PRC Pike River Coal

[Baddarcy]

If they put their money into proven coal miners like MCC, they would have made several hundred % on their money.

PRC was always high risk and therefore, investors have not done well at all for the fisk they took.

Can't argue with that.

But going forward PRC has the potential to outperform it's Aussie counterparts....... if they can get their act together....hence all our interest i suppose.

[Casa del Energia]

If they put their money into proven coal miners like MCC, they would have made several hundred % on their money.

PRC was always high risk and therefore, investors have not done well at all for the fisk they took.

Not quite sure if that is quite correct - Yes, pike is a 'high' risk - therefore there is a larger than average probability that it will turn to custard but counterbalancing that is a greater than average probability that it will produce high returns. However, you've implied that because pike was high risk, the sp should not be in the present doldrums and the shareholders should by rights now be in clover.

(I'd like to point out here that I don't rate pike as a particulaly high risk for the reasons that it has reasonable governance, well trained and qualified staff and very good plant and equipment - - I know view is at odds with most brokers and analysts, but as far as I can work out - the present sp severely overrates the long run earnings risk.)

[Silverlight]

Lack of sellers near term on PRC

2002 1.01 1.02 1000
3000 1.01 1.02 25000
5000 1 1.09 10000
7500 1 1.1 620
5000 1 1.1 5000

A large buyer push may see the price jump.

[corporateraider]

I have been looking at the share price inching up on reasonable volume and the time looked good so I went into the market this afternoon graben all the stock I could get. Yeah it pushed the price a bit, but the volume wasn't there. And there were certainly others coming in behind me pushing the price further, so for now my graben is through. It looks as though at least some of the problems may be behind the company xo I'll likely be back next week.

[Corporate]

raider - isn't their a capital raising on the horzion?

[corporateraider]

Corporate, there is and the nature of it will effect the share price to a greater or lesser extent. Of course it depends where the share price is at that time as to how it affects my entry at 100.

[blockhead]

If there is a cap raising thats when Blocky will get back in....if its attractive !@!!

[Corporate]

Corporate, there is and the nature of it will effect the share price to a greater or lesser extent. Of course it depends where the share price is at that time as to how it affects my entry at 100.

:)

I've been contemplating an entry into Pike too. However, I think I'll wait until after the funding issue is sorted. If Pike can get it together 100%-150% return in the short term is not out of the question.

[corporateraider]

Corporate,

I am thinking that there may be time for an in and out and in around the cash raising. But I have always been optimistic.

Like you I see room for tremendous appreciation in the share price when it goes.

There has been much pessimism as to whether 1 mill tonnes can be moved. To me that's just a mehanical engineering exercise and if the figures show it can be done then it will be.
I suggest that the company is very confident of it because they have talked of an even higher figure than 1 mill.

As to the problems so far. You only have to look around the Sth Island to huge projects that have been built in the face of adversity. The Clutha Dam and the Manapouri tunnel are two.

Not too long ago no one believed that you could blast down the Waimak at 70k, turn on a six pence (ok so it was a while ago) and go just as fast back up river. This project will happen.

To me the key to this company is the huge increase in the coal price compared to the prospectus figures.

[Corporate]

Corporate,

I am thinking that there may be time for an in and out and in around the cash raising. But I have always been optimistic.

Like you I see room for tremendous appreciation in the share price when it goes.

There has been much pessimism as to whether 1 mill tonnes can be moved. To me that's just a mehanical engineering exercise and if the figures show it can be done then it will be.
I suggest that the company is very confident of it because they have talked of an even higher figure than 1 mill.

As to the problems so far. You only have to look around the Sth Island to huge projects that have been built in the face of adversity. The Clutha Dam and the Manapouri tunnel are two.

Not too long ago no one believed that you could blast down the Waimak at 70k, turn on a six pence (ok so it was a while ago) and go just as fast back up river. This project will happen.

To me the key to this company is the huge increase in the coal price compared to the prospectus figures.

I agree if Pike can get operations moving smoothly then this could be a real money marker. I only see HCC prices going higher in the future and Pike have 18+ years of production ahead of them.

Do you have any idea what the current HCC spot price is? I haven't really been following it but I read somewhere US$160?

[Casa del Energia]

Have I missed something? Has anyone got wind of why the sp has sudden Upward pressure …?

[Baddarcy]

Have I missed something? Has anyone got wind of why the sp has sudden Upward pressure …?

I think the market is expecting 2 pieces of good news in the next week or so,

1) they are thorugh the graben
2) First shipment is on its way from the mine

and possibly

1) Liberty Harbor negotiation results
2) capital raising info

[Casa del Energia]

I think the market is expecting 2 pieces of good news in the next week or so,

1) they are thorugh the graben
2) First shipment is on its way from the mine

and possibly

1) Liberty Harbor negotiation results
2) capital raising info

Hmm - you're more than likely right.

[blockhead]

I think the Cobb & Co mail Coach is on its way to Otira with the Ann, if there are fresh horses there it should be available to the Market by Friday, in the meantime the train with the first shipment may overtake the Coach at Rolleston and word will have got out anyway.

[Casa del Energia]

I think the Cobb & Co mail Coach is on its way to Otira with the Ann, if there are fresh horses there it should be available to the Market by Friday, in the meantime the train with the first shipment may overtake the Coach at Rolleston and word will have got out anyway.


Aw c'mon - why does everyone assume it is still 1884 on the coast? I mean it is the very soul of modernity now - - all my cousins had converted their coal range cookers to electric more than twenty years ago!

At any rate, thanks for the broad hint.

[Hoop]

Have I missed something? Has anyone got wind of why the sp has sudden Upward pressure …?

Buyer demand!
Lacking further bad news, the share price has jumped out of it "bad news" trading range (96-102) triggering TA buy signals.
The options pricing tell you that PRC is a reasonably volatile share so investors should not be surprised to see sudden movements (either way).

Disc:
Quote:
Originally Posted by Balance http://www.sharetrader.co.nz/images/buttons/viewpost.gif (http://www.sharetrader.co.nz/showthread.php?p=288014#post288014)
Be our guest and pick up some more then.
.......

Ohh....alright then..if you insist....... Just a little more to add to the collection
5000shares @ 98c. :cool:

[Casa del Energia]

Buyer demand!
Lacking further bad news, the share price has jumped out of it "bad news" trading range (96-102) triggering TA buy signals.
The options pricing tell you that PRC is a reasonably volatile share so investors should not be surprised to see sudden movements (either way).

Disc:
Quote:
Originally Posted by Balance http://www.sharetrader.co.nz/images/buttons/viewpost.gif (http://www.sharetrader.co.nz/showthread.php?p=288014#post288014)
Be our guest and pick up some more then.
.......

Ohh....alright then..if you insist....... Just a little more to add to the collection
5000shares @ 98c. :cool:

I don't know if I should be delighted or depressed by your explanation. Although I often call TA "Voodoo", such mechanics often does appear to work. The depressing thing I guess, is that I was looking at the pit bottom diagram and the graben tunnels diagram the other day - and thought "No, the price has no bearing on reality.. this is a very well planned and executed mine" .. so now we have a sudden rally only because of some arcane market mechanism and has nothing whatsoever to do with the skill of the engineers down there.

(sigh). I think I'll just go out and shoot myself.

[blockhead]

[QUOTE=
(sigh). I think I'll just go out and shoot myself.[/QUOTE]

OOOOh dont say that Casa, it is exactly what my mtb riding buddy did about a month ago.

[Casa del Energia]

OOOOh dont say that Casa, it is exactly what my mtb riding buddy did about a month ago.

I'm sorry to hear that. I guess I should be more careful about flippant quips since there is always a real incident somewhere which is actually a serious matter that affects real people. Please accept appoligies if any hurt was given.

[blockhead]

I'm sorry to hear that. I guess I should be more careful about flippant quips since there is always a real incident somewhere which is actually a serious matter that affects real people. Please accept appoligies if any hurt was given.

No hurt Casa, that is just the way it goes sometimes.

[manxman]

I was looking at the pit bottom diagram and the graben tunnels diagram the other day - and thought "No, the price has no bearing on reality.. this is a very well planned and executed mine" ..

Hi Casa - where did you see the graben tunnels diagram? Is there a place on the web site that I havn't found?

[Hoop]

Hi Casa - where did you see the graben tunnels diagram? Is there a place on the web site that I havn't found?

Hi Manxman ..try here http://www.pike.co.nz/photo_gallery.php&cat=16 and scroll along to the last photo in the picture gallery. Its a small diagram but it gives you a rough idea at what stage they are at at the moment.

From the diagram it seems they are through the graben and have mined a bit of coal on the other side. The accompanying "Note" makes the diagram all ambiguous....


Casa... PRC dropped back to the 102 right on close retesting the roof of the "bad news" trading range zone (hopefully a strong resistance point). I had buy orders here and was surprised:eek: to have them triggered so quickly... I'm now waste deep in PRC (doggy do?). My exit strategy is just below the "bad news" trading range bottom so my maximum loss is limited to around -10%. The -10% risk v ?% reward strategy is worth the buy in from my point of view, others will disagree.

[Casa del Energia]

Hi Casa - where did you see the graben tunnels diagram? Is there a place on the web site that I havn't found?

The woes of age - can't remember the site - I remember googling "pike graben" and in one of googles picks, the there was a pdf that has it in. What's worse - I didn't do it on this pc so I can't look in the IE history.

I think .. it was a presentation by the company - - had a diagram of the tunnels bored in the graben, pit bottom, side tunnels in the coal to the south east and bores into the seams and vague positions for the hydro panels further in the north west - - although it be hard to believe they are a reality yet.

[Casa del Energia]

Hi Manxman ..try here http://www.pike.co.nz/photo_gallery.php&cat=16 and scroll along to the last photo in the picture gallery. Its a small diagram but it gives you a rough idea at what stage they are at at the moment.

From the diagram it seems they are through the graben and have mined a bit of coal on the other side. The accompanying "Note" makes the diagram all ambiguous....


Casa... PRC dropped back to the 102 right on close retesting the roof of the "bad news" trading range zone (hopefully a strong resistance point). I had buy orders here and was surprised:eek: to have them triggered so quickly... I'm now waste deep in PRC (doggy do?). My exit strategy is just below the "bad news" trading range bottom so my maximum loss is limited to around -10%. The -10% risk v ?% reward strategy is worth the buy in from my point of view, others will disagree.

Yes - a false alarm, as it were. But I hate to seem so Pollyanna-ish, you are not in doggy-do … I've been flamed for making these sort of comparisons before but (who cares) here goes: About thirty years ago, my uncle took me down the Charming creek mine (in the days it was still working) - same sort of deal as pike - horizonal on the seam, hydro sluice - - but that's where comparison ends - the sluice was wooden boxing into wooden coal bins, timber props, rickety old 3'6" tracks in main shaft - i.e. same sort of coal seam etc but the mining technology is a century apart) literally. Pike river is a whole new kettle of fish - and is set up and equipped in a way my old uncle could have only dreamed of.


Yes, there are more immediate gains if you're into Aussie coal and there is the lost opportunity factor waiting for pike to come on stream - - but it's 'got it all' and if anyone will succeed - they will.

[Hoop]

The woes of age - can't remember the site - I remember googling "pike graben" and in one of googles picks, the there was a pdf that has it in. What's worse - I didn't do it on this pc so I can't look in the IE history.

I think .. it was a presentation by the company - - had a diagram of the tunnels bored in the graben, pit bottom, side tunnels in the coal to the south east and bores into the seams and vague positions for the hydro panels further in the north west - - although it be hard to believe they are a reality yet.

Casa ...I think this is the same diagram I mentioned in my above post
http://www.pike.co.nz/photo_gallery.php&cat=16
When this web page pops up either scroll the thumbnail pictures sideways or keep clicking the orange right-side arrow...its the last one.

A dopey place to put a diagram..huh?

[Bixbite]

The woes of age - can't remember the site - I remember googling "pike graben" and in one of googles picks, the there was a pdf that has it in. What's worse - I didn't do it on this pc so I can't look in the IE history.

I think .. it was a presentation by the company - - had a diagram of the tunnels bored in the graben, pit bottom, side tunnels in the coal to the south east and bores into the seams and vague positions for the hydro panels further in the north west - - although it be hard to believe they are a reality yet.

From here:-

Presentation - Hong Kong - 29 October 2009 – page 6
http://www.pike.co.nz/files/presentations/091029-ASX-small-midcaps_presn.pdf

[Hoop]

Yes - a false alarm, as it were. But I hate to seem so Pollyanna-ish, you are not in doggy-do … I've been flamed for making these sort of comparisons before but (who cares) here goes: About thirty years ago, my uncle took me down the Charming creek mine (in the days it was still working) - same sort of deal as pike - horizonal on the seam, hydro sluice - - but that's where comparison ends - the sluice was wooden boxing into wooden coal bins, timber props, rickety old 3'6" tracks in main shaft - i.e. same sort of coal seam etc but the mining technology is a century apart) literally. Pike river is a whole new kettle of fish - and is set up and equipped in a way my old uncle could have only dreamed of.


Yes, there are more immediate gains if you're into Aussie coal and there is the lost opportunity factor waiting for pike to come on stream - - but it's 'got it all' and if anyone will succeed - they will.

Casa ...Its not a false alarm / (bull trap).....at this point of time.

[corporateraider]

$1.07 and gone! For the meantime

[Casa del Energia]

$1.07 and gone! For the meantime

Seems to be a good and long 'meantime', half way through trade day and no sign of weakening off.
Just need to see if the anticipated good news is already priced in or whether the price is ready to hit the trade winds.

Does anyone know if anyone is selling Verve Cliquot on special? (I like to celebarate, but not too extravagantly).

[Billy Boy]

Does anyone know if anyone is selling Verve Cliquot on special? (I like to celebarate, but not too extravagantly).

You can get the recycled stuff cheap enough !! :D:D

BB:D

[Lion]

Last edited by Casa del Energia; Today at 12:20 PM. Reason: speling

Ha ha, good one, Casa

[JoeBlogs]

Love it ;-)

Big day tomorrow...............................

[Baddarcy]

Love it ;-)

Big day tomorrow...............................

Hope so, was expecting the announcement a few weeks ago to be honest. All i can guess is that they are saving up all the news for one big announcement.

What are we waiting for news on now

1) Graben
2) First Shipment
3) Funding Requirements and how they plan to get it
4) Liberty Harbor
5) $3m Insurance claim

But for me the 2 biggie's won't be until April at the earliest,

1) Starting Hydro mining
2) contract price setting for the 2010 - 2011 year

[Balance]

Love it ;-)

Big day tomorrow...............................

An observation with PRC - no news is bad news.

The company is always in a big hurry to release good news. And it always delays as long as possible releasing bad news.

[fabs]

Does this suggest ramping up s/p so the ones with inside knowledge can sell?

[root]

I don't currently hold any PRC but am very interested. PRC has had 3 employee share schemes over the last 12 months does anyone know what the uptake was and how many people are currently employed?

[digger]

Does this suggest ramping up s/p so the ones with inside knowledge can sell?

In the last years we have often heard about this theory of ramping up the SP so insiders could sell. I have never understood how it could work. The only possability is if the managment was 100% trusted and investers believed every word said. Naturally it goes without saying this would only be a one off as in the future no-one would have further trust. As has often been said here PRC has little confidence with investers so ramping up is just not going to work here.
Way do we not just face it --all the bad news about PIKE has been out for all to see now for ages.Now the news is starting to get not so bad and this is what is causing the SP rise.Simple as that.With the bad new clearing investers can now focus on some of the better stuff. Like China wanting hard coking coal and production problems slowly getting solved.

[Balance]

In the last years we have often heard about this theory of ramping up the SP so insiders could sell. I have never understood how it could work. The only possability is if the managment was 100% trusted and investers believed every word said. Naturally it goes without saying this would only be a one off as in the future no-one would have further trust. As has often been said here PRC has little confidence with investers so ramping up is just not going to work here.
Way do we not just face it --all the bad news about PIKE has been out for all to see now for ages.Now the news is starting to get not so bad and this is what is causing the SP rise.Simple as that.With the bad new clearing investers can now focus on some of the better stuff. Like China wanting hard coking coal and production problems slowly getting solved.

You are assuming that all the bad news on PRC are out?

I am not too sure. Could be may more grabens waiting for the miners ahead for example. PRC has no idea.

[digger]

You are assuming that all the bad news on PRC are out?

I am not too sure. Could be may more grabens waiting for the miners ahead for example. PRC has no idea.

Thought i had read somewhere that a small sample hole showed solid coal for the next 400 metres.

[GTM 3442]

I should imagine that he 2011 $1.25 options will keep a lid on the price until there's a decent amount of coal coming out consistently, with regular shipments ex Lyttleton.

So I'd expect that the option price is the one to watch over the next year or so.

[Silverlight]

News out

https://www.i-search.nzx.com/blobs/NZXPRC/2010/325641/NZXPRC-113151.pdf

[winner69]

Plenty of pictures but what does it really mean .... up to peoples expectations or not?

[Baddarcy]

Seems to be a bit of good and a bit of bad and a bit of nothing really,

good that the first shipment is on its way from the mine, bad that they have probably slightly delayed the start of hydromining possibly (from April - June to June-July).

Graben is so so, they have not got through yet, but it sounds like they are doing it properly and drilling multiple roadways, they could have just pushed one road through just to get a good headline and then had to spend time afterwards fixing it. GOod to see they are not doing that i suppose.

Funding, still more news to come in a few weeks...

Over all probably slightly positive, at least they are selling coal now

[Doyle]

Markets saying not good news.

[geezy]

the biggest issue to me is the financing problem. I forsee more capital raisings. but i m keeping my fingers crossed for more good news

disc: hold PRC

[digger]

Markets saying not good news.


Seems like everything is down today including the NZ dollar. The world is going back to realise the downturn is not over. The world is as a hole has not yet realised the downturn is the new normal.Peak everything is slowly taking hold,but not yet there for the majority.

[Baddarcy]

the biggest issue to me is the financing problem. I forsee more capital raisings. but i m keeping my fingers crossed for more good news

disc: hold PRC

I hold only PRCOA, so the thoughts of a capital raising doesn't seem that scary to me, according to my interpretation of the "PRCOA rules" is that i get treated the same as PRC holders if they go to shareholders for money. So esentially i will get 4 times as many rights in any capital raising by buying PRCOA instead of PRC, given that for each PRC i could have bought, i bought 4 PRCOA instead.

Any capital raising isn't going to be massive, they have previously said they will need another $20m, so we are talking about a max of what $30m new shares, overall that is less than 10% of the total shares on issue.

Of course I would prefer that they simply took on some more debt, preferably in a loan rather than more convertable bonds.

But my gut instinct tells me they will get more money from Liberty Harbor....

As a side note, there was a slight drop in PRC when the announcement came out of 2c but it seems to have stabilised at a buck for now :-)

[fabs]

Digger,
and to whom it may concern:
Price and demand of coal at this stage and yes they are humming, largeley irrelevant, as PRC has so far not come within cuey
of theire full production dates stated.
At the rate of progress it would be a game individiual from the co. or other to take any bet on, is it by the end of this next or etc. year.
In the meantime the mices are at play with any rumor real or fictitious.
Re: ramping up or down for whatever reason, i could think of several possible scenarios, that could possibly include members of and the co. itself, whether it is legal or not i do not know, if you cannot think of any let it rest there, as i would be stepping on very thin ice putting any to print.
I too hope of cause that i am all wrong on this and only time will tell.


HOLDING DISCL.Indirect through nzo.

[Baddarcy]

Markets saying not good news.

Looks like the market has digested the report and realised it's not all bad news, buyers seem to be coming back to market.

[dsurf]

My take is that the report is bad news as it does not clear up any uncertainty

Another delay of 3 months to full production will mean increased working capital requirements above the 20m

The delay getting through the graben is the killer as there is no real proof that there are not more grabens waiting. Since that cannot be proven the capital raising will be more problematic & expensive

The "yet again" further delay adds to the market perception that management give their best understanding of the facts but that they are only guessing.

There seems to be a continuing factor at work.

Any anouncement regarding time to production ( multiply months to production by three)

Yes I am frustrated as nothing seems to be ever on time with company - even the equipment needs modifying causing delays

[Balance]

You have to laugh. PRC should have advised of the further delay first thing this year. So who knew and who didn't?

Looks like more grabens ahead.

[mouse]

You have to laugh. PRC should have advised of the further delay first thing this year. So who knew and who didn't?

Looks like more grabens ahead.

My guesstimate, 16 December posting, was steady state mining by August 2010. It looks now as if that may be more like October 2010.
A/. 20,000 tons to be shipped February.
B/. 40,00 tons expected April to June 2010.
C/. So that is 18 months production!
D/. Graben was 100 metres wide, now it is 150 metres. So they are still drilling and blasting.
E/. Commissioning hydro mining equipment July to September.
F/. Maybe even my revised guess of October 2010 is too optimistic.

All of the above is bad news. Could someone please tell me what the good news is? We need a bit.
Mind you, I was sorely tempted to buy 10,000 Pike when the price started to move. Am I eligable for psychiatric help?

[Balance]

My guesstimate, 16 December posting, was steady state mining by August 2010. It looks now as if that may be more like October 2010.
A/. 20,000 tons to be shipped February.
B/. 40,00 tons expected April to June 2010.
C/. So that is 18 months production!
D/. Graben was 100 metres wide, now it is 150 metres. So they are still drilling and blasting.
E/. Commissioning hydro mining equipment July to September.
F/. Maybe even my revised guess of October 2010 is too optimistic.

All of the above is bad news. Could someone please tell me what the good news is? We need a bit.
Mind you, I was sorely tempted to buy 10,000 Pike when the price started to move. Am I eligable for psychiatric help?

Mouse, you are bang on.

How the hell can they under-estimate the graben by 50 meters? What does this say about their geological expertise!!!!!!!

40,000 tonnes over 3 months = 160,000 tonnes a year! No way this mine makes any profit in the next 2 years at least.

No wonder the Indians said no more money from us. And other investors thought they are smarter than the Indians.

You are okay, Mouse - PRC is a trading stock. Just need to be on your toes and move fast.

[Bixbite]

Any capital raising isn't going to be massive, they have previously said they will need another $20m, so we are talking about a max of what $30m new shares, overall that is less than 10% of the total shares on issue.

Of course I would prefer that they simply took on some more debt, preferably in a loan rather than more convertable bonds.

But my gut instinct tells me they will get more money from Liberty Harbor....



I prefer the new money from Liberty Harbor.

[Dr_Who]

Looks like they will have to do a rights issue now.

[winner69]

Witht he heads at 101 the OAs at 25 look overpriced

Using current heads volatility the OAs in theory should be about 19-20 cents

OAs priced in anticipation of exciting news? ... but exercise date is now just over a year away

[Balance]

PRC has no idea what lies ahead in the mine. Why do we know that?

Production delay is now in excess of 2 years due to :

1. Soft rocks,

2. Ventilation collapse.

3. Graben.

All 3 should have been scoped out, planned for and engineered into the mine. They obviously were not.

So how many more grabens lie ahead?

Will there be too much moisture and flooding.

Are there streams running through the coal seam.

Is there inconsistent coal quality.

How many pockets of coal gas.

And so on and so forth.

[ratkin]

PRC has no idea what lies ahead in the mine. Why do we know that?

Production delay is now in excess of 2 years due to :

1. Soft rocks,

2. Ventilation collapse.

3. Graben.

All 3 should have been scoped out, planned for and engineered into the mine. They obviously were not.

So how many more grabens lie ahead?

Will there be too much moisture and flooding.

Are there streams running through the coal seam.

Is there inconsistent coal quality.

How many pockets of coal gas.

And so on and so forth.


Dont forget the earthquake

[Corporate]

I was fairly bullish on PRC (bar the financing issue), however, after reading the quarterly I won't touch it until steady state production is more likely. To much risk at the moment.

[mouse]

The problem I face now is, what is the correct price for Pike shares? They told us they needed to raise $20 million, which now seems to be either $30 or $40 millilon. Having written that, they could reach steady production by the end of this year or next year. Is the share price now realistically 90 cents to $1.00, or is it 80 to 90 cents. Also what about the rights price. Has anyone ideas or comments?

[Balance]

The problem I face now is, what is the correct price for Pike shares? They told us they needed to raise $20 million, which now seems to be either $30 or $40 millilon. Having written that, they could reach steady production by the end of this year or next year. Is the share price now realistically 90 cents to $1.00, or is it 80 to 90 cents. Also what about the rights price. Has anyone ideas or comments?

How long is a piece of string?

What PRC is worth is how bullish you are about the company's prospects versus rest of the market.

I would not put money into PRC. Something smells very badly about this company's inability to get coal out of the ground and it's not methane or coal gas.

[Turboman]

http://www.energynews.co.nz/news/pike-river/4452/fy11-production-to-prove-the-test-of-pike-mine-plan-gsjbw

Production levels achieved throughout the 2011 financial year will be the true test of whether Pike River Coal's mine management practices will deliver the desired results, according to Goldman Sachs JBWere director Matt Henry.

Pike has been struck by a number of delays over the last two years, and in its most recent quarterly report, the company announced hydro-mining operations would be delayed until the third quarter of this calendar year, as the company makes slower than expected progress through a graben [faulted rock structure].

However, in a research report Henry says the delays the mine has encountered to-date have been principally related to construction of the access tunnel and initially accessing the coal seam, as opposed to its mine planning.

GSJBW's view is that the delays PRC has experienced so far, in conjunction with the difficulties struck at other New Zealand hydro mines, have given rise to some understandable scepticism in the investment community.

However, these issues are not necessarily indicators of how well or otherwise Pike's mine management strategy will perform.

"PRC's key mine planning/development tool is "in-seam drilling", forward drilling to provide forward visibility of geological conditions including presence of faults.

"Other hydro mines in New Zealand have not used in-seam drilling. To-date Pike River Coal's in-seam drilling has indicated positive geology beyond the current fault," says Henry.

Accordingly, GSJBW says the production levels Pike achieves in the 2011 financial year, scheduled to be the first extended period of hydro-mining, will provide the best indicator of the likely success of PRC's mine planning.

PRC is expected to require additional funds of between $35 and $80 million, due to the impact of the latest delays to steady-state production on cashflow, and its convertible bond conditions with Liberty Harbor.

Last year Pike announced that delays in reaching full production meant the company had failed to meet a condition of its convertible bond facility, which required the company to demonstrate a production capability of 800 kilotonne per annum by the end of November.

PRC has stated that a technical review of ‘key mining issues' had been conducted by a technical adviser to Liberty Harbor, with the result that the company expected to be granted an extension to June 2010.

Henry says the latest delay will require a further extension of between one and three months.

"Our expectation is that Liberty Harbor and PRC will agree on terms, as it did when the previous 'first steady state production' date was not met. Liberty Harbor's modus operandi appears to include such higher credit risk opportunities, which offer upside coupon and/or quasi-equity risk," he says.

GSJBW's view is that investors should expect a further equity raising of between $25 million and $45 million. While the valuation dilution of a placement to existing shareholders will depend on the price of new equity and a view on PRC's fundamental value, the impact an equity raising is unlikely to be material.

While acknowledging the risks PRC faces, Henry maintains a positive view on the outlook for the mine's product; hard-coking coal. There is sufficient value in Pike relative to the international coal sector to maintain exposure ‘on a medium-term horizon'.

[fabs]

Yeah right, more like financial year ending 2012 -2013.
and maybe a massive helping hand from the dwindling NZO Warchest
Like nothing more than to be proven wrong though.

[geezy]

any comments on the quarterly cash flow? looks like they got 10m when they require 20m till feb.

looks like a rights issue on our hands?

[Rabbi]

any comments on the quarterly cash flow? looks like they got 10m when they require 20m till feb.

looks like a rights issue on our hands?

A renounceable rights issue would be the way to go.

[Dr_Who]

Further delays, more hot air and more cap raising is of no surprise to those that have followed this stock.

[Corporate]

Jeez I don't like the look of PRCOA. They expire in just over a year and with full production still a long way off (1 year?) and either more debt funding or dilution just around the corner. They seem over-priced.

[Bixbite]

http://www.energynews.co.nz/news/pike-river/4452/fy11-production-to-prove-the-test-of-pike-mine-plan-gsjbw

Production levels achieved throughout the 2011 financial year will be the true test of whether Pike River Coal's mine management practices will deliver the desired results, according to Goldman Sachs JBWere director Matt Henry.............................................




Copy and paste

Information from PRC’s website.

http://www.pike.co.nz/analyst_reports.php

Analyst Reports

Goldman Sachs JBWere - January 2010

Goldman Sachs JBWere updated research on 25 January 2010 with a 12 month price target of NZ$1.25 and a BUY recommendation. Contact person matthew.henry@gsjbw.com

[MPC]

Corporate,
I have to agree about the options. I have been a bit too optimistic about Pike throughout the whole affair but went soft last week and got rid of all my options, happy with a decent profit but could have ended up a big loss. I lost my courage.

Cheers,
MPC

[Corporate]

Corporate,
I have to agree about the options. I have been a bit too optimistic about Pike throughout the whole affair but went soft last week and got rid of all my options, happy with a decent profit but could have ended up a big loss. I lost my courage.

Cheers,
MPC

I think you've made the right decision MPC. I can see the heads being a worth while investment in the long term. If you horizon is 10 years I'd say you'd easily make a PA return of 8% with acceptable risk. However, the options could quite easily lose you 100% of your capital.

[Balance]

Copy and paste

Information from PRC’s website.

http://www.pike.co.nz/analyst_reports.php

Analyst Reports

Goldman Sachs JBWere - January 2010

Goldman Sachs JBWere updated research on 25 January 2010 with a 12 month price target of NZ$1.25 and a BUY recommendation. Contact person matthew.henry@gsjbw.com

Target price represents 29% upside from correct sp - not bad.

Wonder if there's disclosure that Liberty Harbor is part of Goldmans?

Also, those who follows brokers' analysis and price targets must be wondering what happened to all those price targets of over $2.00 in August 2008 (pg 19).

http://74.125.155.132/search?q=cache:fPyMMS5tawUJ:www.pike.co.nz/files/presentations/080829_fin_results_ops_update_presn.pdf

Notice how PRC has purged all the historical analysts reports from its web-site? We do not want to embarrass the brokers now, do we? Who needs censorship when we have PRC?

[duncan macgregor]

The share needs time to find its own level before it settles down to what the market thinks its worth. The speculators in for a quick buck at the start are gone. The traders wont buy back in until it levels off, and shows a buy signal. The people left holding are the ones that swallowed the hype, and will hang on to the bitter end. I cant see the sp getting back to a dollar until the company proves its self with trouble free production. Another start up miner in Australia AGM has gone from 59c to a $1-18 then back to 68c now at 77c so expect volatility guys anything can happen with mining companies. If anything else goes wrong with this start up the price will plummet. Macdunk Three years have come and gone since I wrote that guys some things never change. This share is a waste of time thinking about it until it shows a little respect to its owners, the share holders, and comes out with a bit of information on what exactly is going on. Macdunk

[the machine]

Three years have come and gone since I wrote that guys some things never change. This share is a waste of time thinking about it until it shows a little respect to its owners, the share holders, and comes out with a bit of information on what exactly is going on. Macdunk

good to hear from you DM

M

[Billy Boy]

Where have you been !!!
Missed you, you know.
Cheers & Beers BB :)

[mouse]

Corporate,
I have to agree about the options. I have been a bit too optimistic about Pike throughout the whole affair but went soft last week and got rid of all my options, happy with a decent profit but could have ended up a big loss. I lost my courage.

Cheers,
MPC

I am pretty convinced this is a very good stock long term. But that means that the price of the options is a bit of a problem. They expire in a year or so. Will Pike shares then be worth $1.50? If less than that, then its a loss. My 2,600 options came with my subscription of 70 cents a share, so have cost me little. They may give me however more options in the new rights issue. Which I suspect now has to be between $40 to $60 million. What about inviting holders of 'rights' to buy shares now at 80 cents? And how much will Pike have to set the new rights at to get the needed cash?

[Turboman]

My 2,600 options came with my subscription of 70 cents a share, so have cost me little. They may give me however more options in the new rights issue. Which I suspect now has to be between $40 to $60 million. What about inviting holders of 'rights' to buy shares now at 80 cents? And how much will Pike have to set the new rights at to get the needed cash?

(j) If Pike River makes any bonus issues of Shares (but not other securities) prior to the expiry or exercise of the Options, the Optionholders will be entitled to participate in such issue on the same basis as holders of Shares, but only upon the exercise of their Options. The entitlements of Optionholders will be determined as if the Options had been exercised immediately prior to the date at which entitlements to the bonus issue are determined.

(k) Optionholders will be offered participation in all new cash issues of capital and securities of Pike River or of any other company, which are offered pro rata to shareholders of Pike River, on the same basis as the holders of Shares. The entitlement of Optionholders shall be calculated as if their Options had been exercised immediately prior to the applicable record date for that issue.

So am I right in thinking that if any new shares or options are issued then option holders are entitled to participate as if they hold head shares as per paragraph (k) and that paragraph (j) is irrelevant since it is referring to bonus shares (such as free shares issued).

[Baddarcy]

(j) If Pike River makes any bonus issues of Shares (but not other securities) prior to the expiry or exercise of the Options, the Optionholders will be entitled to participate in such issue on the same basis as holders of Shares, but only upon the exercise of their Options. The entitlements of Optionholders will be determined as if the Options had been exercised immediately prior to the date at which entitlements to the bonus issue are determined.

(k) Optionholders will be offered participation in all new cash issues of capital and securities of Pike River or of any other company, which are offered pro rata to shareholders of Pike River, on the same basis as the holders of Shares. The entitlement of Optionholders shall be calculated as if their Options had been exercised immediately prior to the applicable record date for that issue.

So am I right in thinking that if any new shares or options are issued then option holders are entitled to participate as if they hold head shares as per paragraph (k) and that paragraph (j) is irrelevant since it is referring to bonus shares (such as free shares issued).

Yes that is how i read it, (j) would only apply in the case of something like a share split.

Valuing options is not easy, in my eyes they are worth whatever the PRC shares are going to be worth in April 2011 minus $1.25.

So if you think PRC will be at $3 then the options are worth $1.75, but if you think PRC will be less than $1.25 in April 2011 the options are worthless.

[Turboman]

So if you think PRC will be at $3 then the options are worth $1.75, but if you think PRC will be less than $1.25 in April 2011 the options are worthless.

Well I guess that's the most simplistic way to explain it but they do have other benefits as well

[J R Ewing]

Valuing options is not easy, in my eyes they are worth whatever the PRC shares are going to be worth in April 2011 minus $1.25.

So if you think PRC will be at $3 then the options are worth $1.75, but if you think PRC will be less than $1.25 in April 2011 the options are worthless.

That is like saying if you think PRC shares are going to be $3 in April 2011 then they (the shares) are worth $3 now. The options WILL be worth PRC minus $1.25 in April 2011, but that doesn't get you very far in calculating a fair price for the options today.

[winner69]

Those OAs not a bargain at current price of 23 cents .... should be about 15-16 cents

Probably because punters got these for 'free' they not selling them ... or is just that some see the shareorice so high in the future that are prepared to punt on the OAs now?


Main consideration with the OAs at the moment is they lose just over 1 cent of time value per month

As apint of interest if the heads were $3 today the OAs would be about $2 today - think that is what you are saying JR

[mouse]

I managed to sell most of my ordinary shares, but have kept 500 only to be 'on the register'. My 2,600 options to be exercised at $1.25 means I can rebuy some of the sold shares at just 20 cents more than I sold the shares for. And I had the cash in my pocket to buy Pyne Gould at 40 cents a share. If Pike are not worth $1.25 in twelve months then I will be pretty pleased I sold the shares and held on to the options. The 500 shares keep me in the loop, with trips to The Blackball Hilton for the AGM every year. Hence people are not selling options, plus they seem to be able to participate in any rights issue.

[dsurf]

The OA's are priced about right. If PRC goes up 30c on one of the following, in the next 6 months, then the OA's will follow by increasing say 5c a % gain if bought at 22c of approx 20%. This why they appear overpriced versus $1.25 exercise price.

What could cause PRC to go up 30C to $1.27??? (remember was trading at $2.50 a year?? ago).

Anything positive beyond thier control is the most likely:

Another commodity spike
Record coking coal price set
Global rebound
Production bottlenecks at Ausi ports etc
BHP, RIO Vale etc continue excellent job of controlling mining supplies
Chinese takeovers at a premium of coking coal companies
Takeover offer for PRC at $1.27 per share

Less likely things under management control:

first coal shipment meets latest released deadline
production ramp up meets latest released deadline
Mechanical gear works as planned
etc etc

[J R Ewing]

Those OAs not a bargain at current price of 23 cents .... should be about 15-16 cents

Probably because punters got these for 'free' they not selling them ... or is just that some see the shareorice so high in the future that are prepared to punt on the OAs now?


Main consideration with the OAs at the moment is they lose just over 1 cent of time value per month

As apint of interest if the heads were $3 today the OAs would be about $2 today - think that is what you are saying JR

Yes, the advantage of options is that they limit you losses (you can let them lapse if SP below conversion price) and also you don't have as much capital tied up compared with the headshares.

The problem is that unless the heads are well above conversion price the headshare comes under pressure as conversion time draws near...

[Hoop]

"The OA's are priced about right. If PRC goes up 30c on one of the following, in the next 6 months, then the OA's will follow by increasing say 5c a % gain if bought at 22c of approx 20%. This why they appear overpriced versus $1.25 exercise price.........".

D surf don't agree with your logic.

Lets do our homework to clarify.


The PRCOA's are priced about right with accordance to the PRC head shares...if one of these 2 statements are real (true):
1..the PRC heads are at 107c (Black Scholes)... no 95c
2..Volatility for PRC heads has increased from about 50% to 70% in the last 6 months and PRC has closed yesterday at 95c no... volatility has possibly declined

Neither Statement is true

PRC heads at 95 is real
PRCOA at 21c is real.
Therefore the Market between the Heads and Options have diverged ...which one is correct:confused::confused:


Dsurf... Lets use your logic using your example in 6 months time (Aug 2010):
....If PRC heads go to 127c up 30c it is a 32.33% increase.
....If PRC is 127 then PRCOA would theoritically be 25.5c..using (Black Scholes) and historic average volatility (55%) up 4c it is a 16% increase.

Result:. Option holders PRCOA lose out:(...logic is bad

Lets look at the logic using a shorter time frame ...theoretical 3 month time scenario (May 2010)...
if PRC heads go to 127c up 30c it is a 32.33% increase.
If PRC is 127 then PRCOA would theoretically be 29.5c..using (Black Scholes) and historic average volatility (55%) up 7c it is a 32% increase.

Result: Break even.:)

Therefore ..PRCOA yesterdays close at 22c... the market are betting the PRC head price will be at 127c or better within 3 months. An interesting assumption considering a possible capital raising may take place before then.

[Balance]

Does this suggest ramping up s/p so the ones with inside knowledge can sell?

$1.07 down to 94 cents.

Be interesting to find out who were selling. We know that the mugs were buying.

[Dr_Who]

I may buy this stock again if they replace top level management and do a $50 million cash issue. Its got to be enough to see them through at least a year or more and not come back to the market for more. Replace top level management cos they have been full of BS and cant deliver.

Stuff PRC, my money is in Aussie supporting miners than can deliver and perform with quality/credible management that dont tell fibs.

disc: ex PRC holder

[mouse]

$1.07 down to 94 cents.

Be interesting to find out who were selling. We know that the mugs were buying.

I almost sold 20,000 Pyne Gould to buy 10,000 or so Pike. So I was about to be a Mug. However, sanity hit and I asked myself, 'What has changed?' My reply was, nothing. So did not buy. But it was a close thing.
How do you separate insanity and common sense? I have no idea. They must be pretty close together.
How do we know when a rally is sound?
The main point I suspect is to avoid rumour and speculation. Buy Pike on sound news. Any idea where that comes from? All very confusing. And I am supposed to be an investor!!

[Balance]

http://www.pike.co.nz/analyst_reports.php

Broker just released report estimating PRC will need between $30m to $40m as PRC cannot get any more bank funding. All credit lines have been drawn down. Production levels have been scaled back for next 2 years. 99 cents price target.

Why would you bother?

[mouse]

http://www.pike.co.nz/analyst_reports.php

Broker just released report estimating PRC will need between $30m to $40m as PRC cannot get any more bank funding. All credit lines have been drawn down. Production levels have been scaled back for next 2 years. 99 cents price target.

Why would you bother?

As I see it, Pike only need funding until April next year when their Rights mature. Use them or lose them. So if the share price can struggle above $1.40 say then Pike have few money worries. However, it does leave the minor question of where is the coal? A rights issue now of 80 cents for $40m would clearly be the last rights isse for a couple of years.

[blockhead]

Its the old story with whatever one does, risk/reward, right now the risk part of the equation is weighing heavier than the reward part. Its easy to say turf the Directors out, they should have seen the graben etc etc but had we been stacking the coal in gigantic piles we would have been very very happy.

Unfortunately NZO is also feeling the effects of PRC's problems.

[winner69]

See the OAs have finally fallen to a more realistic value of 17 cents .... ouch

[Sideshow Bob]

See the OAs have finally fallen to a more realistic value of 17 cents .... ouch

Maybe Mr Market read your post from earlier in the week......

http://www.sharetrader.co.nz/showpost.php?p=291700&postcount=4373

Can you short the OA's??

[Balance]

As I see it, Pike only need funding until April next year when their Rights mature. Use them or lose them. So if the share price can struggle above $1.40 say then Pike have few money worries. However, it does leave the minor question of where is the coal? A rights issue now of 80 cents for $40m would clearly be the last rights isse for a couple of years.

Rights issue will have to be 50 cents to 60 cents to get underwriters.

Clearly the last rights issue? How about more production delays so operating costs blowing out and requiring further funding?

Remember Solid Energy's Spring Creek mine? Mine problems meant shareholders had to keep pumping money in to cover operating expenses.

PRC will be a buy one day. That day looks a long long way away.

[mouse]

Rights issue will have to be 50 cents to 60 cents to get underwriters.

Clearly the last rights issue? How about more production delays so operating costs blowing out and requiring further funding?

Remember Solid Energy's Spring Creek mine? Mine problems meant shareholders had to keep pumping money in to cover operating expenses.

PRC will be a buy one day. That day looks a long long way away.

Many thanks Balance. My problem is little knowledge of mining. However the West Coast is littered with closed coal mines. Maybe China will buy most of the shares.
To news. The Tian Bai Seng is due into Lyttelton Port, trading as Lyttelton Port of Christchurch, on the 18 February to collect the coal. That was my information as at 2.30pm 5 February. The Tian Bai Seng is a ship that is under Pike River Coal on the movement register for Lyttelton. They seem to expect a one or two day turn round. So loading and sailing maybe on the 21st February.
The best spot that I know of to watch the loading is the top of the Timeball Station in Lyttelton. Of course 20,000 tons is a very minor load, but it is a start.

[Balance]

Ouch!


Pike River could ask for twice flagged amount
By GARETH VAUGHAN - The Independent Last updated 13:34 05/02/2010

Pike River Coal, which has already stretched investors' patience since floating in 2007, is likely to tap the market this month for at least twice as much money as it flagged at November's annual meeting.

Pike River announced a delay to hydro mining this month, meaning up to 150,000 tonnes of coal due for production between April and June won't now be produced until the first quarter of the 2011 financial year.

Therefore analysts are tipping a capital raising of up to $45 million, which could almost double again if Goldman Sachs subsidiary Liberty Harbor demands the repayment of its US$27.5m ($38.8m) worth of convertible
bonds.

Both Pike River CEO Gordon Ward and David Salisbury, CEO of cash-rich 30 per cent shareholder NZ Oil & Gas, are keeping mum on the capital raising plans. Details are due this month. At November's annual meeting, Ward said a ''minimum of $20m'' would be needed to meet working capital needs, which could include debt and equity. It will be the third capital raising since Pike River's July 2007, $85m float.

The company has previously raised a combined $105m in two rights issues even before Pike River's first coal shipment - a $3.4m, 20,000 tonnes shipment to India - finally takes place this month. That's 20 months behind the forecast in Pike River's May 2007 prospectus.

Pike River's attempt to extract coal from its West Coast mine has been beset with time-consuming and expensive delays, including a rock fall in its ventilation shaft and complex geological conditions given the mine's location near the Hawera fault.

But investment community sympathy is running out.

Tower head of equities Paul Robertshawe says Pike River has missed every prospectus deadline by a long way. McDouall Stuart head of research, John Kidd, labels the company a serial offender in overpromising and under-delivering. And Goldman Sachs JBWere analyst Matthew Henry says Pike River's track record suggests an inherent over-optimism with regard to timing and cost of capital.

''It has cost more than forecast to get as far as they have and the final proof of [coal] extraction volumes per annum is yet to be had,'' says Robertshawe.

Kidd estimates Pike River needs $35m to $45m to meet short-term funding requirements, with Henry picking something between $35m and $80m, depending on the outcome of the Liberty Harbor negotiations.

The Liberty Harbor bonds carry a 10.75 per cent interest rate, and it has an option to convert them to equity at $1.08 per share. A bond deal condition, that Pike River's mine must achieve ''first steady state production'' by November 30 last year, wasn't met.

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Pike River is now seeking a covenant extension till June 30 this year. However, Liberty Harbor has the right to demand repayment if it can't agree revised terms with Pike River within a 90-day notice period.

Robertshawe says the key question for investors now is whether the mine development phase is going to be representative of the mine extraction phase.

Ward says the infrastructure is in place to mine one million tonnes of coal a year for at least 18 years. At that volume and current production cost estimates, Robertshawe suggests Pike River looks quite attractive.

''But if those volumes slip to 600,000 tonnes [per annum] the attractiveness deteriorates quite quickly.''

Both the company itself and Kidd note a potential silver lining in Pike River's delayed production, assuming it does ramp up in the June 2011 year.

Pike River points to suggestions the hard-coking-coal price for the year from April will rise - boosted by Chinese demand - by 40 per cent to US$180 per tonne. And Kidd picks an even higher price at US$200 a tonne with a revenue boost to Pike River of tens of millions of dollars with minimal costs to offset.

[geezy]

2011 eh, options now look very much worthless, isnt it due in april 2011?

PRC is goin to be a real drag on NZO :(

I expect a capital raising very very soon in similar fashion of the previous 2 times.

Hold some PRC and through NZO

[Corporate]

It might be worth buying a couple of hundred PRC to participate in any discounted share issue...I wouldn't touch the options.

[mouse]

Balance, Geezy and Corporate, You all seem to breathe doom and gloom. What about having instead half truths and cosy illusions? I prefer to believe that its not a dog. But I might admit to now only having 500 shares and some options. The ship sails in a couple of weeks with 20,000 tons of coal. A whole years supply. And it was 25 degrees today in Christchurch. Why not dwell on the good news............er, there aint any!

[GTM 3442]

It might be worth buying a couple of hundred PRC to participate in any discounted share issue...I wouldn't touch the options.

I should imagine that they'll entitle you to participate in every stopgap emergency capital raising between now and:

a) they start shipping coal
or
b) receivership

[GTM 3442]

Forgot option (c) Forced sale to Indian/Chinese customers as result of inability to meet contracted deliveries

[Hoop]

Balance, Geezy and Corporate, You all seem to breathe doom and gloom. What about having instead half truths and cosy illusions? I prefer to believe that its not a dog. But I might admit to now only having 500 shares and some options. The ship sails in a couple of weeks with 20,000 tons of coal. A whole years supply. And it was 25 degrees today in Christchurch. Why not dwell on the good news............er, there aint any!

Mouse...a doom and gloom beater for you....so far PRC has dropped less than the other Ozzie miners in this latest correction:D.

Mouse quote..."...I prefer to believe that its not a dog...."

Hmmmmm..each to their own beliefs

For me personally.... it is my prize pet pedigree poodle...I'm grooming it up for the big show day later in the year.. Just hope it doesn't do doggy do dos in my portfolio between now and then:( (re: too much excess capital raising..dilution...more delays.)

[Balance]

I should imagine that they'll entitle you to participate in every stopgap emergency capital raising between now and:

a) they start shipping coal
or
b) receivership

They will ship coal alright - that's a certainty.

But at what cost per tonne?
Depends on how many tonnes produced per year and fixed costs impost.

Based upon last 12 moinths' production, cost per tonne would have been US$5000 per tonne!

[blockhead]

Cmon you jokers, sure you can read plenty of gloom into the situation, how about turning the page and imagining we are Kiwis who don't give up just cos the going got tough, orright so its not working perfect at the moment, well lets blood y well make it work, not give in and throw the hands in the air !!

[brucey09]

said rightly senor blockhead

[duncan macgregor]

Cmon you jokers, sure you can read plenty of gloom into the situation, how about turning the page and imagining we are Kiwis who don't give up just cos the going got tough, orright so its not working perfect at the moment, well lets blood y well make it work, not give in and throw the hands in the air !! Very well said Blockhead if you had anything to do with it yourself. However the share holders have got to rely on incompetant secretive management to pull their hard earned cash into profit, from what looks like a company hurtling towards bankrupsy. Start up miners have a tendency to go belly up, this one is no different. To complicated for me to invest in, with no past record or profit margins to work out. Looks like we now have the blind leading the blind with the overseas investors jumping in to buy at fire sale prices. Stick to your own level of understanding is my advise this is a dog with fleas. Macdunk

[Balance]

Very well said Blockhead if you had anything to do with it yourself. However the share holders have got to rely on incompetant secretive management to pull their hard earned cash into profit, from what looks like a company hurtling towards bankrupsy. Start up miners have a tendency to go belly up, this one is no different. To complicated for me to invest in, with no past record or profit margins to work out. Looks like we now have the blind leading the blind with the overseas investors jumping in to buy at fire sale prices. Stick to your own level of understanding is my advise this is a dog with fleas. Macdunk

Let's be Kiwis and get stuck in and make all things Kiwis work to the greater glory of NZ! When Air NZ blew itself up by buying Ansett Australia, we should have just backed the management and all got stuck in and put more money in.

YEAH RIGHT.

[duncan macgregor]

Balance never let petty nationalistic pride get in your way in business. The object of the excersize is to increase your own wealth at a higher level than a bank deposit. Who cares if its a gold mine in the Congo or a coal mine in NZealand you dont shag about in business my friend. You never invest in something you know nothing about unless you are a gambler. Pike management make sure you know nothing about what they are up to surely that must be warning enough. Macdunk

[blockhead]

Balance, my suggestion is not to be backing something which is not worth backing but it seems to me some of the posters here are giving up too easily, PRC havent said the mine is a fizzer, there are a few dark clouds for sure but it is to be hoped it is eventually sorted and up and running.
In fact I dont (and nor do any of us...as Dunc points out) have information indicating where the mine is presently headed.

[GTM 3442]

Like many others, I want PRC to be a success. I want them to dig up lots of coal. I want them to sell lots of coal. I want them to make lots of money. I want them to pay out lots of lovely money in lovely dividends.

I don't want them to fail. I don't want them bought out by their customers. I don't want them in receivership.

But they're hardly making it easy to be positive.

[Zito]

Some of you guys are just holding and hoping. You don't get enough information to make a really informed assessment as to whether your investment in the company is timely or wise, so you hold and hope. Where is the sense in that, especially when the value of your investment is being eroded.

I have never held PRC, largely because the company has continually disappointed the market. I accept there is large potential associated with the company but before they get any of my hard-earned they will have to prove they are worth it.

If I ever do invest in PRC it will be on the basis of insider transactions. When large shareholders or insiders start providing some buying impetus I'll be in. They know more about what's really going on than I do and any positive share price move will probably precede good news.

However I'm not holding my breath and I don't believe in speculating.

[mouse]

Seems to be a good and long 'meantime', half way through trade day and no sign of weakening off.
Just need to see if the anticipated good news is already priced in or whether the price is ready to hit the trade winds.

Does anyone know if anyone is selling Verve Cliquot on special? (I like to celebarate, but not too extravagantly).

That was on the 21 January. Over the price being $1.07. Where it is headed today I have no idea, but Down is a guess. I find PRC one of the most interesting investments possible. Up, Down, quite brilliant. But it is a coal miner. So must have trouble with people, machinery, the coal itself, transport, the geology of the mine.
What concerns me is the fact that there is only one mine. Now once they can get another mine on the drawing board it should halve our risks. When will the new mine open up?
Also, modestly, when will the Rights Issue happen and for how much. The $5,000 a ton export of coal is due to be loaded on the 18th February. That will give us $3 million or so. Less transport costs.

[blockhead]

I should probably make it clear, I do not hold PRC at the moment other than through NZO, I deemed it too risky 6 months ago, it doesnt mean I don't support the mine it just means I thought there was too much risk for Blocky.

[fabs]

SOLID ENERGIE--------- watching and waiting!

[Casa del Energia]

That was on the 21 January. Over the price being $1.07. Where it is headed today I have no idea, but Down is a guess. I find PRC one of the most interesting investments possible. Up, Down, quite brilliant. But it is a coal miner. So must have trouble with people, machinery, the coal itself, transport, the geology of the mine.
What concerns me is the fact that there is only one mine. Now once they can get another mine on the drawing board it should halve our risks. When will the new mine open up?
Also, modestly, when will the Rights Issue happen and for how much. The $5,000 a ton export of coal is due to be loaded on the 18th February. That will give us $3 million or so. Less transport costs.

Um - yes. Well. I guess I might have a little trouble in the over optimistic department.

But - on the other hand, the macro view is still a has a big upside - China wants to invest 11b in Aussie coal, local inhabitants in India are being forced off land because of coal demand (I'd like it noted that I don't applaud any of the above) but the point is that the coal held in the buller seam is worth a mega fortune and will be worth a pico fortune before the decade is out.

So the price is a… er.. little depressed. Well, so what?! The whole market is in the doldrums - what the jittery classes are thinking at any one time has little to do with my own investment decisions - - I see the risks but do not yet see disaster.

To my whole hearted joy, Copenhagen fell to bits faster than a flying pavalova - and whilst I see it as a foolish thing to be fiddling while Rome burns - it does imply that coal is will still be going gangbusters WHEN pike gets into full swing.

As for the question of incompetence at the coal face -- while I do see the arguments for it; on balance I doubt it - - I can't see how they got a Km through rock, set up the mine bottom, vent shafts, bins, rail head et al if 'they' really are a bunch of noddys as has been implied in more than one post here.

(Then again - I'm often wrong about many things!)

[Casa del Energia]

SOLID ENERGIE--------- watching and waiting!

And don't talk to me about soild energy - - I'm fuming over thier filibustering over the Granity hydro scheme .... 50 workers in need of rental accomodation, benefits via forward and backward linkage of local industry etc etc - - by holding things up in the env court - it could put off even further my own personal goal of sitting all day on a Tahitian beach doing nothing but drinking cold beers.

hurmph.

[Dr_Who]

So when will they replace top level management and bring back some much needed confidence?

Do a proper cap raising (say $50-60m) and replace top level management. Anything less will just be BS as usual.

[mouse]

I accept there's trouble down the pit. But I am convinced that the Management is first class. They are doing pretty well. When in trouble, look at management but whatever you do, do not get rid of them. Management are the ones who will get us out of the problems. Pike, us, have now split the mine management into two positions. One is for production and the second manager is for equipment maintenance as far as I can work out. That leaves Peter Whitell in Wellington and at the mine. Obviously we need to be talking to Conservation and the Minister.

Lots of our troubles are due to being on Conservation Land. We should put some pressure on Govt for us to get out all available coal. Which is over 40 million tonnes. The mine then has a life of 40 years. A bit of selective logging over the mine, select a forest and log it, would be useful. What does it matter if the ground subsides? Minimal effect.

The share price is of course a lottery. I buy Lotto tickets when the prize is over $5 million. I put in $4.40 a time. I think it will be very worthwhile putting in cash when we have the Rights Issue. More luck than Lotto.

[Balance]

I accept there's trouble down the pit. But I am convinced that the Management is first class. They are doing pretty well. When in trouble, look at management but whatever you do, do not get rid of them. Management are the ones who will get us out of the problems.

PRC's management would like top invite you to the Board. You are exactly the sort of director this company needs.

NOT!

[root]

I like your style Mouse. If the SP hits 85 I might sit in for a couple of hands as well. Crooked dealer or not.

[mouse]

PRC's management would like top invite you to the Board. You are exactly the sort of director this company needs.

NOT!

Management were collected together to put in the mine. The Directors had organized where the mine was to be located etc. Management has so far managed to get the access tunnel through. They are not responsible for the geology of the mine, the Directors are. I have worked in a number of companies both in NZ and overseas. The biggest trouble is when people fiddle with what trained engineers see as the best way forward.

I have for some time posted that we cannot really expect steady state production until towards the end of this year. To change management now is fatal. Since no one will then be responsible for disaster. You point to the chap who has just left! So we keep on the management until we know where we are. Which at the earliest is the end of this year. Our share price is low, but we have the Rights Issue soon. Hence we can put more cash down the hole if we feel its a good idea. I do at 70?cents. Keep smiling. It is supposed to be 22 degrees in Christchurch today. Plus the ship comes in on the 18th February. I think. I hold 500 shares and 2,600 options in Pike. Sold all of my other shares in Pike and made a small profit of $3,000. I am quite happy

[Corporate]

What a disgrace - look at the buy side.

1000 shares @ 85c
20000 shares @ 80c.......and that is it!

[Rabbi]

What a disgrace - look at the buy side.

1000 shares @ 85c
20000 shares @ 80c.......and that is it!

Already jumped and pulled the rip cord on this one.

Too many variables working against them at the moment!

[Balance]

Oh well - there was a great opportunity to exit a few weeks ago at over $1.00.

Wonder who got out.

[mouse]

At some point it must be a 'buy'. Where is the point? If the shares go down too low then we will have a take over from Asia. Which would be a disaster for everyone. Should I buy at 80 cents, or wait for the rights issue at 70 cents or less. Decisions, decisions. When does it stop being a dog to being very desirable? Has anyone any ideas? Why do the shares fluctuate so wildly? Are we all mad?
Can someone help me, or will it all be OK in the morning?

[elZorro]

Rabbi, I like your signoff:


Life can only be understood backwards but it must be lived forward.
Kierkegaard

That really covers it: we can all be mighty clever in retrospect.

A guy I worked with always reckoned he should spend all his efforts making a time machine, because once it was done he could go back and fix up anything that needed sorting (and probably make a pile of money too) :D

And so often with shares, you wish you could have another opportunity either buying or selling, or leaving it out altogether. Guess these are all lessons, and given enough time I might be able to make mostly good decisions.

[Huang Chung]

You can NEVER get shares right.

You ALWAYS buy too many, or not enough :rolleyes:.

[Corporate]

At some point it must be a 'buy'. Where is the point? If the shares go down too low then we will have a take over from Asia. Which would be a disaster for everyone. Should I buy at 80 cents, or wait for the rights issue at 70 cents or less. Decisions, decisions. When does it stop being a dog to being very desirable? Has anyone any ideas? Why do the shares fluctuate so wildly? Are we all mad?
Can someone help me, or will it all be OK in the morning?


I my view PRC is still very risky at current prices. They need circa $50m and I suspect that they will need to raise at least part of this amount either this month or the next. The raising will need to be around 70c per share to get any interest. Plus maybe some more options?

$50m/0.7 = 71.4m more shares issued

71.4m/348m (current shares on issue) = 20.5% further dilution

and who knows if $50m will get them to full production...


disc..dont' hold but I am very annoyed at how things have gone for Pike.

[Corporate]

also what happens if liberty calls...?

[Crispy]

I my view PRC is still very risky at current prices. They need circa $50m and I suspect that they will need to raise at least part of this amount either this month or the next. The raising will need to be around 70c per share to get any interest. Plus maybe some more options?

$50m/0.7 = 71.4m more shares issued

71.4m/348m (current shares on issue) = 20.5% further dilution

and who knows if $50m will get them to full production...


disc..dont' hold but I am very annoyed at how things have gone for Pike.

Who knows how low pike might need to go to get the funds?

With how the share price has been going a 1 for 4 rights issue at 50C would not suprise me.

[dsurf]

A rights issue at 50C is in no-ones best interest so doubt it very much and expect 70c if more equity to be raised however debt is more likely IMO. Liberty are a large option holder (management probably have a few also) and will not want the dilution as the % options gain will be less.

I would expect debt to be the first option & also a barrage of comments from this forum as to they won't get funding etc.

That is bollocks - the management have proved extremely adept at raising money & when the first coal is sold / shipped then the banks may look at them favourably. There is also 2nd tier financing, notes issues, NZO etc etc

This thread is the gloomiest I think I have ever seen it & first coal is about to be shipped. This tells me that as soon as some support appears (today on back of wall st?) it will be a buy with a short term target of $1

[Baddarcy]

Sawe this the other day, so i don't expect any capital raising to turn into a fire sale like Nuplex did,

-------------------------------------------------

NZOG pledges support for Pike River Coal
Andrea Deuchrass | Friday January 29 2010 - 12:16pm
Cornerstone investor New Zealand Oil and Gas is expected to cough up for Pike River Coal, which will announce a capital raising plan in the next few weeks.

Working capital is needed for operations in the first half of the year, after delays and difficulties getting through a rock graben.

The company expects roadways through the graben to be complete by early February. Its first export of 20,000 tonnes of premium hard coking coal, worth $3.4 million, departs Lyttelton in February, to an Indian customer.

New Zealand Oil and Gas (NZX: NZO) holds a 29.6% stake in the company (NZX: PRC) and chief executive David Salisbury said this morning an announcement was expected “in due course”.

NZOG released its quarterly report and cashflow statement this morning, showing the company’s cash balance as of December 31 at $176.4 million – 80% of which was held in US dollar accounts with major New Zealand banks.

[Bixbite]

A rights issue at 50C is in no-ones best interest so doubt it very much and expect 70c if more equity to be raised however debt is more likely IMO. Liberty are a large option holder (management probably have a few also) and will not want the dilution as the % options gain will be less.



To make it simple and fast to get the money, I would like to suggest a transferable rights issue at 50C but without option attachment and no underwriter.

The target is $50M. If 75% would be taken, the company could get $37.5M immediately and it would not affect the option PRCOA.

[Bixbite]

To make it simple and fast to get the money, I would like to suggest a transferable rights issue at 50C but without option attachment and no underwriter.

The target is $50M. If 75% would be taken, the company could get $37.5M immediately and it would not affect the option PRCOA.

Addition: -

Only allow over subscript 10% individually.

[fabs]

Re:
NZO Coughing up for PRC,
lets not foget NZO is paying out big money for management decisions based on 200 years combined experience.
So who are we to question?

[duncan macgregor]

The problem with this company is its obvious lack of management skills. First its failing to come up with the final transport system to get the coal to the market at the startup.
The second great failure was their obvious lack of experience in getting it up and running to meet dead lines.
The third big failure was not having the money at hand to meet its obligations.
When in business open disclousure to its owners [you the shareholders] is a must.
I now think with all this secretcy from management at this moment,that things are worse than some of you investors think. I now think it might be good money chasing bad.
The market waits in anticipation for news good bad or indifferent silence only prolongs the agony. Macdunk

[winner69]

Re:
NZO Coughing up for PRC,
lets not foget NZO is paying out big money for management decisions based on 200 years combined experience.
So who are we to question?

Jeez that is a lot of experience ......

[Silverlight]

Interesting article on Solid Energy's coal mine:

http://www.stuff.co.nz/business/industries/3309795/Theres-a-lot-of-coal-at-Stockton-maybe-20-years/

[Balance]

Re:
NZO Coughing up for PRC,
lets not foget NZO is paying out big money for management decisions based on 200 years combined experience.
So who are we to question?

Quality, not quantity.

[shasta]

Quality, not quantity.

Exactly, the same folk who had there head in the sand over Forex issues that lost nearly all there quarterly revenue by doing NOTHING!

[Bobcat.]

The PRCOA sp mystifies me. With an excise price of $1.25 and date of just over 14 months away, why would these be at the premium price of more than 17c ? Will coal production and delivery (assumably within a year) really lift the head sp to more than $1.40 after a rights issue?

I guess that's the expectation of PRCOA holders, but I am dubious. A $140 sp now seems less likely than when the sp was 80c at the end of last April and the options were trading around 10c.

Others' thoughts?

[mouse]

I have had confirmation that the Tian Bai Seng is due in Lyttelton on the 18th February. Coal trains have been loading coal and delivering it to Lyttelton for the past two weeks. So no cream buns for the train driver as he sneaked into Lyttelton without even sounding his horn. I did see a coal train a few days ago.

They are still working on the Graben, but expect an announcement sooner......Or later.
No news yet on capital raising, still being considered.

[Balance]

I have had confirmation that the Tian Bai Seng is due in Lyttelton on the 18th February. Coal trains have been loading coal and delivering it to Lyttelton for the past two weeks. So no cream buns for the train driver as he sneaked into Lyttelton without even sounding his horn. I did see a coal train a few days ago.

They are still working on the Graben, but expect an announcement sooner......Or later.
No news yet on capital raising, still being considered.

Of course PRC is trying to keep the coal ship,ents now very quiet - all that the first shipment will highlight to the market and investors is how badly PRC has slipped in coal production and the costs blowout.

2 plus years behind schedule and now, over $100m cost blowout.

[Rabbi]

Fom this mornings Press



Pike River Coal is a week away from its inaugural export shipment from Lyttelton port, but is still seeing delays in an area of faulted rock ahead of the main coal face in its underground mine.
Chief executive Gordon Ward said workers were still tunnelling within a graben – a hard section of faulted rock ahead of the coal.
The company estimated that road tunnels through the difficult-to-remove graben would be 150 metres long, though the distance differed depending on the direction drilled through it.
"It's a reasonable amount of rock to blast ... the most recent drilling, which was in January, showed that the area [of graben] we're currently crossing to drill and blast roadway would have been around 150m in width.
"So that has been where some of the delay factor has happened ... in December we talked about [the graben length] being 100m ... but the most recent drilling shows where we're going through to be about 150m through the graben."
PRC eventually wanted to build three road tunnels through the graben into the coal seam and was concentrating on two of those tunnels in the short term, he said.
The graben was an area of hard twisted rock, separate from but related to the Hawera Fault, that marked an eastern boundary in terms of the 9m-high coal seam that PRC was targeting.
The company had averaged about 1.5m a day in drill, blast and excavation progress through the graben, compared to an expected 6m a day of coal seam progress.
PRC had already reached 400m into the coal seam in terms of the planning holes, after having built a 2.3km tunnel to reach the graben and coal face area, Ward said.
Meanwhile, the company had stockpiled enough coal from its West Coast mine to send 20,000 tonnes of high quality coal to Bedi Port, near Jamnagar, Gujarat, in India.
PRC's Indian customer-shareholders are Saurashtra Fuels Private and Gujarat NRE Coal, who have agreed to take 55 per cent of PRC's coal.
The miner also has three-year contracts with Japanese steel mills, to which it had agreed to supply another 22 per cent of its total coal.
It has also done marketing with other customers in China and Brazil.
The rest of the coal would likely be sold on the spot market, he said.
Gujarat NRE was eager to see the coal, which would be converted to coking coal before being used in steelmaking, reflecting wider international demand, Ward said.

PRC expected a coal-carrying vessel, the MV Tian Bai Feng, would arrive at Lyttelton port on February 18 with coal loaded soon after.
"[But] for us, we're still working through this ramp-up period to get to hydro-mining, which is scheduled for the July to September quarter ... that's when the mine really starts to hit its straps."
PRC's board last year talked about the need to raise a further $20m of capital, and analysts have since argued that the miner will need to raise closer to $45m.
The miner has also asked funder Liberty Harbor to extend the conditions of a US$27.5m (NZ$36.5m) convertible bond.
Yesterday Ward said he could not comment further at this stage on either details of the capital raising or how amicable talks with Liberty Harbor were progressing.
"The only [extra] comment I would make is that we had a minimum working capital requirement of $20 million."

The market will be waiting expectantly for details of the capital Raising.

[Baddarcy]

The PRCOA sp mystifies me. With an excise price of $1.25 and date of just over 14 months away, why would these be at the premium price of more than 17c ? Will coal production and delivery (assumably within a year) really lift the head sp to more than $1.40 after a rights issue?

I guess that's the expectation of PRCOA holders, but I am dubious. A $140 sp now seems less likely than when the sp was 80c at the end of last April and the options were trading around 10c.

Others' thoughts?

I sold my PRC and changed it to PRCOA a few months back when they said they would need more cash. Essentially i swapped 1 PRC for 5 PRCOA's. My thinking being that as PRCOA's will be treated the same as PRC's in any capital raising thus i will essentially get the rights to by 5 times as many discounted shares in any raising.

I am assuming that other people are thinking the same as me so the PRCOA's have managed to maintain value???

Regarding the long term value of PRCOA, it really just comes down to whether PRC can get up to somewhere near full production before the options expire in April 2011 which i would have thought was probable/possible as it is still 14 months away.

I did a real simple calc, so don't shoot me for it not being detailed enough, i know i have ignored tax!!

800,000 tonnes of coal times $250 per tonne ($USD180 at 0.70 conversion) = $NZD200 million. Less costs which have been running at about $NZD5 million per month = $NZD140m profit. Multiply that by 14 (BHP seems to be trading at about 37 times profit!!!) gives 1.96 billion and then divide that by the number of shares (guess 500 million after a cap raising) gives $3.92 per share.

[mouse]

The other bit of the costing is transport costs from Pike to Lyttelton. It could easily swallow NZ$50.00 per ton. Which brings down the take quite a bit. Also I am picking an actual figure of 700,000 tons per year being mined. Now I know that is a bit low and some may call me sceptical. But the mine operating costs are fixed. The million tons a year may not happen in the near term. Certainly not before the rights have to be exercised.
However the Directors may extend the exercise period for the rights. Is this possible?

[whatsup]

I sold my PRC and changed it to PRCOA a few months back when they said they would need more cash. Essentially i swapped 1 PRC for 5 PRCOA's. My thinking being that as PRCOA's will be treated the same as PRC's in any capital raising thus i will essentially get the rights to by 5 times as many discounted shares in any raising.

I am assuming that other people are thinking the same as me so the PRCOA's have managed to maintain value???

Regarding the long term value of PRCOA, it really just comes down to whether PRC can get up to somewhere near full production before the options expire in April 2011 which i would have thought was probable/possible as it is still 14 months away.

I did a real simple calc, so don't shoot me for it not being detailed enough, i know i have ignored tax!!

800,000 tonnes of coal times $250 per tonne ($USD180 at 0.70 conversion) = $NZD200 million. Less costs which have been running at about $NZD5 million per month = $NZD140m profit. Multiply that by 14 (BHP seems to be trading at about 37 times profit!!!) gives 1.96 billion and then divide that by the number of shares (guess 500 million after a cap raising) gives $3.92 per share.




Bad..., beware sometimes in a capital raising proceedure the option/warrant holders have to exercise the options/warrants before they can take part in any issue/cap raising. , may be what you dont want to hear but dyor .

[Baddarcy]

Bad..., beware sometimes in a capital raising proceedure the option/warrant holders have to exercise the options/warrants before they can take part in any issue/cap raising. , may be what you dont want to hear but dyor .

Mate, i'm not that stupid :-) I did check first, quote from the web site as follows:

"Optionholders will be offered participation in all new cash issues of capital and securities of Pike River or of any other company, which are offered pro rata to shareholders of Pike River, on the same basis as the holders of Shares. The entitlement of Optionholders shall be calculated as if their Options had been exercised immediately prior to the applicable record date for that issue. "

[Baddarcy]

Just did some quick calcs based on the article in the Press this morning, they said that the part of the graben they are drilling through is 150m and they are making progress at 1.5m per day.

On the 22nd of Jan they said they were 106m through the graben, so 44m to go divided by 1.5m equals 30 days (rounded up), it's been 21 days so far since the announcement so that means they won't get throgh the Graben until around Sunday 21st.

Who wants to bet they won't make any announcement about the capital raising until then??

Personally if it was me i would wait, i would want to come out and say were through the graben and we have made the first shipment, oh and by the way we need another $40m :-)

[Robomo]

Just did some quick calcs based on the article in the Press this morning, they said that the part of the graben they are drilling through is 150m and they are making progress at 1.5m per day.

On the 22nd of Jan they said they were 106m through the graben, so 44m to go divided by 1.5m equals 30 days (rounded up), it's been 21 days so far since the announcement so that means they won't get throgh the Graben until around Sunday 21st.

Who wants to bet they won't make any announcement about the capital raising until then??

Personally if it was me i would wait, i would want to come out and say were through the graben and we have made the first shipment, oh and by the way we need another $40m :-)

What's the bet that an announcement will be made a few days after getting through the graben so it can also be announced that coal at a rate of xxx tonnes per day is now being mined, oh and by the way we need another $40m. My bet is Feb 28.

[Dr_Who]

After cap raising... Oh by the way, we have further delays and it will take another year before we can ship the coal.

[Balance]

After cap raising... Oh by the way, we have further delays and it will take another year before we can ship the coal.

They will ship the first 20,000 tonnes alright. Thing is that it has taken them the last 4 plus months to mine 6,000 tonnes!

Unexpected problems, see?

Next unexpected problems will be that the hydro-mining machines jam due to unexpected suction of coal dust via the unexpectedly slow air pump powered by the unexpected unreliable power supply.

And btw, we need more money.

[mouse]

We, Pike, need more cash. But I cannot get from Pike Management what they are going to do to raise the money. Very suspicious to me. There is nothing stopping them from raising cash in China, Hong Kong, Japan or India. In which case there will be no 'rights issue'. Plus the existing shares would automatically go to NZ$1.00 as soon as the announcement was made. Then could go higher, even get to NZ$1.50 before our rights have to be exercised. We need a 'rights issue' at around 80 cents in order to get the NZ$50 million needed.
Tomorrow we could have a gas explosion down the mine. Which translates to this being a high risk venture. It is an underground, not open cast mine. It is a Black Hole. It is high risk. We cannot see, even with the wonderful idea of everything going 100%, steady state production before the end of this year. I put in a 'buy' order this morning for 5,000 at 85cents a share. I doubt I shall get them at that price. But may then wait for the 'rights issue', if it actually happens. But it may not. If the sp goes too low then a rights issue will not happen. We will get taken over. Disaster.

[winner69]

You just have some happy pills or something mouse?

[winner69]

hey mouse .....toughen up .... be strong man

just for you

http://www.youtube.com/watch?v=RDwg-qgq1vk

[mouse]

You just have some happy pills or something mouse?

No. Chocolate.
Also it is not in our interests to see the sp go too low. I think it is a very good buy at 85cents. :) Hence my buy order.
We need to look at the sp to see where we think it could go from being a dog to being a buy. I will leave my 85cents order in for a week or so I think. I suggest others think the same way. It may now be a BUY.

[Balance]

No. Chocolate.
Also it is not in our interests to see the sp go too low. I think it is a very good buy at 85cents. :) Hence my buy order.
We need to look at the sp to see where we think it could go from being a dog to being a buy. I will leave my 85cents order in for a week or so I think. I suggest others think the same way. It may now be a BUY.

Good luck, mouse.

You deserve better than PRC's management but I am sure they will send you a tonne of coal in exchange for your shares soon enough!

[Dr_Who]

You just have some happy pills or something mouse?

LOL.. Mouse has a BUY recommendation on PRC @ 85 cents. Go the mouse!

[mouse]

:)
LOL.. Mouse has a BUY recommendation on PRC @ 85 cents. Go the mouse!

I put the idea past a very experienced sharebroker in Christchurch. He agreed for me to BUY. Plus I was told by him to SELL all of my Pike at about $1.04 or so. I had earlier sold some at $1.20 or so. He feels the sp could move up quite quickly once a reasonable amount of coal is mined.

I just think that we have to set a floor price. And support it at that price. Which lead me to buy 4,000 at 72 cents some time ago. Timing is everything. I got 4,000 at 72 and 2,600 shares on the rights issue at 70 cents. My hunch now is 85 cents is a good bottom price. But who knows?

Mining shares of any sort are a bit of a gamble. Particularly underground mining. So many variables, so many problems. Hope our Pike gamble gets past the winning post and pays up.:)

[winner69]

So it's all on .... $4 billion worth

First shipment of coal marks end to years of waiting

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10626182

[winner69]

.....and the photographic evidence ..... but where's the coal .... the mountain of coal .... or is it that black lump behind Gordon

[Corporate]

So it's all on .... $4 billion worth

First shipment of coal marks end to years of waiting

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10626182

Good find w69. Raising of $45m + looks on the cards.

[Baddarcy]

The rasing does depend on Liberty Harbor a fair bit. But i really can't see them pulling stumps, what sort of vulture fund would that make them? I think it is more likely to be the other way, they will want to be included in any capital raising i suspect.

But PRC siad they needed at least $20m, so i would prefer they take in more than they need rather than having to come back again and again and again, after all they can just give it back in dividends or a share buy back later on (power of positive thinking :))

My pick is the raising will be at 70c which would be another 64m shares issued. I think 80c might be a bit high for the market, there has to be a benefit for the shareholders (other than stopping the mine going bust and us all losing our money)

[root]

$4,000,000,000 worth of coal @ 20,000 tonnes / year @ $180 / tonne....Wow that's 1100 years worth of coal. ;)

[Balance]

Well, 20,000t is a start, one guesses.

PRC now needs to get all the capital raising behind it and ramp up.

[Hoop]

.....and the photographic evidence ..... but where's the coal .... the mountain of coal .... or is it that black lump behind Gordon

OMG... that's water!!!:eek:....maybe they could bottle that and sell it...mineral water is worth x10 times more.:cool:

[patrick]

Gordon at the stream:
Too swift for the bait!

[winner69]

Gordon at the stream:
Too swift for the bait!

You would have thought that for a story like this Gordon would have stood in front of a pile of coal .... or at least a wagonful of the black stuff ..... maybe there isn't any coal !!!!!!!!!

[Balance]

You would have thought that for a story like this Gordon would have stood in front of a pile of coal .... or at least a wagonful of the black stuff ..... maybe there isn't any coal !!!!!!!!!

PR machine thought water is nicer than coal?

Shows you how much PR drives this co.

[Robomo]

Interesting article in todays Financial Express. If and when Pike gets to full production and if these Financial Express forecasts are correct then PRC SP and dividends should be looking very good in a couple of years time.

http://www.financialexpress.com/news/Steel-sector-faces-massive-coking-coal-shortage/580064/

[Mr Tommy]

Well, 20,000t is a start, one guesses.
PRC now needs to get all the capital raising behind it and ramp up.

Going back to the quarterly report a few weeks back ....

"Recent in-seam drilling to the north shows the graben to be approximately 150 metres wide. Completion of this part of the process by early February 2010"

Well its gone past 'early Feb', where is this at ?

[Baddarcy]

Going back to the quarterly report a few weeks back ....

"Recent in-seam drilling to the north shows the graben to be approximately 150 metres wide. Completion of this part of the process by early February 2010"

Well its gone past 'early Feb', where is this at ?

Chuckle..... you obviously are not that familer with PRC management. :)

Over promise and under deliver is their game.

See my previous post for my estimate of when they will actually get through the Graben (this Sunday), but i am assuming they work 7 days a week on it, if they don't then you can add another 2 weeks to the date.

[mouse]

Fom this mornings Press


Quote: From Rabbi;
Pike River Coal is a week away from its inaugural export shipment from Lyttelton port, but is still seeing delays in an area of faulted rock ahead of the main coal face in its underground mine.
Chief executive Gordon Ward said workers were still tunnelling within a graben – a hard section of faulted rock ahead of the coal.
The company estimated that road tunnels through the difficult-to-remove graben would be 150 metres long, though the distance differed depending on the direction drilled through it.
"It's a reasonable amount of rock to blast ... the most recent drilling, which was in January, showed that the area [of graben] we're currently crossing to drill and blast roadway would have been around 150m in width.
"So that has been where some of the delay factor has happened ... in December we talked about [the graben length] being 100m ... but the most recent drilling shows where we're going through to be about 150m through the graben."
PRC eventually wanted to build three road tunnels through the graben into the coal seam and was concentrating on two of those tunnels in the short term, he said.
The graben was an area of hard twisted rock, separate from but related to the Hawera Fault, that marked an eastern boundary in terms of the 9m-high coal seam that PRC was targeting.
The company had averaged about 1.5m a day in drill, blast and excavation progress through the graben, compared to an expected 6m a day of coal seam progress.
PRC had already reached 400m into the coal seam in terms of the planning holes, after having built a 2.3km tunnel to reach the graben and coal face area, Ward said.
Meanwhile, the company had stockpiled enough coal from its West Coast mine to send 20,000 tonnes of high quality coal to Bedi Port, near Jamnagar, Gujarat, in India.
PRC's Indian customer-shareholders are Saurashtra Fuels Private and Gujarat NRE Coal, who have agreed to take 55 per cent of PRC's coal.
The miner also has three-year contracts with Japanese steel mills, to which it had agreed to supply another 22 per cent of its total coal.
It has also done marketing with other customers in China and Brazil.
The rest of the coal would likely be sold on the spot market, he said.
Gujarat NRE was eager to see the coal, which would be converted to coking coal before being used in steelmaking, reflecting wider international demand, Ward said.

PRC expected a coal-carrying vessel, the MV Tian Bai Feng, would arrive at Lyttelton port on February 18 with coal loaded soon after.
"[But] for us, we're still working through this ramp-up period to get to hydro-mining, which is scheduled for the July to September quarter ... that's when the mine really starts to hit its straps."
PRC's board last year talked about the need to raise a further $20m of capital, and analysts have since argued that the miner will need to raise closer to $45m.
The miner has also asked funder Liberty Harbor to extend the conditions of a US$27.5m (NZ$36.5m) convertible bond.
Yesterday Ward said he could not comment further at this stage on either details of the capital raising or how amicable talks with Liberty Harbor were progressing.
"The only [extra] comment I would make is that we had a minimum working capital requirement of $20 million."

The market will be waiting expectantly for details of the capital Raising. END OF QUOTE FROM RABBI.

FROM MOUSE, COMMENT. One piece in the above report that has not been commented on at all. It seems that we now need three road tunnels through th Graben. It has taken us three months and the first tunnel is not yet complete. On the same timetable it will be August before we get the three tunnels through. So full production cannot happen until then. We then have to get into real volume production. Which may happen by Christmas. I would like to draw attention to the inherent problems of three tunnels through the Graben.
Further, what happens if it is fractured rock, with more Grabens. Are some miners able to advise? I think once we start to climb up the slope of the mine then Grabens should not be so much of a major problem since we can duck and dive to keep getting coal without having to drill and blast Grabens. But advice would help.

--------------------------------------------------------------------------------

[Balance]

F

FROM MOUSE, COMMENT. One piece in the above report that has not been commented on at all. It seems that we now need three road tunnels through th Graben. It has taken us three months and the first tunnel is not yet complete. On the same timetable it will be August before we get the three tunnels through. So full production cannot happen until then. We then have to get into real volume production. Which may happen by Christmas. I would like to draw attention to the inherent problems of three tunnels through the Graben.
Further, what happens if it is fractured rock, with more Grabens. Are some miners able to advise? I think once we start to climb up the slope of the mine then Grabens should not be so much of a major problem since we can duck and dive to keep getting coal without having to drill and blast Grabens. But advice would help.

--------------------------------------------------------------------------------

So they now cannot even properly estimate the width and length of the graben?

Goblins, anyone?

Seriously, do these guys know what they are doing besides spending plenty of money?

[mouse]

I am going to attempt defining profit or loss results per month for this year. It relies on a number of assumptions, all of them guesses.
1/. We know at this moment all that Pike Management know.
2/. That the 'break even' point this year is 40,000 tons per month. That includes mining and finance costs. But no profit and hence no dividends.
3/. That the first roadway through the Graben is finished by 1st March.
4/. That the second roadway is complete by 1st June.
5/. That the third roadway is complete by 1st October.
6/. No unforseen problems occur before the end of this year.
7/. Coal is sold for NZ$120 per ton and transport and all other 'off site' costs are covered by the remainder of the export receipts.
8/. If insufficient coal is mined in a month then the cost of lost production is NZ$120 per ton.

MONTH PRODUCTION PROFIT/LOSS PROFIT LOSS

Cannot make up my chart for some reason. Will do it on next post.

[mouse]

MONTH PRODUCTION PROFIT/LOSS(Tons).. PROFIT/LOSS(Cash).
March 10,000 tons, -30,000 tons, -$3,600,000
April 10,000 tons, -30,000 tons, -$3,600,000
May 10,000 tons, -30,000 tons, -$3,600,000
June 20,000 tons, -20,000 tons, -$2,400,000
July 20,000 tons, -20,000 tons, -$2,400,000
August 30,000 tons, -10,000 tons, -$1,200,000
September 40,000 tons, Nil Nil
October 50,000 tons, +10,000 tons, +$1,200,000
November 60,000 tons, +20,000 tons, +$2,400,000
December 60,000 tons, +20,000 tons, +$2,400,000

I have assumed that 60,000 tons per month during this development stage is the maximum that we can get out. My figures give a loss of $11,800,000 up until 31 December. Plus of course new financing costs.

Would someone please like to pull my figures apart and refine the estimates. Sorry I could not get it onto on posting.
What should be shown is month, then output in tons. Then either a negative or positive profit result in tons. Then an estimate of profit or loss. Sorry it does not show what is typed. Hope you can make sense of it. Mouse

[Hoop]

I am going to attempt defining profit or loss results per month for this year. It relies on a number of assumptions, all of them guesses.
1/. We know at this moment all that Pike Management know.
2/. That the 'break even' point this year is 40,000 tons per month. That includes mining and finance costs. But no profit and hence no dividends.
3/. That the first roadway through the Graben is finished by 1st March.
4/. That the second roadway is complete by 1st June.
5/. That the third roadway is complete by 1st October.
6/. No unforseen problems occur before the end of this year.
7/. Coal is sold for NZ$120 per ton and transport and all other 'off site' costs are covered by the remainder of the export receipts.
8/. If insufficient coal is mined in a month then the cost of lost production is NZ$120 per ton.

MONTH PRODUCTION PROFIT/LOSS PROFIT LOSS

Cannot make up my chart for some reason. Will do it on next post.

Mouse...I like you forward thinking system...but I'm more optimistic than you on the price of coal... NZ$120/tonne going forward seems very low. Have you taken costs out such as royalties, transport etc to arrive at that figure of yours ?



I guessing the 2010-2011 prices (set in April?) for high quality coking coal that PRC will provide will be somewhere around (NZ$225-NZ$310 using 0.71c=NZ$1) maybe more if the current thinking that our NZ$vUS$ will downtrend in 2010. Mouse ...were those gross figures close to your figures you were working on before expenses?

[mouse]

Mouse...I like you forward thinking system...but I'm more optimistic than you on the price of coal... NZ$120/tonne going forward seems very low. Have you taken costs out such as royalties, transport etc to arrive at that figure of yours ?



I guessing the 2010-2011 prices (set in April?) for high quality coking coal that PRC will provide will be somewhere around (NZ$225-NZ$310 using 0.71c=NZ$1) maybe more if the current thinking that our NZ$vUS$ will downtrend in 2010. Mouse ...were those gross figures close to your figures you were working on before expenses?

Yes, the NZ$120.00 a ton price was set as the price as soon as the coal leaves the gates at Pike River Mine. All transport and loading costs are extra. So $120.00 per ton is in the pocket of Pike. Difficult to work out the amount spent on day to day mining and development costs. So large costs are ignored. I reckon that my 40,000 tons per month break even is OK once we are in full production, gives approx half a million tons a year. So that is break even. I guess that this year at least we cannot do better than 60,000 tons a month. That is 700,000 tons a year. I may be a total twallop in my guesswork. I am working on present contract prices which I have just assumed apply to this coming December.
What we are not told on our Quarterly Report is the actual coal mined in the Quarter. Maybe we should insist on having that information. Once we have that we could check it against my estimates and then tweak them to get greater accuracy. :)
Feel very free to take my figures apart. We can then get a consensus on upper and lower profit/loss possibilities.

[Mr Tommy]

I reckon that my 40,000 tons per month break even is OK once we are in full production, gives approx 5 million tons a year. So that is break even. I guess that this year at least we cannot do better than 60,000 tons a month. That is 7 million tons a year.

Mouse, I think your calculator is a bit bung.
40,000 times 12 is 480,000 tonnes a year

[patrick]

Assuming we know all that Pike Management does might be stretching it.

A lot of information has been released by the Company weeks and months after Management have been aware of it and much of this is detail "which a reasonable person would expect to have a material effect on the share price."

My view is that Management is far too slow in releasing relevant information.

[Billy Boy]

A lot of information has been released by the Company weeks and months after Management have been aware of it and much of this is detail "which a reasonable person would expect to have a material effect on the share price."

My view is that Management is far too slow in releasing relevant information.

I,m with you on this one Patrick,
Would be nice to know just how far through this bloody
garben pike is ??
BB

[mouse]

Mouse, I think your calculator is a bit bung.
40,000 times 12 is 480,000 tonnes a year

Quite right, or old age has struck. Many thanks and I have changed it to half a million tons a year. Pike prospectus was one million tons per year. Of course break even is a bit like elastic. I would like discussion on what is the actual break even point. Must depend on costs plus income. Any ideas on either? :)

[mouse]

I,m with you on this one Patrick,
Would be nice to know just how far through this bloody
garben pike is ??
BB

My question, and I only want a little bit of butter on my bread, as the King said to the parlourmaid, what is the monthly or even quarterly production of coal. We know the rat, stoat and weasel kill but have no idea of how much actual coal has been dug out. Please, can they tell us? Does anyone know? We have an Activity Report each quarter. Tells us everything EXCEPT HOW MUCH COAL HAS BEEN ACTUALLY MINED. Is it too much to be told what is actually happening, rather than estimates on what may happen in the future.

I would be quite happy to have a rat, stoat and weasel kill estimate also, but, please, what are the actual figures of coal mined each month. Or even each quarter?

We may also hear about the Graben at the same time. Plus the other two road tunnels. :)

[patrick]

Mouse,
Perhaps Management consider the amount of coal produced not to be a material factor and not relevant to share price;while the rat and stoat kill is!

[root]

Pike is probably just meeting the minimum requirements for Continuous Disclosure. Hit Graben....Working on Graben (estimate of time).......and a future announcement saying Through the Graben, if they make the announcements in a timely fashion. A monthly production rate would be nice but not necessarilly required by Rule 10.1.

However if they know of more Grabens (or problems), that should be disclosed immediately.

[mouse]

Pike is probably just meeting the minimum requirements for Continuous Disclosure. Hit Graben....Working on Graben (estimate of time).......and a future announcement saying Through the Graben, if they make the announcements in a timely fashion. A monthly production rate would be nice but not necessarilly required by Rule 10.1.

However if they know of more Grabens (or problems), that should be disclosed immediately.

But surely the Pike River Quarterly Activities Report should tell us HOW MUCH COAL HAS BEEN MINED. Or is it only of miner interest? :)

[root]

Assuming they are nearly through the Graben, I'd be more worried about how long it takes to finish the raw coal sumps and access roadways. Then it's just a matter of commissioning the new Hydro-Mining system in the scheduled 2 months....how hard can that be?

[Balance]

Assuming they are nearly through the Graben, I'd be more worried about how long it takes to finish the raw coal sumps and access roadways. Then it's just a matter of commissioning the new Hydro-Mining system in the scheduled 2 months....how hard can that be?

Mushrooms do not need anything beyond horse dung?

I can remember PRC showing a weekly progress report on the tunnel when all was sweet. Now they show nothing - tells you plenty if you care to think about it.

[mouse]

Assuming they are nearly through the Graben, I'd be more worried about how long it takes to finish the raw coal sumps and access roadways. Then it's just a matter of commissioning the new Hydro-Mining system in the scheduled 2 months....how hard can that be?

The problem is that there has to be two more roadways cut through the graben before full production starts. So after this graben is got through we have to wait another seven months after that for the other two roadways to be pushed through the same Graben before the hydro mining starts. To get full production requires three roadways through the same Graben, plus commission the Hydro-mining system. Then we have to get to full production. Which will not be this year. :confused:

[Balance]

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

Above from an exuberant poster Sept 2008.

It's now Feb 2010. It sure has been a long climax?

Must be the longest unfulfilled climax ever?

[mouse]

Above from an exuberant poster Sept 2008.

It's now Feb 2010. It sure has been a long climax?

Must be the longest unfulfilled climax ever?

Frigid? :mad:

[the machine]

The problem is that there has to be two more roadways cut through the graben before full production starts. So after this graben is got through we have to wait another seven months after that for the other two roadways to be pushed through the same Graben before the hydro mining starts. To get full production requires three roadways through the same Graben, plus commission the Hydro-mining system. Then we have to get to full production. Which will not be this year. :confused:

mouse, surely the other 2 roadways can be worked on from both ends once first roadway through and there is access [through coal] to end of other graben roadways.

if that is the case then potentially halve the time for other 2 roadways

m

[Dr_Who]

The problem is that there has to be two more roadways cut through the graben before full production starts. So after this graben is got through we have to wait another seven months after that for the other two roadways to be pushed through the same Graben before the hydro mining starts. To get full production requires three roadways through the same Graben, plus commission the Hydro-mining system. Then we have to get to full production. Which will not be this year. :confused:

PRC continues to have premature ejaculation without going through the Graben and delivering the goods.

[mouse]

mouse, surely the other 2 roadways can be worked on from both ends once first roadway through and there is access [through coal] to end of other graben roadways.

if that is the case then potentially halve the time for other 2 roadways

m

I am not a miner. Bluntly I do not know. Working out forecasts in my experience depends on taking a reasonable scenario. Having to have three roadways suggests a wide coal front. Hence we really need Pike Management to tell us. Failure to specify how the roadways are to be tackled, or a timeframe for completion, bothers me a bit. I have just had to guess.

[blockhead]

Mouse, my understanding is there is more than one roadway being cut through the graben, refer to the quarterly report to see below


Progress Through Graben
Progress was made in ‘drill and blast’ construction of roadways through the
rock graben immediately ahead of pit-bottom during the December quarter.
Roadways have now been advanced through 106 metres of rock (with a total of
269 metres of roadway construction in several headings) in a faulted zone (graben) with around 40 metres to cross before the roadway is back in coal. The graben was encountered immediately to the west and north of pit bottom last year by the underground in-seam drilling unit. Recent in-seam drilling to the north shows the graben to be approximately 150 metres wide. Completion of this part of the process by early February 2010, will allow direct access to the main hydro-mining areas in preparation for the commencement of hydro-mining production.

[mouse]

[QUOTE=mouse;293733] Amendments.
1/. We know at this moment all that Pike Management know.
2/. That the 'break even' point this year is NZ$12million per quarter. That includes mining and finance costs. But no profit and hence no dividends.
3/. That the three roadways through the Graben are completed soon. (Many thanks Blockhead, you know more than me).
4/. No unforseen problems occur before the end of this year.
5/. Coal is sold for NZ$160 per ton (the $160 per ton is my guess using data from Hoop, many thanks Hoop).Transport and all other 'off site' costs are covered by the remainder of the export receipts.
6/. My production figures are Pike quarterly report ending December 2009.

APRIL TO JUNE QUARTER.
Coal produced 40,000 tons. @$160 per ton. Income NZ$6,400,000. Loss $5,600,000.

JULY TO SEPTEMBER QUARTER.
coal produced 100,000 tons. @$160 per ton. Income NZ$16million. Profit $4 million. (Note I think Pike estimate of 120,000 to 150,000 tons is excessive).

OCTOBER TO DECEMBER QUARTER.
Coal produced 150,000 tons. @$160 per ton. Income NZ$24 million. Profit $12 million.

I think this layout, using profit or loss in cash, not coal is more helpful. Also using a Quarterly basis for the calculations.
The guesstimate remains, we only get NZ$10million profit for this year.

PLEASE FEEL FREE TO TAKE APART MY FIGURES.:D DO YOU THINK MY BREAK-EVEN FIGURE OF nz$12MILLION IS CORRECT?

STOAT AND RAT KILL.
April to June 12 stoats and 150 rats killed.
July to September 10 stoats and 120 rats killed. (Winter period, kills off some also).
October to December 14 stoats and 170 rats killed.

FURTHER WORK PLEASE ON STOAT & RAT KILL. PLEASE ADD COMMENTS. :)

[mouse]

Mouse, my understanding is there is more than one roadway being cut through the graben, refer to the quarterly report to see below


Progress Through Graben
Progress was made in ‘drill and blast’ construction of roadways through the
rock graben immediately ahead of pit-bottom during the December quarter.
Roadways have now been advanced through 106 metres of rock (with a total of
269 metres of roadway construction in several headings) in a faulted zone (graben) with around 40 metres to cross before the roadway is back in coal. The graben was encountered immediately to the west and north of pit bottom last year by the underground in-seam drilling unit. Recent in-seam drilling to the north shows the graben to be approximately 150 metres wide. Completion of this part of the process by early February 2010, will allow direct access to the main hydro-mining areas in preparation for the commencement of hydro-mining production.

Many thanks. You are totally correct. That cheers me up no end. My Stoat and Rat kill estimates, above, used estimates from the December 2009 Quarterly Activities Report. But I did reduce the Pike estimate of 120,000 tons plus in the July to September 2010 quarter to only 100,000 tons. Both estimates. We will see who is more realistic. :)

[Mr Tommy]

My question, and I only want a little bit of butter on my bread, as the King said to the parlourmaid, what is the monthly or even quarterly production of coal. We know the rat, stoat and weasel kill but have no idea of how much actual coal has been dug out. Please, can they tell us? Does anyone know? We have an Activity Report each quarter. Tells us everything EXCEPT HOW MUCH COAL HAS BEEN ACTUALLY MINED.

I think they have answered this in a round-about way.

"Pike River broke through to coal on 17 October 2008 when a 2.3 kilometre tunnel intersected the Brunner seam of premium hard coking coal"

Its now Feb 2010, and they are just about to ship the first lot.

So the answer is 20,000 tonnes in 15 months.

[root]

So the answer is 20,000 tonnes in 15 months.

Doesn't read too good does it, probably better off without monthly updates.

[Mr Tommy]

Hi Mouse,

From the latest quarterly report ...

"Pike River's second export shipment, scheduled for the April - June 2010 quarter, will be around 40,000 tonnes "

So that gives them up to 5 months (feb-june) to produce the next 40,000t

[J R Ewing]

It's a shame that all those rats and stoats can't be converted into coal within an acceptable timeframe.

[Balance]

Rats and stoats kill may prompt the govt to relax conservation measures?

[the machine]

Hi Mouse,

From the latest quarterly report ...

"Pike River's second export shipment, scheduled for the April - June 2010 quarter, will be around 40,000 tonnes "

So that gives them up to 5 months (feb-june) to produce the next 40,000t


Mr Tommy, with coking coal prices tipped to increase after april, then maybe pike are only shipping the minimum of 20,000t to fullfill contract, thus saving up some stockpiled production for a better price. with a nice weekend coming up maybe a drive up to pike would be enlightening. or a west coast pub crawl might be easier to gain info.

M

[the machine]

Rats and stoats kill may prompt the govt to relax conservation measures?

Balance, it would be nice if that were to be the case, however if the national government's push for more exploitation of resources happens that that may be a better chance to accomplish same.

M

[Mr Tommy]

No mention of the rat/stoat count ....


REL: 1026 HRS Pike River Coal Limited

GENERAL: PRC: Pike River Coal Celebrates Milestone

PIKE RIVER COAL CELEBRATES MILESTONE

Pike River is marking a milestone in the history of the company today with
the first export shipment of its premium hard coking coal to India.

"This is a significant event for the company and the culmination of intensive
efforts to bring the mine into production," says Pike River's chief executive
Gordon Ward.

Pike River's inaugural export shipment of 20,000 tonnes of premium hard
coking coal is being shipped from the Port of Lyttelton on board the Tian Bai
Feng to Bedi Port in Gujarat, India.

From there, it will be transported to coke-maker, Gujarat NRE - one of Pike
River's life-of-mine customers.

Gujarat and fellow Indian life-of-mine customer, Saurashtra Fuels have agreed
to take 55 percent of Pike River's coal.

Pike River also has three-year supply contracts with Japanese steel mills.
These contracts account for the supply of 22% of Pike's total coal
production.

Mr Ward says the next export shipment is scheduled for the April - June 2010
quarter.

"Once hydro-mining is underway in the July-September 2010 quarter, the
typical export shipment size of premium hard coking coal will be
approximately 60,000 tonnes.

"Once full production rates from hydro-mining are achieved, the mine is
expected to produce an average of approximately one million tonnes of premium
hard coking coal a year."

Pike River's inaugural export shipment coincides with a buoyant international
market in which world coking coal prices are expected to rise even higher
than previously forecast.

[Balance]

NO mention that it has taken them 9 months to mine 20,000t and the mine is 2 years plus behind schedule.

Well, the media is sure to pick up on it.

[Baddarcy]

mouse, surely the other 2 roadways can be worked on from both ends once first roadway through and there is access [through coal] to end of other graben roadways.

if that is the case then potentially halve the time for other 2 roadways

m

I believe PRC has advised they have been working on 2 roadways thru the Graben the whole time, so they will only have 1 more to cut, not 2.

[Casa del Energia]

Mr T: Gallus domesticus

[blockhead]

I think not Casa, last seen near the Bealy Hotel on the other side of the Main Divide by an Irishman after a long afternoon in the bar.

[Mr Tommy]

Mr T: Gallus domesticus

Hey Casa, I had to google that one:
From wiki - "The chicken (Gallus gallus domesticus) is a domesticated fowl"

But Pike is only catching rats and stoats. I dont think theres too many chickens up there, unless theyre feasting on all those huge snails

[Casa del Energia]

Hey Casa, I had to google that one:
From wiki - "The chicken (Gallus gallus domesticus) is a domesticated fowl"

But Pike is only catching rats and stoats. I dont think theres too many chickens up there, unless theyre feasting on all those huge snails

Sorry - try Ruttus rattus, Rattus norvegicaus but not Rattus exulans - it's actually protected.

Can't remember what stoats are - Muscelus or something such as like.

[Dr_Who]

Wait for it, wait for it..... oh you want us to pull our wallets out again? ;)

[fabs]

Congrats Gordon
well done

[blockhead]

Hey Casa, I had to google that one:
From wiki - "The chicken (Gallus gallus domesticus) is a domesticated fowl"

But Pike is only catching rats and stoats. I dont think theres too many chickens up there, unless theyre feasting on all those huge snails

I think it refers to Moa Mr T, hence my above reference.

Stoat et al is a musteloid (I think)

[mouse]

I went over to Lyttelton today to see the coal ship loading. Tian Bai Seng, Hong Kong registered, had three holds open for the coal. Looked pretty good. Some cash coming in at last. More due in the next few weeks when we pass the hat round. My 'buy' order of 5,000 shares at 85cents is still not filled. May have to wait for the rights, if any. Sunny day today, 21 degrees C, in Christchurch. I think Tian in Cantonese is Sky. Hopefully Blue Skies for Pike soon.

[corporateraider]

NO mention that it has taken them 9 months to mine 20,000t and the mine is 2 years plus behind schedule.

Well, the media is sure to pick up on it.

Balance,

I think that you misread the announcement. It said that the company celebrates a milestone, and that was the coal shipment.
All that went before it is and remains a millstone!

[glennj]

I went over to Lyttelton today to see the coal ship loading. Tian Bai Seng, Hong Kong registered, had three holds open for the coal. Looked pretty good. Some cash coming in at last. More due in the next few weeks when we pass the hat round. My 'buy' order of 5,000 shares at 85cents is still not filled. May have to wait for the rights, if any. Sunny day today, 21 degrees C, in Christchurch. I think Tian in Cantonese is Sky. Hopefully Blue Skies for Pike soon.

Be careful there Mouse! That shipment must have been the most costly per tonne ever produced in NZ. There is still scepticism amongst some of the mining fraternity that the prospectus production and costs will ever be achieved. Timeliness has already been an abject failure. Once production ramps up and they start winning more coal than rock logistical problems with the rail and port may become apparent. PRC are apparently going to have to play 2nd fiddle to Solid Energy who have preferential deals with rail & port.
Feel free to ignore this West Coast pub talk but remember the earlier stuff I posted was spookily accurate.
Disclosure: ex holder who got out at a good profit when he became concerned at the big dissconnect between what PRC workers, contractors & other miners were telling him and public statements or lack thereof from management.
As a Coaster I wish PRC well but will not be buying back in untill they prove themselves & disclosure improves.

[Mr Tommy]

Made it to TV 1 news last night, you can watch the clip here ...

http://tvnz.co.nz/business-news/pike-river-coal-makes-first-export-3371817

[root]

Feel free to ignore this West Coast pub talk but remember the earlier stuff I posted was spookily accurate.
Disclosure: ex holder who got out at a good profit when he became concerned at the big dissconnect between what PRC workers, contractors & other miners were telling him and public statements from management.
As a Coaster I wish PRC well but will not be buying back in untill they prove themselves & disclosure improves.

Hey Glenn,

Thanks for the point of view, to me West Coast pub talk holds more credence than PRC disclosures.

[Balance]

Hey Glenn,

Thanks for the point of view, to me West Coast pub talk holds more credence than PRC disclosures.

But as always.

Suppliers to Feltex knew the company was going broke as the co could not pay its bills. Took a while before the management let the market know.

[mouse]

:)Feel free to ignore this West Coast pub talk but remember the earlier stuff I posted was spookily accurate.
Disclosure: ex holder who got out at a good profit when he became concerned at the big dissconnect between what PRC workers, contractors & other miners were telling him and public statements or lack thereof from management.
As a Coaster I wish PRC well but will not be buying back in untill they prove themselves & disclosure improves.[/QUOTE]

Many thanks Glennj. I am in the market, at present at 85cents a share. I think that is towards the bottom. I have made a profit by selling most of my holding. I am very suspicious of the underground geology? of the mine. We have had a collapse of the ventilation shaft plus now this Graben. Pretty wide Graben too, so plenty of roadways through it. I agree that the West Coast talk is pretty negative.
However, I am quite happy to put in NZ$10,000 or so as a punt. One major reason is to support the Coast. Pity some of the Coasters are negative. It makes me a little concerned.
Also see my scribble on quarterly production and resultant profit. It should stop investors becoming too euphoric. I cannot see my estimated 700,000 tons maximum annual production being achieved this year. Even for one month. Yet my guesstimate is the mine running costs are NZ$1 million a week. But I am happy to have seen the first shipment. Even if it cost $5,000 a ton!
My view is that investors who are going to put in substantial amounts of cash should visit the Coast and cheque the talk. :) :) :)

[Hoop]

Well the info is starting to emerge of where the shareholders money is going.
I have also found out the true meaning of PRC ( Pike River Conservation )...I'm slightly pissed off about these expenses as they were never disclosed in itemised detail to shareholders.

Well I've also found out that I have shares in a duck dating company as well...it seems PRC found a female for a lonely male duck....Wish I found him first.. I would've saved the PRC shareholders a heap of money.:mad:

No wonder the local pub patrons are ridiculing PRC...jokes abound I presume.
http://www.nbr.co.nz/node/118872

[root]

At least the duck is getting some...Pike isn't.

[Balance]

Wow! No postings for 2 whole days by PRC supporters!

They must really be drinking at Westport's Dirty Mary.

[777]

24/02/2010
GENERAL

REL: 0901 HRS Pike River Coal Limited

GENERAL: PRC: Pike River Announces NZ$50m Equity Issue and New Bond

PIKE RIVER COAL ANNOUNCES NZ$50 MILLION EQUITY ISSUE AND NEW BOND FUNDING

Pike River Coal Limited today announced:
- an intention to make an equity issue of ordinary shares to raise
approximately NZ$50 million;
- a binding agreement with its major shareholder - New Zealand Oil &
Gas Limited (NZOG), to subscribe to a new convertible bond to refinance the
existing US$28.9 million bond facility, conditional on shareholder approvals;

- the grant of a two year option to NZOG to purchase Pike River coking
coal at market prices negotiated annually. The maximum volumes would be the
currently uncontracted coal quantities for the period to 31 March 2013 and up
to 30% of annual coal production for the remainder of the Pike River mine
life.

The new convertible bond and the coal contract option are each conditional,
amongst other things, upon successful completion of the equity issue and
approval by Pike River's shareholders. The convertible bond and the coal
contract are interdependent, such that neither proceeds without the other.
All conditions must be satisfied or waived by 30 June 2010. In the event that
the bond facility and coal contract option were not to proceed, then a break
fee of NZ$1.2 million is payable to NZOG.

The equity issue is to provide working capital to complete the underground
mine development until steady state production from hydro-monitor mining is
achieved. It will include a substantial cash buffer of approximately NZ$20
million to ensure additional operational flexibility during the build up to
normal production levels.

Hydro-monitor mining using high pressure water to cut coal is the main mining
technique Pike River will use and that is scheduled to be underway during the
July-September quarter 2010.

Pike River is considering a rights issue of shares or placement. NZOG has
agreed to support a NZ$50 million equity-raising at its 29.5% interest,
subject to a rights issue being fully underwritten, and also to subscribe to
a new convertible bond for US$28.9 million (approximately NZ$42 million at
current exchange rate of US$0.70) allowing Pike River to repay its existing
Liberty Harbor bond facility.*

The new bonds will mature in March 2012 and have the same conversion price
and other conversion rights as the existing bonds (NZ$1.24 per share when
converted at exchange rate US$0.70) and the same anti-dilution mechanism.

The coal contract option will not impact on existing coal contracts with
Indian and Japanese customers. During this option period Pike River will
still be able to sell into the spot market.

Pike River Chairman John Dow said "The independent directors have carefully
weighed up the merits of NZOG's funding proposal and compared it to market
alternatives. There are a number of advantages with the terms of the new
convertible bond including a much better conversion price than alternatives
thus minimizing equity dilution, no production condition, slightly lower
interest at 10% and no establishment fees. In our view this adequately
compensates Pike River for the grant of the coal contract option."
He also said "An independent expert report on the proposed new bond and coal
contract option will be provided to Pike River shareholders in connection
with the shareholder approvals to be sought in relation to those transactions
at a special meeting expected to be held in the next 2 months".

Gujarat NRE has also agreed to support a Pike River rights issue at its 7.55%
interest, subject to such issue being fully underwritten.

NZOG has agreed to provide interim funding of up to NZ$15 million to Pike
River on commercial terms, to cover funding during the rights issue offer
period. This funding is subject to Pike River securing appropriate
commitments for the equity issue such as an underwriting agreement for a
rights issue, and obtaining any other consents required from its lenders by
20 March 2010,

International demand for hard coking coal has significantly improved in the
past year. Coal market commentators are currently forecasting premium hard
coking coal prices in the range of US$160 to US$200 per tonne for the
Japanese Fiscal Year 2010 (commencing 1 April 2010), prices which are
markedly higher than the prior year.

Pike River's first export shipment of 20,000 tonnes of premium hard coking
coal was shipped to India on 19 February 2010.

* Pike River has the right to redeem the Liberty Harbor convertible bonds up
to certain share price levels

[bull....]

Poor result , but not uncommon from start up mining operations.

[root]

24/02/2010
GENERAL

Pike River is considering a rights issue of shares or placement.



Any thoughts? For existing share holders Rights Issue sounds good, placement sounds bad.

[Robomo]

Any thoughts? For existing share holders Rights Issue sounds good, placement sounds bad.

The market says it all - Share price down 5c (6%) and sellers outnumbering buyers by 5:1

[Hoop]

The market says it all - Share price down 5c (6%) and sellers outnumbering buyers by 5:1
True the market says it all.....but what has actually changed from yesterday at 94 and today at 89ish...todays news... I thought this news was no worse than what the market already knew and had factored in...personally I think PRC are just moving around the deck chairs (hopefully not on the Titanic).... I expected worse...but obviously the market didn't see it that way. We all had suspicions that a capital raising between $40-60M was on the cards and the market knew this too.

In the report there was no downgrading of the 1 million tons/year output and the commencement of hydro-mining is still scheduled for July - Sept quarter... they were my expectation of potential worse news.

PS: No mention how that male blue duck is: ... Damm

[root]

I read it the same way, an initial nervous drop and now the buyers are coming back. Looks like good support from NZOG.

[777]

Some holders realize they will have to front up with cash and if they don't want to increase their investment then they are selling some now to pay for any entitlement that arises. Also our fickle market over reacts to any news, good or bad.

[Dr_Who]

Wait for it, wait for it..... oh you want us to pull our wallets out again? ;)

Welcome to the jungle.

[peat]

obviously theres some good stuff here - support from NOG etc but am I right in suggesting that the lack of a named underwriter is still a hurdle given that nearly all the arrangements make that a prerequisite?

[Hoop]

Welcome to the jungle.

Watch out for that Tree.......theme song for George of the Jungle :)
Yes Peat ..a hurdle... but I assume it wouldn't be a major..surely?....The PRC operation as a whole seems good and sound. NZO is the White Knight and it is in its final phase of construction.



PS..what happened to all those good icons :(:confused::confused:

[Billy Boy]

PS..what happened to all those good icons :(:confused::confused:

Yea Admin put em back on !!! Your worse than the Gumment, Give with one hand and
take with the other !! :confused:
BB

[mouse]

:Dthe new situation is interesting. seems we are no longer going to have obligations to produce a specific quantity, 800,000 tons year, of coal to get the cash. Plus now lots more cash to be raised. Possibly by a 'rights issue' plus a lot of shares sold in a bulk lot to some market investors. Lots of 'options' also being given out. :)
We now have only one mine but a valuation in shares larger than Marac Finance and Pyne Gould.:rolleyes:
One mine is a problem. We do not know the geology of the mine. So could hit more Grabens, in fact we will. But no time for faint hearts. Cough up the cash and smile.:cool:

[Balance]

:Dthe new situation is interesting. seems we are no longer going to have obligations to produce a specific quantity, 800,000 tons year, of coal to get the cash. Plus now lots more cash to be raised. Possibly by a 'rights issue' plus a lot of shares sold in a bulk lot to some market investors. Lots of 'options' also being given out. :)
We now have only one mine but a valuation in shares larger than Marac Finance and Pyne Gould.:rolleyes:
One mine is a problem. We do not know the geology of the mine. So could hit more Grabens, in fact we will. But no time for faint hearts. Cough up the cash and smile.:cool:

Wait for the real damage on the sp to emerge when PRC starts talking to institutions about underwriting the issue.

[Dr_Who]

Odd they announced a cap raising without an underwriter. Maybe they are finding it hard to get an underwriter and will have to pay a huge fee to secure one.

[Balance]

Odd they announced a cap raising without an underwriter. Maybe they are finding it hard to get an underwriter and will have to pay a huge fee to secure one.

They have been working on this since Nov.

They are going to have to make a heavily discounted issue to get underwriting. Who dares to touch this company now as there could be a dozen grabens ahead which will delay production by another 2 years.

It is very telling that Liberty Harbour decided not to extend their loans. What do they know that the rest of us don't?

NZOG has no choice but to double up and front up. It has too much money tied up now in PRC and it is a case of losing everything, so fronting up with some more cash and hoping for the best.

[Balance]

Notice that Saurashtra Fuels decided not to be an underwriter?

So they are saying that they are not going to throw in any more money.

[patrick]

I agree with those who think that the news was the best we could expect other than the indication that SF have lost confidence. Any issue will have to be at a big discount to share price; say a 1 for 5 at 60c. This must be good for option holders.

[Balance]

I agree with those who think that the news was the best we could expect other than the indication that SF have lost confidence. Any issue will have to be at a big discount to share price; say a 1 for 5 at 60c. This must be good for option holders.

I read it as 1 for 3 at 40 cents for underwriters to be remotely interested.

Sp falling suggests institutions being approached are not keen.

[Silverlight]

actually just re read option terms and realised I was wrong :p

[Wiremu]

For those interested in what goes on in the international coking coal industry have a look at International Longwall News - "Hollows on coal prices, costs and port woes." You will need to register for a free 30 day trial. The article puts what is happening with Pike River into perspective.

[root]

I read it as 1 for 3 at 40 cents for underwriters to be remotely interested.

Sp falling suggests institutions being approached are not keen.

Sp coming back up....have they found someone now? ;)

(Tried to use a winking smiley, but this guy looks angry)

[mouse]

Well, it happens. After holding out for more than a week, I bought 5,000 at 90 cents. My order was for 5,000 at 85cents, but I weakened. Now they have gone down to 87 or 86 cents. :D
What I understand from my share broker connections in Christchurch at present is there will be a one for seven or one for five issue at around 75 cents a share. With an option to buy more for any not taken up.
Plus a lot handed out at 75 cents or so to bulk buyers. ;)

Why buy now at 90 cents when I can buy in a month at 75 cents? Simply, the share price is low. Things happen. Maybe the 75 cent rights issue will not take place. Maybe we get a buy out at $5.00 a share. Maybe pigs will fly.
Who can tell? I only had 500 shares, sold the rest at a profit. Now having another dip. Once coal starts moving, price will go up. We will be the last to know. :ohmy:

[patrick]

A one for five issue at 75cents will get in more than 50 million$

[Balance]

A one for five issue at 75cents will get in more than 50 million$

Doubt it will be a 1 for 5 at 75c. If that's the case, underwriting deal would have been done already.

Let's examine what PRC said about its funding requirement carefully. Here's the statement issued by the company in Oct 2009 - 5 months ago.

FINANCING

As previously advised, Pike River has requested Liberty Harbor to extend the US$27.5 million convertible bond production condition date of 30 November 2009 to 30 June 2010. This condition currently requires that the mine be capable of producing 800,000 tonnes (66,700 per month) in the 12 months from the condition date. This requirement is not expected to be met by 30 November 2009. Liberty Harbor's initial response to the requested extension was favourable and a technical review is currently being conducted by their independent adviser before Liberty Harbor formally advises its position. If Liberty Harbor does not agree to the extension then it would be entitled to require the bonds to be redeemed, with the repayment date not being earlier than 90 days after 30 November 2009.

Sounds like Liberty Harbor's independent adviser recommended Liberty take their money and run? Not a good indication of the future upside to PRC's share price. The notes were a sweet deal for Liberty - 1st ranking security over all the assets of PRC (save some BNZ loans) and right to convert into shares at any time prior to maturity - plus a big fat 10.75% pa interest rate. Why would Liberty want their money back? A very bad sign. COULD BE READ AS LIBERTY HAVING CONCERNS THEY WILL EVER GET THEIR MONEY BACK.

The Pike River Board is satisfied that, given the operating status of the mine, the state of international coking coal markets and its ability to raise further funding to the extent necessary, the company will be able to fund the costs of the production delays and/or any bond redemption obligations.

No so confident now. Notice equity issue is subject to full underwriting? In other words, NZO and GC will only put in money if others do.

Notwithstanding the substantial operational improvements gained over the last two months, the resultant push-out of dates for first deliveries of coal and resultant sale proceeds has increased working capital requirements, which management and the Board are actively addressing. Indicatively, existing funds and loan facilities will need to be bolstered with additional cash to meet operational outgoings in the first half of 2010 by approximately NZ$20 million.

The optimal means of obtaining these funds is being addressed which may include additional debt or equity. The company has engaged a specialist international coal industry commercial adviser to pursue certain funding options. That party's opinion is that there would be strong interest from international coal customers in securing a long term coal offtake agreement at competitive market prices in the present buoyant climate for hard coking coal, and that may also include a share placement which may be at a premium to the company's present share price.

So after 5 months, a subject to full underwriting funding deal is the best PRC can come up with? So much for placing shares at a premium.

PRC needs to come clean with the market and shareholders about what the hell is going on. Hard to do, I guess, when the company is covered in coal dust.

[mouse]

This is the whole problem. As discussed by both Balance and Patrick. We basically do not know. Plus we will be the last to know.
HOWEVER, we do know that the international market, and in NZ there is really no other market, is pretty good for coking coal. At this point the whole thing is a bit of a gamble. However, certainties have gone bust in the past. Having a few thousand shares in Pike cannot be wrong. You cannot lose that much, buy a few more!

[Baddarcy]

I agree with Balances comments also, with the exeption of the one about Liberty Harbor. If LH pulled thier money and ran, why did NZO agree to a lower interest rate, longer term, higher conversion rate to shares and no production targets? I think that NZO simply outbid LH for the bonds.

On a brighter note, there was the article below in todays' Australian. Seems there is no stopping the coking coal price at the moment and with our dollar slowly dropping aginst the USD it a win win. If PRC can ever get a decent amount of coal out of the ground this stock is going to be a gold mine (excuse the pun).

---------------------------
Boost for BHP's coal price push Matt Chambers From: The Australian March 01, 2010 12:00AM

BHP Billiton's push to kill annual coking coal pricing is picking up pace, with the first coal indexes being set up and the world's second-biggest exporter, Teck Resources, joining the fight against benchmark pricing.
Data provider Platts is looking to publish a daily cash price and is understood to be targeting a mid-March start-up, while US group Energy Publishing on Friday launched what it said were the world's first coking coal indexes.

BHP's campaign against annual coking coal pricing reflects a similar -- and ongoing -- battle against annual price-setting for iron ore, which was recently backed by the world's biggest iron ore miner, Vale.

Canada's Teck said it supported moves by BHP, the world's biggest coking coal exporter, to try to force Japanese and Korean customers away from annual pricing.

"A significant reason for our support is we think that this market over the next several years looks like it could be very attractive from a supplier's perspective," senior vice-president of corporate development Ron Vance said.

Start of sidebar. Skip to end of sidebar.
.End of sidebar. Return to start of sidebar.
"So shorter-term pricing certainly makes sense."

China's surprise transformation last year from an exporter to an importer of coking coal -- at spot prices -- has boosted BHP's campaign to change the way coking coal is priced.

BHP, which exports its coal from Queensland's Bowen Basin, wants to move from the annually negotiated benchmark system to quarterly or index-based contracts.

A change in coking coal pricing could boost the $22.3 billion of coking coal export revenue the Australian Bureau of Resources Economics expects this financial year.

BHP has reportedly offered quarterly contracts at $US200 a tonne, which is about $US20 a tonne lower than current spot prices out of Queensland.

Last year's contract prices were $US129 a tonne, down from $US300 the previous year.

One analyst said he understood BHP had told Japanese steel mills they could have some volumes on annual pricing in 2010, but this would be the last year.

Mr Vance said Teck had been selling more coking coal to China. He said the company would not contract all volumes this year, saving some for spot markets.

Energy Publishing's first coking coal price, based on Queensland hard coking coal before shipping, was $US222 a tonne.
--------------------------------------

[Balance]

Commentary is that NZOG is bailing out PRC and it's a rescue operation.

NZOG's option over 30% of PRC's production is part of the deal. Buy at spot and sell at higher contracted price if NZOG can. It's a massive transfer of value from PRC to NZOG.

All points towards NZOG having no choice but to pump in more $$$ into PRC.