PRC Pike River Coal

[percy]

Hi Mouse .
Bit of pub talk was it was not all PRC coal that was loaded.Bit of solid energy to top up?

[Balance]

Hi Mouse .
Bit of pub talk was it was not all PRC coal that was loaded.Bit of solid energy to top up?

Hope not. Can't see it myself as the risk of a leak from SolidvEnery would be disastrous for PRC.

Meanwhile, sp is dropping now on big volumes. Institutions being approached or catching wind of terms of rights issue bailing out?

[mouse]

Hi Mouse .
Bit of pub talk was it was not all PRC coal that was loaded.Bit of solid energy to top up?

Brilliant. Brilliant. Wonderful. We can sell, or give away, our coal to NZOG and get a bit on the side from Solid Energy. I am almost sure the talk is right.
Plus look at the number of shares on issue 12 months ago in comparison to those on issue now. 200million or so then in comparison to 350million now. I suppose dilution of our shares is part of hydraulic mining.
BUT, I still think that we should support the shares, since at anything around 90 cents they are a BUY. Watch them now hit 55cents! And I am in Christchurch too. If I buy more on the market I think I should visit the Coast first!

[Balance]

Brilliant. Brilliant. Wonderful. We can sell, or give away, our coal to NZOG and get a bit on the side from Solid Energy. I am almost sure the talk is right.
Plus look at the number of shares on issue 12 months ago in comparison to those on issue now. 200million or so then in comparison to 350million now. I suppose dilution of our shares is part of hydraulic mining.
BUT, I still think that we should support the shares, since at anything around 90 cents they are a BUY. Watch them now hit 55cents! And I am in Christchurch too. If I buy more on the market I think I should visit the Coast first!

LOL ...... Mouse, PRC will recommend you for a knighthood if you are not careful!

[Balance]

The good news is that all the brokers (and their analysts) covering the stock are still recommending Buy or Accumulate.

One pushed the view 2 weeks ago that investors should be buying before the announcement of the first coal shipment as the sp is sure to rise after that!

So good opportunity for those looking to get out to still get a good price before the reality of the rights issue hit ....

The day the brokers turn dark and put sell on the stock - that's when I am buying.

[Balance]

Someone just rang the bell on PRC!

Went and grabbed a few at 86c and attracted 2 big sellers at 86c offering stock!

[mouse]

Someone just rang the bell on PRC!

Went and grabbed a few at 86c and attracted 2 big sellers at 86c offering stock!

I am now thinking of buying 5,000 at 80 cents a share. I am convinced it is a 'BUY' at these prices. Already got 5,000 the other day at 89 cents. Comments please. Is it a good idea?
I suspect the rights issue will be at 75 cents. Also, look at the price of the $1.25 rights excercisable by April next year. Only 15 cents a right.

[Corporate]

I am now thinking of buying 5,000 at 80 cents a share. I am convinced it is a 'BUY' at these prices. Already got 5,000 the other day at 89 cents. Comments please. Is it a good idea?
I suspect the rights issue will be at 75 cents. Also, look at the price of the $1.25 rights excercisable by April next year. Only 15 cents a right.

Don't average down. Down buy until the trend changes.

[GTM 3442]

I am now thinking of buying 5,000 at 80 cents a share. I am convinced it is a 'BUY' at these prices. Already got 5,000 the other day at 89 cents. Comments please. Is it a good idea?
I suspect the rights issue will be at 75 cents. Also, look at the price of the $1.25 rights excercisable by April next year. Only 15 cents a right.

If you bought at $0.89, and are thinking of buying at $0.80, why not wait and buy at either $0.75 on the way down, or $0.84 on the way up ?

[mouse]

If you bought at $0.89, and are thinking of buying at $0.80, why not wait and buy at either $0.75 on the way down, or $0.84 on the way up ?

Part of this is our Patriotic Duty. Pike is our coal mine. We must all pull together to prevent another business falling into overseas hands. So we must try to stop the price falling into 'takeover' zone. Whatever the problems with Pike, it is our own West Coast Mine. NZ expects every man to do his duty.:(

Further we are looking for another mine to start up once the teething problems with this one are over. Raising my holding now seems to be a good idea to me. But of course bottom is a point which Madoff was able pick, I have greater difficulty in getting it right.:confused:

[Corporate]

I am very surprised Pike is currently capped at $300m.


Part of this is our Patriotic Duty. Pike is our coal mine. We must all pull together to prevent another business falling into overseas hands. So we must try to stop the price falling into 'takeover' zone. Whatever the problems with Pike, it is our own West Coast Mine. NZ expects every man to do his duty.:(

Patriotic duty....to what, loose money? I'm sorry but I hope you are not being serious. Buying a few thousand shares here and there will not save Pike from a takeover*. NZOG hold a 30% stake and therefore have the final word on a takeover.

*not that this likely to be on cards



Further we are looking for another mine to start up once the teething problems with this one are over. Raising my holding now seems to be a good idea to me. But of course bottom is a point which Madoff was able pick, I have greater difficulty in getting it right.:confused:

Forget about another mine, this is just management hot air. They have plenty of coal, 18 years worth infact, or 36 years at this rate. Once Pike hits a consistent 1mtpa then start thinking about a second mine.

[root]

Bought mine at 85 Mouse, you might get 80, who knows? Have strapped on my Headlamp, where's the coal?

[Hoop]

Part of this is our Patriotic Duty. Pike is our coal mine. We must all pull together to prevent another business falling into overseas hands. So we must try to stop the price falling into 'takeover' zone. Whatever the problems with Pike, it is our own West Coast Mine. NZ expects every man to do his duty.:(

One great thing about life is that it doesn't matter how old you are, at certain points in time something unexpected happens which stops you dead in your tracks.
I read your post about 5 times Mouse....still can't believe it ..

[GTM 3442]

Raising my holding now seems to be a good idea to me.

Well then, by all means raise your holding.

Do buy some shares.

It might be a good idea.

But please, do be clear about why you're buying them.

And don't be too disappointed when shares bought for one reason fail to satisfy for another reason

[COLIN]

Hi Mouse .
Bit of pub talk was it was not all PRC coal that was loaded.Bit of solid energy to top up?

And was this Solid Energy coal the "high quality coking coal" that PRC's contract requires?! If not, there's going to be trouble at the steel-making end!

Seems an unlikely story.

[Hoop]

And was this Solid Energy coal the "high quality coking coal" that PRC's contract requires?! If not, there's going to be trouble at the steel-making end!

Seems an unlikely story.

Not really ..The West Coast coals are of the Bituminous type and is sought after for Steel making because of its high energy and low ash and phosphorus make up. Very possible the coals would be similar.

[Balance]

PRC is talking to potential underwriters now.

Questions are being asked.

Watch the share price react to the answers given.

[Robomo]

In Pike's activities report for the year ending 31 December it was stated that they would be through the Graben by "early February" and that this would give direct access to the hydro mining areas. It's now early March and I have not seen any announcements that they have got through the Graben.
Has Pike struck more problems at the mine? I'm presuming the worst as I expect that getting back into the coal would be price sensitive information and that would have to be announced immediately to the NZX/ASX.
Does anybody know if Pike is through the Graben and if not, why the delay of at least a further month?

[mouse]

In Pike's activities report for the year ending 31 December it was stated that they would be through the Graben by "early February" and that this would give direct access to the hydro mining areas. It's now early March and I have not seen any announcements that they have got through the Graben.
Has Pike struck more problems at the mine? I'm presuming the worst as I expect that getting back into the coal would be price sensitive information and that would have to be announced immediately to the NZX/ASX.
Does anybody know if Pike is through the Graben and if not, why the delay of at least a further month?

I did ask Pike yesterday if we were through the Graben but Catriona has replied that Peter is dealing with it and is away until Wednesday the 10th March. So will have to wait a week or so. For that reason I suspect we may have one roadway almost through but the other couple are still being worked on. We have to Take Courage as they have plastered on the bridges of London.

[Wiremu]

Perhaps the information from McDouall Stuarts Weekly Report will help:

Pike River Coal (NZX:PRC) $0.86 ▼7.5%
Operations
PRC reported that it is now in coal at the western edge of
the faulted zone of the graben and is entering an
unfaulted zone. Due largely to manpower
currently being deployed elsewhere, it will be another
3-4 weeks before PRC completes the remaining 30-40m
of excavation needed to reconnect with the target seam.
Because of water flow from hydro operations requiring a
very precise entry gradient, this part of the operation will
require careful planning to determine and execute the
correct slope to complete the final driveage towards the
first mining area.
The in-seam drilling PRC has completed over the last
year has given it much stronger confidence over the
locale and extent of in-situ coal in target mining areas.
Results from drilling to the northwest towards the initial
target hydro panel areas indicate a 400m long, 9m thick
seam of low sulphur, high fluidity coking coal. PRC’s
assessment is that the drilling results support expected
production estimates for at least the first six months of
mining. As further advance is made, more in-seam
drilling will be undertaken to extend forward confidence
towards anticipated production rates.
Following its first 20kt shipment last week, PRC has only
a few hundred tonnes of coal sitting in stock. It expects
to send its next shipment (20-40kt) during the April-June quarter.

The weekly report also states - PRC has said that
the NZO financing proposal was the best of the options
available to it, including terms Liberty Harbor was
offering to extend its facility.

[Logen Ninefingers]

It's kind of predictable that right when they are supposed to be going full guns blazing through the graben and ripping into some serious production the chap in charge will be away til the 10th of March. Everything just seems to go at a tortesian pace up at the mine. Aside from that, someone up there's been smashing mirrors and provoking black cats.....I'm just waiting for the news that production has been held up by famine, plague, locust hordes, an attack by rare west coast vampire bats, a lost tribe...........etc.......

[Balance]

The man in charge is apparently away looking for coal finder equipment. That is more important than blasting through the graben as they keep finding rocks. All kinds of rocks - hard ones, fractured ones, soft ones - everything save coal.

Where's the coal?

No wonder Liberty Harbor said "we will have our money back unless you want to pay 18% interest and conversion price of $0.90 per share." Must be something like that.

So what does NZOG do? No choice but to bail out PRC - seemingly on favorable terms but the fish-hook? PRC loses control of the rest of its coal production!

Oh ouch .... someone just smashed all the buyers at 85c. Big volumes too.

[Robomo]

Perhaps the information from McDouall Stuarts Weekly Report will help:

Pike River Coal (NZX:PRC) $0.86 ▼7.5%
Operations
"PRC reported that it is now in coal at the western edge of
the faulted zone of the graben and is entering an
unfaulted zone...."

Thanks for that Wiremu, explains everything. Given the saga of the past 2 years I am just waiting for the next drama to delay sustained production, it would not surprise me if they find a dead Moa in amongst the coal that will stop production as it then becomes a heritage site.....

[mouse]

:scared:
Thanks for that Wiremu, explains everything. Given the saga of the past 2 years I am just waiting for the next drama to delay sustained production, it would not surprise me if they find a dead Moa in amongst the coal that will stop production as it then becomes a heritage site.....

Now before we laugh, it could happen. Who will be in charge of the find? Historic Places, Conservation or who. Will the Maoris be given first option? We could get tourists coming to look at a dollar a head. That should recover some of the costs.:D
The point of all this bluntly is no serious production until the end of this year. Anyone who thinks differently will probably be quite disappointed. :p
The share price of 85cents today is a buy. There could be some serious cash to be made at any point below the 85 cent level. Further I suspect the options, due in April 2011 at $1.25, are totally overpriced at 15 cents. Patriotic Duty is called for. Buy more shares! To make sure our Pike shares are not sold to those Ozzie lot at a knock-down price and to put cash into our own pockets. :) Plus to keep the money machine on the Coast running. I suspect Peter is in Wellington with the job of convincing Govt that we should be able to extract all mineable coal. Not a wast of time at all. This is just guesswork, but my guesswork has been right before. Except when I was persuaded last week to buy at 90cents and should have held out for 85cents. I think I am going to have a go for 5,000 at 80 cents. :)

[percy]

Mouse,
You have now learnt why Sir Ron,Warren Buffett and wise old investors do not invest in start ups.They wait until company has a record of results before they buy.Don't think it has not cost me a lot of money to learn this lesson.I was going to make a lot of money out of a company whose name I forget,but it then became Aorangi.then Cadac,before showing great promise(as allways) as WDT. Profit still just around the corner as it has always been.More than 15years I think of cash issues .I was lucky I gave up a few years ago when at the time i would not buy a share unless they were paying a divie.I have since lost my way again!!!

[Silverlight]

PRC currently have 347.5m shares and 64.2m options, all participate equally on a capital raising.

So 411.8m, if they want to raise 50m they need 8.2 cents from each share/option. For discussions sake say they did a one for 10 rights issue at 80 cents would mean 62.5m new shares.

0.5 cent discount to market (5 cents divided by 10), would mean the options already have the 0.5 cent built in, esp if you can sell the rights on market, meaning the options have 14.5 cent value.

If the rights issue is below 80 cents, say 75 cents, then you get an intrinsic value of 1 cent per option, anything lower, say 70 cents means 1.5 cent, which could be sold on market, which is 10% of the current option price, almost like receiving a div payment on the options.

Thoughts?

[root]

All the discussion is about a rights issue, is it not possible that PRC could still raise the equity with a placement of shares? They indicated this was a possibility in there announcement about an equity raising.

[Balance]

All the discussion is about a rights issue, is it not possible that PRC could still raise the equity with a placement of shares? They indicated this was a possibility in there announcement about an equity raising.

If they could do it, they would have done it.

[the machine]

PRC currently have 347.5m shares and 64.2m options, all participate equally on a capital raising.

So 411.8m, if they want to raise 50m they need 8.2 cents from each share/option. For discussions sake say they did a one for 10 rights issue at 80 cents would mean 62.5m new shares.

0.5 cent discount to market (5 cents divided by 10), would mean the options already have the 0.5 cent built in, esp if you can sell the rights on market, meaning the options have 14.5 cent value.

If the rights issue is below 80 cents, say 75 cents, then you get an intrinsic value of 1 cent per option, anything lower, say 70 cents means 1.5 cent, which could be sold on market, which is 10% of the current option price, almost like receiving a div payment on the options.

Thoughts?



far to complicated.

with the coking coalprices set to soar then prc can consider themselves lucky.

coking coal mines in queensland now have water issues again impeading production

i have just returned from darwin and experienced first hand the torrential rain over many days that has caused lots of flooding in both nt and queensland.

M

[patrick]

Does anyone know whether the couple 'sleeping out" counting the kiwi, rats .stoats. muttonbirds, or whatever, are on a fixed term contract?
If so ,expiry date please.

[mouse]

:mellow:I have just been chatting to a local Labour MP about Pike River Mining. She was absolutely opposed to any mining on Conservation Land. A sort of 'my mind is made up, dont confuse me with facts'. So we have quite a problem of ideas long term to get more coal out.
The idea of Pike is to be 'good neighbours' and assist with Conservation. I am sure that the count of Kiwi etc plus rats and stoats will be of great value. Very pleased it is being done. We need to get permission to take out all the mineable coal. Which should give us at least 40 million tons in the bank. Hence small amounts of cash spent on Conservation should be applauded, not opposed.:)

[Baddarcy]

Very interesting news item in todays Australian

http://theaustralian.news.com.au/business/story/0,,26818191-643,00.html?from=public_rss

[mouse]

Very interesting news item in todays Australian

http://theaustralian.news.com.au/business/story/0,,26818191-643,00.html?from=public_rss

Click on the quote is compulsory. :) Many thanks Baddarcy. Now we just need to get the coal.:)

[Balance]

Click on the quote is compulsory. :) Many thanks Baddarcy. Now we just need to get the coal.:)

Sadly, Mouse - that's what they have been saying for the last 3 years!

That's the lovely thing about mining stocks - they keep dangling the carrot and the punters keep pouring money down a black hole.

If the construction of a building is running 2 years plus behind schedule, what do the funders of the building do?

[dsurf]

Steelmaker sets the bar higher for coking coal
By Javier Blas
Published: March 5 2010 12:22 | Last updated: March 5 2010 22:23
A groundbreaking deal for a 55 per cent increase in coking coal prices, a key input in steelmaking, has been agreed between BHP Billiton, the world’s largest miner, and JFE Steel of Japan. The contract, which will run only for the quarter between April and June, marks a break with decades of tradition under which contracts were agreed on an annual basis.
This new deal with see JFE pay $200 a tonne for coking coal instead of the $129 a tonne under its current annual contract which expires at the end of the month.
The sharp increase in coking coal along with rising iron ore costs is set to push up steel prices, possibly by around 30 per cent, according to analysts.
Earlier this year, BHP Billiton said that it wanted to shift to quarterly contracts that track spot prices more accurately and away from the annual negotiations under which the first deal agreed between a miner and a steelmaker created a benchmark which was then followed by the industry that year.
Analysts said JFE’s acceptance of a quarterly contract was likely to force others to follow. Miners and steelmakers, including ArcelorMittal, Baosteel of China, Nippon Steel and South Korea’s Posco, have begun their frequently acrimonious discussions to settle prices for the 2010-11 contracts, due to start on April 1.
However, JFE said that it still wanted to negotiate an annual contract.
“We’ll start new negotiations after July. This doesn’t mean we accepted their shift to shorter-term contracts,” a spokesperson for JFE told Reuters.
The deal for a 55 per cent increase is the strongest sign of tightness in the coking coal market and bodes well for miners from BHP Billiton to Xstrata.
Spot coking coal prices have risen sharply to about $220-$240 a tonne after a drop in China’s domestic production forced Chinese steelmakers to import.
China imported about 30m tonnes of coking coal last year, up from only one tonne in 2008. Beijing’s shift to an importer follows a clampdown on illegal and unsafe mining operations.

[root]

PRC is becoming more poular with traders, not sure if this is because of imminent news about a rights issue or recent news about coking coal prices. Buying at 85 looks like a good decision now.

[mouse]

PRC is becoming more poular with traders, not sure if this is because of imminent news about a rights issue or recent news about coking coal prices. Buying at 85 looks like a good decision now.

Congratulations Root. I lost my nerve and paid 89cents. But even that looks OK now. I think they have to make some announcement in the next few days, and by 20th March in any event. See their $50million rights notice.
No news on Graben yet though. Maybe both rights and Graben made at the same time

[Sideshow Bob]

There have been a few positive days in a row....if history repeats we should see an announcement soon!!

[mouse]

This is a simple bit of info on the Graben problems. We really need a digram to understand the various headings and roadways. This is the best to be done without that. ;)
The priority seems to have moved a bit, so getting through the Graben is one priority and getting the mine ready for hydraulic mining is an equal priority. Hopefully there will be more info later. To the report, the best I can do. It is from an 'insider.' :) This is not in any way 'insider' info., you can share it with others.

Both B and C heading are at the western boundary of the graben structure. Because the roadways had to be maintained on a constant grade, this means that they are not at the same horizon as the coal seam and will have to continue in stone a few tens of metres more till they grade up to the correct horizon. C heading is being progressed and we are relocating our inseam rig to b heading to drill ahead and ensure the correct grade is used. :confused:

Meanwhile we progressing the third heading (D heading) through the graben also, although it will only need to go half way across at this stage and link into the other roads.
Our crews are also working to develop a couple of roads in coal in pit bottom south for infrastructure installation. ;)

While the roadways through the graben are essential for commencement of hydro, they are not actually the critical path roads to be done. D heading and the roads in coal are equally important so that we can commence installation of our pumping and electrical systems. :mellow:

It is always a fine balancing act with what is the highest priority and it does change weekly. Although one priority does not change, and that is commencement of hydro and extraction of increasingly large volumes of coal from our mine. :)

A lot of work is being done on site by a very focused and dedicated team of mining and engineering professionals, and they are aware that our shareholders have great expectations for the operation as they do themselves. :)

[Baddarcy]

Thanks Mouse,

So if i read this correctly they are actually through the Graben at points B & C, but because of the angle they need the tunnel at they have actually come through the Graben below the coal seam so now need to drill a bit further to reach the seam again. But they have moved the inseam driller back to the mine ready to start drilling through coal.

Like everyone i was hoping they would be back in coal by now, but still good to know where they are up to.

[Balance]

Good work, Mouse.

You are doing a damned good job!

Compared to some of the posters who keep asking stupid questions and can't be bothered getting off their backside to do some investigation, you are showing the way.

You are going to go a long way.

Keep it up!

[mouse]

Thanks Mouse,

So if i read this correctly they are actually through the Graben at points B & C, but because of the angle they need the tunnel at they have actually come through the Graben below the coal seam so now need to drill a bit further to reach the seam again. But they have moved the inseam driller back to the mine ready to start drilling through coal.

Like everyone i was hoping they would be back in coal by now, but still good to know where they are up to.

Yes and No. I would guess that there are still around 40 metres to go through rock to get to coal, but the engineers are not sure. They are working in a black hole. Clearly the $50million needed indicates that they see the end of this year to be around the target date for steady state coal production.
Further they seem to have run out of cash options from the bank. No more working capital coming, hence our cash call shortly.
The solution is Hydro Mining. But getting the start date for that is beyond the engineers telescope. We, shareholders, may have to view Pike as a bit of a punt. There could well be more 'fractured rock' ahead. However the SP looks quite good at around 90cents and has allowed for problems ahead.
A second solution is Peter Whittall in Wellington chatting with DOC etc about us extracting all mineable coal. Hence we get 40million tons, not 18million tons. That may well offset some fractured rock problems. :)

[digger]

Yes and No. I would guess that there are still around 40 metres to go through rock to get to coal, but the engineers are not sure. They are working in a black hole. Clearly the $50million needed indicates that they see the end of this year to be around the target date for steady state coal production.
Further they seem to have run out of cash options from the bank. No more working capital coming, hence our cash call shortly.
The solution is Hydro Mining. But getting the start date for that is beyond the engineers telescope. We, shareholders, may have to view Pike as a bit of a punt. There could well be more 'fractured rock' ahead. However the SP looks quite good at around 90cents and has allowed for problems ahead.
A second solution is Peter Whittall in Wellington chatting with DOC etc about us extracting all mineable coal. Hence we get 40million tons, not 18million tons. That may well offset some fractured rock problems. :)

As i understand it it is not possible to take all the coal as coal pillers have to remain in place to hold the roof up. About two years ago i asked Peter w this point and wondered if concrete pillers could be put in place but at the time he felt that was too far down the road to work at.So lets see if we can get the 18 million tonnes first.

[manxman]

From the Herald website 14 March


Forest and Bird says the Government has plans to start mining on 7,000 hectares of conservation land.

It has learnt of three sites named in a discussion document as areas the Government wants to allow mining in, 3 News reported.

They include high-value areas on Great Barrier Island, the Coromandel Peninsula, and the Eastern Paparoa National Park on the West Coast.

According to Forest and Bird, this shortlist of sites is in line to lose Schedule Four protection, opening the door for mining to begin.

But the conservation group said the areas all have ecological and landscape value, which is why they have previously been protected.

Energy and Resources Minister Gerry Brownlee said a public discussion would be held once Cabinet made a decision.

"I'm not saying anything until that time," he told One News.

This really could be a biggie for Pike. The current plan is to leave sufficient coal pillars stop the land above subsiding. If you extract all the coal, the roof falls in, bit by bit, over the years. This subsidence eventually works its way to the surface, and may not happen evenly. The result, in the national park, is that trees which may have grown vertically for three hundred years, adopt a wee tilt. Perhaps thirty years after the mine has been worked out, a tree leans over. If there is no one there to see it, what does it matter? There is no effect on biodiversity or habitat. Landscape value would be essentially unaffected. Trres fall over all the time.

It would not be a quick gain for PRC. You would still have to mine to the full extent of the mine plan, leaving adequate pillars in place, and then extract the pillars starting at the extremities and working back to the pit bottom, letting the roof fall in its own good time. But right away you would double the coal reserves, which would provide a welcome boost to the credibility of the mine, and perhaps reduce the cost of raising capital.

Gerry Brownlee has to decide whether the minimal effect of surface settlement caused by pillar extraction is sufficient justification for locking up 20 million tonnes of coal. No one is talking about a huge new open pit operation ripping up a pristine landscape.

There will be a public debate, he says. Be prepared for a s***load of mindless misinformation.

[mouse]

From the Herald website 14 March



This really could be a biggie for Pike. The current plan is to leave sufficient coal pillars stop the land above subsiding. If you extract all the coal, the roof falls in, bit by bit, over the years. This subsidence eventually works its way to the surface, and may not happen evenly. The result, in the national park, is that trees which may have grown vertically for three hundred years, adopt a wee tilt. Perhaps thirty years after the mine has been worked out, a tree leans over. If there is no one there to see it, what does it matter? There is no effect on biodiversity or habitat. Landscape value would be essentially unaffected. Trres fall over all the time.

It would not be a quick gain for PRC. You would still have to mine to the full extent of the mine plan, leaving adequate pillars in place, and then extract the pillars starting at the extremities and working back to the pit bottom, letting the roof fall in its own good time. But right away you would double the coal reserves, which would provide a welcome boost to the credibility of the mine, and perhaps reduce the cost of raising capital.

Gerry Brownlee has to decide whether the minimal effect of surface settlement caused by pillar extraction is sufficient justification for locking up 20 million tonnes of coal. No one is talking about a huge new open pit operation ripping up a pristine landscape.

There will be a public debate, he says. Be prepared for a s***load of mindless misinformation.

The problem at present is that Conservation will not allow any slump at all on the surface above the mining operations. Pillars would still be left in, but even so slump, subsidence, would occur. We should selectively fell trees above the mine site, that is, select them and then fell them. Plant new ones later.

This is why Peter Whittell is in Wellington. To try to get permission to allow a gradual slump of the surface above the mine, plus get us rights to do more mining in the area. Hence using our facilities 100%. We have to work now since the Labour lot, plus Greens, are totally opposed to mining. But once we employ staff as at Pike it is difficult for them to close us down. Pike is establising a track record with Govt which will stand us in very good stead when the contracts are issued.

Also, dont forget, National are very interested in West Coast votes. :) Forty million tons of coal would be helpful.

[manxman]

We should selectively fell trees above the mine site, that is, select them and then fell them. Plant new ones later.


That's very naughty. Just as well Helen the cat didn't hear you.

I'm sure Gerry Brownlee can be convinced that a bit of settlement won't be the end of the world, and DOC will find more important things to do. They won't be able to oppose everything this government wants to do, and will need to save their credibility for where it can make a real difference. The problem is that if Joe Public is being whipped into hysteria, then the government are politicians first and foremost, and may find that the electoral price is too high.

[Dr_Who]

Can someone give me the coal reserve estimate PRC has under ground? Cheers. Saves me time looking in the report. I wanna do some numbers.

[root]

Scheduled to produce 18 million tonnes over the next 18 years.

[Dr_Who]

Thanks Root

[mouse]

Can someone give me the coal reserve estimate PRC has under ground? Cheers. Saves me time looking in the report. I wanna do some numbers.

The approvals are for only 18million tons. However, there is at least 40million tons of coal that can be mined and leave pillars in to give some support from subsidence. If we could mine and damn the subsidence we might even get far more than 40 million tons.
Which is why I am a supporter of selective logging. :)

Thus all of our calculations are very difficult to make. :confused:

[Jonathan]

Just signed up to the forum. Not bad so far. I used to have PRC a couple years ago, gosh it sure has dropped allot. I have been doing some research and it seems with this rights issue they are trying to stop a devalue in their share price. But My concern that no matter what, borrowing more money is never a good sign. My question is, to anyone who wants to answer it, ho much lower under 90c can they go?

[the machine]

Just signed up to the forum. Not bad so far. I used to have PRC a couple years ago, gosh it sure has dropped allot. I have been doing some research and it seems with this rights issue they are trying to stop a devalue in their share price. But My concern that no matter what, borrowing more money is never a good sign. My question is, to anyone who wants to answer it, ho much lower under 90c can they go?

welcome jonathon

wish i had sold out of pike when sp a lot higher than today

as regards to how low can go - my guess is the bottom has passed and sp is supported by much higher coking coalprices pending for jpy from april

m

[Baddarcy]

welcome jonathon

wish i had sold out of pike when sp a lot higher than today

as regards to how low can go - my guess is the bottom has passed and sp is supported by much higher coking coalprices pending for jpy from april

m

I think also the impending defeat of the graben is also providing some support to the SP. Once that is out of the way they are at least back to mining coal rather than rocks.

[mouse]

Just signed up to the forum. Not bad so far. I used to have PRC a couple years ago, gosh it sure has dropped allot. I have been doing some research and it seems with this rights issue they are trying to stop a devalue in their share price. But My concern that no matter what, borrowing more money is never a good sign. My question is, to anyone who wants to answer it, ho much lower under 90c can they go?

I have bought 5,000 at 89 cents. I think anything between 85cents and 90 cents is reasonable buying. However, once the $50million rights issue comes on then we could see sp go down to 80cents, since people may need to sell to buy rights. Which of course raises questions of how much will the rights be priced at. My view is buy, but not too many, anywhere between 85cents and 90cents.

[Jonathan]

@ The Machine: Thanks for the feedback. Yeah my gut feeling is, pending a disaster, that the price has stabilized, give or take a few percent with the rights issue.

@ Mouse: Yeah i think I will def buy, I just want to see how much Stock dilution there is with the rights issue, as are many people. But everyone knows that if all is well and w get production of the 18m T of coal there is only one way the stock price is going to go!

[Balance]

@ The Machine: Thanks for the feedback. Yeah my gut feeling is, pending a disaster, that the price has stabilized, give or take a few percent with the rights issue.

@ Mouse: Yeah i think I will def buy, I just want to see how much Stock dilution there is with the rights issue, as are many people. But everyone knows that if all is well and w get production of the 18m T of coal there is only one way the stock price is going to go!

Hmmm.

What does the track record of this company tell you about its likely performance?

[biker]

Hmmm.

What does the track record of this company tell you about its likely performance?

IMHO until the hydro miners are consistently producing coal at a reasonable rate there is a fair amount of de-risking still to be done. Still in 'risky punt' territory this stock, better punts elsewhere. Good luck to all who hold. There is substantial upside potential and I do hope you get it. With the current risk, I'm happy to miss the first flush of enthusiasm if all goes well, and buy in well off the bottom with a much greater possibility of preserving capital.

[the machine]

this cyclone bearing doen on queensland coking coal country could have a very significant effect on the coking coal prices

M

[Balance]

this cyclone bearing doen on queensland coking coal country could have a very significant effect on the coking coal prices

M

As relevant to PRC as a short term drought on vege prices. PRC cannot even supply to its contracted customers. let alone supply to spot market.

[Balance]

IMHO until the hydro miners are consistently producing coal at a reasonable rate there is a fair amount of de-risking still to be done. Still in 'risky punt' territory this stock, better punts elsewhere. Good luck to all who hold. There is substantial upside potential and I do hope you get it. With the current risk, I'm happy to miss the first flush of enthusiasm if all goes well, and buy in well off the bottom with a much greater possibility of preserving capital.

Not according to the one-eyed believers. The big volume coal is just around the corner.

One can understand why Bishop Tamaki gets to live the high luxurious life whilst his congregation gave up sky tv, coffee, holidays - salvation to heaven is just around the corner!

[Logen Ninefingers]

Not according to the one-eyed believers. The big volume coal is just around the corner.

One can understand why Bishop Tamaki gets to live the high luxurious life whilst his congregation gave up sky tv, coffee, holidays - salvation to heaven is just around the corner!

The Destiny thread fuses with the PRC thread?

[peat]

The Destiny thread fuses with the PRC thread?
according to Elliot Wave International IATSM (Its all the same market) ;+)

[Balance]

The Destiny thread fuses with the PRC thread?

Indeed.

I should have written - the big volume coal is ALWAYS just around the corner.

Amazing what you can get from the believers when you promise satisfaction and fulfillment - if they hang in there for just a little bit longer, and a little bit longer. And BTW, we need some more money.

[mouse]

Indeed.

I should have written - the big volume coal is ALWAYS just around the corner.

Amazing what you can get from the believers when you promise satisfaction and fulfillment - if they hang in there for just a little bit longer, and a little bit longer. And BTW, we need some more money.

The daft part about Pike is if we had been allowed by Conservation to do a proper survey the mine could not have gone ahead. Since no money would have been put in, particularly with prices for coking coal where they were when the mine was planned. I am convinced that there will be no volume production before the end of this year. But it is worth a 'small' punt.

[Balance]

The daft part about Pike is if we had been allowed by Conservation to do a proper survey the mine could not have gone ahead. Since no money would have been put in, particularly with prices for coking coal where they were when the mine was planned. I am convinced that there will be no volume production before the end of this year. But it is worth a 'small' punt.

For NZ, it is fantastic that PRC went ahead. NZ needs the mineral wealth under the ground to be extracted and generate wealth.

Luckily for NZ, PRC is not footed by taxpayers but by risk capital from investors.

Just not so good for the investors and shareholders.

They could have put into money in any number of Oz coal miners like MCC or GCL and doubled their money.

[Monkey Poms]

I have recently returned from a long holiday visiting the South Island of New Zealand, and whilst there I managed to make arrangements to visit Pike River Coal, as I and a number of friends and family have considerable holdings in the company.

After reading comments on Sharechat, together with Gordon’s over-optimistic comments not coming to fruition within his timescale, my confidence in PRC shares had dipped. This is the main reason for my visit to the mine – to see the “state of play” - believe me I am not a one eyed believer - for myself. Being in the coal trade I know what to look for.

Although I could not enter the mine shaft, the rest of the operation which I saw was impressive, if a little over-engineered, but certainly built to stand the test of time over twenty years. If the mine produced steam coal I would not invest a cent in the project. However, as a coking coal with a very low ash, the product is up there with the very best. Once it becomes established in the market it will command a premium price over the world spot price. Unfortunately PRC will not see the full benefit of this as most of its future production is pre sold, a necessity to keep the banks on board.

Shareholders have invested and PRC have spent in the region of NZ$ 320,000,000 to get the mine to the stage it is at the moment (about the price of planning and legal fees if the mine was to be developed in the UK).

I would be interested to know your views on the following and whether you would invest.

As a hypothesis, suppose someone offered on the NZX a new opportunity to buy into a new company, with a view to raising NZ$700,000,000 to fund the following:-

A coal project, production to start August 2010
Full planning consent obtained
All infrastructure in place
Earning potential over the life of the mine
Coking coal valuation at spot price as of 14th March 2010 US$240 per tonne F.O.B
18,000,000 tonnes of product x US$240 per tonne = US$4,320,000,000

Should the government allow in future all the coal to be extracted, the profit over the life of the mine would double, to US$8 billion plus (I would buy into this project).

I think I have convinced myself to buy more shares in Pike at NZ$ 0.90 cents. It would be cheap at twice the price!

PRC have achieved value for money despite some of the major problems they have faced. I would support a further share placement if the terms are similar to PRC’s last issue of shares. Should the new share issue be under-subscribed, we Poms will do our best to take up some of the slack.

With the coal cutting equipment available to PRC, 200 tonnes of washed coal per hour for 15 to 16 hours out of a 24 hour period should be achievable. It’s not a lot of coal, you could feel the frustration of the men who work on the washing plant waiting for the chance to process coal at full production.

Cheers
Monkey Pom

I would just like to thank Mouse for his technical description on the progress on the graben (11-03-10).

[Dr_Who]

The question now is not the value of the existing coal, but if they can meet the forecast deadline and potential further delays. Management have disappointed us in the past with not deliver on promised forecast. In fact, management even made forecast deadlines and in only weeks turned around to announce further delays of 6-12 months. The question now is management credibility and not value.

[Balance]

I have recently returned from a long holiday visiting the South Island of New Zealand, and whilst there I managed to make arrangements to visit Pike River Coal, as I and a number of friends and family have considerable holdings in the company.

After reading comments on Sharechat, together with Gordon’s over-optimistic comments not coming to fruition within his timescale, my confidence in PRC shares had dipped. This is the main reason for my visit to the mine – to see the “state of play” - believe me I am not a one eyed believer - for myself. Being in the coal trade I know what to look for.

Although I could not enter the mine shaft, the rest of the operation which I saw was impressive, if a little over-engineered, but certainly built to stand the test of time over twenty years. If the mine produced steam coal I would not invest a cent in the project. However, as a coking coal with a very low ash, the product is up there with the very best. Once it becomes established in the market it will command a premium price over the world spot price. Unfortunately PRC will not see the full benefit of this as most of its future production is pre sold, a necessity to keep the banks on board.

Shareholders have invested and PRC have spent in the region of NZ$ 320,000,000 to get the mine to the stage it is at the moment (about the price of planning and legal fees if the mine was to be developed in the UK).

I would be interested to know your views on the following and whether you would invest.

As a hypothesis, suppose someone offered on the NZX a new opportunity to buy into a new company, with a view to raising NZ$700,000,000 to fund the following:-

A coal project, production to start August 2010
Full planning consent obtained
All infrastructure in place
Earning potential over the life of the mine
Coking coal valuation at spot price as of 14th March 2010 US$240 per tonne F.O.B
18,000,000 tonnes of product x US$240 per tonne = US$4,320,000,000

Should the government allow in future all the coal to be extracted, the profit over the life of the mine would double, to US$8 billion plus (I would buy into this project).

I think I have convinced myself to buy more shares in Pike at NZ$ 0.90 cents. It would be cheap at twice the price!

PRC have achieved value for money despite some of the major problems they have faced. I would support a further share placement if the terms are similar to PRC’s last issue of shares. Should the new share issue be under-subscribed, we Poms will do our best to take up some of the slack.

With the coal cutting equipment available to PRC, 200 tonnes of washed coal per hour for 15 to 16 hours out of a 24 hour period should be achievable. It’s not a lot of coal, you could feel the frustration of the men who work on the washing plant waiting for the chance to process coal at full production.

Cheers
Monkey Pom

I would just like to thank Mouse for his technical description on the progress on the graben (11-03-10).

Of course we would all invest.

Except you are making some huge assumptions here :

- that the company will actually produce the 18m tonnes of coal,
- that the price of coal will stay up here,
- that the NZ$ will not spike higher,
- that mining and transportation costs will be economical,
- that management are competent ,
- etc.

They are particularly courageous assumptions given the history and track record of PRC.

Question : Would you invest in Telecom if XT was up and running smoothly and the company landed the government's broadband rollout at $2.16?

[mouse]

I think at anywhere under 90cents Pike is a buy. HOWEVER I would not put a penny into the stock if I lived in UK. Since how do I know what is happening?
What does bother me a little is if we hit further grabens. Will we then maybe have to abandon hydro mining and go to other methods of mining. What are those methods and how much will they cost as opposed to hydro mining?
Next little problem is China. Is it a bubble? Many think it is. If so, when it bursts, what will be the effect on coal prices?

All ideas, even wacky ones, welcome. I am ignorant.

[mouse]

My view is that Government, any sort of Govt, will have to let us take at least 40million tons. We could get more. But of course all costings have to be done on 18million tons.

[root]

Waiting, waiting, waiting........I seem to have misplaced my Rights Issue.

[Wilkins_Micawber]

Waiting, waiting, waiting........I seem to have misplaced my Rights Issue.

How slack of you ;) - sounds like you might qualify for a management position at PRC :(

[gambier33]

Hi Monkey, thanks for your input. You really reminded me of the old business adage that sunk costs are behind you and that you cannot change history or get most of that money back. You should, therefore, evaluate buying Pike as investment from today looking forward. As an almost completed project it definitely makes Pike look pretty good today at 90c, as you point out. Balance, quite validly, points out some of the other issues that also need to be taken into account:

- that the company will actually produce the 18m tonnes of coal,
- that the price of coal will stay up here,
- that the NZ$ will not spike higher,
- that mining and transportation costs will be economical,
- that management are competent

Business is always about risk and return. The graben is a reminder of that. The probability of all Balance's concerns going in the same direction at the same time is relatively low.
(hold NZO, hence interest in PRC).

[the machine]

monkey, thanks for your comments

m

[Balance]

My view is that Government, any sort of Govt, will have to let us take at least 40million tons. We could get more. But of course all costings have to be done on 18million tons.

They have to leave coal pillars so that there's no cave-ins and ground subsidence. Some parts are simply not economically accessible - eg. coal under the graben.

That's why they are targeting 18m tonnes.

You are making a heroic assumption that they can even get out 1m tonnes a year.

[Balance]

Hi Monkey, thanks for your input. You really reminded me of the old business adage that sunk costs are behind you and that you cannot change history or get most of that money back. You should, therefore, evaluate buying Pike as investment from today looking forward. As an almost completed project it definitely makes Pike look pretty good today at 90c, as you point out. Balance, quite validly, points out some of the other issues that also need to be taken into account:

- that the company will actually produce the 18m tonnes of coal,
- that the price of coal will stay up here,
- that the NZ$ will not spike higher,
- that mining and transportation costs will be economical,
- that management are competent

Business is always about risk and return. The graben is a reminder of that. The probability of all Balance's concerns going in the same direction at the same time is relatively low.
(hold NZO, hence interest in PRC).

Could have said the same thing about so many delays - what are the odds of them encountering soft rocks, hard rocks, fractured rocks, ventilation shaft collapses, grabens?

Try thinking of the next one.

I can - it's a long long thing.

[Balance]

I think at anywhere under 90cents Pike is a buy. HOWEVER I would not put a penny into the stock if I lived in UK. Since how do I know what is happening?
What does bother me a little is if we hit further grabens. Will we then maybe have to abandon hydro mining and go to other methods of mining. What are those methods and how much will they cost as opposed to hydro mining?
Next little problem is China. Is it a bubble? Many think it is. If so, when it bursts, what will be the effect on coal prices?

All ideas, even wacky ones, welcome. I am ignorant.

And you think that being NZ as a a shareholder that you will know what's happening?

Heck, even the management had no idea of the graben!

Or the weakness of the ventilation shaft.

And when they do, have they been releasing that infor to the market in a timely and accutate manner?

[mouse]

And you think that being NZ as a a shareholder that you will know what's happening?

Heck, even the management had no idea of the graben!

Or the weakness of the ventilation shaft.

And when they do, have they been releasing that infor to the market in a timely and accutate manner?

The mining engineering view is that up to 40million tons can be got out without major subsidence at the surface, but there will be some. Even on 18million tons there will be some subsidence. We, Pike, have to be good neighbours and kill their stoats and weasels plus ratty. With that done and a good rebound of native birdlife etc we should get approval for 40million tons. However, getting 18million tons out at present would be a surprise. Balance, can you calculate how much the next coal shipment will have cost us in dollars per ton? I guess that our running costs are one million dollars NZ a month. Any other offers?

I didnt get a rat in my trap last night. In Christchurch. They could be in the roof.

[Balance]

The mining engineering view is that up to 40million tons can be got out without major subsidence at the surface, but there will be some. Even on 18million tons there will be some subsidence. We, Pike, have to be good neighbours and kill their stoats and weasels plus ratty. With that done and a good rebound of native birdlife etc we should get approval for 40million tons. However, getting 18million tons out at present would be a surprise. Balance, can you calculate how much the next coal shipment will have cost us in dollars per ton? I guess that our running costs are one million dollars NZ a month. Any other offers?

I didnt get a rat in my trap last night. In Christchurch. They could be in the roof.

Same engineering staff who were surprised when the ventilation shaft collapsed and caused PRC to blow $45m?

Mouse, I have seen an analyst report projecting cash cost at NZ$130 per tonne for 2011.

Valuation of PRC is under $1.15.

[mouse]

Same engineering staff who were surprised when the ventilation shaft collapsed and caused PRC to blow $45m?

Mouse, I have seen an analyst report projecting cash cost at NZ$130 per tonne for 2011.

Valuation of PRC is under $1.15.

Which supposes they meet the target production. I think there is no show of that happening this year. I am very concerned about what happens if more Grabens and Hydro mining does not work. Anyone any ideas?
At NZ$130 per tonne for 2011, which seems to me to be quite hopeful, it should be OK. But not spectacular. And it depends on conditions underground. Plus machinery above ground. Fingers crossed?

[the machine]

seems like pike will get underwritten by that cyclone heading to queensland on the weekend, inturn likely to impact on future coking coal production.
by time sorted out that mess then pike should be over the line [and lucky to be over the line]

M

[Balance]

seems like pike will get underwritten by that cyclone heading to queensland on the weekend, inturn likely to impact on future coking coal production.
by time sorted out that mess then pike should be over the line [and lucky to be over the line]

M

Er - the cyclone is goingn to last forever? Cyclone only delaying shipments. Coal stockpile at ports are at actually "overflowing".

[mouse]

Same engineering staff who were surprised when the ventilation shaft collapsed and caused PRC to blow $45m?

Mouse, I have seen an analyst report projecting cash cost at NZ$130 per tonne for 2011.

Valuation of PRC is under $1.15.

Was the valuation of NZ$130 per tonne ex mine gate, or FOB at Lyttelton? A difference of course.

[Dr_Who]

If management can meet target and get their act together, PRC can be a good buy at these levels. The rewards is there if you are prepare to take the risks. I would love to own this stock again. The only thing stopping from buying this stock is management.

[Balance]

Was the valuation of NZ$130 per tonne ex mine gate, or FOB at Lyttelton? A difference of course.

$130 is cash cost per tonne - all up FOB required to get a ton to customer. Excludes depreciation - which could be another NZ$15 ton.

Depending on the shape the rights issue, the analyst expects valuation to drop towards $1.00 per share.

I suspect that's why PRC is struggling to get institutions to underwrite. Remember they recruited an industry expert in Oct 2009 to help them? PRC said at that time it could even be placing shares at a premium! Usual management bs and spin.

[pietrade]

Was passing thru Newcastle the other day and counted 31 ships anchored out, awaiting their turn.!!??

[Balance]

If management can meet target and get their act together, PRC can be a good buy at these levels. The rewards is there if you are prepare to take the risks. I would love to own this stock again. The only thing stopping from buying this stock is management.

Like moth to fire.

[mouse]

Like moth to fire.

No, No, No, not an underground fire in the mine to add to problems.
How do you put them out?

[the machine]

Er - the cyclone is goingn to last forever? Cyclone only delaying shipments. Coal stockpile at ports are at actually "overflowing".

your correct, the cyclone will neither last forever nor will the effects of it.

if some mines are flooded for 3 months, inturn disrupts supply, then coupled with pending jfy price setting, then that is all the time pike should need to get over the line

M

[Monkey Poms]

Best way to put a fire out in the mine is to avoid it in the first place. Take all the coal that can be mined safely out of the mine and eliminate the problem.

[mouse]

Best way to put a fire out in the mine is to avoid it in the first place. Take all the coal that can be mined safely out of the mine and eliminate the problem.

Brilliant reply. Is it possible?
Also, what do we do if we cannot use hydro mining due, for example, to too many grabens?

[Balance]

your correct, the cyclone will neither last forever nor will the effects of it.

if some mines are flooded for 3 months, inturn disrupts supply, then coupled with pending jfy price setting, then that is all the time pike should need to get over the line

M

Cyclone downgraded to tropical storm.

Market will now be flooded instead with the 'overflowing' coal stockpile?

[Casa del Energia]

No, No, No, not an underground fire in the mine to add to problems.
How do you put them out?

I don't mean to be scary "How do you put them out?" - You can't. Think Millerton Mine.

[mouse]

I don't mean to be scary "How do you put them out?" - You can't. Think Millerton Mine.

Exactly, and that is why its a punt.

[Casa del Energia]

Exactly, and that is why its a punt.

Wouldn't go so far as putting it into 'punt' territory - just another risk factor. At any rate, chances nowadays of runaway fire is a lot less - I understand that the millerton fire started because they (mine management) weren't as aware of spontaneous ignition due to overburden pressure as hopefully responsible mine management are today.

At any rate - great news announced today about mining on conservation land - - there is so little choice in NZ for listed investment -Pike is the only game in town for coal), But I'm a little narked by statements like..

"It's social welfare for multinationals. Mining companies are creaming off huge profits. They already receive large income tax concessions not available to ordinary Kiwis. They pay pitifully low royalties. We privatise our minerals by just giving them away to overseas corporations," Mr Tegg said.

It is gauling to us individual investors who stump up the hard earned cash to open up pike and (despite my sometimes Pollyanna-ish outlook on Pike) have in all reality taken a big risk, not yet seen a red cent in profit but are now collectively being berated as multinational fats cats. It seems awfully unfair.

[Balance]

From an old timer who originally advised me against investing in PRC - the biggest problem for PRC is that the West Coast geology has been shaped by earth movement activity over the centuries. Thus, fractured rocks, hard rocks etc all over the place.

Grabens are formed by earth movements - you get one and there's likely to be more.

Open pit is fine as you can dig and mine around the grabens. Tunneling - you hit one and you are stuffed until you blast your way through the freaking thing. Meanwhile, you have supply obligations to customers and ships waiting to load. Plus downtime for the staff etc. Very expensive exercise.

So keep the fingers crossed that the next graben is not several kilometers thick!

[Bixbite]

So keep the fingers crossed that the next graben is not several kilometers thick!

Copy and paste
“The Brunner coal deposit runs six kilometres north-south and up to one-half kilometres east-west, and averages about 7 metres in thickness.”

So it looks the logic…..?

[Balance]

Copy and paste
“The Brunner coal deposit runs six kilometres north-south and up to one-half kilometres east-west, and averages about 7 metres in thickness.”

So it looks the logic…..?

Read up on grabens and you will find they range from meters to kilometers.

Well, until they are encountered, who knows?

[Hoop]

The opinion poll on Stuff.co.nz (http://www.stuff.co.nz/) is interesting. Third of the way down on the right hand side of the webpage.

From reading the media news my first impression was that a high percentage of Nzers were against it....not so it seems.

Do you support the Government's plans to open conservation land to mining?

Results so far
Yes 40.0%
No 51.8%
I'm not sure 8.2%
Total votes 2360

[Dr_Who]

Whats is the forecast for getting the coal out and delivering it? What assurances have management put in place to meet the forecast?

[Balance]

Whats is the forecast for getting the coal out and delivering it? What assurances have management put in place to meet the forecast?


Give Gordon Ward a call as Mouse does.

[mouse]

Give Gordon Ward a call as Mouse does.

Send an enquiry to Catriona. She is helpful.
Also we need to put in submissions on mining to Govt plus write letters to the papers etc saying what a good idea it is.

[Aotea]

Just to add fuel to the fire, the Millerton fire isnt the only one burning on the Coast- what about Stockton? Ive walked over it and it cant be put out as far as I know...
As others have said the word on the street in West Coast pubs is the there are grabens for africa and thats why I have pulled my cash out of Pike. Last time I posted I said Pike was in trouble and I was banned for simply saying what Coasters in the pubs are saying. While Im not a geologist, Ive been up into Pike and its my opinion that this is a punt...Personally I'd like to see Pike succeed, but the geology coupled with management makes that a big ask. That said, I enjoy the posts on here!

[Balance]

As others have said the word on the street in West Coast pubs is the there are grabens for africa and thats why I have pulled my cash out of Pike.

Each graben encountered can take several months to blast through.

Sobering.

[Monkey Poms]

Would PRC have difficulty in cutting 200 tonnes of coal per hour target range? Approximately 15 years ago I shipped a container from N.Z to England loaded with 50% +25mm Strongman coal and 50% +25mm Island Block (I remember walking to the top of a ridge so high I thought I needed a pilots licence, the views were spectacular)! The opencast mining operation literally took off the top of a mountain ridge to expose about 15 meters of solid coal.

Unfortunately, I havent saved a sample of the Island Block coal, but managed to keep a sample of the Strongman coal. I believe the Strongman coal to be the best in the world, bar none, in appearance and burning quality for use as a household coal.

Comparing the above two coals with PR Coal - the PR Coal is soft and friable, similar to Island Block. If I attempted to use a household jet-sprayer on PR Coal it would probably splinter into pieces. Using the same jet-sprayer on the Strongman coal would probably polish it! (I have no intention of jet-spraying my sample of PR Coal as I carried it back home 12,000 miles using part of my luggage allowance)!

I wouldnt be confident of the hydro-mining cutting the Strongman coal, but I am with PR Coal. Once the operators of the hydro-mining equipment get the opportunity to use it, 200 tonnes per hour will be achieved.

[dsurf]

Good point it will soon to time to estimate time to full production. Hopefully there will be enough pit bottom access to divert operations to other seams or areas in the short term should other difficulties (grabens in particular) surface. Although frustrated with progress speed, progress is occurring and IF / when production does increase to profitable levels the SP will surely respond given the escalating international coal price

[Balance]

Why is the underwriting taking so long to organise?

Underwriters not wanting to be stuck with shares in a dysfunctional mine?

[Dr_Who]

Would PRC have difficulty in cutting 200 tonnes of coal per hour target range? Approximately 15 years ago I shipped a container from N.Z to England loaded with 50% +25mm Strongman coal and 50% +25mm Island Block (I remember walking to the top of a ridge so high I thought I needed a pilots licence, the views were spectacular)! The opencast mining operation literally took off the top of a mountain ridge to expose about 15 meters of solid coal.

Unfortunately, I havent saved a sample of the Island Block coal, but managed to keep a sample of the Strongman coal. I believe the Strongman coal to be the best in the world, bar none, in appearance and burning quality for use as a household coal.

Comparing the above two coals with PR Coal - the PR Coal is soft and friable, similar to Island Block. If I attempted to use a household jet-sprayer on PR Coal it would probably splinter into pieces. Using the same jet-sprayer on the Strongman coal would probably polish it! (I have no intention of jet-spraying my sample of PR Coal as I carried it back home 12,000 miles using part of my luggage allowance)!

I wouldnt be confident of the hydro-mining cutting the Strongman coal, but I am with PR Coal. Once the operators of the hydro-mining equipment get the opportunity to use it, 200 tonnes per hour will be achieved.

Thanks for the insight. You make some good points.

[geezy]

monkey poms, u should be hired by PRC :)

[mouse]

Why is the underwriting taking so long to organise?

Underwriters not wanting to be stuck with shares in a dysfunctional mine?

No they are organising for Monkey Poms to come over and help with the capital raising. Seriously, Monkey Poms posts are really useful. However, I am concerned about no information on the rights issue yet.

[the machine]

March 24 (Bloomberg) -- BHP Billiton Mitsubishi Alliance, the world’s largest steelmaking coal exporter, said it may take as long as six weeks for the Hay Point port to resume full operations after damage caused by Tropical Cyclone Ului.

The alliance has declared force majeure and notified customers it will miss shipments, Amanda Buckley, Melbourne- based spokeswoman for BHP, said in a statement. The rail line serving Hay Point in Australia’s Queensland state and the neighboring Dalrymple Bay port will reopen at 6 p.m. today, QRNational Coal said in an e-mailed statement.

Cyclone Ului made landfall on Australia’s northeastern coast early on March 21, with winds gusting to 200 kilometers (124 miles) an hour, damaging houses, triggering blackouts and closing ports and railway lines. Hay Point has two berths and a capacity to export 44 million metric tons of steelmaking coal a year. The terminal was closed March 11 because of strong winds.

“An early and incomplete assessment suggests that it will take three to six weeks for both berths to return to full operation,” Buckley said in the e-mailed statement. The storm damaged walkways, cabling and platforms, she said.

The alliance, known as BMA, is a joint venture between BHP and Tokyo-based Mitsubishi Corp. QRNational is a unit of QR Ltd., Australia’s largest coal transporter and owned by the state government. Force majeure is a contractual clause that allows companies to miss deliveries because of circumstances beyond their control.

BMA owns and operates seven mines in Queensland’s Bowen Basin. The alliance is monitoring conditions at the port and its coal mines in Queensland are gradually restarting after the bad weather, Buckley said.

Dalrymple Bay has resumed loading ships after the cyclone, spokesman Andrew Garratt said by telephone today.

To contact the reporter on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net

Last Updated: March 23, 2010 22:34 EDT


M

[Monkey Poms]

Good point it will soon to time to estimate time to full production. Hopefully there will be enough pit bottom access to divert operations to other seams or areas in the short term should other difficulties (grabens in particular) surface. Although frustrated with progress speed, progress is occurring and IF / when production does increase to profitable levels the SP will surely respond given the escalating international coal price

Good point you made dsurf regarding access to other seams from pit bottom.

I would hope management will leave an area of mineable coal close to pit bottom of easily mined coal as a reserve against the possibility of meeting new rock faults in future that you cant go under, over or around.

To Pay 150 employees for 4 months to do nothing wont be cheap, to cover for a period of 4 months stoppage time to due future rock faults.

At hopefully 60,000 tones per month production you need to leave coal in the reserve area to cover 240,000 tons.

As coal insitu under pressure stores at about 0.776 cubic meter per metric ton

0.776 x 240,000 = reserve area 186,240 cubic meters
This = an area 7 meters high and 14 meters wide, 1900 meters long

Sounds a lot if we apply the area and apply the equation to the area quoted by Bixbite on his chat 23-2-2010
6 kilometers long north to south and 1 1/2 kilometers east to west with average of 7 meter seam of coal

The area required for insurance reserve mining the last coal you intend to mine equals 0.33% of the total mining area. The numbers are vast, hope someone will check them.

Still no news on the share issue. I have a bad feeling on this one whereby shares will be offered to a third party possibly a mining company without the existing shareholders having the chance to subscribe to a new share issue, or possibly a financing company similar to Liberty Harbour, who I think were far to clever for the Pike team who negotiated the bond deal with Liberty - too many penalties. Well done NZO for removing L.H.

[bk]

I can't get to the website - last cached version according to Google with some error message about sql problems dates from last night

I can't get them on the phone either - call goes to an answer phone

I wonder what's up. Any guesses?

[Balance]

Still no news on the share issue. I have a bad feeling on this one whereby shares will be offered to a third party possibly a mining company without the existing shareholders having the chance to subscribe to a new share issue, or possibly a financing company similar to Liberty Harbour, who I think were far to clever for the Pike team who negotiated the bond deal with Liberty - too many penalties. Well done NZO for removing L.H.

Disagree. LH are not idiots. The convertible deal they had was already a very good one with full security, share price upside and great fixed rate return. For them to walk away means they are not comfortable PRC can make the mine produce to forecast. Two and a half year delay, tens of millions of costs blow-out and all kinds of problems tell me a lot of how poorly managed the whole
project is.

[KS]

I can't get to the website - last cached version according to Google with some error message about sql problems dates from last night

I can't get them on the phone either - call goes to an answer phone

I wonder what's up. Any guesses?

Technical problem at PRC's web host.
The host's web site is also down, and their network status speaks of "problems with an upstream provider".

[winner69]

Technical problem at PRC's web host.
The host's web site is also down, and their network status speaks of "problems with an upstream provider".

Hope their upstream provider isn't Graben ...

[J R Ewing]

Technical problem at PRC's web host.
The host's web site is also down, and their network status speaks of "problems with an upstream provider".

We have this same problem, today I wish WE were in the coal mining business!

[dsurf]

Disagree. LH are not idiots. The convertible deal they had was already a very good one with full security, share price upside and great fixed rate return. For them to walk away means they are not comfortable PRC can make the mine produce to forecast. Two and a half year delay, tens of millions of costs blow-out and all kinds of problems tell me a lot of how poorly managed the whole
project is.

Did LH walk out or did PRC pay them out (no doubt at a nice premium for LH) using NZO money so that NZO protected their investment by avoiding further severe penalty payments for PRC. As a NZO holder I hope that NZO fund the (6 month??? so we are told??? ) shortfall in working capital with interest paid in further equity.

[blockhead]

I suspect they havent paid LH out yet, the whole deal needs to be approved by PRC shareholders and I dont think that has happened as yet but it was worded like this,

"NZOG will provide a new convertible bond facility for US$28.9 million
with an interest rate of 10%, to fund the potential redemption of the Liberty
Harbor convertible bonds. NZOG's new bonds will mature in March 2012. They
will be convertible into Pike shares at the same conversion price as the
Liberty Harbor bonds (NZ$1.24 per share converted at an exchange rate of
US$0.70), subject to adjustment under anti-dilution provisions.
Pike River has the right to redeem the Liberty Harbor convertible bonds up
to certain share price levels "

So take what you can out of that

[Monkey Poms]

Disagree. LH are not idiots. The convertible deal they had was already a very good one with full security, share price upside and great fixed rate return. For them to walk away means they are not comfortable PRC can make the mine produce to forecast. Two and a half year delay, tens of millions of costs blow-out and all kinds of problems tell me a lot of how poorly managed the whole
project is.

I agree with you, Liberty Harbour are not idiots.

The NZO management are not idiots either, they sit on a mountain of cash. Earning very little interest on their US$ and maybe 6% on their NZ$ accounts. US$ holdings being eroded by the strength of NZ$. They will be under pressure from the market to achieve higher returns.

NZO looked at the LH bond agreement after seeing Pike being penalised by LH paying cash out for under-performing due to being too optimistic on the timing of ramp up to full production.

NZO are going to support their problem child until he grows up . At the same time extracting from Pike a deal to market a percentage of the future production of coal.
Although not yet approved NZO are nudging LH out.

How unlucky management were deciding to buy German coal cutting equipment with faulty tracks causing months of delay for Pike. They should have ordered the equipment from the UK. Everyone knows the UK have the edge in engineering. Look at the Sydney Harbour Bridge designed and manufactured in the UK. Germany cant compete with the Brits on that one as they cant in the manufacture of aeroplanes. Pommy Spitfires easily beat German Fokkers and Messerschmitts.

[boysy]

big call there about german manufacturing i think you would have to say the german messerschmitts had it over the brits spitfire and hurricane there were mitigating factors but lets not get drawn into a debate.

[Balance]

I agree with you, Liberty Harbour are not idiots.

The NZO management are not idiots either, they sit on a mountain of cash. Earning very little interest on their US$ and maybe 6% on their NZ$ accounts. US$ holdings being eroded by the strength of NZ$. They will be under pressure from the market to achieve higher returns.

NZO looked at the LH bond agreement after seeing Pike being penalised by LH paying cash out for under-performing due to being too optimistic on the timing of ramp up to full production.

NZO are going to support their problem child until he grows up . At the same time extracting from Pike a deal to market a percentage of the future production of coal.
Although not yet approved NZO are nudging LH out.

How unlucky management were deciding to buy German coal cutting equipment with faulty tracks causing months of delay for Pike. They should have ordered the equipment from the UK. Everyone knows the UK have the edge in engineering. Look at the Sydney Harbour Bridge designed and manufactured in the UK. Germany cant compete with the Brits on that one as they cant in the manufacture of aeroplanes. Pommy Spitfires easily beat German Fokkers and Messerschmitts.

NZO & PPP - that tells you all you want to know how smart NZO management really are.

[Hoop]

Writing about England V Germany in quality of manufactured products brings up an interesting topic about which countries are growing in manufacturing size and which aren't. Thermal coal is needed by Manufacturing countries so one can see from the table below which Countries will be needing large amounts of coal + other raw materials now and in the future

.
The table below is crappy, so click on the site for a much better view http://investing.curiouscatblog.net/2009/10/13/data-on-the-largest-manufacturing-countries-in-2008/


http://i458.photobucket.com/albums/qq306/Hoop_1/moz-screenshot-2.png

Its interesting to note the faster growing Countries...China is no surprise to anyone ..but Germany is up there too in 4th spot double the size of UK in 6th spot.
Notice Russia the comeback kid.. WOW.. and also Spain Korea India with rapid growth rate. Brazil is there as well
USA No 1 has slow growth and will lose its top spot to China within the next 3 years.. No3 Japan is going nowhere and may lose its No3 spot to Germany within the next 5 years.
Very interesting seeing the shift of world power

[Monkey Poms]

You are right with that one balance at the time of purchase by NZO of PPP shares PPP had 100 million us$ in the bank with the income from Tue over the next couple of years NZO have the shares for free.

[blockhead]

They should have ordered the equipment from the UK. Everyone knows the UK have the edge in engineering.
Above quoted from Monkey Pom

Not really sure how much validity in that statement MP, Porsche always looked to perform a bit better than Austin Marina to me !!

[winner69]

.
Above quoted from Monkey Pom

Not really sure how much validity in that statement MP, Porsche always looked to perform a bit better than Austin Marina to me !!

Still see the odd Morris Minor around .... most in perfect condition

[Balance]

You are right with that one balance at the time of purchase by NZO of PPP shares PPP had 100 million us$ in the bank with the income from Tue over the next couple of years NZO have the shares for free.

Hmm. You sure you have been following PPP closely?

[Monkey Poms]

.
Above quoted from Monkey Pom

Not really sure how much validity in that statement MP, Porsche always looked to perform a bit better than Austin Marina to me !!
Got me on that one blockhead,I thought all the Marina evidence turned to rust.

[Baddarcy]

Sarah-Jane Tasker From: The Australian March 29, 2010 12:00AM

THE closure of BHP Billiton's Hay Point coal terminal in Queensland is forcing up the spot price.
According to Metal Bulletin, a cargo of premium quality coal from Australia has been sold at $US240 a tonne while offer prices for the steel feed are about $US240 to $US250 a tonne, up from $US220 to $US225 a tonne.

BHP announced last week that the terminal suffered damage from cyclone Ului and the port remained closed, forcing BHP to declare force majeure on shipments from the port.

Hay Point, which is part of the miner's BHP Mitsubishi Alliance with Mitsubishi, has been closed since March 11 because of high seas, and rail shipments to the terminal stopped on March 18.

BMA is the world's biggest producer of coking coal for the seaborne market, having a total mine capacity of about 58 million tonnes a year. The bulk of that material is exported through Hay Point, which has capacity of up to 45 million tonnes a year.

BHP finalised quarterly coking coal export contracts with Japan's JFE Holdings earlier this month for $US200 a tonne, 55 per cent above the 2008-09 contract price of $US129/tonne and close to the prevailing spot rate of $US220/tonne.

[Sideshow Bob]

It would be good news, if we were producing (more)

[Balance]

It would be good news, if we were producing (more)

Haha - you mean if PRC was producing any!

[the machine]

Haha - you mean if PRC was producing any!

ironically sp went up today

murphy's law must dictate that if any bad news the sp goes up and good news the sp goes down

M

[dsurf]

Eventually PRC will be producing - The reserves will still be there when it does and the value of those reserves has increased so the SP should be stable / supported. Also the potential to mine other areas in the ranges must add some value?

[digger]

Eventually PRC will be producing - The reserves will still be there when it does and the value of those reserves has increased so the SP should be stable / supported. Also the potential to mine other areas in the ranges must add some value?

I think you are on to it dsurf. It is the potential to mine in other areas that is hot before the govt at the moment that is now calling the shots IMHO. In fact i would go so far to say that that is what is delaying the cash issue or whatever money rasing scheme PRC will decide. It would just be sooo much better for them to show a long future in the mining industry with a growing reserve before they again front to the public. Soon it will not be just the PRC we have known but one with a greater future.That future will be better because it will have govt support,a growing reserve and a slowly gaining experience in the mining area. It will also once it gets under way suddenly look good as the three one off incidences that have bugged it will be behinh it --ventulation shaft,garbon and the german mining equipment.Also to note is that the costs overruns are not greater than the increase in HCC since the mine started its development.

[Hoop]

Agree Dsurf,Digger.

PRC has done alot of DOC's work. I assume to convince the Govt and People of NZ that there is such a thing as "Environment responsible mining". If this strategy pays off then surely PRC would be the front runner for any new areas opened up by Government and there is some in the neighbourhood to be released.

After looking after lonely male ducks and native snails and trapping 4 legged pests such as rats etc I would've be peed of if Solid Energy got the nod ahead of PRC.... lets hope not....yes Digger PRC maybe awaiting that anticipated good news from the Govt.

[Balance]

Eventually PRC will be producing - The reserves will still be there when it does and the value of those reserves has increased so the SP should be stable / supported. Also the potential to mine other areas in the ranges must add some value?

2.5 years later, still the same thing said.

Reserves are only worth something if they can be taken out of the ground and at an economic cost.

Heck, bananas can be grown in hot houses in NZ but why bother?

[Balance]

I think you are on to it dsurf. It is the potential to mine in other areas that is hot before the govt at the moment that is now calling the shots IMHO. In fact i would go so far to say that that is what is delaying the cash issue or whatever money rasing scheme PRC will decide. It would just be sooo much better for them to show a long future in the mining industry with a growing reserve before they again front to the public. Soon it will not be just the PRC we have known but one with a greater future.That future will be better because it will have govt support,a growing reserve and a slowly gaining experience in the mining area. It will also once it gets under way suddenly look good as the three one off incidences that have bugged it will be behinh it --ventulation shaft,garbon and the german mining equipment.Also to note is that the costs overruns are not greater than the increase in HCC since the mine started its development.

The problems show that PRC's management has no handle on the geological challenges of the mine.

What is delaying the cash issue is the inability to find underwriters.

[Sideshow Bob]

Haha - you mean if PRC was producing any!

Well they have 20,000MT tonnes which came from somewhere

[Monkey Poms]

I always look forward to logging on to the Pike Sharetrader page. However, due to lack of news updates regarding any progress, Sharetrader members have little to debate. All will change once Gordon breaks his vow of silence and returns from his holiday in the monastery!

Following reports by various financial commentators on the mining cost per tonne of the coal delivered to port, I have put together a "guesstimate", based on a lot of assumptions. It's a "back of the envelope" guess, which has served me well in the past. The "guesstimate" is based on a daily production rate, with a lot of assumptions on cost. Some of the pre-production costs ie trip to Hong Kong and delivering concrete by helicopter will cease and be replaced by hefty bank charges for such things as confirming letters of credit.

Sample of costs incurred based on following assumptions at the time of full production:

150 employees, excluding management, x NZ$ 80,000 pa / 365 days = NZ$ 32,876 cost per day
Electricity & diesel = NZ$ 9,500 cost per day
Depreciation assuming final cost of mine development is
NZ$ 400,000,000 over 10 years = NZ$ 40,000,000 per year / 365 days = NZ$ 109,589 cost per day

Road and rail transport based on NZ$ 43 per tonne delivered to port

Income based on 1 tonne of coal = US$ 200 x conversion 0.70 = NZ$ 285.71 per tonne

Results simplified and rounded off into zones:

Red Zone = 1,000tn per day, daily income NZ$ 285,714
(comment - will cover costs no dividend)

Amber Zone = 2,000tn per day, daily income NZ$ 571,428
(comment - whopping dividend at 12%. Management, this is not good enough)

Green Zone = 3,000tn per day, daily income NZ$ 857,142

In the distance stands a large tree. At the very top of the tree are a group of relieved and happy management monkeys.

"How did we manage to pull this off?"
"We learnt the job as we went on and got there in the end"
"But we took a lot of stick and were pelted with bananas from the shareholder monkeys, weren't we?"

They look down at the happy, smiling shareholder monkeys standing tall at the base of the tree,
A monkey on the left looks up to the top of the tree and sees a group of lucky B _ _ _ _ _ _ S
A monkey on the right looks up and sees a bunch of A R_ _ _ _ _ _ S

One small group of sad, unsmiling monkeys in the distance with arched bodies (must be something wrong with their spines) gather together, thinking
"Bugger! - we sold out to the Aussies and those lucky Pommie B _ _ _ _ _ _ S"!

So, guys, bearing in mind we are in the Green Zone, what are your views? Do you agree with the monkey on the left or the monkey on the right?

[Balance]

Management as monkeys - very appropriate.

Monkeys as shareholders - even more appropriate.

Maybe, an ape like a baboon as management?

Or did you mean buffoon?

[Mr Tommy]

Management as monkeys - very appropriate.

Monkeys as shareholders - even more appropriate.

Maybe, an ape like a baboon as management?

Or did you mean buffoon?


And which of these categories do you fall into ?

[Balance]

And which of these categories do you fall into ?

LOL. The truth hurts huh?

[Mr Tommy]

LOL. The truth hurts huh?

Mushrooms could be more appropriate. Kept in the dark and fed on BS

[Monkey Poms]

REF: Mr Tommy / Balance: Come on girls the monkey article is a little bit of fun.

I actually think the Pike management are doing a good job. I sometimes take a pop at the messenger for being over optimistic. ( I wouldn't shoot the messenger. )

Clearly Pike are not where they should be regarding development work and coal production. Somewhere in the past a mistake has been made, 10's of millions of NZ$ have been spent which could have been avoided.

I don't know for sure I have no evidence, I will take a stab at where I think things went wrong (Mouse may be able to dig some info on this with his contact). Pike River Coal would have subcontracted professional surveyors and a drilling company to drill the four boreholes at the mine to determine proof and depth of coal from the surface, thickness of the coal seams, angle of the seams. A sharp angle may suggest some sort of rock fault. If correct, the other three borehole samples should tell you after taking into consideration the various heights.

The first borehole will set a mark for a datum line. The following three boreholes would be drilled at varying heights on the surface. The surveyor would submit a report to PRC. The information from surveyors would have been taken as gospel by management as it should have been. They are professionals, they employed professionals to do the job, PRC would have paid for the surveys and drilling information and assume it to be correct. Thats it.

From the surveyors report PRC would assemble a plan of the mine including the direction of the tunnel, say North at tunnel entrance to South at pit bottom, a distance of 2.3 Kilometers.

I am sure we all know about the graben, if the tunnel leading to pit bottom could be altered 5 degrees to the West, pit bottom would now be 200 meters west on the far side of the graben. We would now be in the Green Zone. However, we are now where we are, lets get on with it.

Incidentally, I agree with the monkey on the left.

[Bixbite]

About 2 - 3 years ago, when the tunnel entrance was being drilled, someone posted here about the name which they called it. Ha, let's see how those old folks get through the h_ _ _ _.

[fabs]

Are you refering to that horrible Myth about the dreaded ROCK -OVERHANG?
HOW PROPHETIC WAS THAT?

[mouse]

If you think Pike, we, have trouble, visit NZWindfarms, NWF, on Sharechat. The last couple of pages. Will make you think Pike is Rolls Royce in comparison. Comments please.

[Lion]

April 6th 2011, PRC last traded at $3.16


Ha ha haaa - you bunch of suckers!! Pike's just burst through $3, up a whole dollar since start of 2011, there's no stopping it now. Thanks for selling me all those cheap shares at the beginning of last year! LOL! Ha ha f-ing ha! Surely you realised that I was just down-ramping so I could hoover up as many as I could? I'm living a sweet retirement now, thanks to you suckers. At the risk of repeating myself, ha ha ha! Pike was always going to be an absolute winner once they got past the initial problems, anyone could see that, anyone but you bunch of suckers! LOL!

Yeah, yeah, OK, I have to admit you were right, Balance, but can't you stop crowing so much now?
You cost me a lot of money when I sold up back in April 2010 because of you, ya b*stard!!

[Balance]

April 6th 2011, PRC last traded at $0.16

Yeah, yeah, OK, I have to admit you were right, Balance, but can't you stop crowing so much now?
You saved me a lot of money when I sold up back in April 2010 because of you, ya b*stard!!

It's okay.

Glad you listened.

Amazing how many more problems they encountered eh?

[mouse]

Page 6. Table 1. This gives timing, previous forecast and the current forecast. Basically we start breaking even, I think, after February 2011. At February 2011 we hope to be mining 12 metres per day.
Now this is a little confused since the forecasts relate to Roadway Development. However, if they could get better figures out by estimating coal mined then I think we would have that quoted instead.:confused:

PRODUCTION PROFILE, following Table 1/., indicates 750,000 tonnes for the year to 30 June 2011. With output meeting their targets shortly after. :) However, I am still of the opinion that 70,000 tonnes per month is about what we will get. Hopefully not less. :)

No indication of any 'cash call'. Maybe it wont happen. Maybe ACC will buy the lot? (A guess, but on the cards). :(

[dsurf]

SP activity suggests an announcement coming very soon? Graben through?

[Billy Boy]

SP activity suggests an announcement coming very soon? Graben through?
Yes....
and moving in the Water Cuitting Guns.

[blockhead]

Would you buy a few options if you had a lazy quid at the moment BB ??

[MPC]

I bought a few yesterday and then sold them today. Nice little pocket filler thank you.
Maybe should have held but a winning trade is always nice. Have to save for my Porsche.

Cheers,
MPC

[blockhead]

Will yours be a GT3 MPC or do you not have such lofty aspirations ?

Couldnt wait for BB's advice so hopped in and got a few options @ 19c just to be in the game.

[Billy Boy]

Blocky
I topped up big time @ 15c. I would say you are not too late @ 19c.
See what happens 2morrow & Friday when the traders get out.
By the way.... Where did you get that bloody hay burner. I know where you keep
it. Being able to watch you ride it...... welll :D:D:D.
The hand brake is on the right.:D
Sterring wheel.. is those two funny little levers sticking outta his head :D
Dont lift the brushy bit at the back or you could be in the sh*t.:eek2:
etc etc...:ohmy:
Cheers BB

[MPC]

I am after an ugly but cool retro targa.
When Pike reaches $3 I am there.

Cheers,
MPC

[blockhead]

When NZO gets to $3 I'm there as well...thats a GT3, if PRC gets to $3 I'll be able to put a new set of tyres on the GT3.

Only had the hayburner for a day BB, we reopened the Ferry Hotel at Arundel for a day and needed appropriate transport to celebrate the occasion

[Billy Boy]

Only had the hayburner for a day BB, we reopened the Ferry Hotel at Arundel for a day and needed appropriate transport to celebrate the occasion
:scared::eek2::eek2:... Ye-gods Blocky
Did they let you dirve :ohmy:..:ohmy:.. You had better stick prcoa @ 19c.
safer bet ???... :ohmy::ohmy:
cheers & Beers
BB :D

[bung5]

Would not be surpised if there was annoucment coming up in the next few days with the share price taking off in the last few days

[Billy Boy]

Well Blocky,( PRCOA)
I would have said , anything under 20c would be good buying.
Seams they are set to begin ramp-up. So, end of this quarter could see the hydro
mining begin.
Coal price looking good. Maybe another shipment ready to go.
They no doubt will tell us all when it suits them.
A quick look at the "market stackings" and size of trades, speaks volumes.
BB

[blockhead]

I only got 10,000 of them but if there is an attractive rights issue that should give me a leg in there, as always..interesting times !

[patrick]

Big rat and/or stoat catch?

[foodee]

Have recently switched prcoa to head share for out lay of 81c/share.
Interesting times ahead.

[Hoop]

Would not be surpised if there was annoucment coming up in the next few days with the share price taking off in the last few days

I think the NZX should issue Pike a speeding ticket.

If the NZX don't issue a price query.....then maybe us shareholders should ring the local pub to find out...or perhaps the DOC office....eh

[mouse]

I think the NZX should issue Pike a speeding ticket.

If the NZX don't issue a price query.....then maybe us shareholders should ring the local pub to find out...or perhaps the DOC office....eh

Rat and stoat kill up.

[Baddarcy]

Maybe they found something interesting in the graben, like gold haha:)

[Lion]

PRC, 109c today, up 10c for the day, up 15c for the week, up 20c in two weeks

Ah, Balance - yeah, looks right you were right again, the shareprice does seem to be heading down to 16c lately.

Can't you buy up a few more to boost the price please?

[Sideshow Bob]

I think the NZX should issue Pike a speeding ticket.

If the NZX don't issue a price query.....then maybe us shareholders should ring the local pub to find out...or perhaps the DOC office....eh

Explaination is easy. There will be an announcement tomorrow with a substantial shareholder notice with Balance taking a major shareholding......... ;-)

[digger]

Explaination is easy. There will be an announcement tomorrow with a substantial shareholder notice with Balance taking a major shareholding......... ;-)+

This comment is more than likely correct. Although the announcement will not have Balance as given but his real name with no link back. There have been a number of negative commenters over the years who have just used sharetrader to ramp the price in their desired direction.The rest of us just have to wise up to this and take what they say with this in mind. So Balance buying up while ramping down would not suprise me,as there is simple no other reason to invest sooooo much time in a stock you keep saying is crap.

[Billy Boy]

You are so right Digger
Notice how quite Balance has been as of late...
BB

[Wilkins_Micawber]

From PRC ... "The Company is not aware of any material information concerning it that has not been announced which, if known, could be an explanation for recent trading in the securities of the Company."

Perhaps I am being too harsh but this seems a bit rich to me - I have been thinking for a while that by now there must surely be some info due to the market about progress through the graben or the capitol raising. I find it rather hard to believe that something is not progressing, with word getting out about it, which could at least contribute to this sort of share price increase (or maybe with PRC I am just being a bit too optimistic/hopeful :( )

[blockhead]

Perhaps the Directors should head down the Blackball boozer and see what the word is over by the pool table !

[COLIN]

+

There have been a number of negative commenters over the years who have just used sharetrader to ramp the price in their desired direction.The rest of us just have to wise up to this and take what they say with this in mind. So Balance buying up while ramping down would not suprise me,as there is simple no other reason to invest sooooo much time in a stock you keep saying is crap.

He was probably trying to achieve the same effect with SCF! (Those acquainted with that thread, on NZDX, will know the saga.)

[777]

I thought he was just negative on everything. Have had him on my ignore list for the past 3 months so I don't have to read his postings.

[JoeBlogs]

I was a bit dubious about price action over the last couple of days, but a decent bit of volume through today can only be a good thing. Technically I'd say it's a pretty convincing reversal - hopefully this time fundamentals won't cap it too quickly!

I've noticed analysts quietly shifting to the upside over the last couple of months. I also like the fact that management have wound back their production forcasts - perhaps they are finally starting to see the pattern that's stared us all in the face for so long! I would much rather they set less exciting, but more relistic targets they can actually meet.

[Mr Tommy]

JB Were put out a BUY recommendation yesterday, which probably explains the rise. Target of 1.50 in 12 months.

[Casa del Energia]

JB Were put out a BUY recommendation yesterday, which probably explains the rise. Target of 1.50 in 12 months.

Oh ye of little faith - Looks like you sold down too soon. But I won't gloat, Mr T.

[root]

Don't get me wrong, I'm enjoying just holding the shares and watching the price go up, but is there still a rights isuue on the horizon? Any thoughts?

[mouse]

Perhaps the Directors should head down the Blackball boozer and see what the word is over by the pool table !

I phoned Scotty up at the Blackball Hilton. Phone 03-732-4705. He told me that he thought the rise in the share price is due to them getting coal out. Now how much I do not know. Nor how reliable the gossip at Blackball Hilton is. I cannot give you a 'nudge, nudge, wink, wink.' at present. But I would tend to hold. Disclosure, I recommended buy at 85 cents, lost my nerve and bought at 89 cents. A bad mistake. But not a mistake to buy. Now, do not all phone the Blackball Hilton, but an update in a few days may be useful.
Also note, if Pike were getting out very substantial lumps of coal then maybe they would have made an announcemet. However, if what they are getting lines up with forecasts then no announcement is required. They have already told us and, we of little faith, just did not believe them. A bit like Cassandra.
She of course could only prophesy woe. And further, no one would believe her. But hopefully this is not woe.

[Jonathan]

I am glad i brought at 92c. I was waiting for the price to drop, lucky I didn't! Lets hope the tide is turning and things are finally on the up and up...

[waterboy]

There is a lot of activity amongst the aussi coal miners with takeovers at the moment not to mention a good run on commodities, I think PRC is just riding the wave rather than doing anything amazing like actually meeting a target

[geezy]

i think the recent rival bidding M & A activity at McArthurs coal and commodity strength is what is causing the PRC spike.

Perhaps, could it be someone taking over PRC?

[blockhead]

I think you may be right, I grabbed a profit today and hopped out again

[Unicorn]

PRC still has a significant capital raising to be completed. It desperately needs that money in order to keep going, if it is to become a producer. So the possibility of a large number of discounted shares coming on the market has undoubtedly been weighing on the share price for some time. After the price rise this week, my guess is that the capital raising details will be announced next week, and it will be on better terms than many had expected.

I guess NZX would not see such information as requiring disclosure to the wider market. After all the share price has only moved by about 25% over 3 days. And previously tunnel collapses and unexpected grabens with multi-month delays was also not considered to need disclosure!

[Sehnsucht888]

And Balance is unsuprisingly? quiet... Come on - where is the Balanced perspective...

[the machine]

bloomberg article the other day had 218 ships waiting to load coal up near hay point - I think it is all coking coal from north queensland.
queue due to rain and a cyclone, with port damage.

April 8 (Bloomberg) -- BHP Billiton Mitsubishi Alliance, the world’s largest steelmaking coal exporter, reopened a berth at the cyclone damaged Hay Point coal terminal in Queensland, easing congestion at Australian ports.

Further tests and repair work are planned for Berth 1 and an earlier estimate of three to six weeks for the return of full operations at the port remains in place, Fiona Martin, Melbourne-based spokeswoman for BHP, said in an e-mailed statement today. A vessel started taking on coal from Berth 2 on April 2, she said.

Ships lining up outside ports on Australia’s east coast waiting to load cargoes have climbed to 218, from last year’s record of 210, as heavy rain and flooding constrained exports, according to Commodore Research & Consultancy. Hay Point closed March 11 due to strong winds from the Tropical Cyclone Ului. Australia is the world’s largest coal exporter.

“Two months of heavy rain and flooding have resulted in heavy port congestion, which ultimately increased at the end of March due to the region being hit by Cyclone Ului,” Commodore Research said in an April 5 client note. The ship queue was at 221 a week ago, it said.

Cyclone Ului made landfall on Australia’s northeastern coast early March 21, with winds gusting to 200 kilometers (124 miles) an hour, damaging houses, triggering blackouts and closing ports and railway lines. Hay Point has two berths and the capacity to export 44 million metric tons of steelmaking coal a year. The storm damaged walkways, cabling and platforms.

Dalrymple Bay terminal, which neighbors Hay Point, resumed loading ships after the cyclone. The port handles coal from as many as 18 mines in Queensland’s Bowen Basin region and customers include Rio Tinto Group, Xstrata Plc and Macarthur Coal Ltd.




this helps with coking coal annual price setting, inturn pike will see the upside

m

[Monkey Poms]

I think you may be right, I grabbed a profit today and hopped out again

I think hopping in and out of pike may be ok up to August then beware blockhead when production reaches 3000 tons per day (The green zone ) a printing press would be hard pushed to print $ compared to the rate of profit which pike could achieve if all things go to plan.
hope you are in when the real action starts.
i have been in from the beginning, Missed some of the excitement. I do not want to be left behind.

[Balance]

And Balance is unsuprisingly? quiet... Come on - where is the Balanced perspective...

Here, guys.

Loving the price action.

[digger]

Here, guys.

Loving the price action.

Now why would you be loving it given you have rubbished this share for ages?Perhaps if anyone is still listening to what you say it is well past time they discounted it and pay attention to what you do.Bought a big stake did you while downplaying the share and managment.

[Balance]

Now why would you be loving it given you have rubbished this share for ages?Perhaps if anyone is still listening to what you say it is well past time they discounted it and pay attention to what you do.Bought a big stake did you while downplaying the share and managment.

There's more than one way to play a stock like PRC than the one-eyed buy buy mindset.

BTW - pity you guys have not been listening and bought MCC instead.

[rabcat]

I would like to say that I found Balance's comments over the last month or so enlightening.After a little independent research of my own decided to invest in PRC below 90 cents. Thank you Balance keep up the good work!

[mouse]

I would like to say that I found Balance's comments over the last month or so enlightening.After a little independent research of my own decided to invest in PRC below 90 cents. Thank you Balance keep up the good work!

I agree, price is everything. I lost my nerve and bought at 89cents, should have held out for 85 cents buy. I was rubbished for posting it was our 'Patriotic Duty' to buy Pike below 90cents. It was, plus it was profitable. I avoid shares where I cannot knock on the door of the company to see how they are doing. Or phone the local pub.

[geezy]

there an article on herald mentioning that the price spike could be due to ppl cashing out on mccarthurs deal and pouring money into PRC?

[Balance]

I would like to say that I found Balance's comments over the last month or so enlightening.After a little independent research of my own decided to invest in PRC below 90 cents. Thank you Balance keep up the good work!

My pleasure, Rabcat.

Pity you did not buy MCC.

[Billy Boy]

OK we got a trading halt.... what the predictions/reason !!
BB

[sideline]

OK we got a trading halt.... what the predictions/reason !!
BB

Whatever the recent price runup was about will be finally announced to the rest of the market!

[Dr_Who]

Right issue

[JoeBlogs]

Apart from a further reduction to the year to 30 June 11 production forcast (620kt from 700-800kt) this looks pretty good to me. The equity raising terms look favourable, especially to option holders. In seam drilling report is of greatest significance from my POV.

[dsurf]

Wondering how to value the rights. I know it all depends on value of head share but not as simple for the options which seem to be winning with free rights per option instead of % of value of head.

[JoeBlogs]

I know what you mean, I can't see how options are afforded the same rights as heads, but that seems to be what they're saying. The orders for the OAs reflect that. As an option holder (only) I will be pleasantly supprised if this is how it works.

The way I've valued them (based on heads @ $1.10) is ex rights heads at $1.08, therefore rights value 20c. This is simplistic, and doesn't account for dilution casued by options and placement, but it won't be far off I wouldn't think.

Why the trading halt until end of trade? Seems a little excessive for a largely anticipated release? Perhaps forcing traders to sleep on it before voting with their feet or otherwise? I haven't seen this happen recently though (trading halt extended AFTER all info released), anyone else shed some light?

Cheers

[patrick]

Joe,
Terms of rights give them the same entitlement as shares in event of new issue....so there was no option for the Directors.

[JoeBlogs]

Thanks Patrick

In that case I can see this pushing the options up a bit in the short term!

[Baddarcy]

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

I did point out the anomaly regarding PRCOA being treated the same as PRC in any future capital raisings some months back. I guess it was an anti-dilution strategy that wasn’t all well thought out?

[Billy Boy]

In that case I can see this pushing the options up a bit in the short term!

You say in the short term !. Ramping up with a reasonable amount of confidence through drilling ahead
suggests the "short term" wont be so short. I think there will be the initial spike, but that wont come
back so far this time. (maybe). Interesting times ahead
BB

[JoeBlogs]

Hope so BB, and of course the NZ government is helping out from the sidelines with their current positioning.

[mouse]

:)Rights at 88 cents are just one cent less than the 89 cents I paid for my last parcel a couple of months ago. Pike shares are quite volatile, thus the price of 'rights' have to reflect both the present price but also price fluctuations. Maybe 5 cents is a reasonable valuation of the rights. Small investors will not be able to buy many shares under their allocation anyway.:(
Further, why should people buy 'rights' today at 88 cents when they refused to buy shares at 85 cents a couple of months ago?
I will be taking up my 900 rights, but find the situation a bit confusing.
:confused:

Two shares for every 19 held is rather cutting out the small shareholder. But at least we were thought about!

[Balance]

:)Rights at 88 cents are just one cent less than the 89 cents I paid for my last parcel a couple of months ago. Pike shares are quite volatile, thus the price of 'rights' have to reflect both the present price but also price fluctuations. Maybe 5 cents is a reasonable valuation of the rights. Small investors will not be able to buy many shares under their allocation anyway.:(
Further, why should people buy 'rights' today at 88 cents when they refused to buy shares at 85 cents a couple of months ago?
I will be taking up my 400 rights, but find the situation a bit confusing.
:confused:

Two shares for every 19 held is rather cutting out the small shareholder. But at least we were thought about!

Er - why are people prepared to pay $2.25 today for RBD when they could have bought for less than $1.00 a year ago?

Likewise, why were people prepared to buy DIL at 55c today when they could have bought at under 35 cents 2 months ago?

Doh!

[mouse]

Er - why are people prepared to pay $2.25 today for RBD when they could have bought for less than $1.00 a year ago?

Likewise, why were people prepared to buy DIL at 55c today when they could have bought at under 35 cents 2 months ago?

Doh!

Most confusing. Since the essential information today is the same as two months ago, except it takes us longer maybe to get towards full production. 'Theres none so queer as folks.'

[Baddarcy]

Most confusing. Since the essential information today is the same as two months ago, except it takes us longer maybe to get towards full production. 'Theres none so queer as folks.'

Uncertainty scares people, the more uncertainty in a situation the more scared people are. Scared people sell they don't buy.

While todays announcement seemed completely obvious to me and you could see it coming from 6 months ago (and probably many other contributors in this thread), for many people it will remove uncertainty and thus they will buy.

[mr.needs]

The way I've valued them (based on heads @ $1.10) is ex rights heads at $1.08, therefore rights value 20c. This is simplistic, and doesn't account for dilution casued by options and placement, but it won't be far off I wouldn't think.

In that case I can see this pushing the options up a bit in the short term!

Perhaps not as simple as you first thought Joe.

I value I calculated, including the dilution of the options and placement, using the method shown in the investor presentation for the head shares is $1.069. Very close to what you got.

This gives a rights price of 18.9c and because of the 2 for 18.9 (coincidence I'm sure!) rights issue the value of every option increases by 2c.

What you haven't taken into account is fact the ex rights share price has fallen by 3c to $1.07.

Before the rights issue, the share price needed to increase by 13.6% for the options to be in the money. After the 3c drop they now need to increase by 16.9% to be in the money.

By my calculations, the option holder is now worse off unless the share price rises above approx $2 before expiry.

[JoeBlogs]

Yeah I did take all that into account. What I'm alluding to is that a 2% change in share price is negligable in a share that is so volitile, and it will be hard to even measure a change that is soley attributable to rights issue. Barring a major plummet in the heads, I can only see this being good for the OAs in the short term. After that, it's back to the standard performance measures.

Also, if you're going to look at option pricing given a 3 c fall in the heads, you'd be looking at around a 1.5 c reduction in value (65% vol), so theoretically you'll get an extra 0.5 c out of your OAs (which are currently looking undervalued by 2-3 c)!

Maybe winner69 can help us out with this?

[mr.needs]

Yeah I did take all that into account. What I'm alluding to is that a 2% change in share price is negligable in a share that is so volitile, and it will be hard to even measure a change that is soley attributable to rights issue. Barring a major plummet in the heads, I can only see this being good for the OAs in the short term. After that, it's back to the standard performance measures.

Also, if you're going to look at option pricing given a 3 c fall in the heads, you'd be looking at around a 1.5 c reduction in value (65% vol), so theoretically you'll get an extra 0.5 c out of your OAs (which are currently looking undervalued by 2-3 c)!

Maybe winner69 can help us out with this?

I agree option pricing is very difficult. You don't need to look past Long Term Capital Management (run by the Nobel prize winners who developed the option pricing models used today) to see its pitfalls.

However, I was not looking to value the options directly, so to speak. I was looking to calculate the sole effect of the rights issue, keeping all else constant.

To do this I assumed all rights accrued to option holders would be sold (at the theoretical price) and used to purchase more options. I then looked at the relationship between the percentage increase in the head share price (between now and option expiry) and the return to an investor with, and without the rights issue if options were purchased today. Without the rights issue, the investor would be significantly better off until the head share price reaches approx $2, where the investor would be better off with the rights issue.

Agreed, the short term effect on the option price may well be a small increase in option price.

I don't however think this adequately compensates for the longer term dilution effects of the issue on the option return.

Food for thought anyway.

[JoeBlogs]

Food for thought anyway.

Sure is, will be an interesting day tomorrow, and next few weeks.

[winner69]

Yeah I did take all that into account. What I'm alluding to is that a 2% change in share price is negligable in a share that is so volitile, ........

Perception is a dangerous thing

PRC heads is one of the less volatile shares on the NZX and over the last year the volatility has been decreasing

Since floating the heads volatility has been 47% ... over the last year 40% and over the last 6 months 30% .... see it has become less volatile over the last year

These sort of volatilities are pretty average .... nothing unusual about it .... and doesn't say it is so volatile

The OAs have consistently been priced with an implied volatility of 60% which is why I have said the OAs have consistently been overpriced

Will think abvout the impacts of this rights issue on the option pricing but at the end of the day they are only worth what people think they are worth

[JoeBlogs]

Interesting, thanks for the input winner.

[Snow Leopard]

Perception is a dangerous thing...

...The OAs have consistently been priced with an implied volatility of 60% which is why I have said the OAs have consistently been overpriced...

That is if you believe the theoretical model is correct and that the market is wrong

regards
Paper Tiger

[JoeBlogs]

at the end of the day they are only worth what people think they are worth

That bit about sums it up!

Where did your post go Balance? That was an issue I've been concerned about, although I wouldn't expect a sell-off by these big players, at least not at this point.

[sideline]

Perception is a dangerous thing

PRC heads is one of the less volatile shares on the NZX and over the last year the volatility has been decreasing

Since floating the heads volatility has been 47% ... over the last year 40% and over the last 6 months 30% .... see it has become less volatile over the last year

These sort of volatilities are pretty average .... nothing unusual about it .... and doesn't say it is so volatile

The OAs have consistently been priced with an implied volatility of 60% which is why I have said the OAs have consistently been overpriced

Will think abvout the impacts of this rights issue on the option pricing but at the end of the day they are only worth what people think they are worth

Re" options pricing
If I recall correctly from looking at Black-Scholes it implicitely assumes that the past volatility can
be taken as a guide for the future (or that you can trade continuously and without costs to hedge
the risk arising from a change in volatility). I always found that suspicious, especially with a
company where possible upcoming events could change the price outlook substantially.
It might be the best formula available but it has some severe limitations.

[winner69]

That is if you believe the theoretical model is correct and that the market is wrong

regards
Paper Tiger

PT ... perception was PRC heads were 'so volatile' according to somebody .... reality is that the PRC heads are not that volatile and were actually getting less volatile

Thats one statement and unconnected to the other part of your reply

Yes .... the market was/is expecting the heads to become more volatile (by pricing the options as they are) .... but in (reality) the heads are not behaving this way (yet) ..... so will it all end up in tears ... nobody knows yet

[upside_umop]

The implied volatility relates to the volatility of the future percieved volatility of the options...not the heads. Options should be more volatile than the heads (given their general riskiness by nature), this is why your implied volatility via the BS model is different to the recent heads volatility.

Its kind of a merry go around in my opinion. You need to guess the future volatility of the options (this is where the market would take into account certain events, sideline). But to guess this, you are basically purely guessing! The volatility of options changes over time...so there becomes an iteration component to it also...

In short, the market decides (although it could be wrong) what the volatility is by predicting. Although like Mr Needs says, LTCM thought they could outdo the market....(different story, the amount of leverage they had was crazy/nuts/every synonym of crazy/nuts you can think of!)

[J R Ewing]

Yes .... the market was/is expecting the heads to become more volatile (by pricing the options as they are) .... but in (reality) the heads are not behaving this way (yet) ..... so will it all end up in tears ... nobody knows yet

The head price will need to be well above the conversion price a few months prior to conversion or this will certainly end in tears. If there is not a substantial lift in head price fairly soon the options (and possibly head share) will come under a great deal of pressure as option holders are facded with either letting them lapse or finding the $1.50 to convert.

[J R Ewing]

The implied volatility relates to the volatility of the future percieved volatility of the options...not the heads. Options should be more volatile than the heads (given their general riskiness by nature), this is why your implied volatility via the BS model is different to the recent heads volatility.



The volatility referred to in BS is volatility of the head share not the option.

[mr.needs]

The head price will need to be well above the conversion price a few months prior to conversion or this will certainly end in tears. If there is not a substantial lift in head price fairly soon the options (and possibly head share) will come under a great deal of pressure as option holders are facded with either letting them lapse or finding the $1.50 to convert.

I believe the exercise price is $1.25, not $1.50

http://www.nzx.com/markets/NZSX/PRCOA

[J R Ewing]

I believe the exercise price is $1.25, not $1.50



Yes, I stand corrected.

[mr.needs]

The volatility referred to in BS is volatility of the head share not the option.

I agree with you that the volatility relates to the head share.

The problem I see with the options is that the exercise price is now effectively higher as a result of the rights issue. I'm not sure if the option pricing models take this into account.

Anyhow, the point is moot. As has been mentioned, the price is determined by what the market thinks will happen, not by option pricing models.

[upside_umop]

The volatility referred to in BS is volatility of the head share not the option.

I think this is a general misconception. BS uses implied volatility does it not? I'll be happy to be proved wrong though!

http://en.wikipedia.org/wiki/Implied_volatility



In financial mathematics (http://en.wikipedia.org/wiki/Financial_mathematics), the implied volatility of an option (http://en.wikipedia.org/wiki/Option_(finance)) contract is the volatility (http://en.wikipedia.org/wiki/Volatility_(finance)) implied by the market price (http://en.wikipedia.org/wiki/Market_price) of the option based on an option pricing (http://en.wikipedia.org/wiki/Valuation_of_options) model. In other words, it is the volatility that, when used in a particular pricing model, yields a theoretical value for the option equal to the current market price of that option. Non-option financial instruments that have embedded optionality, such as an interest rate cap (http://en.wikipedia.org/wiki/Interest_rate_cap), can also have an implied volatility. Implied volatility, a forward-looking measure, differs from historical volatility because the latter is calculated from known past returns of a security.

[mr.needs]

I think this is a general misconception. BS uses implied volatility does it not? I'll be happy to be proved wrong though!

http://en.wikipedia.org/wiki/Implied_volatility

No, BS uses the volatility of the head share in calculating an option's value


σ is the volatility of the stock

The implied volatility you mention is the volatility of the head share that is represented by the option's market price. I guess it can be thought of as the markets prediction of the future volatility of the head share.

The difference between the historical volatility and the implied volatility is represented by the difference between the theoretical price and the market price of an option. The implied volatility encompasses upcoming events etc.

Winner states the implied volatility has consistently been above the historic volatility. This suggests to me either the option holders expect volatility to increase in the future (hence higher implied volatility), or they are simply irrational!

[upside_umop]

The difference between the historical volatility and the implied volatility is represented by the difference between the theoretical price and the market price of an option. The implied volatility encompasses upcoming events etc.

Winner states the implied volatility has consistently been above the historic volatility. This suggests to me either the option holders expect volatility to increase in the future (hence higher implied volatility), or they are simply irrational!

Yeah your right re volatility is that of the underlying.

Also agree with what you have said here. I mentioned something similar re sidelines comments last page. The market is forecasting volatility that is different than prior months....you could check out VIX for the market to see if this is accurate, but as you say there are company specific events and no shortages of them with PRC! Plus, beta sucks.

[mouse]

:)No discussion on Pike confirming we are through the graben with one roadway. I suspect this is the reason for the increase in coal production as discussed earlier from Blackball Hilton.:)

[geezy]

what will the number of shares be on issue ; after this rights issue and options (expiring in 2011)?

cheers

[winner69]

'Volatility' is a funny thing

Imagine if PRC went from a 100 to 200 in the next 3 months and then went back to 100 in the following three months (in a steady sort of way) ....... some would say pretty volatile eh ..... but in reality this would be far less volatile than what PRC has done over the last 6 months

Then again if PRC went up every day by 1 cent from 100 to 200 there is stuff all volatility

Appreciation of what volatility really means is needed to understand options pricing .... volatility is essentially the factor that drives the probability of options being in the money at a future date in any pricing methodology .... let alone worrying about what is risk free rate of return and all the other considerations

[winner69]

what will the number of shares be on issue ; after this rights issue and options (expiring in 2011)?

cheers

PRC say 404 million after the placement and rights issue

Then 64 million options next April

So if all options taken up 469 million

Unless there is more placements or capital raising to come!

[upside_umop]

'Volatility' is a funny thing

Imagine if PRC went from a 100 to 200 in the next 3 months and then went back to 100 in the following three months (in a steady sort of way) ....... some would say pretty volatile eh ..... but in reality this would be far less volatile than what PRC has done over the last 6 months

Then again if PRC went up every day by 1 cent from 100 to 200 there is stuff all volatility

Appreciation of what volatility really means is needed to understand options pricing .... volatility is essentially the factor that drives the probability of options being in the money at a future date in any pricing methodology .... let alone worrying about what is risk free rate of return and all the other considerations

And by rights, you should only be wanting upside volatility. Ie...when the stock price rises so the option is in the money!

[Cannibal]

This report today from Agora Financial:

“China, for the first time, is an importer of coal,” writes Chris Mayer. “And it looks like it might be an importer for some time yet, providing a boost for coal prices. There has been drought in southern China and the Mekong Delta for months now. Now there is also drought in the northern part of the country. Since there is quite a bit of hydropower in these places, it looks like output could drop 70-90%. That would mean electricity shortages of 10-15% nationally.
“Unless China gets some big-time rain soon, that will mean it will have to rely more on coal to make up the difference. In fact, there is a possibility that China’s reservoirs go completely dry, in which case its hydropower plants will have to shut down…
“The longer this drought goes on, the more the Chinese will have to buy coal to offset the decline from hydropower. We could see quite a spike in coal prices over the next few months as Chinese buyers wade into the market.”

[peat]

And by rights, you should only be wanting upside volatility. Ie...when the stock price rises so the option is in the money!
my understanding is that measuring volatility ignores whether price variation is upside or downside, its purely about movement and the maths uses squares and square roots to achieve this so effectively negating the directional factor

[mr.needs]

This report today from Agora Financial:

“China, for the first time, is an importer of coal,” writes Chris Mayer. “And it looks like it might be an importer for some time yet, providing a boost for coal prices. There has been drought in southern China and the Mekong Delta for months now. Now there is also drought in the northern part of the country. Since there is quite a bit of hydropower in these places, it looks like output could drop 70-90%. That would mean electricity shortages of 10-15% nationally.
“Unless China gets some big-time rain soon, that will mean it will have to rely more on coal to make up the difference. In fact, there is a possibility that China’s reservoirs go completely dry, in which case its hydropower plants will have to shut down…
“The longer this drought goes on, the more the Chinese will have to buy coal to offset the decline from hydropower. We could see quite a spike in coal prices over the next few months as Chinese buyers wade into the market.”

Probably wont have much effect of the contract price Pike receives for its coking coal.

Would be good however if you sold thermal coal on the spot market.

[Catalyst]

What I can't understand is the market cap of PRC has more than doubled since listing? Have the fundamentals of the company really improved by that much?

At July 2007 IPO:
# shares 200m x $1.00 issue price = $200m market cap

Post this lot of capital raising:
# shares 404m x $1.10 share price say = $440m market cap

[mr.needs]

my understanding is that measuring volatility ignores whether price variation is upside or downside, its purely about movement and the maths uses squares and square roots to achieve this so effectively negating the directional factor

Correct. Volatility ignores direction in the price movements. I imagine if you hold options you want the volatility to be in the positive direction only!

[JoeBlogs]

That's right peat from my understanding. I was talking recently about PRC being very volitile at least to my untrained eye (refering to the past couple of weeks), but as winner69 pointed out, volitility over the medium to longer term is relatively average.

Of course, you can have high volitility and still maintain an upward trend - the way I look at it, volitility is used in option pricing, as it describes the shares tendancy to move, or market uncertainty. Hence a higher volitility increases the probability of the share achieving some higher price at a given point in the future (conversly it aslo increases the likelyhood of greater downside targets). This may be overly simplistic.

[winner69]

my understanding is that measuring volatility ignores whether price variation is upside or downside, its purely about movement and the maths uses squares and square roots to achieve this so effectively negating the directional factor

Right on .... doesn't care whether prices go up or down .... just the size of the change

Stange but true but if PRC increased by a 1 cent a day from now until it geot to say 200 and option holders happy as the volatility over that period is virtually zilch

[mr.needs]

That's right peat from my understanding. I was talking recently about PRC being very volitile at least to my untrained eye (refering to the past couple of weeks), but as winner69 pointed out, volitility over the medium to longer term is relatively average.

Of course, you can have high volitility and still maintain an upward trend - the way I look at it, volitility is used in option pricing, as it describes the shares tendancy to move, or market uncertainty. Hence a higher volitility increases the probability of the share achieving some higher price at a given point in the future (conversly it aslo increases the likelyhood of greater downside targets). This may be overly simplistic.

Yes, I think your right.

The volatility does not show the underlying direction in a share's price movement. 2 different share could have the same high volatility while one is in a strong up-trend and the other is in a strong down-trend. Conversely, another 2 different shares could have the same low volatility, with one being in an up-trend and the other in a down-trend.

So, while the volatility does not give an indication of the direction of price movements, it does give and indication of their magnitude. To put it another way, the volatility shows how far into the money the share price could get. (or how far down the share price could go!)

[mr.needs]

Right on .... doesn't care whether prices go up or down .... just the size of the change

Stange but true but if PRC increased by a 1 cent a day from now until it geot to say 200 and option holders happy as the volatility over that period is virtually zilch

Similarly, PRC could increase in price by $1 a day, every day and the volatility would be next to nothing.

In that case the option holders would be VERY VERY:eek2::eek2: happy!!

(disc. not that likely to happen in the real world:t_up:)

[The GrandMaster]

the real world is always so disappointing

[winner69]

Just highlights how theory don't always work .... if the market doesn't price options according to theory is the market inefficient?

So as said yesterday everything is worth only as much as somebody is prepared to sell or buy it for

[mr.needs]

if the market doesn't price options according to theory is the market inefficient?

Funnily enough its actually the opposite to this that's true. One of the underlying assumptions in BS is the efficient market hypothesis. So if markets aren't efficient, the theory doesn't hold.

A little bit like the whole chicken and egg situation isn't it?

As you say, it just goes to say you can't always have blind faith in the theory.

[upside_umop]

my understanding is that measuring volatility ignores whether price variation is upside or downside, its purely about movement and the maths uses squares and square roots to achieve this so effectively negating the directional factor

Yes, I understand this too. What I am saying is, if the market goes down its counted as volatility. For option holders this is no good...but the theory still states that the price should still rise as there is greater volatility and thus a greater chance of 'in the money'...although its moving away from the money.

So in short, if you hold options, upside volatility is what your after right?!

[mouse]

What I can't understand is the market cap of PRC has more than doubled since listing? Have the fundamentals of the company really improved by that much?

At July 2007 IPO:
# shares 200m x $1.00 issue price = $200m market cap

Post this lot of capital raising:
# shares 404m x $1.10 share price say = $440m market cap

Plus the options being exercised April 2011. All of this halves, at least, our dividends. As my brother in Canada wrote to me on the IPO, 'tell me when they are actually producing coal!' Not so far, except for small amounts. We need to have 60,000 tons a month exported. That would justify a good share price increase. Hopefully we will see it by the end of this year. I think Monkey Poms, who I have great respect for, may think the same. Come in Monkey Poms please. :):):)

[dsurf]

Just read a forecast that suggested US$ 250 to $300 per tonne for Q4 2010. Forecaster suggested BHP etc will each quarter reference the spot price & force price up.

[Balance]

Just read a forecast that suggested US$ 250 to $300 per tonne for Q4 2010. Forecaster suggested BHP etc will each quarter reference the spot price & force price up.

Read a forecast that said that PRC will produce coal by March 2008.