.pdf) or pages 14 to 21 hard copy
(c) Development and operating risks and costs
The Mine is a development project and the first development undertaken by Pike River. Development projects have no operating history on which to base estimates of future operating costs and capital requirements. Unforeseen geological, geotechnical, seismic and mining conditions (including significant geological faults which have not already been identified) or breakdown of equipment could also adversely affect development of the access tunnel, ventilation shaft and mining and transport operations and result in increased development and/or operating costs or, in the extreme, closure of the Mine. Industrial accidents, labour disputes, extreme weather conditions, changes to customs duty, increases in the cost of fuel and other expenses which are outside Pike River’s control and delays in importing materials and equipment could also adversely affect Pike River’s operations and financial results. Pit bottom construction may take longer and be more expensive than scheduled if underground conditions vary materially from predictions based on surface mapping and bore holes. Mitigating this risk in part is that 1960 metres (as at close of business on 13 January 2008) of the 2300 metre tunnel have now been excavated.

Overall Section 6 is very detailed...therefore PRC investors who have done their homework should know their shares are presently still high risk. This is confirmed with section 6 in the new 2009 rights prospectus (http://www.pike.co.nz/shareholder-section/rights-issue-2009/Investment_Statement.pdf) recently issued

Disc: bought some PRC recently (73 to 75c) on the recent bad news combined with sharemarkets new bottom index levels

[Nitaa]

Hoop. Fair point and i take back those comments. I was more aiming towards the overall risks versus reward going back 3 plus years and before the prospectus was put out. This whole project was a logistical nightmare that required excellent planning and foresight.

I certainly give 10 out of 10 for persistance and i have to give them about a 6 out of 10 for what they have achieved so far. I am confident that Pike will deliver a good return to shareholders buts its prbably one you want to chuck in the bottom draw for a long term investment.

[Hoop]

Hoop. Fair point and i take back those comments. I was more aiming towards the overall risks versus reward going back 3 plus years and before the prospectus was put out. This whole project was a logistical nightmare that required excellent planning and foresight.

I certainly give 10 out of 10 for persistance and i have to give them about a 6 out of 10 for what they have achieved so far. I am confident that Pike will deliver a good return to shareholders buts its prbably one you want to chuck in the bottom draw for a long term investment.


Yeah ..in its pre-planning stage some locals had grave reservations about it....... so I (and the other less informed people) found out later.

Yep agree ..20 year life span with good dividend yield ..could be a Mum & Dad type share..with an occassional disaster chucked in to satisfy the shorter term trader

[biker]

BHP agrees to 60pc cut in coking coal priceFont Size: Decrease Increase Print Page: Print Elisabeth Behrmann | March 20, 2009
Article from: Dow Jones Newswires
BHP Billiton has agreed to cut coking coal prices for the 2009-10 contract year by about 60 per cent, analysts said.

Citigroup said today that BHP, the world’s largest supplier of seaborne coking coal, has agreed to sell coking coal at $US115-$US125 a tonne to Japan’s Nippon Steel Corp.

Merrill Lynch said BHP appeared close to settling coking coal prices at $US129 tonne for its premium Peak Downs brand.

The potential benchmark deal - if confirmed - is a win for coal producers, after Japanese steel mills pushed for prices below $US100 a tonne, analysts said.

“Prices are above market expectations, even for metallurgical coal bulls. A good outcome for producers in a clearly bear steel market,” Merrill Lynch said in a note.

Last year, contract prices concluded at $US300 a tonne after huge floods in Australia’s Bowen basin shut down many mines.

BHP declined to confirm the news, and Nippon Steel couldn’t be reached due to a public holiday in Japan.

South Korean steelmaker Posco confirmed it has settled pulverised coal injection prices at $US90 a tonne with Australian suppliers, down 63 per cent on year.

“Prices of $US120 a tonne would give producers a healthy margin,” said Citi.

[the machine]

BHP agrees to 60pc cut in coking coal priceFont Size: Decrease Increase Print Page: Print Elisabeth Behrmann | March 20, 2009
Article from: Dow Jones Newswires
BHP Billiton has agreed to cut coking coal prices for the 2009-10 contract year by about 60 per cent, analysts said.

Citigroup said today that BHP, the world’s largest supplier of seaborne coking coal, has agreed to sell coking coal at $US115-$US125 a tonne to Japan’s Nippon Steel Corp.

Merrill Lynch said BHP appeared close to settling coking coal prices at $US129 tonne for its premium Peak Downs brand.

The potential benchmark deal - if confirmed - is a win for coal producers, after Japanese steel mills pushed for prices below $US100 a tonne, analysts said.

“Prices are above market expectations, even for metallurgical coal bulls. A good outcome for producers in a clearly bear steel market,” Merrill Lynch said in a note.

Last year, contract prices concluded at $US300 a tonne after huge floods in Australia’s Bowen basin shut down many mines.

BHP declined to confirm the news, and Nippon Steel couldn’t be reached due to a public holiday in Japan.

South Korean steelmaker Posco confirmed it has settled pulverised coal injection prices at $US90 a tonne with Australian suppliers, down 63 per cent on year.

“Prices of $US120 a tonne would give producers a healthy margin,” said Citi.



guess pike would be looking at usd$125+ per tonne so still pretty good for pike in todays market


just have to get coal to market

M

[Paint it Black]

Agree Machine - there will be much celebration when the first train load arrives in Lyttelton. Let's hope the next thing isn't a crumbling US dollar - PRC no doubt will be very careful covering this in future contracts.

[the machine]

Agree Machine - there will be much celebration when the first train load arrives in Lyttelton. Let's hope the next thing isn't a crumbling US dollar - PRC no doubt will be very careful covering this in future contracts.

the first train will not be for a while now until ventilation shaft completed.
if pike were producing coal now then there is scope to hedge the currency, but it would be very foolish to hedge currency until coal is being produced

M

[Nitaa]

Agree Machine - there will be much celebration when the first train load arrives in Lyttelton. Let's hope the next thing isn't a crumbling US dollar - PRC no doubt will be very careful covering this in future contracts.The US currency is looking extremely unstable. I would think that this is a good time to hedge the currency, which goes against my normal decision. The $NZ has by recent years over corrected itself and the US economy is still very shaky will more fallout likely.

[the machine]

The US currency is looking extremely unstable. I would think that this is a good time to hedge the currency, which goes against my normal decision. The $NZ has by recent years over corrected itself and the US economy is still very shaky will more fallout likely.

need to be producing some thing first that can be sold before contemplating finer points of
locking in exchange rates on future production.


as regards us currency, in simplistic terms the usd$ invested offshore has had to be brought home to service debt, thus giving artificial support to usd$

M

[sideline]

March 23 (Bloomberg) -- Nippon Steel Corp. and JFE Holdings Inc. Japan’s two largest mills, negotiated a 57 percent cut in the price they pay BHP Billiton Ltd. for hard coking coal, said two industry executives with knowledge of the deal.

The mills will pay $128 to $129 a metric ton for the coal for the fiscal year starting April 1, down from $300 a ton a year earlier, said the executives, who declined to be named as the agreement is confidential. The deal was reached with BHP Billiton Mitsubishi Alliance, a joint venture between Melbourne- based BHP and Japan’s Mitsubishi Corp.
....................

[RossT]

PRC
25/03/2009
GENERAL

REL: 1414 HRS Pike River Coal Limited

GENERAL: PRC: PRC - Ventilation Shaft Restoration Underway

Restoration of Pike River Coal's ventilation shaft, blocked by a rock fall in
the lower 30 metre zone, is underway.

An experienced Australian 'Alimak' contractor has started work on driving a
new shaft (called an 'Alimak raise'), to divert around the rock fall by
intersecting the main shaft at about 50 metres above its base.

The Alimak process uses the drill-and-blast method to progressively construct
a 2.5 metre shaft, with rockbolts and mesh used to support the new shaft
walls as it is advanced upwards each day. This will prevent the sort of rock
fall which occurred in the main shaft.

In preparation for the Alimak raise, a section of the existing tunnel floor
has been excavated to 6 metres in height and more than 45 grouted cablebolts,
8 metres in length, have been installed in the roof to support the area of
the new rise and to create the 'nest' for the Alimak equipment to park when
explosives are deployed.

The Alimak equipment, already air freighted from Australia, is due for
delivery to site by 27 March. Following installation of the equipment in the
mine, the raise drill and blast will commence by mid-April and is due to be
completed by end of May.

A nine man team will work in shifts around the clock to construct this new
'linking shaft'. The Alimak raise will be extended each day by using a
working platform on a rail to carry tunnelling staff higher after each blast.

Meanwhile, drilling of a 'slimline' ventilation hole from the surface to pit
bottom has commenced. This hole will then be reamed to 600mm diameter and
fully cased with steel pipe to provide enough additional fresh air to allow
one of the coal cutting machines, a continuous miner, to start producing coal
during April.

Upon completion of the Alimak raise and the slimline hole, ventilation to the
mine will be re-established and the three coal cutting machines and in-seam
drilling unit will be operating.

[blockhead]

Sheeze, wouldn't have minded haing a spare Alimak machine in the garage, be able to name your price in doing that job. A lot of coin there for a few workers I suspect...and good on them too !!

[biker]

Who's buying up $2,760,001 turnover at 10am


Wrong stock. That was PGW.

[blockhead]

I see the 1:5 Rights (and optons) issue opens 31st March and closes 17th April, I wasn't able to see what the actual date of entitlement is. Anyone know ??

Interesting the sp is edging upwards as we get closer to the entitlement date, not really any sellers showing till 87c at the moment.

I was picking sub 70c come entitlement time

[777]

From their website

The renounceable Rights described in this short form Prospectus and Investment Statement
will be issued to existing Shareholders on the register at the close of trading on NZSX on the
Record Date for this Offer, being 30 March 2009. Entitlement to Rights for New Shares (and
the New Options to be issued for no additional consideration) traded on ASX will be determined
at close of trading on 30 March 2009and existing Shares will be quoted on ASX “ex rights”
from 24 March 2009and on NZSX “ex-rights” from 31 March 2009. Special provisions apply to
Shareholders with registered addresses outside of New Zealand and Australia. Such persons
should read section 1.7of this Prospectus.

[blockhead]

Thanks 777, indications are then positions are being taken to gain the rights/options ??

That is encouraging

[the machine]

went ex rights on asx earlier this week

with coking price settling slightly higher than expected and other positive news from pike, their sp has gained a bit on asx.

am undecided if will take them up or sell the rights

M

[zorba]

More info on new Coking Coal prices -- BHP profit forecast on the up.

UBS analyst:

“Despite severe recessionary conditions and considerable deflationary pressure, nominal coking coal prices have settled at the second-highest level ever recorded.”


http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a_lSk.oQ1F3g
.

[nwood]

National Business reported that Pike River Coal expects to sell coking coal at USD 128 per tonne in the coming year.

Mr Gordon Ward CEO & GD of Pike River Coal said He expecting to sell the coal for USD 128 per tonne, given that an alliance between BHP Billiton and Mitsubishi this week completed the first coking coal settlements with Nippon Steel and the Goonyella coal PRC benchmarks against was sold for that price.

He said that “That is the price that we would expect to negotiate for our coal in this coming year. Overall we actually consider that a pretty good result, even though it’s a fairly large drop from last year, it also represents a price that’s above what was a record coal price only 3 years ago when the price rocketed up to USD 125 a tonne. It also compares to about USD 95 which is what was predicted for this year by AWE.”

He added that “We’ll just have to wait and see what happens over the course of this year with steel mills and it’s really driven by consumer demand and as these various stimulus packages around the world start to take effect you may see an increase in confidence coming through.”

(Sourced from National Business)

[swissboy]

I think the new Options on the ASX are now tradeable but can not find the new ticker

[the machine]

I think the new Options on the ASX are now tradeable but can not find the new ticker

PRCR is the code

M

[Hoop]

I think the new Options on the ASX are now tradeable but can not find the new ticker
Try PRCR.au

[Hoop]

PRCR
150,000https://www.directbroking.co.nz/DirectTrade/images/spacer.gif 1 buyer at 3 AUCents
142,025 1 buyer at 2.1

[the machine]

PRCR
150,000https://www.directbroking.co.nz/DirectTrade/images/spacer.gif 1 buyer at 3 AUCents
142,025 1 buyer at 2.1


someone seems keen to pick up a heap of shares cheaply, after conversion


M

[manxman]

NEW YORK (MarketWatch) -- Brazilian mining giant Vale has started the construction of a $1.3 billion coal mining project in Mozambique that contains one of the world's largest unexploited coal reserves.
Vale, or Companhia Vale do Rio Doce, said Friday that the development of the Moatize Project in Mozambique's Tete province is in progress.
The Brazilian company will invest $1.3 billion in the project, which will have a nominal capacity to produce 8.5 million metric tons of metallurgical coal as well as 2.5 million metric tons of thermal coal.
Moatize, Vale's first greenfield project in Africa, has proven and probable reserves of 838 million metric tons of coal, which makes it one of the world's largest unexploited coal reserves, according to the company.
The start-up is expected for December 2010, Vale said.

Still a good time to invest for the long term apparently.

[Scuffer]

LPC are in process to reclaim land and expand their coalyard area designated for coal storage, the yard will be twice the size of original yard, storage was a key issue for transporting of the pike coal initially, that will be overcome in a few years, expect pikecoal to be exiting Lyttelton by september in small quantities per annum.

[Hoop]

Ticker code for rights in NZ
PRCRB.NZX

[blockhead]

Ticker code for rights in NZ
PRCRB.NZX

OK so that is a "right" to purchase a PRC share @ 70c, but as holders we also receive a "free" option to purchase a share @ $1.25 These options must be tradeable too ???

What code are they ?

[sideline]

OK so that is a "right" to purchase a PRC share @ 70c, but as holders we also receive a "free" option to purchase a share @ $1.25 These options must be tradeable too ???

What code are they ?

Probably PRCOA , but you'll find them only after PRC have received the money
and they have been allocated,start trading on 27 April.

[sideline]

...........

If somebody goes to the PRC presentation in Hastings, PalmerstonNorth or Wellington
today, I would love to see a summary of what's been said that's not already known or
in the presentation available on the PRC website. I'm thinking of any Q&A not covered
in the presentation.

Thx

[Sehnsucht888]

OK so that is a "right" to purchase a PRC share @ 70c, but as holders we also receive a "free" option to purchase a share @ $1.25 These options must be tradeable too ???

What code are they ?

The Rights when converted give you the option, from my understanding. So they aren't around till after the 17th when the rights cease trading, and the shares are alloted late April.

[blockhead]

The Rights when converted give you the option, from my understanding. So they aren't around till after the 17th when the rights cease trading, and the shares are alloted late April.

Ah, that makes sense, thanks

[Sumnerned]

I see there's a typo in today's announcement. Does that nullify the hole thing?

(2001 instead of, presumably, 2011. 1.2 para 3)

It shouldn't really, I suppose, since the expiry is stated earlier.

[geezy]

I see there's a typo in today's announcement. Does that nullify the hole thing?

(2001 instead of, presumably, 2011. 1.2 para 3)

It shouldn't really, I suppose, since the expiry is stated earlier.

Certainly nullifies yours ("hole") :D

[QOH]

me if the rights issue was a straight 1 for 5? I seem to have a few missing according to DB in my portfolio.
Shouldn't I have 2000 rights for 10,000 shares?

[nwood]

me if the rights issue was a straight 1 for 5? I seem to have a few missing according to DB in my portfolio.
Shouldn't I have 2000 rights for 10,000 shares?

Where have you seen your rights recorded?

[QOH]

At DB they seem to automatically go into your portfolio whenever there is any rights issue announced.

[Hoop]

me if the rights issue was a straight 1 for 5? I seem to have a few missing according to DB in my portfolio.
Shouldn't I have 2000 rights for 10,000 shares?

hi QOH

Actually the right issue is announced as 1 for 5 but is rounded down figure from the actual entitlement ratio of 1 Right for every 5.015281102 fully paid Shares.

and
..I'm not kidding you ;)

[sideline]

...........

Hi, I noted from the announcements that the interest rate for the bonds
has now risen from 6.75% to 10.75%. Has that been announced before??

Also, how do you interpret the new "right of PRC to prematurely repay the
bonds" under certain (share-price) circumstances? If it was done as early
as Sep09 or nearby it surely would require yet another capital raising after
the one currently in progress.
Thoughts anyone?

[digger]

Hi, I noted from the announcements that the interest rate for the bonds
has now risen from 6.75% to 10.75%. Has that been announced before??

Also, how do you interpret the new "right of PRC to prematurely repay the
bonds" under certain (share-price) circumstances? If it was done as early
as Sep09 or nearby it surely would require yet another capital raising after
the one currently in progress.
Thoughts anyone?

I have just come back from the PRC meeting in Hamilton. In responce to a question they assure us that there will be no further capital raising.Production will be up to full speed in Sept or Oct.The ventilation shaft should be completed in May and current production that was interruped will be able to restart.Abooklet was available that covers all that was said at the meeting.

[sideline]

I have just come back from the PRC meeting in Hamilton. In responce to a question they assure us that there will be no further capital raising.Production will be up to full speed in Sept or Oct.The ventilation shaft should be completed in May and current production that was interruped will be able to restart.Abooklet was available that covers all that was said at the meeting.

Thanks digger!

[QOH]

hi QOH

Actually the right issue is announced as 1 for 5 but is rounded down figure from the actual entitlement ratio of 1 Right for every 5.015281102 fully paid Shares.

and
..I'm not kidding you ;)

Cheers Hoop, they sure don't like to keep things simple.

[NOCASH]

Can some one tell me, if you apply for additional new shares how likey would you be able to obtain them?

Also if they refuse to accept you additional share, but accepted your entitlement would they send you back a cheque on the difference?

[777]

Can some one tell me, if you apply for additional new shares how likey would you be able to obtain them?

Also if they refuse to accept you additional share, but accepted your entitlement would they send you back a cheque on the difference?


Unsure on the likelihood of getting extra shares but they will have to repay any extra money sent in. Just remember that they will present your cheque as soon as they receive it and won't refund until after the issue closes.

[The BOWMAN]

Can some one tell me, if you apply for additional new shares how likey would you be able to obtain them?

Also if they refuse to accept you additional share, but accepted your entitlement would they send you back a cheque on the difference?

Hey, NOCASH, do you actually have cash or not?

Yes, I would say it is almost certain you will get some additional new shares if you applied, the question is how much. There will always be some rights not converted. The shares will be distributed among the people who requested more shares. Sometimes it is a percentage of your request, sometimes a fixed number, more often is a fixed number plus percentage if over. They will decide after the date. You pay for all you ask for up front and they will refund you the money for the ones you didn't get.

[Hoop]

Can some one tell me, if you apply for additional new shares how likey would you be able to obtain them?

Also if they refuse to accept you additional share, but accepted your entitlement would they send you back a cheque on the difference?

NOCASH....How likely to obtain additional new shares? The higher the share price rises above that 70c mark the less likely you will get your full amount you apply for.
As a guide ... During Pike's last rights issue @90c (March 2008) the share price had fallen but was rising back up around the $1 mark I received 9745 from the 10000 extra I applied for..I was mildly surprised that I got that many.

Would they send you back a cheque on the difference? They will refund you in some way... I got my small refund electronically deposited back into my trading account at DB two weeks later after the close.

[NOCASH]

Thanks! very helpful, i have save up all my student allowance since i started University i would use to fund

[777]

Just don't send your cheque in too early. Looks like a close of 78c for the head share tonight. This could be due to head share sellers becoming rights issue buyers and may dry up over the next few days. The value of the option is minimal in my opinion.

But what do I know.

[Sehnsucht888]

777 - Minimal now, but 2 years to run. Production will be full, and things ticking along pretty well. More importantly the world economiyes must surely have started heading back up again - can't stay this way that long. The key will be getting in and out at the right times... (just like always!)

[Sideshow Bob]

Went to the presentation today - very interesting. Most of the other people there had grey hair........

My main concern was the rise in cost per MT of approx 35%, from $44 to $60/MT

[Xerof]

Yes SSB, I went to the Hastings one, and made the very same observation....

Does owning PRC give everybody the silver fox look?

I can't comprehend why Grey Power would be still holding equity investments.... especially high risk, but on reflection, it's been safer than finance companies

[winner69]

Yes SSB, I went to the Hastings one, and made the very same observation....

Does owning PRC give everybody the silver fox look?

I can't comprehend why Grey Power would be still holding equity investments.... especially high risk, but on reflection, it's been safer than finance companies

.... not everybody follows the likes of Chris Lee

There was some research done a while ago that came up with a figure that outside of institutional / substantail shareholders .... ie those deemed to be retail investors .. or mums and dads ...... more than 60% of equity investments in NZ were estimated to be held by those over 55.

bearing in mind that the market cap of the NZX is a piddly $43 billion probably equities is only a small proortion of their overall wealth (collectively) anyway

[Balance]

.... not everybody follows the likes of Chris Lee

There was some research done a while ago that came up with a figure that outside of institutional / substantail shareholders .... ie those deemed to be retail investors .. or mums and dads ...... more than 60% of equity investments in NZ were estimated to be held by those over 55.

bearing in mind that the market cap of the NZX is a piddly $43 billion probably equities is only a small proortion of their overall wealth (collectively) anyway

PRC worries me. Engineering mishaps and production delays after delays after delays do not point towards coherent and effective planning.

Chris Lee? Notice he has gone very quiet since he was outed for putting clients into the very same finance companies he was criticizing after they collapsed! What an idiot!!!!!

[The BOWMAN]

The prospectus says we can apply for additional new shares, but it doesn't mention whether an option will be issues together with the additional new share like the ones came with the rights. Does anyone know the answer?

[Xerof]

Yes

Entitlement form has:


If you wish to apply.....
Number of additional new shares (together with New Options)

[Sideshow Bob]

Yes SSB, I went to the Hastings one, and made the very same observation....

Does owning PRC give everybody the silver fox look?

I can't comprehend why Grey Power would be still holding equity investments.... especially high risk, but on reflection, it's been safer than finance companies

I think they only when for the free feed - looked not too bad but didn't stay. But seriously, the directors and management must shake their head at some of the questions they get asked - just like farmers I think they stew away waiting for their opportunity with a crowd.

[Balance]

I think they only when for the free feed - looked not too bad but didn't stay. But seriously, the directors and management must shake their head at some of the questions they get asked - just like farmers I think they stew away waiting for their opportunity with a crowd.

Safer than finance companies? Them dumb investors were taking equity positions in finance companies as they were effectively funding the directors and shareholders of the finance companies!

[Balance]

I think they only when for the free feed - looked not too bad but didn't stay. But seriously, the directors and management must shake their head at some of the questions they get asked - just like farmers I think they stew away waiting for their opportunity with a crowd.

The directors and management, being honourable people with the best interests of shareholders at heart, should say to them "Based upon your questions, you should not invest in shares and especially in a high risk mining company like PRC."

Would not that be a super-nova revelation of integrity and honesty by said directors/management?

[oldowl]

me if the rights issue was a straight 1 for 5? I seem to have a few missing according to DB in my portfolio.
Shouldn't I have 2000 rights for 10,000 shares?

I aked and got this answer:
The reason your entitlement is ......... is due to the correct ratio being : 1: 5.015281102

[oldowl]

DIVIDEND POSSIBLE IN 2010

http://www.stuff.co.nz/business/2316070/Dividend-possible-in-2010

[blockhead]

[QUOTE=oldowl;250089]DIVIDEND POSSIBLE IN 2010

QUOTE]


Yes that is correct wise old owl but if Sniper was still about he might point out a rockfall is possible in 2010 as well, there will be a few ifs and buts before we have the divie chq in the back pocket

[Hoop]

DIVIDEND POSSIBLE IN 2010

http://www.stuff.co.nz/business/2316070/Dividend-possible-in-2010

Something in that article does not compute

Quotes fro the article ...

"..Pike River should produce about 750,000 tonnes of coal by June 30, 2010 and it should be in full production by the last quarter of this year, Dow said..."

"... Mr Dow said. Broker consensus forecasts have Pike River earning $50m (before interest and tax ebit) next year...."

"...Pike chief executive Gordon Ward said the company expected to get about US$128 a tonne for the March 2010 year, based on the US$128 achieved by big Australian miners..."

Very rough calculation

June 30th 2010 coal income $US128 / 0.58 = $NZ220/tonne

$NZ220 x 750000 tonnes = $NZ165M

Income $NZ165M ......

Brokers say Estimated profit before ebit of $NZ50M ??

Cost of production say $NZ60/tonne x 750000 = $NZ45M

Hmmm $NZ70M gone where?.... loan paybacks?

Can anyone clarify?

[digger]

Something in that article does not compute

Quotes fro the article ...

"..Pike River should produce about 750,000 tonnes of coal by June 30, 2010 and it should be in full production by the last quarter of this year, Dow said..."

"... Mr Dow said. Broker consensus forecasts have Pike River earning $50m (before interest and tax ebit) next year...."

"...Pike chief executive Gordon Ward said the company expected to get about US$128 a tonne for the March 2010 year, based on the US$128 achieved by big Australian miners..."

Very rough calculation

June 30th 2010 coal income $US128 / 0.58 = $NZ220/tonne

$NZ220 x 750000 tonnes = $NZ165M

Income $NZ165M ......

Brokers say Estimated profit before ebit of $NZ50M ??

Cost of production say $NZ60/tonne x 750000 = $NZ45M

Hmmm $NZ70M gone where?.... loan paybacks?

Can anyone clarify?







Probably gone nowhere. As with Tui startup there is always a difference between production achieved by 30 june 2010 and monies received by that date. It just takes awhile to get the invetory built up enough to have a constant flow of monies coming in.Have not gone into your figures as too busy but would quickly ask if you considered this problem.It seems to come up with every new start project. Kupe will be next with this one.

[the machine]

even though interest rate with liberty has jumped 4% to 10% [effective ?], this is mostly offset in short term by much higher price of coking coal [approx usd$128] than otherwise expected.

will probably take up my rights.

M

[The BOWMAN]

Just a silly question here. The rights purchased on the market has the associated options right? I am in the process of selling shares and buying rights. If they don't have the options then I am just wasting my commission fees here. So better to be safe than sorry.

[beacon]

bowman, options are attached to rights.

[digger]

Just a silly question here. The rights purchased on the market has the associated options right? I am in the process of selling shares and buying rights. If they don't have the options then I am just wasting my commission fees here. So better to be safe than sorry.

Bowman i pointed this confusion out to Gordon Ward at the Hamilton meeting.It is correct that the options are attached to the rights but i find that a confusing way of putting it. To me it is clearer all around to say that each new share that is created from this cash issue will be given a free option when the monies are paid.The options do not exist until the monies are given over for the new shares.At that point they come into existance and it does not matter how you arrived at getting these new shares. Hope this helps.It is how i see it.

[Rabbi]

Bowman i pointed this confusion out to Gordon Ward at the Hamilton meeting.It is correct that the options are attached to the rights but i find that a confusing way of putting it. To me it is clearer all around to say that each new share that is created from this cash issue will be given a free option when the monies are paid.The options do not exist until the monies are given over for the new shares.At that point they come into existance and it does not matter how you arrived at getting these new shares. Hope this helps.It is how i see it.

Dead right Digger.

EG. If you sell your rights, you are selling your entitlement to purchase off the Company, your allotted number of new shares with a free option at 70 cents, and the buyer of your rights will take over your entitlement pro rata.


However, you could sell your rights today- for say 6 cents -and re-buy them next week at 3 cents thereby pocketing the difference. If you need the money and have to sell your rights, it is best to sell early, because if you leave it till the last couple of days, buying may dry up, with traders withdrawing from the market.

The use of the plural "rights" generates all the confusion.

Strictly speaking, from the record date-ie ex rights- you receive the "right" to purchase "x" number of shares at 70 cents and once you have PAID your 70 cents you receive a free option equaling the number of shares you paid for.

[Mr Tommy]

I just bought some PRCRB rights at 5c, the broker also took the 70c to convert the rights (next friday) out of my account. So just beware before you put in a big order that you have the funds.

[Billy Boy]

I just bought some PRCRB rights at 5c, the broker also took the 70c to convert the rights (next friday) out of my account. So just beware before you put in a big order that you have the funds.
Tks Mr Tommy
I presume they will replace the money if you sell ??
BB:)

[nwood]

Tks Mr Tommy
I presume they will replace the money if you sell ??
BB:)

Yes, same with the NPX rights, the cost of the shares is deducted with the purchase of the rights, if the rights are resold before they close then the cost of the shares is credited also

[geezy]

anyone know how many options per share is attached to the rights? does it go like 1 rights @ 70c u get one option?

thanks much ! :)

[the machine]

anyone know how many options per share is attached to the rights? does it go like 1 rights @ 70c u get one option?

thanks much ! :)


correct

M

[winner69]

anyone know how many options per share is attached to the rights? does it go like 1 rights @ 70c u get one option?

thanks much ! :)

Offer One new share and one bonus option for every 5 shares held as at 24 March 2009

... so the answer to your 2nd question is yes ... evry new share you buy at 70 cents you get one option

[Steve]

When is the option expiry date?

[winner69]

When is the option expiry date?


Pike River advises that the proposed bonus options have a
two year term expiring 21 April 2011 and an exercise price of $1.25 per
option.

[temptation]

Do we know if the options will be listed on the NZX/ASX?

[777]

It is all on their website.

http://www.pike.co.nz/shareholder-section/rights-issue-2009/Investment_Statement.pdf

[the machine]

posted my nz draft today for entitlement[s] plus some extra.

it irks me that have to pay in nz $ as cost of draft is aud$15 and using a bank's exchange rate - bought nz$ @1.2027

its a 20 year+ mine so will hopefully provide a steady dividend in years to come

M

[Billy Boy]

posted my nz draft today for entitlement[s] plus some extra.
its a 20 year+ mine so will hopefully provide a steady dividend in years to come
Ditto to the above...:)

Do you think Pike are going to stay put with just this one mine. ?
There are other prospects. ( Coking & other ). I would suggest that Pike will go after them.
BB

[Placebo]

Hope springs eternal... Let's see if they can get the first mine operating and producing something first.

[Dr_Who]

Ditto to the above...:)

Do you think Pike are going to stay put with just this one mine. ?
There are other prospects. ( Coking & other ). I would suggest that Pike will go after them.
BB

Pike have no cash to go after anything.

I agree with Placebo's comment.

[dsurf]

I assumed the options money would be used to develop the other seam.

[Hoop]

Ditto to the above...:)

Do you think Pike are going to stay put with just this one mine. ?
There are other prospects. ( Coking & other ). I would suggest that Pike will go after them.
BB

Hi BB
Nah..I'm with you one this one..they will go after them
They are only paying out 50% of the profit in future Dividends aren't they?

[777]

The options money will only be there if people take them up at $1.25 by expiry date. The share price will have to be that, or greater, for it to happen.

If you are meaning the rights issue then I think that is probably earmarked for cash flow where they are now.

[whatsup]

So whats the possible dividend per share after the number of new shares issued taken into account but without the exercise of the options ???

[Billy Boy]

Pike have no cash to go after anything.

I agree with Placebo's comment.

Hey you's two !!!
I,m not talking short term, I'm thinking three or more years from now
BB

[sideline]

Ditto to the above...:)

Do you think Pike are going to stay put with just this one mine. ?
There are other prospects. ( Coking & other ). I would suggest that Pike will go after them.
BB

After operating profitably for a year or two Pike should have plenty of
money for extensions. In the meantime, stay focused on the immediate task.

[Billy Boy]

After operating profitably for a year or two Pike should have plenty of money for extensions. In the meantime, stay focused on the immediate task.

Hi Sideline
I take your point and would suggest, the big picture is also part
of the " immediate task "
BB :)

[Placebo]

The point being, BB, that your enthusiasm for the project is laudable but to date the operators of the Pike River mine have not demonstrated an ability to produce anything. Until they do, it is a bit premature to start thinking they could run other mines as well.

Learn to crawl before you can walk... :)

[Sehnsucht888]

Interesting the disclosure that the ACC have acquired almost 10% of the rights (last week) just before trading in them ends..

[Mingeathinaikos]

Am I too late to apply for my allocation from the UK?
Usually a NZ bank account # provided, but can't seem to find it anywhere... guessing I can fax the form back as well.....
Help please.

[digger]

Am I too late to apply for my allocation from the UK?
Usually a NZ bank account # provided, but can't seem to find it anywhere... guessing I can fax the form back as well.....
Help please.

If i were you i would send the money with am accompying letter stating the number of new shares you have a right to buy at 70 cents each.Must do this immediatly to be in on time. I know they always say it must be with proper forms but in reality some forms get lost in the process but if they have your money and on time ,I would say it would have to be accepted. You have also put it here on Sharetrader declaring your intent which helps to covery your but,so just do it.

[Sehnsucht888]

I agree with digger, despite the close date being set, additional shares seem to get allocated over quite a long period as I think they process obscure appliactions.
I would suggest ringing the company though and asking for advice. If there has been great uptake, it just may be a matter of - well you had lots of time....

[Snow Leopard]

I have been buying into a few stocks over the last couple of months and have purchased some Pike rights in the last few days, drawn by the temptation of cheap shares and options with two years to run.

Just hope that not too much more of the mine caves in :rolleyes:

regards
Paper Tiger

[the machine]

Hi BB
Nah..I'm with you one this one..they will go after them
They are only paying out 50% of the profit in future Dividends aren't they?


am inclined to think that after pike get some decent production figures over a year or 2 then yes they will chase more coal to add to their reserves. with nats in power then maybe extend the mining lease further into national park would seem to me a reasonable expectation.

if there are smaller coal desposits available then they could be trucked to the coal processing plant and dumped into the sludge

M

[croesus]

Before we get too carried away..... have they got the cave in sorted.....

[digger]

Before we get too carried away..... have they got the cave in sorted.....
The Hamilton presentation said this would be sorted and functioning fully by mid May.

[Placebo]

The Hamilton presentation said this would be sorted and functioning fully by mid May.

Translation: November.

[blockhead]

So the next imponderable is ; what are the 2010 options going to be worth ???

01 - 02c perhaps

[whatsup]

block----, refresh me are they to be listed and when, whats the call sign if they are to be?

[Bilo]

So the next imponderable is ; what are the 2010 options going to be worth ???

01 - 02c perhaps

The investment statement says "New options can be exercised at any time before April 24 2011." ..just pay 1.25 ... but they don't participate in dividends until they are exercised - so where does the "2010" come from?

[blockhead]

My error, options are 2 year to April 21st 2011

Dont know what the ticker will be

[Hoop]

block----, refresh me are they to be listed and when, whats the call sign if they are to be?

R = rights
O= options
A = first issued
B = second issued .. C 3rd.. D 4th ..and so on

I think this is PRC first option issued (not sure)

therefore the option code should be PRCOA


Early days ... as NZX hasn't released the code yet

[777]

Put the code in DB and you get this result.

This security PRCOA is not yet listed on the NZX exchange. The reported listing date is 27/04/2009.

[blockhead]

Anyway, who is going to have a stab at their value ??

[777]

This far out I would not think they are worth more than 1-3 cents.

[whatsup]

B H .04-.05 great gearing opp for the brave bearing in mind the current track record of the company.

[digger]

Translation: November.


Interesting i am sure the ventualtion shaft was to be finished by mid may and then the mine would be up fully running by about nov. First export coal is to be exported to Japan at end of this year so shaft will have to be in operation sometime before coal is available for shipment. Anyone else hear from presentation?

[Sehnsucht888]

Placebo is just being pessimistic/cynical digger..

[Placebo]

Placebo is just being pessimistic/cynical digger..

Given the track record of PRC to date, I think you mean "realistic/optimistic" ;)

[Sehnsucht888]

Yeah well,they have had some bad luck. But they have also done some large developments as part of this. If there is another disaster then you are probably on to it, if no real dramas then I don't see why they can't finally deliver.

[Dr_Who]

Sept/Nov is still a long way away. Anything can happen between now and then.

[Billy Boy]

Sept/Nov is still a long way away. Anything can happen between now and then.
Yep....
Placebo will have us all believing the sky will fall on our heads by then, :D
BB

[Mr Tommy]

Interesting i am sure the ventualtion shaft was to be finished by mid may and then the mine would be up fully running by about nov. First export coal is to be exported to Japan at end of this year so shaft will have to be in operation sometime before coal is available for shipment. Anyone else hear from presentation?

In the Pike annoucement on NZX dated 25 March 2009:
Meanwhile, drilling of a 'slimline' ventilation hole from the surface to pit
bottom has commenced. This hole will then be reamed to 600mm diameter and
fully cased with steel pipe to provide enough additional fresh air to allow
one of the coal cutting machines, a continuous miner, to start producing coal
during April.

So there should be some level of production starting up this month, with it all full on again in late May when the main ventilation is restored.

[Dr_Who]

I am starting to think more seriously about PRC now that the contract price for coal have stablised above the $125 levels and the financing is out of the way.

Do you think PRC will settle a new contract with the buyers these coming months or wait till they have the coal is out of the ground?

[Placebo]

Yep....
Placebo will have us all believing the sky will fall on our heads by then, :D
BB

Billy I won't try to convince you the sky might fall... but Pike have already shown that their roof might fall in... I guess that is just a reminder that with a project like this, potentially fantastic as it is, still has its potential pitfalls. The rockfall could have happened at any time - chance would have it that it occurred just after the tunnel was completed and as production was ramping up.

Bad luck or bad design? I don't know. But a reminder that the sometimes irrational optimism needs to be tempered by a bit of cold hard reality.

Disc: Continue to hold.

[Mr Tommy]

On 8 January there was a release titled 'Ventilation Shaft Raiseboring Completed' which stated...

'Because of difficult rock conditions in a 35 metre zone immediately below the
surface, 'coring' the ventilation shaft had been expected to take longer, but
the job turned out to be more straightforward. The pilot hole drilled in
December 2008 provided evidence that the large quantities of cement injected
into the top 35 metres to solidify the ground had been effective. That was
proven correct when the raisebore successfully cut through that zone without
difficulty. Little water was encountered and the ventilation shaft is in
very good condition.'

And then on 19 Febuary the bottom 30m fell in, when they thought the top 35m would be the problem. Maybe they drilled it upside down ?

[Sehnsucht888]

Maybe they drilled it upside down ?

Haha - nice one

[the machine]

I am starting to think more seriously about PRC now that the contract price for coal have stablised above the $125 levels and the financing is out of the way.

Do you think PRC will settle a new contract with the buyers these coming months or wait till they have the coal is out of the ground?


as new price now basically set then IMO they should wait until producing reasonable amount before arranging a shipment.

have supply chain more than half full before having a shipment

with scope to stockpile at coal preperation plant, both in pond and after processed, at the railhead and in lyttlyton, then should be able to store quite a lot


of course pike will want the cashflow, so most likely as soon as have 40,000t then will have a shipment

M

[the machine]

guess the capital raising was a success since sp has been higher.

M

[Billy Boy]

guess the capital raising was a success since sp has been higher.
I see my cheque has'ent be cashed yet, so presume they are still processing. I went for twice my entitlement, so you might be right.
BB :)

[Dr_Who]

guess the capital raising was a success since sp has been higher.

M

All the Aussie coal miners have gone for a good run with the exception of PRC.

It would be good for PRC sp if they announced an agreement to sell the coal for over $125 this year. I assume they will negotiate a contract if they are confident they can deliver coal sept this year.

[Hoop]

I see my cheque has'ent be cashed yet, so presume they are still processing. I went for twice my entitlement, so you might be right.
BB :)
"I went for twice my entitlement"...Me too

[the machine]

see pike have updated 2009 photo's on website

M

[777]

So how many will you get?


PRC
21/04/2009
GENERAL

REL: 1643 HRS Pike River Coal Limited

GENERAL: PRC: PRC - Fully Subscribed Rights Issue for Pike River Coal

FULLY SUBSCRIBED RIGHTS ISSUE FOR PIKE RIVER COAL

Pike River Coal Limited announces that its $41 million rights issue which
closed on 17 April 2009 has been fully subscribed and scaling of shareholders
applications for shares under the excess subscription facility has been
necessary.

The issue had been fully underwritten by McDouall Stuart Corporate Finance
Limited and New Zealand Oil & Gas Limited.
More than two-thirds of Pike River Coal's 7,800 shareholders have taken up
their rights entitlements for 53.76 million shares out of the total offer of
58.57 million shares. Nearly 3,000 shareholders applied for a further 12.38
million shares in excess of their entitlements.

Allocation of the 4.8 million shortfall in rights based applications for
shares between Pike River Coal shareholders under the excess subscription
facility and the underwriters has been undertaken in accordance with the
Investment Statement. Accordingly 2.4 million shares will be allocated across
shareholders and 2.4 million shares allocated to underwriters. The
allocation to shareholders who applied under the excess subscription facility
will be scaled on the basis of their shareholdings on the Record Date of 30
March 2009

[patrick]

If i presented the message and coal was likely to be exported by Sept, as promised, then i would SAY so.
Instead we get ... hydro mining by Oct/Dec
Just be up front please.

[Balance]

So shortfall of 8.2% and 33% of shareholders decided to pass on the rights issue.

Oversubscription by those who believe they can flick for a quick few cents?

Worked last time.

[the machine]

we subscribed by an extra 25% so hopefully will get them all, otherwise will be a real pain with any refund in nz$ - the bank would love the fees and the nz$ has dropped since we bought the draft last week.

M

[digger]

we subscribed by an extra 25% so hopefully will get them all, otherwise will be a real pain with any refund in nz$ - the bank would love the fees and the nz$ has dropped since we bought the draft last week.

M

I went for a lot more than 25% and think there is a chance of getting the lot. Frankly i think Pike should just accept the oversubscribtion given that approx 33% decided not to take up there rights. Feed the willing and thereby reduce the nay sayers % holding. Increasing the % of backers has got to be good for the company,especially in these troubling times.

[the machine]

I went for a lot more than 25% and think there is a chance of getting the lot. Frankly i think Pike should just accept the oversubscribtion given that approx 33% decided not to take up there rights. Feed the willing and thereby reduce the nay sayers % holding. Increasing the % of backers has got to be good for the company,especially in these troubling times.

but there is scaling so they will not be accepting any substantial oversubscription

M

[Snow Leopard]

The numbers would imply that over subscriptions will be scaled back to about 9% of your original entitlement.

regards
Paper Tiger

[the machine]

The numbers would imply that over subscriptions will be scaled back to about 9% of your original entitlement.

regards
Paper Tiger

hopefully a minimum oversubscription will still apply ie up to 1,000 then will get them all, with scaling above

M

[Rabbi]

hopefully a minimum oversubscription will still apply ie up to 1,000 then will get them all, with scaling above

M

It would have been less complicated to buy the rights on market; that way you could get as many free options as you wanted. For 5 cents a share, you are paying a slight premium on the 70 cent "new" share price, but at least you would have secured your desired allocation; that is if you had the money.

Those free options are going to make you a lot more than 5 cents.

With the benefit of hindsight, this is what I should have done, and I now wouldn't have to worry about my application getting scaled back.:cool:

[Billy Boy]

It would have been less complicated to buy the rights on market; that way you could get as many free options as you wanted. For 5 cents a share, you are paying a slight premium on the 70 cent "new" share price, but at least you would have secured your desired allocation; that is if you had the money.
Those free options are going to make you a lot more than 5 cents.
With the benefit of hindsight, this is what I should have done, and I now wouldn't have to worry about my application getting scaled back.:cool:

Nail on the head Rabbi...
I should have gone the options way and did'nt. :o Bugger !!!
However.... there is a lot more money out there than most think,
wise money waiting to pounce.
BB

[Sehnsucht888]

I sold most of my heads and bought rights at a slight discount, so have the same heads, extra options, the entitlement for extra allocation on the original quantity, and a few $.
The risk with doing this was timing, and the chance I could have been left with nothing but the entitlement.

Be interesing to see how the options go, I can't wait.

[patrick]

At todays share prce...my guess... 11cents

[AMR]

Aren't they exerciseable at $1.25 and thus way way out of the money?

[777]

Todays price has very little to do with it while they are out of the money.

[Hoop]

At todays share prce...my guess... 11cents

I was looking very closely at the "options effect" during the time the rights were trading with the heads. Most of the time the rights price+70c = the head shares, therefore very little effect. Over that period the average spread was 0.6c so theoretically a PRCOA = 0.6c. during that time

However there is only 58 million of them which may make them illiquid for trading plays, ....be interesting to see what happens next Monday..probably none being traded at all is a very distinct possibility.

Another possiblity is the fact that selling the options (PRCOA) may be a losing exercise after brokerage fees costs...so many shareholders may just hoard them for now....sellers may be thin on the ground.

[Dr_Who]

PRC holders will be happy to read this bit of info.

China may boost coking coal imports

Updated: 22 Apr 2009 03:04:17 PST

April 22 MetalBiz--

It was reported that China may increase coking coal imports after international prices dived.

Experts said Chinese domestic coal costs about1,000 yuan per ton (US$146 per ton), but imports of the steelmaking ingredient cost only about US$120 per ton plus US$10 per ton for freight, that why most Chinese steelmakers would like to import coking coal rather than buy domestic coking coal.

In fact, Asian coking coal prices slashed almost 60% this year compared with 2008 after the global recession came about.

For recovering the downturn economy, Chinese government had been spending 4trl yuan to spur the economy animation for the sector of building infrastructure, automobiles by stimulating demand on steel and other metals. However, Shanxi province, the biggest coal-producing region in China, has still resisted cutting prices with foreign rivals and expected domestic steel demand will recover.

[777]

If interested you can see what extra shares you have been alloted today. I note that the options have yet to be recorded on the site. Probably will happen over the next day or two.

http://www-au.computershare.com/

[Sehnsucht888]

Options are shown there now.

[the machine]

energy review article


Pike River eyes CSG for mine power
(Friday, 24 April 2009)


MINER Pike River Coal has won an extension to an old petroleum exploration permit over its coal mine on the West Coast of New Zealand’s South Island so it can evaluate the coal seam gas potential of the project.
Full Story...

as we do not subscibe then only have headlines

M

[Bixbite]

To the office of Pike River Coal Company,

I think the Company and the Computershare might need to double-check the entire of the transaction list because “I got more than I paid”.

I checked the company website and didn’t find a direct contact link. Then I emailed to enquiries@pike.co.nz.

Could I have those extra shares for free because of my honest?

Cheers

[777]

It is all handled by the registry so they should be who you contact.

[oldowl]

If interested you can see what extra shares you have been alloted today. I note that the options have yet to be recorded on the site. Probably will happen over the next day or two.

http://www-au.computershare.com/

I am interested, however I am asked for my FIN, which I have lost.
Any idea how to get my FIN again?

Thanks
OO